Canada affirms its strong partnership with the African Development Bank
Today, Canada announced its willingness to temporarily increase its callable capital at the African Development Bank (AfDB) by up to US$1.1 billion, should it be required. Through this commitment, Canada is supporting the negotiations of the African Development Bank’s Seventh General Capital Increase.
Terms of the general capital increases, which are negotiated by shareholders, include the size of the capital increase, what share of it will be paid-in capital and over how long a period. It would also include any policy and operational reforms and actions required by the AfDB to improve on its capacity and effectiveness. Once the terms of the general capital increase are agreed upon by shareholders, Canada’s temporary callable capital would no longer be needed and would be withdrawn.
Canada currently owns shares in the African Development Bank valued at $4.64 billion, at current exchange rates. Of that total, $339 million is paid-in capital and $4.3 billion is callable capital.
Canada’s capital investment in multilateral development banks, including the AfDB, consists of a mix of paid-in capital (cash contributions) and callable capital. Callable capital is carried as a contingent liability in the Public Accounts of Canada. Most multilateral development banks rely on additional support from their shareholders through callable capital. Given the strength of their operations, multilateral development banks have never requested payment of the callable capital.
As an active member of many international financial institutions, Canada has supported efforts to supply the resources and tools required to ensure that multilateral development banks can support the achievement of the 2030 Sustainable Development Goals and the Paris Agreement on climate change. The African Development Bank’s operations are guided by its 10-year strategy for 2013 to 2022 and focus on five priority areas: light up Africa, feed Africa, industrialize Africa, integrate Africa and improve the quality of life of the people of Africa.
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