AfDB triple loan to Africa3

Ethiopia: AfDB to triple lending to Africa
Posted on Tuesday 3 February 2009 - 16:28
Andualem Sisay, AfricaNews reporter in Addis Ababa, Ethiopia
The African Development Bank is to triple lending facilities to African countries to cushion the continent against the global financial crisis. The banks Director General Donald Kaberuka made the announcement in Addis Ababa, Ethiopia.

The bank has taken four major steps to minimize the burden of global financial crises on African countries. It has set up a $1.5 billion emergency liquidity facility and $1 billion trade financing facility.

In addition, AfDB has also set up African Bond initiative to mobilize resources and plans to accelerate finance system in order to make short and fast loan receiving procedures.

Due to global financial crises, Africas annual GDP growth is estimated to decline by 2% from the 6% average it was for the past years, according to Kaberuka.

In their statement of January 16, 2009, African Ministers of finance and planning and governors of central banks indicated that the crisis was developing into a fully blown economic and development crisis with far reaching consequences for the economic fortunes of the continent; the fight against poverty; and the reversal of our hard earned achievements.

It is an unprecedented, dynamic and fast moving situation. Investment and trade finance has been reduced to a trickle; infrastructure and mining projects are being cancelled or scaled down; a number of currencies have continued to depreciate; African equities have been hit; commodity prices have continued to decline; remittances are beginning to slow; fiscal retrenchment is setting in; private sector activity is contracting in sectors dependent on international demand; and domestic arrears are building up, the communiqué, which followed the cape town meeting noted.

Kaberuka in a press briefing during the 12th AU heads of States Meeting said that AfDB is currently doing well when compared to other continental banks. He also urged central banks of African countries to strengthen their supervision activities in order to protect their foreign currency reserve from declining.

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• AfDB
• Africa
• Finance
• Economic crises