Banking

One of the biggest financial institutions, the African Development Bank (ADB), has, despite several challenges last year, continued to support development and the reduction of poverty on the African continent. However, there is still much work to do as was evident from the bank's meetings in Addis Ababa, Ethiopia in June.

One of the biggest challenges being faced by the bank in its last financial year, was not so much a financial issue, but one of safety.

After being based in Abijan, Cote d'lvoire for 40 years, the bank decided to temporarily relocate to Tunis, Tunisia, after political unrest that broke out in the host country on 19 September 2002.

Moving a bank the size of the ADB is no easy feat - and definitely not under emergency circumstances. However, it was felt that for the safety of both the bank and its employees, it was of utmost importance to relocate the bank.

The bank's emergency plan enabled it to undertake all financial transactions without any interruptions, first from the backup sight in Paris and then from Tunis. This include fulfilling its obligations with respect to its borrowings of close to US$6 billion from the capital markets, continued management of its US$7 billion portfolio of its own financial resources and disbursements to more than 600 on-going projects and programmes throughout the continent, with a loan portfolio of US$23 billion.

Despite the difficulties faced by the bank the total financing operations for the bank group as a whole reached US$2.8 billion in 2002. Lower than 2001, but still higher than previous years.

Several plans are in place to improve on this in the years to come.

At present, the plan is to remain in Tunis for another two years, before planning moving back to Abidjan.

However, many observers and governors are of the opinion that the political unrest in Cote d'lvoire would not have been such a huge problem if the bank was more decentralised.

Ove Ullerup, acting governor for Denmark, remarked that: "there is little doubt that the crises in the Ivory Coast has impacted negatively on the economic situation of the country, of the region and of the ADB. But on a more optimistic note, the crises may also provide a momentum for change. Denmark firmly supports further decentralisation of the bank - including decentralisation of authority and installation of appropriate control mechanisms. Increased decentralisation could also minimise the bank's future vulnerability to instability in the host country."

Strategic Plan

For the first time ever, the ADB also adopted a strategic plan in 2002 stretching from 2003 to 2007. The plan identifies the key operational areas for the bank group and will guide the deployment of the bank's human and financial resources in line with the strategic goals and priorities envisioned in the bank's vision.

"The preparation of the 2003 budget was for the first time linked to the strategic plan in the coming years. This link will be strengthened to ensure that the allocation of budgetary resources of the bank is indeed in line with the priorities set in the Strategic Plan," said Omar Kabbaj, president of the ADB group at the opening session of the 2003 annual meetings.

The main focus of the Strategic Plan is to focus on poverty reduction through the development of the agricultural and rural sectors in Africa.

NEPAD

There are huge expectations from around the continent that the ADB would be closely linked to the New Partnership for Africa's Development (Nepad).

"The ADB group supports the Nepad initiative. The board of governors has approved budgetary allocations to enable the bank to set up a small unit of experts to work solely on Nepad-related initiatives," reported Kabbaj.

He continued to say that the Nepad Heads of State Implementation Committee has assigned the bank the leadership role in infrastructure, banking and financial standards. The bank in turn has developed a framework for fostering such standards which has also been incorporated into the African Peer Review System.

The bank will support the Nepad programme through lending from its ADB window.

"Nepad is the most important initiative to formulate a new vision on Africa," said Pasi Hellman, temporary alternate governor for Finland.

"We maintain that the core nature of Nepad is in its African ownership and recognition of Africa's own responsibility for the development of the continent".