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S&P Global, an American financial services company and credit-rating agency, has affirmed the 'AAA/A-1+' long- and short-term issuer credit assessment of African Development Bank (AfDB), with stable outlook. The rating decision was announced on Friday, according to a statement released today by the bank, which said it is delighted by the decision.

The rating agency said its decision was based on a positive assessment of AfDB’s financial risk profile, capital adequacy, funding and liquidity, extraordinary shareholder support and adequacy of its governance and management. According to S&P Global, AfDB will play a key role in supporting the Africa region, particularly in the context of the COVID-19 pandemic.

The agency noted the bank’s $115 billion capital increase approved by shareholders in October 2019, and the replenishment to the African Development Fund (ADF), the bank’s concessional financing window, in December 2019.

“We are therefore affirming our ‘AAA’ long-term issuer credit rating on the AfDB,” the agency said. “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.”
 
Following the outbreak of COVID-19, AfDB has approved up to $10 billion in relief packages for its member countries. The bank will finance $6.9 billion of the total packages, while the remainder of the amount will be financed through ADF – one of the three distinct entities that comprise the African Development Bank Group, the other two being AfDB and the Nigeria Trust Fund (NTF).

“We are delighted with and welcome S&P Global’s decision to affirm the Bank’s AAA/A-1+ rating,” said Akinwumi Adesina, AfDB’s President. “It reflects the Bank’s very strong financial position and risk management, as well as our sound governance. 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.”

S&P Global’s rating decision was announced amid an ongoing investigation into the allegations of impropriety levelled against Adesina by some whistle-blowers. Earlier this month, the Bureau of Board of Governors of the AfDB gave an approval to proceed with an independent investigation into the allegations as demanded by the United States, a non-regional member country. A report by the bank’s Ethics Committee in May cleared Adesina of wrongdoing. The AfDB President, who is currently vying to be re-elected for a second term, has repeatedly denied culpability in the complaints by the whistle-blowers against him.

The ratings agency further stated that it expects the shareholders to remain supportive by providing timely capital payments. It also said it expects AfDB to “prudently manage growth in private-sector lending in a way that’s aligned with its mandate.”