Five regional AfDB member states join the replenishment of the African Development Fund | African Development Bank

AfDB director Rufus Darkortey; Seedy Keita, Minister of Finance and AfDB Governor for The Gambia; Mohammed Amin Adam, Minister of State, Ministry of Finance and Economic Planning, Ghana; Augustus Flomo, Deputy Minister of Economic Management, Liberia; Bockarie Kalokoh, Deputy Finance Minister, Sierra Leone; and Muhammad Bashar Muhammad, Secretary of State for Economic Planning, Sudan.

Five governors of the African Development Bank have signed an agreement committing to contribute at least $1 million to replenish the African Development Fund (ADF), the Bank Group’s concessional counter.

Under the self-initiated agreement, the five-member constituency – Gambia, Ghana, Liberia, Sierra Leone and Sudan – will contribute to the ADF from the next replenishment cycle in 2025.

With nearly half of its client countries as fragile states, the African Development Fund contributes to poverty alleviation and economic and social development in least developed African countries by providing concessional financing for projects and programs.

The signing took place on the sidelines of the African Development Bank Group’s 2023 annual meetings in the Egyptian resort of Sharm El-Sheikh.

The agreement was signed by the governors of the African Development Bank or interim governors for the five countries, namely: Seedy Keita, Minister of Finance of The Gambia; Dr. Mohammed Amin Adam, Minister of State at the Ministry of Finance (signing on behalf of Finance Minister Ken Ofori-Atta); Augustus Flomo, Deputy Minister of Economic Management of Liberia (signed on behalf of Treasury Secretary Samuel Tweah); Bockarie Kalokoh, Deputy Finance Minister of Sierra Leone (signing on behalf of Finance Minister Sheku Bangura); and Muhammad Bashar Muhammad, Sudan’s Undersecretary for Economic Planning (signed on behalf of Finance Minister Gibril Ibrahim).

The agreement emphasizes domestic revenue mobilization as a priority. It requires member states to allocate at least $3 million annually to support internal revenue streams, which in turn will free up more resources for accelerated development. Another priority area is expanding local, private sector-led economic growth through support to small businesses.

They also committed to investing $1 million to improve their equity holdings in the Bank Group.

All told, each constituency member will invest at least $8 million annually from their national budget to implement the agreement, which also covers climate mitigation.

Rufus Darkortey, executive director of the constituency that witnessed the signing, said the agreement would allow the five countries to pursue policies that would bolster economic resilience.

“It is a way of accelerating the pace of development and growth in our respective countries to complement the support we receive from our development partners,” said Executive Darkortey.

Governor Keita said: “The agreement came at the right time and would boost domestic revenue mobilization, which has become more important in countries’ development efforts amid the current global economic headwinds.”

Kalokoh also welcomed the agreement. “It’s about making sure the private sector is strong, and we’re demonstrating that commitment through this agreement to dedicate a portion of the national budget to implementing and scaling these initiatives.”

Flomo said Liberia remains committed to the agreement with plans to increase budget allocation to selected sectors over time.

“We believe that working to build resilience and address issues such as climate change and contributing to the African Development Fund will help strengthen the bank and also help ourselves,” he added.

Bashar from Sudan said: “Despite the sad situation in my country, we are sticking to the agreement because it is the right step and in line with our development plans.”

Ghanaian Dr Adam said the deal is in line with Ghana’s plans to increase domestic revenue from 15% in 2022 to 18.7% in 2026.

“Africa cannot always be on the receiving end, which is why this agreement comes into play – we need to take homegrown initiatives to support our development efforts while leveraging external resources,” he said.