AfDB/AfDF: African Development Bank / African Development Fund – Core Contribution

AfDB/AfDF has a comparative advantage as a Regional Development Bank/Fund in the policy-dia¬logue and cooperation with African Governments. The fact that the majority of shareholders are countries from the region underlines their ownership of “their” Bank and increasees the institutions legitimacy. The fact that most of its employees come from the region facilitates the cultural understanding of the working context. Having the headquarters in the region means also reduced administrative costs, concerning project supervision and monitoring of results.. On the other hand, there is increasing competition from emerging countries which are very active in providing financially competitive loans for infrastructure investments and trade facilitation with fewer conditions

The TYS with its two main objectives (inclusive growth and transition towards green growth) determines AfDF’s strategic selectivity and operational focus on infrastruc-ture, regional integration, private sector development, governance and accountability, and skills and technology; with three areas of special focus, namely fragile states, agriculture& food security, and gender equality. AfDF’s overarching goal of poverty reduction and the areas of special focus are well in line with the Swiss strategic directions as defined in the last bill on International Development Cooperation 2013-2016 approved by Parliament in 2012. Through its membership in AfDB/AfDF, Switzerland has got the opportunity to contribute to Africa’s transition and development also in countries where Switzerland is not bilaterally active. Furthermore, AfDB/AfDF’s operations in Switzerland’s focus countries offer the opportunity of optimizing complementarities and synergies between the bilateral and multilateral approach (scaling-up).

Africa is now the fastest growing continent in the world. The growth rate of its low-income count¬ries exceeded 4% during the past 3 years. The AfDF has assisted its developing member count¬ries in achieving this growth and the accom¬panying poverty reduction through policy support and investments, manily in infrastructure and governance. 26 of the 54 African countries have now achieved middle-income status. Strong eco¬nomic growth together with the right policies has contributed to the reduction of income poverty. The share of the population living below the poverty line has fallen from 51% in 2005 to 39% in 2012. Under AfDF-12, the Fund contributed to the strengthening of core state systems, public financial management systems and enabling business environments, including in fragile situations.

In its interventions, Switzerland maintained a strong focus on improving corporate governance and effectiveness of the Fund’s operations, including management of development results, and risk management. Through its inputs from the field (reality check), Switzerland had an influence on the management of AfDB/AfDF and Board decisions in an over-proportionate manner compared to its capital share (1.46%). With its specific support to the Rural Water Supply and Sanitation Initiative Trust Fund (RWSSI-TF) and to the Governance Trust Fund (GTF), Switzerland contributed with its specialist knowhow in these areas, including in sharpening the focus on fragile states (applying of a fragility lens).

Under AfDF-13 the following main outcomes are intended to be achieved: Infrastructure development in Africa will remain a key area of intervention. To help bridge the financing gap in infrastructure on the continent, the Bank Group is exploring ways to crowd-in private sector financing, including through public-private partnerships and the use of new guarantee instruments. In supporting regional integration, the Fund will focus both, on the construction of hard infrastructure, including regional transport links, energy, water and sanitation, and telecommunication networks, as well as on soft institutional infrastructure, including support for integration policies at national and regional levels. On private sector development, the Fund will support the implementation of the new Bank Group’s Private Sector Development Strategy 2013-2017 with the objective of creating jobs. Given the importance of governance and accountability in promoting inclusive and green growth, the Fund will build on results achieved under AfDF-12 in strengthening core state systems and enabling business environments. The Fund will also work on improving natural resouces management and by promoting transparency and accountability on curbing corruption and illicit financial flows. AfDF-13 will also deliver new approaches on skills

During the AfDF-13 replenishment, Switzerland focussed particularly on enhancing the results monitoring and management, on green growth and climate change, on the importance of gender equality aspects, on governance and accountability issues (including participation of civil society and on fiscal decentralization), on risk manage¬ment, private sector development (on job creation) and on enhancing the cooperation with fragile states. Switzerland (SDC) will continue with its particular support to the RWSSI-TF (focussing mainly on enhancing collaboration with fragile states, applying a fragility lens and promoting the human right on water and sanitation, as well as improving results monitoring in partner countries), and following a positive review of the past achievements of the GTF, SDC may decide to continue its financial support to the GTF.

Due to the increase of its burden share to 3%, Switzerland is ranking 11th out of 27 donors (as until AfDF-10 2005-2007).

Switzerland (overall capital share of 1.46%) forms a constituency with Germany and Portugal. In the constituency office (Office of the Executive Director), Switzerland is always represented by a Senior Advisor, and every 8 years, Switzerland will have the Executive Director for 3 years (first time in 2018-2021). With a burden share of 3% in the AfDF-13 replenishment, Switzerland is the 11th largest donor among 27.

Phase 12 01.05.2014 - 31.12.2023   (Completed)