UK should support faster disbursement of African Development Bank funds to promote continent’s covid-19 recovery
To help African nations recover from the impact of covid-19, the Sub-Committee on the Work of the Independent Commission for Aid Impact has called on the UK Government to push for faster disbursement of funds held by the African Development Bank.
The sub-committee’s latest report has considered ICAI’s review on The UK’s Support to the African Development Bank, which assessed the UK’s involvement in the Bank as Green/Amber, indicating “satisfactory achievement in most areas, but partial achievement in others”. The UK has the smallest shareholding in the Bank of all G7 nations, yet its involvement has been positive in promoting the UK’s aid objectives, including key cross-cutting priorities such as fragile states and gender.
Amid uncertainty over the UK’s future official development assistance (ODA) spend, the sub-committee was reassured by Minister James Duddridge’s reassurance that given the positive work of the Bank, the UK Government would like to continue working closely with the Bank to leverage the UK’s development experience. This was reinforced two weeks ago by the Foreign Secretary who confirmed ODA spend for the African Development Fund, within the African Development Bank.
As Africa recovers from the impact of covid-19, the sub-committee heard how more paid-in capital can help communities get back to normal. The sub-committee urged the UK Government to consider supporting the faster disbursement of this capital.
The Bank is already focussing on low-carbon investments, and has made no investment in coal since 2015. This is impressive and important ahead of COP27, which will be Africa-led, and could lead to greater investment in greener energy. Supporting the Bank in this area will enable African countries to grow economically without associated increased emissions.
The sub-committee was concerned with the current shortage of some skills at the Bank, recommending that the UK Government should do all it can to encourage the filling of these gaps. The UK should press the Bank for early action and regularly monitor progress on recruitment and retention.
Overall, the sub-committee found that UK engagement with the African Development Bank has been beneficial, and was pleased to hear that this has continued since the formation of the Foreign, Commonwealth and Development Office.
Chair of the Sub-Committee on the Work of the Independent Commission for Aid Impact, Theo Clarke MP, said:
“Since its inception, the African Development Bank has offered valuable financial assistance to developing countries across the continent. The sub-committee’s report demonstrates that the UK’s support of the Bank should be viewed as a real success story for UK aid, promoting economic development while also achieving UK priorities ranging from supporting fragile states to gender equality.
“However, Africa does face the major challenges of the coronavirus pandemic and the growing threat from climate change. I hope the Bank rises to these challenges, supported by its donors. Funds should be made more accessible to support recovery from covid-19. Following COP26 in Glasgow, eyes will be on the continent as there will be an African host of COP27, therefore investment in green technologies and innovation is key, and the African Development Bank can play a major role in realising this potential.”
The recommendations are:
- One of the key challenges facing the African Development Bank is in leveraging private finance for its key infrastructure projects. The current financial situation due to the coronavirus pandemic is likely to make that problem worse. One possible action that could improve the prospects for funding of infrastructure is for a faster disbursement of the Bank's paid-in capital. We urge the Government, through its position as UK Executive Director, to consider encouraging this and other possible routes to maintaining financial support for Africa's infrastructure.
- The UK Government should do all in its power to encourage sustained progress towards filling the skills gaps at the Bank. While bearing in mind the need to respect the Bank's independence and to maintain a multilateral approach, the UK should press the Bank for early action and regular monitoring of progress on recruitment and retention. An update on the staffing situation should be provided to the Committee by the end of October 2021.
- The UK's future support for the African Development Bank should reflect the Bank's key role in complementing bilateral support.