Droit prepared by the Committee oj Nine Explanatory note submitted by tlte Committee oj Nine
Amendments proposed h)-' Governments
Final text adapted by the Conjerence
TITLE
Draft Agreement establishing an African Development Bank
Title: Constituent instruments of international orgamzations are styled many names - "Agreement" (as in the case of the IADB), "Articles of Agreement"
(IBRD, IFC, IDA), "Constitution", "Convention" (Bank for International Settle-ments, "'Protocol", "TreatyH, etc. There is no rule which determines the name that is apposite in eachca~e. However, the terms "Agreement" and '~Conventionn
are most common. Following the example of thc IBRD, IFC, IDA and IADB, it is suggested tht: present instrument should be named "Agreement",
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AGREEMENT ESTABLISHING THE AFRICAN DEVELOPMENT BANK
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-Drqft prepared by the Committee oj Nine
Explanatory noles submitted by the Committee oj Nine
Amendments proposed by Governments
Final text adopted by the Conference
Preamble
THE GOVERNMENTS on whose behalf this Agreement is signed;
DETERMINED to strengthen African solidarity by means of economic co-operation between African States;
CONSIDERING the necessity of accelerating the development of the ex-tensive human and natural resources of Africa in order to stimulate economic development and social progress in that region;
REALlZI~G the importance of co-ordinating national plans of economic and social development for the promotion of the harmonious growth of African economies as a whole and the expansion of African foreign trade and, in parti-cular, inter-African trade;
RECOGNIZI NG that the establishment of a financial institution common to all African countries would serve these ends;
HAVE AGREED to establish hereby the African Development Bank (herein-after called the "Bank") which shall be governed by the following provisions:
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PREAMBLE
THE GOVERNMENTS on whose behalf this Agreement is signed;
DETERMINED to strengthen African solidarity by means of economic co-operation between African States;
CONSIDERING the necessity of accelerating the development of the extensive human and natural resources of Africa in order to stimulate economic development and social progress in that region;
REALIZING the importance of co-ordinating national plans of economic and social devdopment for the promotion of the harmonious growth of African economies as a whole and the expansion of African foreign trade and, in particular, inter-African trade;
RECOGNIZING that the establishment of a financial institution common to all African countries would serve these ends;
HAVE AGREED to establish hereby the African Development Bank (herein-after called the "Bank") which shall be governed by the following provisions:
Draft prepared by the Committee of Nine
Explanatory notes submitted by the Committee of Nine
Amendments proposed by Governments
Final text adopted by the Conference
CHAPTER I
Purpose, Functions, Membership and Structure PURPOSE
Purpose (Article I)
The purpose of the Bank shall be to contribute to the economic development and social progress of its members - individually and jointly.
The definition of the essential purpose of the Bank, contained in this Article, will be interpreted in the light of the considerations set out in the preamble. In their turn, the definitions of the purpose and functions of lhe Bank shall guide it in its decisions - see Article 2 (3) below. For other lending agencies, cf. IBRD, Art. I;
IFC, Art. I; IDA, Art. I; IADB, Art. I (I).
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CHAPTER I
Purpose, Functions, Membership and Structure
ARTICLE I PURPOSE
The purpose of the Bank shall be to contribute to the economic development and social progress of its members - individually and jointly.
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-Draft prepared by the Committee of Nine
Explanatory notes submitted by the Committee of Nine
FUNCTIONS Functions (Article 2)
(I) To implement its purpose, the Bank shall have the following functions:
(a) To use the resources at its disposal for the financing of investment proj-ects and programmes relating to the economic or social development of its members, including, among others:
(i) ProjectsOt programmes which by their nature or scope concern scveral members;
(ii) Projects or programmes designed to make the economies of its mem-bers increasingly complementary and to bring about an orderly ex-pansion of their foreign trade;
(b) To undertake, or participate in the selection, study and preparation of projects, enterprises and activities contributing to such development (c) To mobilize in Africa, and outside Africa, resources for the financing
of such investment projects and programmes;
(d) Generally, to promote investment in Africa of public and private capital in projects or programmes designed to contribute to the economic development or social progress of ib members;
(e) To provide such technical assistance as may be needed in Africa for the study, preparation, financing and execution of development projects or programmes; and
(f) To undertake such other activities and provide such other services as may advance its purpose.
(2) In carrying out its functions, the Bank should co-operate with national and regional development institutions existing in Africa. To the same end, it should co-operate with other international organizations pursuing a similar purpose and with other institutions concerned with the development of Africa.
(3) The Bank shall be guided in all its decisions by the provisions of Articles 1 and 2 of this Agreement.
I. Functions indicate tbe modes of action by which the Bank should strive to fulfil its purpose. The form, which its action will mostly take, that is to say, the operations which it may carry ont, are defined in Art. 14, and the projects to which its opetations shall relate, are dealt with in Art. 17. For other lending agencies, cf. IBRD, Art. I; IFC, Art. I; IDA, Arts. I and V (4); IADB, Art. 1(2).
2. So as not to hamper the Bank unnecessarily in its activities, not only should the definition of its functions (para. (I» be couched in broad language but also there shonld be - as is the case in para. (1) (f) - a general residual clause covering activities andservices advancing the Bank's purpose, which are not expressly specifi-ed in the definition. Moreover, it should be borne in mind that the definition of functions will be interpreted in the light of the considerations set out in the preamble to the Agreement.
3. The first sentence of para. (2) suggests that the Bank should co-operate with national and regional development agencies and institutions in Africa; the second sentence contains the same recommend::ltion as regards co-operation with (e.g.
world-wide) international organizations having a similar purpose as the Bank (cf. Art. 1) and "other institutions" outside Africa concerned with Africa's develop-ment - e.g. a government agency or a financing institution in a capital supplying country among whose functions is the financing of trade with or the development of under-developed countries generally.
4. Para. (3) contains a rule for the interpretation of all articles of the Agreement, the Bank's by-laws, and other rules and regulations: all these provisions should be interoreted in the lighl of Arts. I and 2.
Amendments proposed hy GOl'ernments
Final lexl adopted by the Conference
UAR: Paragraph (2): The word "existing" at the end of the first sentence ,hould be deleted. A sentence should be added at the end of the paragraph, which should read: "Bank loans from international or national lending institutions should not he conditional and should be free from all strings".
Mauritania: Paragraph (I) (a): To implement its purpose, the Bank shall have the following functions:
To usc the resources at its disposal for thc financing of investment projects and programmes relating to the economic or social development of its members exclusively, except the case of island States, for
Paragraph (2): In carrying out its functions, the Bank shall co·operate with national regional and sub~regjonal development institutions in Africa.
ARTICLE 2 FUNCTIONS
(I) To implement its purpose, the Bank shall have the following functions:
(a) to use the resources at its disposal for the financing of investment projects and programmes relating to the economic and social develop-ment of its members. giving special priority 10:
(i) projects or programmes which by their nature or scope concern several members; and
(ii) projects or programmes designed to make the economies of its mem-bers increasingly complementary and to bring about an orderly ex-pansion of their foreign trade;
(b) to undertake, or participate in, the selection, study and preparation of projecls, enterprises and activities contributing to such development;
(c) to mobilize and increase in Africa, and outside Africa, resources for the financing of such investment projects and programmes;
(d) generally, to promote investment in Africa of public and private capital in projects or programmes designed to contribute to the economic development or social progress of its members;
(e) to provide such technical assistance as may be needed in Africa for the study, preparation, financing and execution of development projects or programmes; and
(f) to undertake such other activities and provide such other services as may advance its purpose.
(2) In carrying out its functions, the Bank shall seck to co-operate with national, regional and sub-regional development institutions in Africa. To the same end, it shonld co-operate with other international organizations pursuing a similar purpose and with other institutions concerned with the development of Africa.
(3) The Bank shall be guided in all its decisions by the provisions of Articles and 2 of this Agreement.
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Dra]t prepared by the Committee of Nine
Exp/anatOlY notes submitted by the
Committee oj Nine
Alnel1dments proposed by Gf)l!ernments
MEMBERSHIP AND GEOGRAPHICAL AREA Membership and geographical area (Article 3)
(I) Any African country which has the status of an independent State may become a member of the Bank. It shall acquire membership in accordance with paragraph (I) or paragraph (2) of Article 65 of this Agreement.
(2) The geographical area to which the membership and development activities of the Bank may extend (referred to in this Agreement as "Africa" or "African", as the case may be) shall comprise the continent of Africa, Madagascar and other African islands.
I. Paragraph (I) of the Arlicle lays down the principle that all independenl African States have the right to acquire membership of the Rank. The right is ex-ercised in accordance with para. (I) or para. (2) of Art. 65. Thus, States only may become members of the Bank which is an inter-governmental organization.
2. The effect of para. (I) is that:
(a) All African States named in annex A to the Agreement, the Governments of which have signed the latter (cf. Art. 64) and deposited an instrument of ratification or acceptance, in accordance with Art. 65 (I), will acquire membership upon snch deposit, though not before the date on which the Agreement enters into force;
(h) All other independent African States named in annex A to the Agree-ment will become members jf their Governments so request, on term~
determined by the Board of Governors provided they deposit an instru-ment of accession: they will acquire membership on the date appointed by the Board (see Art. 65 (2)); and
(c) All dependent African territories will become qualified for membership upon achieving independence and will become members in conformity with the procedure outlined in para. (b) above (see Art. 65 (2)).
As regards membership of other lending agencies, cf. )BRD, Art. II (1); )FC, Art. II (I); IDA. Art. IT (I); IADB, Art. II (I).
3. Before the acquisition of membership. the Bank has power to enter into suitable arrangements providing for co-operation (for instance, in the field covered by Art. 2 (I) (e)) with appropriate authorities of African countries which have not yet attained independent status. Equally, the Bank may maintain interim relations with the Government of an independent African State which has not yet become a member (see Art. 29 (2)).
4. Withdrawal from and suspension of membership are dealt with in Arts. 44 and 45 of the Agreement.
5. The definition of the potential geographical area of the Bank in para. 2 is inspired by the Terms oj Reference of the United Nations Economic Commission for Africa which reads: "The geographical scope of the Commission's work shall be the whole continent of Africa, Madagascar and other African islands" (para. 4).
The definition implies, first, that "development" activities of the Bank may not extend to non~Africanterritories of an African State and, second, that other acti-vities of the Bank - e.g. the mobilization of additional resources~ may take place outside Africa.
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Final text adopted by the Conterence
ARTICLE 3