The African Development Bank recently released a report highlighting the performance and challenges of national development banks in Africa. While these institutions play a key role in financing sustainable development, they face major obstacles, including low capitalization and governance.
The African Development Bank (AfDB) recently released a report that highlights the performance and challenges faced by national development banks (NDBs) in Africa. These institutions play a crucial role in financing the Sustainable Development Goals (SDGs), thereby supporting infrastructure projects, inclusive growth initiatives and the fight against poverty on the continent. However, despite their strategic importance, BNDs face significant obstacles, mainly linked to their insufficient capitalization and their sometimes weakened governance.
CDG, one of Morocco’s most influential national development banks, occupies the first position in Africa in terms of assets. In 2022, CDG reached total assets of $32.5 billion, an impressive figure that reflects its ability to mobilize resources to finance the country’s major infrastructure projects. Alongside other major players in the Moroccan financial sector, such as Crédit Agricole du Maroc, with $13.7 billion, and the Communal Equipment Fund (FEC), CDG actively contributes to consolidating the position of Morocco as a financial leader in Africa. This performance demonstrates the solidity and effectiveness of the Moroccan model in financing large-scale projects in essential areas such as infrastructure development, support for productive sectors and modernization of the economy.
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National development banks, like CDG, benefit from flexible mandates which allow them to intervene in various strategic sectors, ranging from the financing of infrastructure projects to that of territorial development, without forgetting support for entrepreneurship, particularly for small and medium-sized enterprises (SMEs). However, despite these successes, the ADB report highlights several structural challenges that hamper the potential of these institutions, and the CDG is not immune to these difficulties.
One of the main obstacles facing African NDBs is their low capitalization. In 2022, the cumulative assets of African NDBs stood at $98.6 billion, representing less than 0.5% of global assets, a figure well below other regions of the world. This situation results largely from the modest size of African economies, the budgetary constraints of States and the difficulty of access for BNDs to international capital markets. In addition, the absence of sufficient long-term savings at the national level constitutes a major obstacle to the capacity of NDBs to mobilize stable resources to finance large-scale projects.
According to the report, other significant challenges are also identified, including a lack of technical expertise to properly evaluate the projects to be financed. Political interference in the management of these institutions also represents a risk, sometimes distracting the NDBs from their fundamental economic objectives. Furthermore, the effectiveness of NDBs largely depends on the relevance of their mandates. A mandate that is too broad or too sectoral can limit their ability to respond effectively to development challenges.
The ADB report recommends solutions to address these challenges. A recapitalization of the NDBs, combined with a strengthening of their governance and a clarification of mandates, would improve their efficiency and impact. The development of technical expertise, to better evaluate the projects to be financed, also constitutes a strategic lever to increase their effectiveness. These measures, if implemented, would offer the African NDBs, and the CDG in particular, the means to assert their central role in financing sustainable development on the continent.
It is also worth noting the concentration of BND assets in certain regions of Africa. Indeed, Moroccan and South African banks alone hold 84% of the assets of African BNDs, highlighting their capacity to mobilize significant financing to meet the development needs of the continent. This reflects not only the strength of the financial sector in these two regions, but also their role as leaders in mobilizing the resources necessary for sustainable development in Africa.
