Improving Governance in Africa
What is AfDB's credit policy?
AfDB's credit policy allows eligible ADF countries to access to the AfDB sovereign window, for financing viable projects. The
private sector in ADF countries already has access to AfDB financing and governments will also access AfDB resources, subject
to a stringent set of criteria. The criteria, which will ensure that AfDB resources do not contribute to an increase in debt
distress, include: (i) the country must have a sustainable debt profile and be classified as having low or moderate risk of debt
distress, as defined by an IMF Debt Sustainability Assessment (DSA), (ii) the country must have headroom for non-concessional
borrowing, as determined by the IMF DSA, and in compliance with the IMF external debt limit policy for countries under fund-
supported programs and the Bank Group Policy on Non-Concessional Debt Accumulation, (iii) the country must have a
sustainable macroeconomic position, as determined by a Special Risk Assessment conducted by Management, and (iv) the
country must receive a positive recommendation by the Bank's Credit Risk Committee, based on the Bank's elaborate risk
management framework.
As of August 2016, there are 16 countries eligible for AfDB resources only. Although Nigeria is officially considered eligible for
AfDB resources only, the country is still receiving ADF funding within a gradual phasing-in-out mechanism, thanks to the
transition framework (aiming at smoothing the transition from ADF to AfDB window). Thus, the country is not included in the
16 countries. The 5-years transition period of Nigeria started in 2014 and is expected to end on January 1, 2019.
Up to July 2016, Côte d'Ivoire, Ethiopia, Rwanda, Senegal, Tanzania, and Uganda have already benefitted from AfDB approvals.
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