The African Development Bank (AfDB) faces a growing demand for loans from African countries trying to cushion the impact of the global crisis and will need a threefold increase in capital to prevent it breaching lending limits. “We need a 200% increase in capital,” says Donald Kaberuka, the AfDB’s Managing Director, adding that “there is political will to do so”.

The Tunis-based African Development Bank (AfDB) has asked its 77 member nations for a recapitalization top-up — the first time in more than 10 years, reports AfDB treasurer Pierre Van Peteghem.

The bank estimates it will increase lending to African countries by 14% a year until 2013, pushing debt as a ratio of usable capital to more than 100% above its target. The AfDB’s capitalization was $3.5 billion in 2008.

“The bank had foreseen an expansion in its operations between 2008 and 2012,” Van Peteghem maintains, “but now we have the global financial crisis. Demand for the bank’s product has increased dramatically.” The bank approved $3.5 billion in loans and grants last year, 14% more than in 2007. Some 45% of disbursed funds were committed to infrastructure projects.

Visit African Development Bank’s website

Source(s):
African Business