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22.03.2008 General News

ADB To Focus On Economies Of 'Fragile' States

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The African Development Bank (ADB) would soon give special attention, in the form of financial support, to the economies of 'fragile' states of the Regional Member Countries (RMCs) of the bank, to help accelerate their developmental objectives.

The ADB Resident Representative in Ghana, Mr Alieu Jeng, who gave this assurance, said ADB 'was mindful of the special problems' of 'fragile' states like Sierra Leone and Liberia, which needed to receive special attention.

He was closing a five-day 'sub-regional' workshop on 'Enhanced Performance-Based Allocation (PBA) Framework and Forward-Looking Debt Sustainability Analysis', at Elmina last Thursday.

The workshop was aimed at enhancing participants' understanding of the ADB's procedure for applying the PBA guideline for a broader understanding of the features of the system.

This would enable them to engage in high level dialogue with ADB officials for the allocation of loans and grants.

The participants, who included some members of parliament and representatives of Civil Society Organisations, were from the Gambia, Ghana, Liberia, Nigeria and Sierra Leone.

Mr Jeng expressed his delight about the enthusiastic manner in which the participants dealt with the various issues at stake, and stressed that the main objective, was to enhance transparency and accountability in resource allocation.

He tasked them to sensitise their colleagues about the deliberations to ensure that all stakeholders including civil society organisations become abreast of the guidelines.

Mr Jeng said it was the aim of ADB to enhance its operation on the continent and that it has so far, established 26 offices in various parts of Africa.

The participants, had earlier in an 18-point communiqué, called on the ADB Group to conduct frequent reviews on fragile states with the aim of exploring ways to assist them.

They also called for the financing needs of the RMCs to be strongly considered, and ensure that their efforts in achieving the Millennium Development Goals (MDGs), were not jeopardised by too much focus on macro-economic indicators and country performance assessments.

According to them, incentives under the 20 percent grant discount should not be deducted from the weaker countries, but rather, donors should finance that grant reduction from country allocations, since Gross Domestic Product (GDP) growth, which was a denominator in the debt ratio, required additional resources to drive it.

On capacity building, the participants urged the improved participation of RMCs, and allow them to use 'own-country debt sustainability framework', in order to strengthen local capacity for carrying out debt sustainability and management.

They also noted that since Debt Sustainability Framework (DSF) was one of the major determining factors for resource allocation under the PBA system, RMCs should be supported to strengthen capacity through grants.

'The ADB should make it a priority to standardize debt data classification in RMCs for effective debt sustainability analysis.'

It, therefore, tasked the ADB to sensitise and disseminate information to RMCs on the terms and conditions of the policy on non-concessional loans.

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