South Africa Increases Shareholding in African Development Bank

The Board of Directors of the African Development Bank approved, at a meeting last week, requests by South Africa and certain other shareholders to increase their shareholdings in the ADB.

With this decision, South Africa increases its shareholding in the African Development Bank from 0.88% to 4.1% of the total shares, and will become the fifth largest shareholder after Nigeria, United States of America, Japan and Egypt.

The additional shares were allocated under the new Share Transfer Rules of the ADB, which were adopted by the ADB Board of Governors at an Extraordinary General Meeting held in Abidjan in May 2000. These Rules provide a mechanism for quarterly re-allocations of non-subscribed or forfeited shares, thus averting capital subscription arrears, while maintaining the aggregate proportional shareholding between the regional members and non-regional members of the Bank.

The Rules grant priority in the allocation of shares, to eligible member countries, on the basis of their economic capacity, this strengthening the financial quality of the ADB. It will be recalled that in 1998, the Board of Governors of the ADB approved a fifth general capital increase for the Bank, which increased its authorized capital by 35% to US$31 billion. The capital increase was preceded by a restructuring of the aggregate proportional shareholding between regional and non-regional members of the ADB, with the regional shareholders holding 60% of the total shares and the non-regional shareholders holding 40% of the total shares.

Four other member countries, Algeria, Spain, Belgium, and Equatorial Guinea, also received allocations. Algeria, which held 3.6% of the total shares increased its shareholding to 3.8% of the total shares. Spain, which held 0.6% of the total shares will now hold 1.0% of the total shares; Belgium, which held 0.4% will now hold 0.6% of the total shares; and Equatorial Guinea, which held 0.02% of the total shares will now hold 0.16% of the total shares.

This allocation of shares is anticipated to be the first of several allocations this year as the present demand for additional shares is yet to be fully satisfied.