Last week the Annual Meetings of the African Development Bank (AfDB) took place in Brazzaville. Members of the Big Shift Global Coalition attended, and spent the week pushing for meaningful engagement and dialogue with the Bank - beyond the tick-box exercises we so often see from these institutions - to bring our concerns and recommendations on how the AfDB’s development agenda can better serve people and communities in Africa.
Top of the agenda for the meetings was the Bank’s New African Financial Architecture for Development (NAFAD), which seeks to look inward, to Africa, for financial architecture reforms that best suit the continent and that mobilise the money sitting on the continent more effectively and coherently. While this emphasis on economic transformation for Africa is welcome and needed, the prioritisation on mobilising the private sector to fund this transformation is a big concern - as for-profit funding has the potential to undermine just and equitable development outcomes. Additionally, the shifting focus from public to private finance should not be used as a cop-out by the Global North who owe a trillion-dollar debt to Africa for shouldering the burden of their development.
Another hot topic at the meetings was Mission 300, the flagship initiative of the AfDB and the World Bank to connect 300 million people in Africa to energy access by 2030. Africa possesses significant renewable energy potential, and is home to 60% of the world’s best solar resources. If done well, Mission 300 could bring significant development benefits in all sorts of sectors. However, what should have the highest priority is ensuring that the value of Africa’s energy and mineral resources remains on the continent, enriching the lives of the African people.
According to the AfDB’s 10-year strategy, their vision is a "prosperous, inclusive, resilient, and integrated Africa". Climate change is a major threat to this. The AfDB needs to end all financing to fossil fuels, and instead channel funding to sustainable, clean energy projects and transformative climate action. It must do so without locking African countries into further debt through private sector prioritisation, or supporting projects that undermine African energy sovereignty and exclude and marginalise people. At the same time, the global transition offers manifold economic opportunities for African countries to participate in green value chains and position themselves as key players in the world economy, and the AfDB can play a role in seizing these opportunities. However, without deliberate and meaningful engagement with civil society and impacted communities, AfDB projects and policies will not meet the actual needs of the people. No one knows what is best for Africa better than the African people.
Quotes:
Bertha Letsoko, ACRP: The two buzz terms this week have been economic transformation and private sector. While we heard a lot about how the NAFAD will transform Africa's economy- the emphasis on private sector cooperation must be questioned. As civil society, we are clear that a New African Financial Architecture must not recreate an extractive development model that threatens Africa's fiscal sovereignty. Relying heavily on private finance for climate action has the potential to undermine justice outcomes. Prioritising private finance for Africa's development is concerning because often, this finance must produce profit, or return on investments, which leaves little for non-profit producing sectors and social protections. Without appropriate finance deals and the already failing safeguard mechanisms, African communities are at risk of being stuck in this ongoing cycle of inequality and structural exclusion in the name of development.
Anja Gebel, Germanwatch: “The main message of the AGM - that Africa has a lot of financial resources which it needs to put to better use - is very much to be welcomed. The concrete design and implementation of the NAFAD initiative, the project of the new AfDB President Sidi Ould Tah, is still to be seen. It will show whether the AfDB will use the expected additional funds for prioritising green diversification and green value chains on the African continent - or whether it will listen to a regressive narrative of fossil-based industrialisation and gas as a transition fuel.”
Rajneesh Bhuee, Recourse: “In Brazzaville, Bank seniors told us 90% of the energy portfolio is in renewables and that they hadn't financed upstream gas in years. And yet there's the Coral North LNG - $150 million into Cabo Delgado, a region still living with the consequences of exactly this kind of project. UN human rights experts have said it contradicts the Bank's own climate strategy. President Sidi Ould Tah has come in with real ambition, and NAFAD is reframing a genuinely important question about how Africa mobilises and governs its own capital. But the Climate Change Action Plan must be finalised and it must be the filter through which every financing decision is made. That is what implementation actually looks like post the annual meetings.”
Karabo Mokgonyana, Power Shift Africa: “The AfDB Annual Meetings highlighted an institution thinking seriously about Africa’s future. Through its 10 Year Strategy, Mission 300, and the emerging NAFAD framework, the Bank is positioning itself around some of the continent’s most pressing development challenges. The challenge now is execution. As climate impacts intensify and global energy markets continue to shift, the AfDB must move faster on its Climate Change Action Plan and ensure that its energy investments strengthen resilience, energy security, and structural transformation. The real test will not be the ambition of these initiatives, but whether they deliver long-term value for African economies and communities.”
Federico Sibaja, Recourse: “In light of the great ambition from African leaders on financial system reform in the last few years, it is extremely disappointing to see such widespread support for fossil fuels at the AfDB meetings. While there is no doubt that the economic transformation needed to deliver on the Paris Agreement must abide by the common but differentiated responsibilities principle, fossil fuel projects in the AfDB pipeline are still export-oriented and will not deliver on rights-based development.”