• AfDB President Sidi Ould Tah urges swift ratification of the FAD charter to enable market borrowing and expand Africa’s financing capacity.

• The reform would enable the African Development Fund to blend concessional and market resources, despite challenges related to debt and risk management.

• Global uncertainty and shrinking donor budgets heighten pressure as Africa seeks $650 billion yearly to meet its Sustainable Development Goals.

Dr. Sidi Ould Tah, who officially took office as President of the African Development Bank (AfDB) on September 1, 2025, reiterated the urgency of ratifying the charter of the African Development Fund (ADF). The goal is for the Fund to reach an 85% threshold of borrowing capacity from capital markets by December 31. “Without this, our ability to serve will be fundamentally limited,” he said.

Currently, the ADF can mobilize resources only from concessional lenders such as states and development finance institutions. This setup fits the Fund’s nature as the concessional window of the AfDB Group, whose mission is to provide highly favorable loans and grants to low-income countries.

The issue had already been discussed at the first technical meeting in March 2025 on the Fund’s replenishment, but implementing this reform remains complex. It would mean raising money at market rates to support economies with fragile debt capacity. Convincing investors about how risks will be managed will be a crucial challenge.

During the Lusaka discussions, Sidi Ould Tah acknowledged the scale of this task. According to the AfDB, he announced that a strategic dialogue with export credit agencies and development finance institutions would be held in December to build new partnerships and attract private investment in ADF-eligible countries.

Moreover, the AfDB could deploy a range of financial instruments — guarantees, blended finance, local-currency borrowing, and project preparation support — in a unified offer designed to reduce risks in fragile markets and create concrete investment opportunities.

“Together, we can build a strong and forward-looking ADF-17 that optimizes our collective capacity, strengthens resilience and prosperity in Africa, and delivers clear, measurable results for each contributor,” Sidi Ould Tah stated. However, this ambition will face credibility tests, particularly from financial markets.

On the international debt market, investor interest in African sovereign bonds has picked up. The average spread between borrowing costs and yields — a key indicator of investor sentiment — has narrowed to 3.4%, the lowest in 15 years, according to Bloomberg. The AfDB Group has also maintained its “AAA” rating with Moody’s, one of the world’s leading credit agencies. Denmark added a positive note by increasing its contribution by 40% to the equivalent of $172 million (at the current exchange rate).

Still, the challenge remains immense. Africa must bridge an annual $650 billion external financing gap to achieve the Sustainable Development Goals (SDGs). At the same time, the arrival of the Trump administration in the United States, with its new stance on development and climate cooperation, clouds the outlook for a traditional ADF partner. Together with France, the United Kingdom, and Germany, the U.S. contributed $2.4 billion to the 16th ADF cycle. Yet, the three European partners continue to face domestic pressures, and the funding gap could reach $850 million.

Countries such as China, South Korea, Norway, and Sweden are expected to step up their support. Meanwhile, the AfDB and several African nations recently demonstrated their capacity to raise about $2 billion in a single operation on international capital markets. These discussions took place from October 7 to 9, 2025, in Lusaka, Zambia, during the final technical meeting preceding the December 2025 conference in London, which will focus on replenishing the 17th ADF.

The event brought together representatives of beneficiary countries and members of the AfDB’s Board of Directors, including non-African participants. It aimed to define priorities, financing frameworks, and implementation strategies for the upcoming 2026–2028 cycle. These financing challenges come as the International Monetary Fund, in its latest Fiscal Monitor, urges emerging economies to adapt and “do more with fewer resources.”

Idriss Linge