The African Development Bank (AfDB) opened a donor conference on Monday seeking to raise US$25 billion for its concessional lending arm, warning that reduced engagement from the United States could undermine funding for Africa’s poorest countries.
The two-day pledging meeting focuses on replenishing the African Development Fund (ADF), which provides grants and low-interest loans to low-income nations. The AfDB said uncertainty over Washington’s contribution has left a potential funding gap.
Earlier this year, the US administration withheld a US$197 million tranche pledged during the previous replenishment round, raising doubts over whether it will support the fund this cycle. While a US representative is attending the talks in London, the bank said it remains unclear whether a financial commitment will be made.
“Existing partner countries are unlikely to fully close the US$560 million grant funding gap that would remain without a United States pledge,” said Valerie Dabady, the AfDB’s head of resource mobilisation and partnerships.
The White House did not respond to a request for comment.
More Read
In September, a US Treasury spokesperson said Washington was seeking to refocus the ADF on its “core mission of promoting economic growth and poverty reduction in the poorest African countries,” without elaborating.
The uncertainty comes amid broader cuts by the US administration to multilateral development financing. In May, Washington reduced its contribution to the World Bank’s International Development Association by $800 million.
Vital source of funding
Replenished every three years, the ADF has provided about US$45 billion in financing to 37 low-income African countries since its creation in 1972, supporting projects ranging from irrigation and transport to electricity generation.
Unlike the AfDB’s main lending window, which provides loans on less favourable terms, the ADF offers grants and concessional financing with repayment periods that can exceed 20 years.
Its role has become increasingly important as many African governments face heavy debt burdens, declining aid flows and tighter global capital markets that restrict access to affordable financing.
The United States contributed nearly seven percent of the previous US$8.9 billion ADF replenishment agreed at the end of 2022, ranking among the top five donors alongside Germany, France, Britain and Japan.
The AfDB’s US$25 billion target for the current round would represent a significant expansion of the fund, but officials say it may prove difficult to achieve without renewed US backing.
Other donors step up
Some countries have increased their pledges. Denmark said in October it would raise its contribution by 40 percent to 1.1 billion Danish crowns (US$171 million), while Norway pledged a nearly six percent increase last month.
African member states are also set to begin contributing. Kenyan President William Ruto committed $20 million last year, and other potential donors include Benin, Ghana and Sierra Leone, Dabady said.
The AfDB is also finalising plans to raise around US$5 billion per replenishment cycle from capital markets and to tap philanthropic organisations, as it seeks to diversify funding sources and reduce reliance on traditional donors.
