Highlights of Year 2005 Positive economic outlook and indicators for Africa G8 adopts the Multilateral Debt Relief Initiative Mr. Donald Kaberuka assumes office as the seventh elected President of the Bank Group in September Constitution of a Presidential Task Force on Institutional Reform Bank policies and mix of products are amended to better address the needs of member countries Launch of first Botswana Pula denominated bond under the local currency initiative 2
Table of Contents African Economic Outlook 1 Bank Group’s Activities and Road Ahead 2 Bank Financial Profile 3 Capital Market Activities 4 3
African Economic Outlook 1 The combination of the positive economic outlook and greater attention from the international community should result in progress towards achieving the Millennium Development Goals in Africa 4
Africa’s 2005 real GDP growth rate exceeded 4.5% for the third consecutive year Real GDP Growth 6% 5.2% 18 countries achieved GDP growth rates 4.9% 5% above 5 % 4.6% Average per region 5% Central Africa: 4.8% North Africa: 4.8% 4.0% 4% East Africa: 5.6% Southern Africa: 5.0% West Africa: 4.4% 4% 3.5% 3% 2001 2002 2003 2004 2005 Drivers Macroeconomic stability – Debt relief – Continued global expansion 5
Significant improvement in terms of trade and export growth lead to two consecutive years of current account surplus for the first time in two decades. 13% 10% Terms of Trade 7% 4% 1% 2001 2002 2003 2004 2005 -2% -5% 2.5% 2.0% Current account as a % of GDP 1.5% 1.0% 0.5% 0.0% 2001 2002 2003 2004 2005 -0.5% -1.0% -1.5% -2.0% 6
Improved export performance and debt relief measures have contributed to a steady decline in debt service 20% 60% Debt Service Ratio Debt / GDP 17.8% 53.3% 52.9% 50% 48.3% 14.9% 15% 13.8% 42.4% 40% 12.0% 35.7% 10.6% 10% 30% 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 7
Sound macroeconomic policies and strengthened economic management are yielding result which will allow countries to pursue second-generation reforms, such as privatization and public sector reforms. Inflation Fiscal balance as % of GDP 12% 3% 2% 11% 1% 10% 0% 9% -1% 8% -2% -3% 7% 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 8
In 2005, the spotlight of world development agenda was firmly on Africa Millennium G8 SUMMIT ON POVERTY Development Goals Fight against disease Multilateral Debt 1. Eradicate extreme poverty and hunger: Relief Initiative and hunger Bono, Clinton & Gates 2. Achieve universal primary education 3. Promote gender equality and empower women 4. Reduce child mortality 5. Improve maternal health 6. Combat HIV/AIDS, malaria African Infrastructure and other diseases Consortium 7. Ensure environmental sustainability Commission for 8. Develop a global Africa partnership for development Still, only few African countries will achieve the MDGs by 2015 even if all existing commitments to increase aid are honoured. 9
Bank Group’s Activities and Road Ahead 2 In 2005, the Bank continued to build on its achievements and to reposition itself for greater effectiveness and efficiency in the delivery of its mandate 10
Providing impetus to Africa’s development through the three windows of the ADB Group Bank Group Vision “ The African Development Bank is the premier financial development institution of Africa dedicated to combating poverty and improving the lives of the people of the continent and engaged in the task of mobilizing resources toward Access to ADB window the economic and social progress of its regional Access to ADF window member countries ” Access to ADB and ADF windows 11
The Bank Group’s coverage of regions and sectors is well diversified North Africa 32.7% West Africa 24.2% Central Africa 11.9% East Africa Multiregion 14.8% 3.1% Southern Africa 13.3% Since inception, over 3,100 approvals amounting to UA 38.6 billion (US$ 55.2 billion) as at 31 December 2005 12
The Bank Group’s approvals reflect customized assistance US$ 4.3 In UA billion million US$ 3.0 US$ 3.3 billion billion US$ 2.8 billion US$ 2.6 billion 24 out of 33 eligible African countries already benefit from debt relief under enhanced HIPC initiative 13
The Bank’s Middle Income Countries Initiative in 2005 further increased the attractiveness of the ADB window Commitment fees eliminated for new sovereign guaranteed loans COMPETITIVE PRICING Lending spread decreased from 0.5% to 0.4% Market risk premium eliminated for fixed rate loans MIC Trust Fund amount increased from UA 1 million (US$ 1.43 million) to UA 16 million (US$ 22.87 TECHNICAL ASSISTANCE million) Ceiling per project raised to UA 600,000 (US$ 857,562) from UA 100,000 (US$ 142,927 ) ENVIRONMENTAL IMPACT Loan-processing procedures streamlined 14
Development of a vibrant and competitive private sector across Africa is a strategic priority for the Bank Product Type Sector Distribution Guarantee 0.7% Lines of Finance Infrastructure Loans Credit 55.20% Funds 30.0% 53.6% Mining 8.70% 6.10% Tourism Equity 2.00% Funds 9.3% Manufacturing Others 0.90% Private & 1.00% Enclave Quasi- Infrastructure Projects Equity 12.20% 5.6% 0.8% Oil & Gas 13.90% Approvals in UA million Approvals in US$ million Private sector strategy focus on 350 306 Creating a conducive business environment 300 270 257 255 241 250 Strengthening financial systems 199 206 192 200 180 Improving infrastructure through Public-Private 164 150 Partnerships 100 Promoting development of trade and 50 small-and-medium scale enterprises 0 2001 2002 2003 2004 2005 Cumulative approvals: UA 1.17 billion (US$ 1.67 billion) 15
ADF addresses the needs of low-income countries • UA 16.26 billion (US$ 23.24 billion) of assistance provided at end-2005 through ten replenishments of ADF Approvals • Total approvals Increased to UA 1.42 billion (US$ 2.03 billion) in 2005 from UA 1.26 billion US$ 1.96 billion) in 2004 • Project lending prioritized agriculture and rural development, transport, social sectors and multi-sector activities which account for 84.2% of ADF loan approvals in 2005 2005 • 2005 grant approvals benefited 18 countries and almost doubled to UA Activities 415 million (US$ 593 million) from UA 214 million (US$ 332 million) in Highlights 2004 • 2005 grant operations focused on water and sanitation, agriculture and rural development, the social sector and transportation Policy • ADF borrowers offered the flexibility to select the currency of their Update choice 16
Through co-financing and partnership, the Bank Group enhances the resources and expertise mobilised for Africa Sector Distribution in 2005 9.5% 0.6% • 1.2% From 1967 to 2005, the Bank participated in 852 18.6% 15.7% co-financing operations, amounting to UA 84.2 billion (US$ 120.4 billion). 6.7% • In 2005, 19 operations for UA 3.2 billion (US$ 4.6 billion) were co-financed compared to 31 operations for UA 2.9 47.7% billion (US$ 4.4 billion) in Multisector Energy Sector Environment 2004. Finance Transportation Agricultural Sector Social Sector 17
The Multilateral Debt Relief Initiative launched in 2005 aims to complement the HIPC debt relief process • HIPC debt relief is projected to substantially lower debt stocks Heavily Indebted and debt ratios for most HIPC beneficiaries Poor Countries • 14 countries had reached completion point at end - 2005, 11 are Initiative at decision point and 7 are at pre-decision point • The G8 Summit in July 2005 proposed that the ADF, IDA and IMF provide 100% irrevocable debt stock cancellation for countries that reach the Multilateral completion point under the enhanced HIPC initiative Debt Relief • 33 of the 42 eligible countries are in Africa Initiative • Underlying Principles: Irrevocability and additionality of debt relief as well as preservation of the financial integrity of ADF and IDA • Based on debt outstanding and disbursed at December 31, 2004, as the cut- off date, and January 1, 2006, as the implementation date, the cost of canceling the ADF debt of the 33 potential beneficiaries, after HIPC relief, is estimated at UA 5.84 billion (US$9.06 billion) in nominal terms. • Donors will make new contributions to match, “dollar -for- dollar”, foregone principal and service charge payments based on an agreed burden sharing 18
Recommend
More recommend
