African Development Bank(redirected from African Bank of Development)
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African Development Bank
the first international financial organization of the independent countries of Africa. Its seat is Abidjan (Ivory Coast). The idea of creating the bank emerged in 1960; in February 1962 at a session of the Economic Commission for Africa of the UN, representatives of 32 African states adopted a resolution on the creation of the bank. The agreement establishing it officially came into force on Sept. 10, 1964, and the bank began to function on July 1, 1965. The work of the bank is to promote the industrialization of the countries of Africa and to decrease their dependence on the condition of the world capitalist market, in which their role is to supply mineral and agricultural raw materials. By the end of 1968 the bank had 31 members—Algeria, Burundi, Cameroon, Chad, Congo (Brazzaville), Congo (Kinshasa), Dahomey, Ethiopia, Ghana, Guinea, Ivory Coast, Kenya, Liberia, Malawi, Mali, Mauritania, Morocco, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Tunisia, Uganda, United Arab Republic (UAR), Upper Volta, and Zambia. The highest body of the bank is the council of governors, which chooses the bank’s president, vice-president, and administrative council. All financial operations are carried out under the supervision of the administrative council. The employees of the bank are Africans; foreigners may be enlisted as experts.
The capital of the African Development Bank is small: 250 million accounting units (1 accounting unit = 0.88807088 g gold = 1 US dollar), representing 25,000 shares, of which 20,000 are allotted by subscription. Each member state of the bank has 625 votes in the Council of Governors plus one vote for each share acquired. The minimum contribution to the capital of the bank has been set at 1 million accounting units. The size of a subscription is determined by the economic capacities of the member countries (as a function of the size of the national income and the volume of foreign-trade operations). The largest shareholders in the bank (in millions of accounting units) are the UAR (30), Algeria (24.4), Nigeria (24.1), and Morocco (15.11). The member nations make payments in gold or convertible currency in six stages (over a period of six years). The first payment toward working capital is 5 percent of the subscription and is made when the agreement on entry into the bank is ratified. The second payment is 35 percent of the subscription. The third through sixth payments are each 5 percent. According to the bank’s statute, only half of its capital may be used in operations, while the other half remains untouched and serves as its guarantee. The bank’s capital, the loans issued by it (which may be distributed both to member countries and outside the bank’s membership), and its own profits and reserves constitute the ordinary resources of the bank. Its special resources include, first and foremost, special funds formed from grants or loans and guaranteed by the untouched portion of the bank’s capital. The special funds are used to grant loans for periods of more than 20 years at low interest rates.
Operations of the bank may assume the following forms: direct grants of loans or participation in loans granted by a third country, contribution to the capital of state and private organizations or enterprises, or partial or complete guarantees of loans granted by third countries. The bank’s financial policies are guided by the following principles: loans should have a sound basis; and priority is given to those projects which most promote the economic growth of the continent as a whole and are included in national or regional programs of development, preference being given to projects of regional programs (for example, the construction of dams on rivers crossing the territory of a number of countries, the construction of railroads in which a number of states have an interest). Loans may be obtained by the governments of member countries, the state or private enterprises of these countries, and organizations of other African countries, on condition of the compulsory guarantee of the loan by the government of the given country.
V. P. PANOV