Monrovia — As global financial aid continues to decline, experts warn of the increasing risks posed to low-income countries and urge regional stakeholders to look inward to fund much-needed development.
Speaking at the African Transformation online briefing on Tuesday, the Manager of Resources and Partnerships at the African Development Fund (ADF), Valerie Dabady, said the changing environment significantly affects the ADF’s ability to mobilize resources during its 17th replenishment cycle.
The ADF is the concessional financing arm of the African Development Bank, which provides grants and low-interest loans to the poorest and “vulnerable countries”, mostly in sub-Saharan Africa. The fund looks to donors, which include European nations and the U.S., every three years to replenish resources for development projects.
The organizers of Tuesday’s briefing, the African Center for Economic Transformation (ACET) and its partners, said they aim to spark conversations about the challenges to Africa’s development in the current environment and encourage “stronger coalitions”.
During the briefing, Dabady focused on the need for African financial institutions to forge partnerships, saying the ADF wants to encourage existing partners to increase their support. She said countries in the region should look inward and leverage their “own sources of funds”.
The ADF also announced that it is working on forging new ties with Golf Nations to fill the resource gap.
Earlier this year, AfDB’s outgoing President Akinwumi Adesina said the bank was seeking to raise the U.S. $25 billion during this replenishment campaign, an ambitious target from the 16th cycle’s U.S.$ 9 billion.
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However, “even meeting ADF 16 cycle targets would represent a major victory”, according to the Center for Global Development (CGD). This the center wrote in a paper which outlined the fundraising challenges facing the ADF, “potentially by significant amounts”.
From investments in infrastructure, agriculture, health, and education to non-project operations like technical assistance, the ADF is seen as a lifeline.
Zambia, for instance, has been “hopping” into ADF resources since 2018, against the backdrop of economic challenges, according to Joseph Chanda, Zambia’s Assistant Director for Regional Management, who also spoke at Tuesday’s briefing.
Chanda said ADF’s financing has supported national and cross-border transports, as well as energy infrastructure. He said resources have also gone to livestock management and irrigation support projects.
For Chanda, the ADF must continue to fill this resource gap.