Tunis: We are pleased to present this regional publication which provides an overview of the African Development Bank’s operations and partnership in Southern Africa. The publication comes at a critical time for the region and the Bank. The aftermath of the global financial crisis threatened to set back, in less than a year, the economic gains so painfully made over the last decades. The crisis slashed the continent’s growth rate from a healthy 6% to 2%, reduced export earnings, decreased Diaspora remittances and investment flows, and contracted the private sector. To ensure its regional member countries weathered the financial storm, the Bank intervened and helped shore up many economies by lending at record levels, including to Middle Income Countries.
In addressing the impact of the crisis, the Bank utilized its resources more quickly than envisioned. In May 2010, a significant capital increase tripled the institution’s resources to US$ 100 billion. This will allow us to sustain a higher level of lending, both to the public and private sector, and to respond expeditiously to demands from our diverse clients. The Bank and donors also agreed an ADF-12 replenishment of US$ 9.35 billion over the next three years (2011-2013). These resources will enable us to leverage additional funding from other partners (multilateral, bilateral, private sector) to finance public sector investments in Africa, focusing on infrastructure, governance, higher education, science and technology, regional integration and support to fragile states.
Our ability to lend to both the public and private sector is a key part of the Bank’s comparative advantage.
Southern African economies started to recover from the global financial crisis in 2009.This recovery is driven by a rebound in export demand, rising commodity prices and reforms and policies implemented prior to the financial crisis. However, profound challenges remain, including high levels of unemployment and a surge in public deficits and debt.
To meet these challenges, we have articulated our strategy in the Regional Integration Strategy Paper for Southern Africa recently approved by the Bank. It covers he period 2011-2015, and is the outcome of a consultative process with COMESA, SADC and EAC. A key focus of the strategy is regional economic cooperation and integration, and in particular, regional infrastructure.
Our approach is to prioritize projects according to their stage of preparation and commitment of participating countries. The Bank is already working with COMESA and SADC on the North-South corridor, the Nacala Corridor and other similar initiatives, to which it has committed nearly US$ 1 billion. The corridors blend hard and soft infrastructure projects - reducing delays in border crossing and customs procedures, as well as rehabilitating and constructing transport links and port facilities.
To deepen our knowledge and capacity to provide policy and advisory services to our differentiated clients, the Bank recently completed the Zimbabwe Infrastructure Flagship Report. Additional analytical work and other studies have also been identified for the Southern African region, including a study on Alternative Energy Sources.
We look forward to continued collaboration with the Southern African region in the years ahead.
* Foreward to the publication by Aloysius Uche Ordu, Vice President for Operations I, Country and Regional Programs and Policy, African Development Bank (AfDB) Group. The 162 page report can be accessed here.