by Caroline Breeze

Created on: October 19, 2009

Africa in many regions and countries, is severely wanting in development in many aspects: health, food security, water and sanitation, housing, education, roads, electricity and other basic infrastructures and the list goes on. Evidence has shown that African governments cannot tackle all of these issues on their own for various reasons including lack of capital.

All of these needs cannot be met all at once and as many of them are interlinked, solving one problem can trigger a positive snowball effect that can benefit other aspects of the development effort. Business potential is enormous in many African countries including small and medium businesses, however, something as basic as the lack of adequate road infrastructures to channel products or manufactured goods to markets is constitute a non negligible barrier in this area of economic development.

Development efforts have taken place for many years, some successful and others not so successful, and the trial and error processes have been numerous. Funding for such development have and still mostly come from more advanced and developed countries and institutions in the West. The African Development Bank is actually an African institution that works toward the assistance of member African countries by investing in these countries.

The African Development Bank promotes economic and social development in Africa through its support of African banks in member countries, and its contributions in the way of loans and grants to member countries to fund much needed projects. Loans are provided to member countries at advantageously low rates such as 2% payable over 25 years (this is just one example) to support and encourage project initiatives. They also provide expertise in assessing the feasibility of projects before funds are invested toward their implementation. In some instances, loans can be accompanied by grants to support some projects as with the case for example of the government capacity building support project (PARCA) in the areas of education and training recently awarded to Guinea Bissau.

The African Development Bank also provides guarantees for member countries seeking loans from other banking institutions in the international non-African market, and supports other funding mechanisms for these countries.

The sectors in which the African Development Bank has operated and continues to operate include the following: agriculture and rural development, water supply and sanitation, power supply, transportation,

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