S&P Global affirms AfDB’s AAA rating

S&P Global, a rating agency, has affirmed the ‘AAA/A-1+’ long- and short-term issuer credit assessment of the African Development Bank (AfDB) with a stable outlook.

In a statement on Monday, the AfDB said S&P Global “positively assessed” its strong financial risk profile, capital adequacy, strong funding and liquidity, shareholder support; and the adequacy of its governance and management.

“The stable outlook reflects our expectation that, over the next two years, AfDB will prudently manage its capital while maintaining solid levels of high-quality liquidity assets and robust funding,” S&P said.

The rating agency said it expects that the AfDB would continue to benefit from preferred creditor treatment, make sure private sector lending continues to align with its mandate and enjoy shareholders support in terms of capital payments.

It also described the multilateral development bank as a key player in supporting African countries in the fight against COVID-19.

Reacting to the development, Akinwumi Adesina, the AfDB president, said the rating reflects the bank’s “very strong financial position and risk management, as well as sound governance”.

Adesina was recently investigated by the bank’s ethics committee on whistleblower allegations of favouritism. He was absolved of the allegations but the US rejected the results and called for an independent investigation.

The bank’s bureau of governors agreed to an independent review of the ethics committee’s report.

“We will continue to maintain these standards, with the strong support of all our shareholders, as we deliver much needed financial, knowledge and policy support to our regional member countries during and after this period of the COVID-19 pandemic,” Adesina concluded.

In October 2019, the bank requested and got shareholders approval for a $115 billion capital increase for the African Development Fund  — the largest in its history.

AfDB also uses the ADF and the Nigeria Trust Fund (NTF) to provide assistance to member countries.