Title: An evaluation of the financial performance of the African Development Bank

Authors: Charles Okeahalam, Victor Murinde

Addresses: AGH, Private Bag X9, Postnet Suite 410,Benmore 2010, Johannesburg, South Africa. ' Birmingham Business School Ashley Building, The University of Birmingham, Edgbaston Birmingham B15 2TT, UK

Abstract: This paper analyses the financial performance of the African Development Bank. A two-pronged approach is applied. Firstly, we conduct a discussion of the role of development banks and the difficulties of finding an appropriate measure with which to assess their performance. Secondly, we develop a data set of the balance sheet and income statements of the African Development Bank (ADB) Group for the period 1970–2000. This is used to conduct a simple statistical analysis of the relationship of variables that might affect the financial performance of the ADB group. The basic finding is that differences in the terms and conditions of financing via the concessional Africa Development Fund (ADF) window, relative to the ADB bank window, have presented the ADB group with a number of challenges. Policy responses involve designing carefully tailored schemes to reduce the level of non-performing ADF grants, creating incentives for recipients of ADF grants to graduate to the ADB loan window, and the greater pursuit of institutional, macroeconomic and microeconomic reforms in ADB group client countries.

Keywords: financial performance; development banks; African Development Bank.

DOI: 10.1504/IJAAPE.2004.004146

International Journal of Accounting, Auditing and Performance Evaluation, 2004 Vol.1 No.1, pp.125 - 142

Available online: 31 Mar 2004 *

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