Brief history of the AfDB

The African Development Bank was formed in 1963 as a thoroughly African institution extolling the virtues of “Africanicity”.

It was formed by Africans to solve African problems. It is mandatory that the bank’s president be an African. Initially, all its executive board members and staff were all African.

By 1964 the AfDB’s capitalisation was US$300 million of which half was in convertible currency.

Since 1973, the institution has deliberately tried to augment its capital through external borrowings.

Post-1980 the AfDB began to engage extra-regional partners as it had begun to bond and Euro currency markets. Before that only 5 percent of the bank’s capital came from bilateral loans and the floatation of bonds subscribed by central banks. The bulk was mainly sourced from transactions in private markets. Post-1982 African members voted to invite extra-regional membership.

Between 1981 and 1982 the authorised capital of the bank rose by more than 120 percent.

Despite the AfDB growing remarkably over the years, the growth has not been accompanied by a corresponding increase in lending to African countries. Concessionary funding has been scarce. Many countries, Zimbabwe included, have been in arrears on both payments of subscriptions and on repayments of outstanding loans, attracting the AfDB sanctions in the process, which often means that projects are stopped.

Its regarded as the rarest of African species because of its success; it currently has a AAA+ rating.

At the establishment of the bank, voting was allocated to African countries according to a formula that tended to equalise influence.

Basic votes accounted for 50 percent of the total. Even when additional votes were allocated according to additional subscriptions, the ratio between the country with the highest number of votes to the smallest was just 5:1, even when the maximum ratio of subscriptions was significantly higher.

It was so egalitarian that by 1986, the largest contributors to the Bank — Nigeria, Egypt, the United States of America and Japan — only had 9,28 percent, 5,78 percent, 5,51 percent and 4,68 percent respectively. Essentially, the bank is shorn of hegemonic tendencies.

No country can control voting or exercise veto powers.

It was also stipulated that regional member countries control two-thirds of voting power, with extra-regionals controlling one-third.

Similarly in the ADF voting its spilt between RMC and extra-regionals. The votes for the latter are apportioned according to their share of financial contributions. Major decisions of the Fund require three-fourths approval. The Bank has over the years contributed less than 2,11 percent of financial resources by December 1986.

It is regarded as politically blind, with the only exception that it did not work with the South African apartheid regime.

The US previously opposed allocations to Angola and Ethiopia to no avail.