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Table of Contents 1 Overview of Operating Environment and Operations 2 AfDB Financial Profile 3 AfDB Capital Market Activities 4 Appendix 2
1 Overview of Operating Environment and Operations 3
A decade of progress interrupted • A decade of progress in Africa has been interrupted by the global financial and economic crisis Crisis leads to Collapsing Deteriorating several external demand terms of trade shocks for exports Reduced Lower Decline in capital flows remittances tourism Overview of Operating Environment and Operations 4
A decade of progress interrupted: The toll of the crisis Real GDP Growth (%) 7% Setback to growth: 6.4 6.2 5.9 GDP growth halved from the 5.6 5.6 6% 5.4 5% p.a level in the past decade 5 5% 4.3 4.2 Decline in real GDP per capita for 4% the first time in the past decade 3.1 3% 2.5 2% 1% Increase in debt: 0% Debt level of the continent 1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 increased from 21.3% in 2008 to 23.4% in 2009 Unprecedented rate of growth undermined Overview of Operating Environment and Operations 5
A decade of progress interrupted: Twin deficits reemerge Current Account as % of GDP Fiscal Balance as % of GDP 6.5% 8% 6.3 4.6 4.5% 6% 2.6 2.5 2.2 3.8 3.8 2.5% 4% 3.8 0.4 0.3 1.8 0.5% 2% 1.5 0.2 0 -0.25 -1.1 0% -1.5% -2.3 -1.4 -2% -3.5% -1.9 -2.9 -4.4 -5.4 -4% -5.5% 1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Unless sufficient FDI and concessional financing is Expenditures on core infrastructure and social available, existing foreign reserves accumulated over sectors could be affected several years could be depleted Overview of Operating Environment and Operations 6
Better outlook for 2010 Africa‟s real GDP Support from Global Domestic Development projected to pick recovery responses Partners up to 4.5% in 2010 AFRICA‟S RESPONSE • Pre-crisis efforts of maintaining macroeconomic soundness, Impact varied strengthened good governance, economic diversification and but generally regional integration preserved strong resilience to crisis • Mitigating measures like fiscal stimulus packages, target sectoral assistance and expansionary monetary policies applied • World GDP growth forecast of 3.9% in 2010 • Timely delivery of promised financial and technical assistance critical for growth sustainability in Africa • Recovery in Africa supported by countercyclical role played by development banks like AfDB • Regional disparities however remain Overview of Operating Environment and Operations 7
Bank Group scaled up assistance and advocacy role for Africa Approvals increased by 129% and US$ 1.5 billion Emergency Liquidity Facility (ELF) disbursements US$ 1.0 billion Trade Finance Initiative (TFI) increased by 119% in 2009 Division of labor between Development Committee of Ten Financial Institutions ADF resources (C-10) African reinforced frontloaded and Ministers of Finance accelerated transfers and Central Bank Governors created Global Trade Liquidity Program concluded Overview of Operating Environment and Operations 8
Lender of choice: increased operations in line with countercyclical role Approvals (including HIPC) and disbursements In UA million 8,000 8,000 In 2009, 181 approvals for 2,427 Bank Group compared to 7,000 7,000 133 approvals in 2008 6,000 6,000 5,000 5,000 4,084 4,000 4,000 Massive increase enabled Bank Group to effectively 1,665 3,000 3,000 respond to the crisis 1,382 1,422 1,861 1,545 1,616 2,000 2,000 1,290 1,239 5,604 1,000 1,000 1,807 1,670 1,045 869 - - 2005 2006 2007 2008 2009 ADB ADF Bank Group Disbursement Overview of Operating Environment and Operations 9
“One Bank” approach with unified set of strategic priorities and cross-cutting themes ADB STRATEGIC ADF STRATEGIC ORIENTATIONS ORIENTATIONS Strategic Priorities Strategic Priorities Strategic Priorities • Higher Education • Fragile States • Infrastructure • Regional Integration • Private Sector • Governance Cross-cutting Themes Cross-cutting Themes • Regional Integration • Private Sector Cross-cutting Themes • Food Security • Environment/ Climate Change • Gender Equality Overview of Operating Environment and Operations 10
Driving development of infrastructure that is modern, reliable and affordable Sector distribution for 2009 National road projects in KEY Burkina Faso, Cameroon, Water supply and Chad, Ghana, Guinea, INFRASTRUCTURE sanitation Transportation PROJECTS Mali, Sierra Leone, 8% Communications 33% 2% APPROVED IN 2009 Malawi, Rwanda, Senegal and Uganda Power projects in Airport projects in Botswana, Kenya, Morocco and Tunisia Lesotho, Nigeria, South Africa and Tunisia Power supply 57% Multinational road projects for Cameroon- Water sector projects Nigeria; Cameroon- in Tunisia, Morocco Gabon; Kenya-Ethiopia; UA 3.9 billion for 52% of and Egypt and Mozambique- Bank Group approvals Malawi-Zambia Overview of Operating Environment and Operations 11
Regional Infrastructure in East Africa Road Corridors • Developing key transport corridors through the East African Road Network Project • US$ 382m into Mombasa-Nairobi-Addis Road Phase I and II (Kenya/Ethiopia) Railways • Reducing transport costs and pressure on the road network • US$ 4.1m to study extending Dar es Salaam- Isaka line into Rwanda and Burundi Energy • Developing hydro-electric schemes and wind power • US$ 155m into interconnection of electric grids of 5 Nile Equatorial Lake Countries Overview of Operating Environment and Operations 12
Tapping into the West Africa Power Pool brings electricity and development to rural villages Nigeria-Benin-Togo Interconnection and Electrification in Rural Centers of Benin • Nigeria now supplies 40% of electricity supply to Benin at one-sixth the cost of local generation • In the village of Aguégués, electricity meant: • Government services provided locally • Pass rate at school rose from 65% to 86% • Malaria testing done locally, treated faster • Small business thrived, supplier links improved „‟Because the children can study in the evening, we are able to advance in our curriculum and go deeper into topics during the school day.‟‟ Leonard Koudjle, School Director Overview of Operating Environment and Operations 13
Providing impetus to private sector development in Africa Sectoral distribution for 2009 Geographical distribution for 2009 Regional/ ADB countries Private equity Transport multinational 6% 12% 9% projects 52% Communication 7% Power Supply 4% Industry 10% ADF countries 42% Financial services 58% 1400 1,160 1200 1,000 901 Infrastructure 1000 Strong 800 Additionality Access to catalytic role 600 and financial 278 with a historic 400 185 development services 200 multiplier of impact Employment 0 five times opportunities 2005 2006 2007 2008 2009 Private Sector Operations in UA million Overview of Operating Environment and Operations 14
Use of innovative measures would help open up more capacity to support private sector operations African Financing Partnership Crowding in private sector Selective selling down of loans where Benefits of efficiency, diversification, additionality or ensuring developmental effectiveness and capacity building purpose has been achieved B-loan syndication African Development Fund Leveraging public resources to Exploring a pilot program for catalyze private finance and risk leveraging ADF resources through sharing for more projects, bigger guarantees to expand private sector financing tickets and longer maturities operations in LICs Overview of Operating Environment and Operations 15
Private sector operations at a glance Liberia Bank for Development and COCOBOD (Ghana) Investment (Liberia) • • USD 35 million for receivables backed USD 5 million subordinated loan to support trade finance facility its fund raising • Will facilitate funding of an estimated 1200 • Financing the international marketing of SMEs by 2012 Ghana’s 2009 cocoa harvest Access Bank of Tanzania (Tanzania) Main One Cable System (Multinational) • • EUR 0.6 million in preference shares USD 55 million in senior debt to support 7000 km of submarine fiber optic cable • Support to a green-field microfinance between Portugal, Ghana and Nigeria with bank that provides financial services to branching units to Morocco, Senegal and the poor and low-income people Côte d’Ivoire. Multiplier effect of over four • Greater regional and international connectivity at reduced cost Overview of Operating Environment and Operations 16
Three-pronged role of private sector operations Diagnostics & Strategy “Understanding the “Honest broker” development priorities Helping to ensure fair and the enabling environment and transparent treatment bottlenecks” and processes Advisor and financier Helping to raise and Enabling structure financing for Programs Catalytic feasible projects and to “Improving the Private Sector provide credit enhancement enabling Operations environment and “Showing that paving the way for Partner entrepreneurship private sector pays” Sharing the risks of projects growth Overview of Operating Environment and Operations 17
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