The African Development Bank’s Contribution to Aid for Trade (AfT)

Kennedy Mbekeani

NEPAD, Regional Integration and Trade Department

3rd Meeting of Trade Ministers of Landlocked Countries

Swaziland, October 21-22, 2009

African Development Bank Group 2

1. Specific Issues for LLDCs

2. The AfDB’s Contribution to AfT• Financial and Technical Assistance:

o Operational Activitieso Capacity Buildingo Knowledge Products

• Institutional Support to AfT Processo Monitoring and Evaluationo Advisory Groups

3. The Way Forward

Outline

African Development Bank Group 3

• Challenges– Infrastructure

RoadsRailMaritime

– Transit and Trade Facilitation

Specific Issues for LLDCs

African Development Bank Group 4

Infrastructure Missing Links Road Network

African Development Bank Group 5

African Ports

African Development Bank Group 6

Solutions

• Potential Solutions• Regional approach to deal with cross-border constraints

Road and rail networkPort infrastructureRationalization of the RECs

• Harmonization of policies

African Development Bank Group 7

The AfDB’s Contribution to AfT

AfDB’s Contribution to AfT

Institutional Support to AfT ProcessFinancial and Technical Assistance

Operational

Activities

Capacity

Building

Monitoring

and

Evaluation

Advisory

Groups

Knowledge

Products

African Development Bank Group 8

Financial and Technical Assistance:Operational Activities

• Infrastructure accounts for over 75% of the AfDB’s activities.

- In 2008, the AfDB invested nearly US$ 2.2. billion in infrastructure:

45.4% on transport

37.8% on power supply

16.8% on other infrastructure

- Multinational infrastructure also supports regional integration.

• Investments in infrastructure have been scaled up.

- The AfDB has supported projects such as the North-South Corridor, as well as projects within corridors.

North-South Corridor: US$ 600 million for 2009-2012 to support activities in the corridor.

Nacala Corridor US$181 million.

African Development Bank Group 9

Financial and Technical Assistance:Capacity Building and Knowledge Products

• Capacity Building

Training of trade policy officials, especially through the African Development Institute.

Support to trade facilitation programs to increase cross-border trade and regional integration.

• Productive Capacity building

- Agriculture Sector: 2006 in US$336 million; 2007 US$230 million

African Development Bank Group 10

Financial and Technical Assistance:Capacity Building and Knowledge Products

• Trade Development

- Trade Finance Initiative: Provision of emergency funds to support trade:

US$ 500 million in the form of lines of credit to African financial institutional to support trade finance operations.

US$ 500 million in the Global Trade Liquidity Programme, which will be jointly implemented with the IFC and other DFIs.

• Knowledge Products

The AfDB conducts studies and reports on markets and trade in Africa (i.e. African Competitiveness Report).

African Development Bank Group 11

Institutional Support to AfT Process

• Monitoring and evaluation

– Monitor and report AfDB’s financial commitments.

Finalized the OECD donor questionnaire

Assisted member countries in completing the OECD questionnaire

– Participate and support national and regional AfT reviews

First regional review was held in Tanzania in 2007.

Eastern and Southern Africa sub-regional review was held in Lusaka in April 2009.

Regional reviews are planned for West, Central, and North Africa

– Participate in the AfT Global Review conducted by the WTO

• Advisory Groups

– WTO AfT Advisory Group

– Africa AfT Working Group

African Development Bank Group 12

The Way Forward

• The AfDB recognizes the importance of Aid for Trade in support of the trade liberalization agenda and its capacity to foster economic growth.

• The AfDB is committed to playing a leadership role in the implementation of the AfT in Africa by:

– Addressing soft and hard infrastructure constraints through operational activities;

– Assisting in institutional capacity building;

– Providing knowledge;

– Enhancing the monitoring and evaluation agenda to show the impact of AfT;

– Sharing lessons with other donors, member countries and regional economic communities.