US$ 92 Million ADF Loans and Grants for East Africa

Abidjan, Ivory Coast – The African Development Bank (AfDB) Group has signed two loans and three grants agreements totaling 61.50 million Units of Account (UA*), equivalent to US$ 92 million with Kenya, Tanzania and two East African regional organizations, to finance road infrastructure in the region.

The agreements were jointly signed in Tunis by Messrs. Mr. Mandla Gantsho, AfDB Vice-President in charge of Infrastructure, Regional Integration and Private Sector Development and the Secretary General of the East African Community, Juma Mwapachu. The other signatories were the permanent Secretaries in the Kenyan and Tanzanian ministries of finance, Messrs Joseph Kinyua and Gray Mgonja respectively; as well as the Executive Secretary of the Northern Corridor Authority, Godfrey Onyango.

Commenting on the two projects to be funded with the loans and grants – The East Africa Trade and Transport Facilitation and the development of the Arusha-Namanga-Athi River Road Corridor Projects – Mr. Gantsho emphasized their importance in light of deepening globalization and the need for African economies to make fundamental adjustments, both on an individual and regional basis.

“The reality of small market sizes and inadequate infrastructure amongst others, constrain countries on our continent from fulfilling their economic potential within the globalization paradigm,” he said, adding that this scenario underscores the need for regional economic integration as a vehicle to unlock the huge economic and human capital potential of the continent.

The AfDB Vice-President noted that the two projects, which represent a priority within the NEPAD transport programme, address both hardware and the so-called ‘Software’ barriers to regional integration such as facilitating movement of people and goods across national boundaries and the provision of physical infrastructure.

Mr. Gantsho also acknowledged the role of the World Bank and the Japan Bank for International Cooperation that are co-financiers of the project.

“The two projects are good examples of coordinated effort to provide assistance to several regional member countries and regional organizations to tackle development challenges on a regional scale”, he said.

For his part, the Permanent Secretary at the Tanzanian Ministry of Finance, Mr. Gray Mgonja, dwelt on the need for African countries to have road and air links between them, noting that it took him three days to travel from Tanzania, through Europe to Tunis which is an African country.

The AfDB Executive Director for Tanzania, Mr. Gerald Zirimwabagabo, underscored the strategic importance of infrastructure for the development of Africa as a whole and East Africa, in particular.

The agreements bring the Bank Group’s total commitment to East African countries, including Burundi and Rwanda to US$ 5.5 billion, covering projects in the economic and social sectors.

* 1 UA = 1.50440 US$ as at 9/02/2007