(1) Whenever the par value of the currency of a member is reduced in terms of the unit of account defined in paragraph (1 ) (b) of Article 5 of this Agreement, or its foreign exchange value has, in the opinion of the Bank, depreciated to a signi-lkant extent, that member shall pay to the Bank within a reasonable time an amount of its currency required to maintain the value of all such currency held by the Bank excepting currency derived by the Bank from its borrowing.
(2) Whenever the par value of the currency of a member is increased in terms of the said unit of account, or its foreign exchange value has, in the opinion of the Bank appreciated to a significant extent, the Bank shall pay to that member within a reasonable time an amount of that currency required to adjust the value of all such currency held by the Bank, excepting currency derived by the Bank from its borrow-ing.
(3) The Bank may waive the provisions of this Article where a uniform propor-tionate change in the par value of the currencies of all its members takes place.
Explanatory notes submitted by the Commiuee of Nine
Introductory note for Chapter V
1. This chapter is concerned with questions of organization and management.
Following the example of the IBRD, the chapter also deals with such organiza-tional and management problems as location of the offices of the Bank, channels for its communications with members, depositories, publication of reports etc., and the allocation of net income.
As regards the other lending agencies, see IBRD, Art. V; IFC, Art. IV; IDA, Art. VI; IADB, Art. VlIl.
2. It should be recalled that the basic structure of the Bank was defined in Art. 4 of the Agreement for reasons indicated in note 2 thereto.
3. The principle that the Bank is an African institution is given expression in the rule that governors, directors, their alternates and the president of the Bank must be nationals of the Bank's member States. Provision for this is made in Arts.
30 (1), 33 (2), and 35.
4. Subject to other special requirements of the Bank, the proposed provisions follow, wherever possible, the corresponding texts of the IBRD and IADB. Where useful, the relevant provisions of the by-laws of these two lending agencies have been summarized in the notes to the Articles.
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146-Draji prepared by the Committee of Nine
Explanatory notes submitted by the Committee of Nine
CHAPTER V
Organization and Management BOARD OF GOVERNORS: POWERS Board 01 Governors: powers (Article 29)
(I) All the powers of the Bank shall be vested in the Board of Governors.
In particular, the Board shall issue general directives concerning the credit policy of the Bank.
(2) The Board of Governors may delegate to the Board of Directors all its powers except the power to:
(a) Decrease the authorized capital stock of the Bank;
(b) Establish or accept the administration of special funds;
(c) Authorize the conclusion of general arrangements for co-operation with the authorities of African countries which have not yet attained inde-pendent status or of general agreements for co-operation with African Governments which have not yet acquired membership of the Bank, as well as of such agreements with other Governments and with other in-ternational organizations;
(d) Determine the remuneration of directors and their alternates;
(e) Select outside auditors to certify the general balance sheet and the state-ment of profit and loss of the Bank;
(f) approve, after reviewing the auditors' report, the general balance sheet and statement of profit and loss of the Bank; and
(g) Exercise such other powers as are expressly provided for that Board in this Agreement.
(3) The Board of Governors shall retain full powers to exercise authority over any matter delegated to the Board of Directors pursuant to paragraph (2) of this article.
I. Paragraph (I): As in the 09,. of other lending agencies, the general principle of the constitution of the Bank is that al/ its powers are vested in the Board of Governors. To give it due emphasis, this principle is couched in absolute language.
In fact, however, the Agreement provides a few exceptions thereto (see, for instance, Arts. 19 (2) and (3), 20 and, of course, 32 (2)).
2. Paragraph (2) provides that the Board of Governors may delegate its powers to the Board of Directors. However, the general principle laid down in para. 1 is - following the example of IADB, Art. VIn(2) (c) - expressly extended even to matters which, under para. 2, are delegated to the Board of Directors; this is provided in paragraph (3). Itshould be noted that para. (3) applies only to powers which are delegated to that Board, not to its powers for which the Agreement provides expressly.
3. Where the provisions of the Agreement expressly provide for powers of the
"Bank'\ such powers are - by virtue of para. (1) - vested in the Board OJ Governors which may delegate them to the Board of Directors by virtue of para. (2).
4. The power of the Board of Governors to delegate to the Board of Directors, provided in paragraph (2), has been exercised in "blanket" form by the other lend-ing agencies (see notes to Art. 32 below).
5. Of powers exempt from delegation under para. (2), clause (g) is of a general nature. It signifies that where the Agreement expressly provides for the powers of the Board of Governors, such specified powers may not be delegated by that Board (though preparatory work on the matters in question should be done by the Board of Directors - see Art. 32 (2)). This clause includes powers of the Board of Governors
- Relating to the increase of the capital of the Bank (Arts. 5 (3) and 6 (2));
- To determine initial subscriptions; to increase the subscriptions of mem-bers; and to determine the terms of issue of shares and the mode and dates of payment (Arts. 6 (1), (3) and (4) and 7 (2) and (3);
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147-Amendments proposed by Governments and by international organizations
Final text adopted by the Conference
- To fix "ceilings" for investments of the Bank in equity capital (Art. 15 (4) (b»;
- To elect the directors of the Bank (Art. 33);
- To determine the reserves and the distribution of the Bank's net income (Art. 43);
- To dispense with or terminate the suspension of a member (Art. 45 (I»;
- To decide on the termination of the operations of the Bank and on the distribution of the Bank's resources and other assets (Arts. 48 (I) and 50 (I) (ii»;
- To "approve" amendments to the Agreement (Art. 61 (I);
- To determine appeals from interpretations of the Agreement given by the Board of Directors (Art. 62 (3»; and
- To determine the terms for admission of new members (Art. 65 (2)).
6. Other powers exempt from delegation under para. (2) call for the following remarks:
Sub-para. (a): This power may be exercised by the Board of Governors where a member has withdrawn from the Bank and shares owned by that member have been repurchased by the Bank (see, Art. 46);
Sub-para. (b): See Art. 8;
Sub-para. (c): This sub-paragraph concerns arrangements and agreements of a general nature. The powers of the Board of Directors and the President, as defined in Arts. 32 and 37 (I), enable them to carryon daily relations with the
Govern-ments~ authorities and organizations concerned and to enter into agreements with them concerning particular issues or transactions. As to the international personality of the Bank, see Art. 51; as to the nature of interim agreements with independent African States and arragements for co-operation with the authorities of African countries which have not yet attained independence, see note 3 to Art. 3.
Sub-para. (e): See IADB, Art. VII (2) (b) (i) and IADB, by-laws 10 which define the terms of reference of outside auditors in detail. Other lending agencies do not refer in their constituent instruments to outside audits;
Sub-para. (f): See Art. 42.
Algeria, Cameroun and Libya: Para. (I) (e) should read: "select outside experts to certify the general balance sheet and the statement of profit and loss of the Bank and to submit a general report on its management".
IBRD: Article 29. While the selection of outside auditors and the establish-ment of special funds are undoubtedly matters of major importance, it is for con-sideration whether the requirement of action by the Board of Governors might not raise practical problems because of the delays likely to be caused by reference to the Board of Governors rather than the Board of Directors.
Paragraph 2 (a) concerning the power to decrease the authorized capital stock of the Bank might be deleted. There is no provision for such power in Article 5;
nor is any needed since there is no reason whythe authorized capital stock should be decreased upon the repurchase of shares from a withdrawing member.
CHAPTER V
Organization and management ARTICLE 29