Today 2 June 2009, I am publishing the second Joint Strategic Framework for the engagement of the Governments of the United Kingdom, Germany, the Netherlands, and Portugal with the African Development Bank. This framework sets out how the UK and its fellow constituency members will work with the African Development Bank to improve its effectiveness over the next three years to 2011. It replaces Joint Strategic Framework 1 (2006-08).

This Joint Strategic Framework is written at a time of great opportunity but also of great challenge for the African continent. Overall economic performance in most African countries has been good, but progress towards the millennium development goals still needs to accelerate. The global financial crisis has introduced new pressures and uncertainties.

Slower global economic growth, more difficult credit conditions, and changes in the international aid architecture pose additional challenges to which the African Development Bank will need to respond. At the same time, the bank must be better able to deal with the longer-term challenges facing Africa, including climate change, development in fragile states, gender equality, ensuring that private sector growth has positive benefits for the poorest, and helping countries in Africa work and trade together.

In addition to the three-year objectives on bank effectiveness set out in the Joint Strategic Framework, the UK has several specific objectives for the African Development Bank over the next 12 months.

Response to the financial crisis

The financial crisis is impacting on Africa, with commodity prices down, remittances falling, and private investment flows slowing. The bank has a key role to play in Africa’s response, and to help countries deal with the challenges they are facing. In particular we will work with the bank over the coming year to:

Enable it to meet additional demand for lending during the crisis. We expect demands on the bank’s finances will increase during the crisis, and we are committed to ensuring the bank has the resources it needs to deliver its mandate for all members.

Change policies that limit the impact of the bank’s response, especially removing the cap on the proportion of bank funds that can be used for budget support.

Fragile states

Fragile states experience huge poverty and human development problems. In these countries, the millennium development goals are most off-track with extreme poverty, and child and maternal deaths three to four times more prevalent than in other developing countries. The African Development Bank’s £400 million fragile state facility is an important instrument that the bank can use in fragile states. We will work with the bank this year to:

Establish effective bank programmes in all countries receiving funding under the fragile states facility.

Decentralisation

As the 2005 Paris declaration on aid effectiveness said, developing countries must set their own strategies for poverty reduction. To support this, the African Development Bank is decentralising its staff from the headquarters to bank offices around Africa. The bank has made good progress establishing a large number of field offices in recent years, but these offices need to be strengthened with the right expertise, and given an appropriate level of delegated authority. This year we will work with the bank to:

Complete the decentralisation process in 15 countries, with 15 fully-staffed country offices operating effectively with appropriate delegated authority.

Results

Effective development organisations need clear objectives, and must be able to benchmark and demonstrate progress against achieving them. The African Development Bank now has a single results system for all its operations, but the system is still being bedded in, and in some cases baselines against which progress can be measured still need to be established. We will work with the bank over the coming year to:

Establish results frameworks in all bank country strategies.

Ensure Bank management reports every six months on its performance indicators.

A copy of the Joint Strategic Framework will be placed in the House of Commons Library.