Southern African Development Community - United States ...

infrastructure funds, and development financial institutions are devoted to expanding
and cultivating various segments of the private sector. Additionally, ADF technical
assistance operations continue to assist countries in project-related activities such as
feasibility studies, environmental impact assessments, sector and multisector studies,
and detailed engineering studies.
The AfDB Group is actively involved in the movement to provide African countries with
debt relief. The AfDB Group’s collaboration with the World Bank and IMF on the
Enhanced HIPC Initiative complements its efforts in that area. Under the Enhanced
HIPC Initiative, the AfDB Group relieves regional member countries of up to 80 percent
of their annual debt. The AfDB Group uses the PRSPs to monitor projects, and poverty
reduction strategies are implemented with available funds. 24
Table 4-7 summarizes AfDB and ADF approvals of loans and grants for SSA projects
in 2003 (including multinational projects). In 2003, the AfDB Group authorized
funding for 16 projects at a total cost of $473 million. South Africa received the single
largest amount of loans and grants, $158 million, with 67 percent designated for a line
of credit for the Development Bank of South Africa. In 2003, over $2 million was
authorized for drought relief and $169 million for lines of credit.
International Monetary Fund
The IMF is composed of several lending facilities that tailor their assistance to respond
to specific balance-of-payments problems and to help cushion the impact of structural
adjustment. Stand-By Arrangements (SBA) and the Extended Fund Facility (EFF) are
two traditional examples of such assistance. Member countries requiring a line of
credit on a short-term basis rely on the SBA; member countries requiring long-term
funding (at least 3 years) rely on the EFF. In FY 2001, the IMF changed the repurchase
schedule for the EFF. Payments must still begin in 4.5 years, but must be repaid after 7
years instead of 10. The Supplemental Reserve Facility and the Contingent Credit Lines,
established in 1999, provide additional resources to prevent loss of market confidence
in a member country or to sustain those experiencing abrupt reversals of investment
flows. 25
The IMF has two mechanisms through which it addresses protracted payments arrears:
the HIPC Initiative and the Poverty Reduction and Growth Facility (PRGF). In 1996, the
World Bank and the IMF combined their resources to provide debt relief more
effectively through the HIPC Initiative. In 1999, the World Bank and IMF governing
boards adopted the Enhanced HIPC Initiative to shorten the time it takes for a country to
qualify for relief. The PRGF is the most recent incarnation of the IMF’s concessional
24 AfDB, 2001 Annual Report, pp. 37-40.
25 IMF, Annual Report 2001, pp. 38-40.
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