THE AFRICAN DEVELOPMENT BANK AS A BUSINESS PARTNER

The NEPAD Business Foundation (NBF), in conjunction with the Consulting Engineers of South Africa (CESA), hosted a Business Opportunities Forum at the IDC offices in Sandton on Thursday, 19 March 2009. The aim was to showcase business opportunities in partnering with the African Development Bank (AfDB). NBF CEO, Lynette Chen, stressed the importance of the Forum, “We are committed to continue hosting these Business Forums as it provides a platform for dialogue between the private sector and various partner institutions to discuss and debate Africa’s challenges and in so doing, to develop solutions that work for Africa”.

The AfDB is a regional multilateral development bank that promotes the economic development and social progress of African countries by aiming to help reduce poverty, improve living conditions for Africans and mobilize resources. This is in line with the NBF’s values; therefore the NBF proudly supports the AfDB and its objectives.

The AfDB is a development finance institution that was established to support its member countries and has 4 core focus areas, namely: Infrastructure; Governance; Private Sector; Education, Health and Technology. The 44 year old body consists of 53 regional and 24 non-regional members.

The AfDB’s Private Sector strategy has been tweaked to cope with the global economic crisis and growth in private sector involvement and investment is expected to increase for 2011. According to Ms. Ladé A. Dada, Project Officer from the NEPAD-Infrastructure Project Preparation Fund (IPPF), “The AfDB remains Africa’s premier development finance institution. Its mandate is laudable and its work programme is large”.

The AfDB’s process for access to support a project, from grants and loans to technical assistance, has improved significantly. Procurement specialist at the AfDB, Reginald Sherman, highlighted the improvements on the AfDB’s procurement procedures, referring to the new rules and procedures that have been developed. As an indication of the latest procurement developments, the submission of bids to the bank can now be made electronically.

Furthermore, step-by-step assistance is offered to the AfDB’s members, or “borrowers”; suppliers; contractors and consultants during the project application stage. While there are general considerations and rules, eligibility exceptions are legitimately made to cater for individual cases.

Sherman, provided tips for effective tendering, amongst these useful tips highlighted are: being well prepared; having a well thought out business plan and forming partnerships with African firms if non-regional firms wish to tender. If tenders are unsuccessful, the option to evaluate why it failed, is available. This demonstrates the AfDB’s strong focus on governance and transparency and allows for successful future tenders.

Aside from the above, the establishment of the South African branch of the AfDB is currently underway, which will allow easier direct access to the Bank for its South African members. Sherman added by saying, “The opening of the AfDB office will guarantee that the bank has a greater presence in the country. We hope that after 2010, it will be back to business as usual and we’ll see South Africa doing more business outside of its borders, with the avid participation of the AfDB”.

In 2008, the AfDB boasted 12 new grant approvals with the UK and German governments allocating resources to be mobilized, despite the financial crisis. There are 23 effective projects currently underway and up to 35 projects are expected to be approved in 2009, totaling US$50 million. In fact, many requests for 2009 have already been made, which means the AfDB has to be more selective with regards to the projects it intends to pursue. The transport and energy sectors are the two priority sectors that have been identified for the continent, followed by ICT, water and sanitation and health.

Aside from the abovementioned opportunities within the AfDB, there are exciting partnership prospects. Firms may and are encouraged to partner with the AfDB in the following areas: Project Preparation - for feasibility studies and design etc.; financing - equity finance for the physical implementation; capacity building - for the implementation of capacity building programmes and knowledge sharing - the sharing of ideas to ensure that better implementation takes place so that the work programme is completely effective.

The opportunity the AfDB offers is considered by Mr. Roelof van Tonder, CEO of the Built Environment Professions Export Council (BEPEC) as essential, as “there is a lack of development in Africa, due to the fact that we do not engage with the right institutions. If we use these opportunities, we can generate work for our businesses”.