Declaration on IDB Group Cooperation with Africa

We, the Governors of the Islamic Development Bank (IDB), assembled in Ouagadougou (Burkina Faso) on 16-17 Shaban 1423H (22-23 October 2002), on the occasion of our 27th ordinary meeting

guided by the principles of Islamic solidarity;

recalling the purpose of our institution to foster economic development and social progress of its member countries and Muslim communities in non-member countries;

considering the development challenges faced by the African member countries particularly the least developed among them;

and considering that IDB has extended so far an amount of US$3.5 billion for project financing in Africa;

wish to reaffirm the commitment of the IDB Group to accord specific attention to these countries under its operational activities.
In spite of the assistance extended by the member countries and the international community to African countries, and in spite of the considerable efforts exerted by these countries to overcome the difficulties and challenges they are faced with, many of them are still among the least developed countries of the world.

The situation is indeed a cause for grave concern given the prevailing trend towards globalization which is likely to marginalize those that do not have the minimum capacity required to follow the leading countries. Many African countries do run that risk and it is therefore vital that enhanced attention is devoted to help them escape it.

Within its available means, the IDB has indeed been active in extending assistance to its member countries, including the African ones, which have obtained 60% of the concessional financing extended by IDB. However, the current and exceptional circumstances require that such cooperation is streamlined and strengthened to make it address more intensively and aggressively the major issues confronting these countries. The solution of these issues will depend on original and innovative approaches carried out in the framework of the national policies and development strategies and in harmony with the various initiatives which were launched recently, including the New Partnership for Africa's Development (NEPAD). It will also require a full commitment of the recipient countries.

Priority Sectors

In selecting its fields of intervention in Africa through close consultation with the countries concerned, IDB will aim at accelerating economic growth and contributing to the fight against poverty while reducing the wide disparities between rural and urban areas. In addition it will ensure that, while the social sectors are the main beneficiaries of IDB financing (particularly in the least developed countries), growing support is also extended to income generating activities.

The IDB will give the highest priority to basic education along with teachers training, technical education and vocational training as one key to break the poverty curse. In so doing, IDB will accord a special attention to reducing the school enrollment gap between boys and girls.

The IDB will encourage regional projects in development-oriented higher education. It will also ensure that African countries suitably benefit in the framework of the IDB's scholarship programs that are open to them.

A major objective of IDB’s interventions has been and should continue to be to provide the population with safe drinking water, in the framework of rational utilization. The efficient utilization of water resources for agricultural purposes (primarily for food production) should also be encouraged and organized to be in harmony with environmental features.

In order to improve access to basic treatment for people in rural areas, the IDB will accord particular attention to primary health care. The IDB will also support the various initiatives launched to combat malaria, through prevention, research and treatment.

The lack of suitable infrastructure in many African countries has led the IDB to provide continuous support in that field to the African continent. This effort has proved its effectiveness and should be sustained with due priority to projects which serve more than one country. The IDB will thus continue its support for the joint African projects and initiatives such as the Trans-Sahara Road, the Senegal River Development Organization, the Gambia River Development Organization, the Inter-State Committee for the Struggle against Drought and the Liptako-Gourma Authority.

In line with success stories in other regions, the IDB will give a special importance to the promotion of private sector, particularly at the level of small and medium size enterprises which are considered as the engine for growth, and in creating rural employment through micro-finance schemes. The Bank will also seek to attract private financing from other Member countries and around the globe through special investment promotion events and businessmen conferences. Investment insurance, as extended by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), will also be instrumental towards that objective.

IDB will provide support to African member countries, through technical assistance or attractive financing to allow them to take their share in world trade exchanges. The highest priority will be given to promoting trade among the African Member countries and between the latter and other member countries. The various IDB affiliates and windows, such as ICIEC and the export financing scheme, could play a significant role towards that end.

The capacity of the institutions needs to be strengthened in numerous fields such as project implementation, science and technology (in particular, in the information and communication domains), private sector development, investment promotion, contracting, consulting services, regional policies, etc. IDB will therefore provide technical and financial support to assist in achieving progress in those areas.

Other Operational Aspects

In order to carry out and strengthen its financing activities in Africa, the IDB will rely in particular on cooperation among the African countries themselves but also between them and member countries from other regions.

Exchange of experience and expertise, direct investments and joint-ventures, will be modes of cooperation to implement IDB’s interventions. This will be, inter alia, the case for the contractors and consultants: associations between such firms from the region and from other member countries should be encouraged with the objective of building the hitherto weak capacity of many African countries in those key domains.

Similarly, as far as financing arrangements are concerned, preference will be given to activities which will attract support from other international institutions, as well as the donor countries which might be ready to extend financial assistance.

IDB will also promote the intervention of Islamic banks and institutions. It will encourage the establishment of such banks and institutions in the region, working on sound principles, as an instrument for mobilizing domestic savings and acting as a vehicle for attracting foreign investment.

The IDB will study the opportunity of involving NGOs to ensure speedy and efficient projects implementation.

Efforts are also expected from the member countries themselves to improve the management and utilization of external assistance. Necessary measures should be considered to simplify procedures and accelerate implementation while safeguarding highest quality.

Financing Instruments

In order to implement the above, the IDB Group will continue to make use of its available resources, to the extent possible. In particular, the least developed member countries will be provided with the most appropriate concessionary terms of ordinary loan financing. Furthermore, IDB will continue to provide debt relief through the HIPC initiative to additional member countries that reach the decision point.

Paying particular attention to the African LDMCs which are facing an acute financial resources situation, the IDB Group will ensure they will get a sizable share of its available financing. Specifically, the objective of the Group should be to reach an overall financing of US$ 2 billion in the coming five years, to be allocated to these African LDMCs. In parallel, the Board of Executive Directors (BED) has been requested to adapt the policies and procedures of the IDB in order to ensure swift and efficient utilization of the resources.

The BED has been directed to devote special attention and work out an innovative approach to ensure that all African member countries make full use of the various trade financing facilities available in the IDB Group. This approach should include assigning a high priority to structuring transactions involving the target countries, using imaginative structured finance vehicle and more utilization of export-credit insurance and other non-conventional security instruments.

Taking into account the expected financing, the BED is requested to work out a five-year action plan for IDB Group interventions in African LDMCs, integrating the financing aspects as well as other supporting measures. A progress report on the cooperation between the IDB Group and Africa (and particularly the least developed member countries) will be submitted in our forthcoming regular meetings.

In order to allow the IDB Group undertake the above ambitious program, the member countries are expected to propose well-prepared projects so that the Group management can take necessary practical measures, in the framework of approved policies and procedures.

While acknowledging the magnitude of the task faced by Africa, we are convinced that the continent has also considerable opportunities which can be put to effective use with the cooperation of the IDB and its other member countries, in coordination with the international development financing community.