The Medium Term Strategy Progress and Challenges Af

The Medium Term Strategy – Progress and Challenges Af. DB PARTNERSHIPS FORUM Hotel Ramada Plaza-Gammarth COBS/ORPC VISION: Preferred Partner for High Impact, Well-focused Development Assistance 24 -25 March 2010 1

Outline of the Presentation 1. Policy Context of Bank Group Operations 2. Responses to the Crises 3. Addressing Climate Change 4. MTS Achievements 5. Challenges and Outlook VISION: Preferred Partner for High Impact, Well-focused Development Assistance

Policy Context of Bank Group Operations (1/2) ■ Africa grew by over 6% per year in the past decade…prospects for reaching MDGs improved ■ Structural and Macroeconomic Reforms were key ■ FDI increased tenfold to about USD 70 bn and remittances fourfold to USD 40 bn. ■ Social Policy Reforms including Universal Primary Education and better health care VISION: Preferred Partner for High Impact, Well-focused Development Assistance

Policy Context of Bank Group Operations (2/2) ■ Global financial and food crises exacerbated Africa’s needs… FDI and remittances declined by over USD 10 bn in 2009 alone. ■ Plans to access capital markets through international bond issues were abandoned ■ Investors in Africa’s emerging Stocks Exchanges “flew to safety” VISION: Preferred Partner for High Impact, Well-focused Development Assistance

Responses to the Crises ■ Frontloading ADF Resources … over 80% of ADF resources committed by December 2009 ■ Portfolio Restructuring and Reprogramming…. Priority was given to areas affected by the financial crisis ■ Emergency Liquidity Facility (ELF) ■ Trade Finance Initiative (TFI) VISION: Preferred Partner for High Impact, Well-focused Development Assistance 5

Addressing Climate Change ■ Response to Climate Change Inbuilt in MTS - Dedicated Unit Bank as spokesperson for RMCs Safeguards Mitigation/Adaptation Strategies Advisory Services Climate Proofing VISION: Preferred Partner for High Impact, Well-focused Development Assistance

MTS Achievements (1/6) ►High Level Panel Report - 2007 ☼ The VISION: ■ Af. DB Preferred Partner in Africa The Strategic Framework in 5 Areas 1 Operational Selectivity 2 Results and Performance 3 Decentralization 4 Streamlined Internal Processes 5 Staffing, Knowledge, Financials, and Partnerships as Foundation VISION: Preferred Partner for High Impact, Well-focused Development Assistance 7

MTS Achievements (2/6) ● Core Priorities Set Out in MTS Sector focus § Infrastructure Special applicability to… § Regional Integration § Governance Cross-cutting § Gender § Environment § Fragile States § Private Sector § Climate Change § MICs § Higher Education § Agriculture VISION: Preferred Partner for High Impact, Well-focused Development Assistance § Knowledge Management

MTS Achievements (3/6) ► FOCUS ON PRIORITIES MAINTAINED (End 2009) Governance (Programmatic Lending) 22% Private Sector 36% VISION: Preferred Partner for High Impact, Well-focused Development Assistance Others (incl. Higher Education) 10% Infrastructure (Sovereign) (32%)

MTS Achievements (4/6) ► IMPROVING DELIVERY CAPACITY ● ● Decentralisation - Decentralisation Strategy - Enhanced Country Dialogue and Portfolio Management Operations Business Processes - Creation of COO, SMCC and OPSCOM - Greater Strategic Alignment and Delivery Human Resources - Increased recruitment Budget Reforms - Strengthened link between priorities and resource allocations VISION: Preferred Partner for High Impact, Well-focused Development Assistance

MTS Achievements (5/6) Strategy Drives Resource Allocation Af. DB MTS Af. DB approved Work Programmes & Outputs Key Performance Indicators Alignment Process VISION: Preferred Partner for High Impact, Well-focused Development Assistance Af. DB Resources & Budget 2011 -2013

MTS Achievements (6/6) ► Expanded Operations Bank Group Lending More than 100% increase b/w 2006 to 2009 ► Problematic Projects Dramatic Reductions since 2006 5 856 2 307 2 765 18% 3 290 9% 7% 6% 2006 Lending (UA Million) 2007 2008 2006 2007 2008 2009 VISION: Preferred Partner for High Impact, Well-focused Development Assistance 12

Challenges and Outlook (1/2) ► ► High Risk environment with limited resources Increased demand for funds from RMCs Capacity for delivery and corporate business efficiency Strategic Alignment ■ MTS is undergoing a Mid-Term review: ► Ensure the adequacy of the Bank’s strategic framework for the remainder of the MTS period. . confirm/revise targets and projections VISION: Preferred Partner for High Impact, Well-focused Development Assistance

Challenges and Outlook (2/2) The Bank is demonstrating progressive achievements towards its vision in 2012 in three key areas: ► Growth Increases in lending, staffing and advanced stages for GCI and ADF replenishments ► Responsiveness Quick action prevented the financial crisis from becoming a development crisis by acting in a countercyclical way to liquidity availability as well as the accelerated resource transfer and policy support ► Relevance Aligning the Bank’s current priorities with those of RMCs lays foundation for recovery on the continent once global recovery sets in VISION: Preferred Partner for High Impact, Well-focused Development Assistance

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