Canada affirms its strong partnership with African Development Bank
April 12, 2019
Global Korean Post
The African Development Bank (AfDB) is a key institution that plays a critical role in the growth and development of Africa. The Government of Canada is a long-standing partner in delivering on shared objectives alongside the AfDB.
Canada joined the AfDB in 1982 and is the fourth-largest non-regional shareholder. It is also the institution’s second-largest AAA-rated shareholder.
Maryam Monsef, Minister of International Development and Minister for Women and Gender Equality, announced that Canada is willing to temporarily increase its subscription of callable capital at the African Development Bank by up to US$1.1 billion, if necessary, while the AfDB negotiates a permanent capital increase among all of its 80 member states. Minister Monsef made this announcement at the Spring Meetings of the International Monetary Fund and the World Bank Group.
Callable capital serves as a guarantee from shareholders that the AfDB may call on, as required, to meet its obligations on borrowed funds. Canada has strong confidence in the AfDB’s capital adequacy framework, which is why it is willing to provide this temporary callable capital, if necessary, to support the bank and its clients.
The temporary callable capital requested by the AfDB of its AAA-rated shareholders, such as Canada, will allow the AfDB to maintain its AAA credit rating and its support to client countries during the general capital-increase negotiations. It would allow the AfDB to continue the important development work that is helping provide much-needed transport and energy infrastructure to the continent. Through its loans the AfDB has supported clean energy and improved agricultural technologies, helped small businesses gain access to financial services, and helped provide many thousands of people with clean water, improved sanitation and quality education. Once the terms of the general capital increase are agreed upon by shareholders, Canada’s temporary callable capital would no longer be needed and would be withdrawn.
Gender equality is also an integral part of the AfDB’s vision for Africa. This includes helping create opportunities for women and disadvantaged and marginalized people and communities so they can participate in and benefit from the development of their communities and nations.