The African Development Bank Group has released its Annual Report for 2023, painting a picture of improved financial performance and robust support to its member countries across Africa.
The critical financial support has resulted in increased resilience and recovery despite the challenging effects of regional conflicts, economic shocks, climate change, and the after-effects of the COVID-19 pandemic.
In the face of stubbornly high inflation, public debt and associated financial vulnerabilities, African countries balanced efforts to spur growth and measures to contain the impact of rising cost of living on their citizens, as acknowledge by the Bank Group President, Dr. Akinwumi Adesina.
"Our nations, our economies, and our people continue to show remarkable fortitude," he noted in the report's foreword. "Despite the overall economic slowdown, 15 countries posted output expansion of more than 5 percent and Africa retained its position as the fastest-growing economy after Asia with real GDP growth close to the global average of 3.2 percent."
The Annual Report shows that Bank Group approvals for 2023 (USD 10.77 billion) were 30 percent higher than those for 2022 (USD 8.2 billion), and close to the highest approvals in the history of the Bank Group.
Approvals for sovereign operations - projects financed with the guarantee of a sovereign entity such as a national or sub-national government - in 2023 increased sharply by 43%, to reach USD 9.07 billion as the Bank provided extensive sustainable finance to boost several African countries in their post Covid-19 recovery.
The Bank's High 5 priorities: to Light Up and Power Africa, Feed Africa, Industrialize Africa, Integrate Africa, and Improve the Quality of Life for the People of Africa all saw increased approvals in 2023, except "Feed Africa," which showed a decrease. The decrease in Feed Africa approvals from the exceptionally high level in 2022, is a result of the African Emergency Food Production Facility created in 2022 to offset disruption of food supplies across the continent due to Russia's invasion of Ukraine.
The Bank Group also demonstrated its capacity to deliver while prioritizing governance, reform, compliance and accountability. In 2023, it reached 95% completion of the implementation of its Integrated Quality Assurance Plan aimed at enhancing the quality of its operations to increase its development impact.
The report records the impressive results of projects delivered across the High 5's which were completed in 2023: 2.4 million people with access to new electricity connections; 11 million farmers used improved techniques including micro-irrigation, fertilizer, and climate-resilient seeds; over 440,000 enterprises had access to finance, and almost 233,000 of them are women-owned, 3.5 million people gained access to better transport services; and 9 million people had new or improved access to water and sanitation.
Bank shows strong growth, maintains gender markers
In 2023 a record 100% of sovereign operations were categorized using the Gender Marker System, of which 58% contributed directly to women's access to social services and skills. The Gender Marker System seeks to differentiate operations to focus on those that have a greater impact on reducing gender gaps.
Also in 2023, approvals for climate finance registered substantial increase over 2022, reaching USD 5.8 billion, representing 55% of total approvals.
The overall financial performance of the African Development Bank Group improved in 2023 with significant increase in revenue across all its three entities. The African Development Bank's revenue rose to USD 2.32 billion up from USD 1.03 billion in December 2022. The increase was a result of heightened loan activities and favorable returns on treasury and other investments. Although, this was largely offset by higher borrowing expenses, the Bank achieved very strong net income of USD 544.79 million, close to double the USD 318.44 million in 2022.
The African Development Fund, the group's concessional lending arm, saw the largest increase in revenue, totaling USD 446.54 million in December 2023, up from USD 201.94 million in December 2022, marking its largest surplus (USD 154.65 million) in the past 20 years. Similarly, The Nigerian Trust Fund demonstrated improved financial performance, with revenue reaching USD 8.33 million a notable increase from the USD 3.38 million recorded in December 2022.
In another measure of its strong performance the ratings of the Bank's senior debt (AAA/Aaa) were reaffirmed with a stable outlook by all four leading international rating agencies. The high credit ratings reflect the Bank's solid capital adequacy, robust risk management, prudent financial management, very high liquidity coverage, excellent funding record, preferred creditor status, and very strong shareholder support, the report notes.
To learn more about the 2023 Annual report, click here
