African Bank Tries to Triple Capital Base

The African Development Bank is seeking to triple its capital base to accommodate surging demand for emergency loans from African states and businesses hit by falling export income and sharp declines in foreign investment and remittances. Donald Kaberuka, the AfDB’s president, will put the plans to the bank’s annual general assembly in Dakar this week in one of the first tests of developed countries’ commitments to financing an economic rescue package for Africa. The Group of 20 industrialised nations agreed at last month’s summit in London to $50 billion (£33.1 billion) of aid, on top of existing commitments, to mitigate the impact of the global downturn through increased lending from international financial institutions, including the World Bank, IMF and AfDB. Economic growth across the continent will fall to 2.8 per cent this year, less than half the rate forecast before the global slowdown began, the AfDB said in its annual outlook for Africa, published with the Organisation for Economic Co-operation and Development on Sunday. In an interview with the Financial Times, Mr Kaberuka said the better performing African states had, in the current climate, been priced out of international capital markets. The AfDB was, he said, therefore being called upon to play a greater role in keeping the engines of growth going. Read more. (Subscription required.)