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Bank seeking to double African lending

THE African Development Bank (AfDB) can draw on its triple-A credit rating and step up borrowing to raise funds for African states that are now unable to tap the market, its president said yesterday.

AfDB President Donald Kaberuka said the AfDB disburses US$5 billion a year across Africa, and it was now aiming to double that amount.

But the bank, like other international financial institutions, will need an increase in capital to help it shoulder the increased demands put on it by the Group of 20 leading nations, Kaberuka told a news briefing.

Kaberuka declined to specify how much extra capital the bank needed, noting this was a matter for shareholders, but he said: "I welcome very much the indications that the Asian Development Bank might be going for a 200-percent capital increase, and the countries of Asia are pushing very hard for this increase."

He added: "I imagine the needs in Africa are larger."

Kaberuka said the AfDB had raised more than US$1 billion in December, and had to be ready to mobilize more resources as the financial crisis hits Africa. "As it increases we are able to go to the markets and borrow money," he said.

He noted that Ghana had gone to the markets last year for the first time and raised 750 million euros (US$1 billion), and other African states had been expected to follow.

But the crisis meant that African countries were unable to access capital markets, or only at prohibitive rates, he said, suggesting that the AfDB could fill the gap.


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