Canada affirms its strong partnership with African Development Bank
Canada is willing to temporarily increase its subscription of callable capital at the African Development Bank by up to US$1.1 billion
African economies have, on the whole, grown significantly since the last capital increase at the African Development Bank almost 10 years ago
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.
The Honourable Maryam Monsef, Minister of International Development and Minister for Women and Gender Equality, today 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increase are agreed upon by shareholders, Canada’s temporary callable capital would no longer be needed and would be withdrawn.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.
“African economies have, on the whole, grown significantly since the last capital increase at the African Development Bank almost 10 years ago. To sustain this growth—and empower women and girls as powerful agents of change, which will help Africa overcome its significant development challenges—continued access to finance and to the AfDB’s technical assistance is needed.
“Canada’s willingness to step forward to provide temporary capital demonstrates our country’s ongoing commitment to the AfDB’s operational and development effectiveness.”
- Maryam Monsef, Minister of International Development and Minister for Women and Gender Equality
The African Development Bank was established in 1964 and is a main source of multilateral funding for economic, social and institutional development on the continent.
The AfDB’s mandate is to promote inclusive and green growth in order to reduce poverty.
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.
Canada previously subscribed to temporary callable capital in 2010 to support the African Development Bank while it proceeded with the negotiation of a general capital increase needed to improve its response to the global financial crisis.
Distributed by APO Group on behalf of Global Affairs Canada.