WORLD TRADE  
ORGANIZATION  WT/AFT/W/7 
28 April 2006 
 (06-2002) 
Aid for Trade Task Force Original:   English 
  
 
COMMUNICATION FROM THE AFRICAN DEVELOPMENT BANK 
  
 The following communication, dated 21 April 2006, is being circulated to the Aid for Trade 
Task Force at the request of the African Development Bank (AfDB). 
 
 
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RESPONSES TO WTO TASK FORCE ON AID FOR TRADE 
  
Perspectives of the African Development Bank 
 
on the WTO Aid for Trade Initiative  
 
 
 I. INTRODUCTION 
1. At the WTO Hong Kong Ministerial Conference in December 2005, WTO Ministers included 
an "Aid for Trade" (AfT) initiative in their Decl aration to help developi ng and least developed 
countries benefit from international trade opportunities.  More specifically, it aims to help developing 
and least developed countries address supply-side c onstraints, including trade-related infrastructure 
bottlenecks, adjustment costs associ ated with trade liberalization, and trade-related institutions and 
capacity building.   
2. Since the first quarter of 2006, the WTO has al so been consulting widely with the IFIs, 
including the Bretton Woods Institutions and re gional development banks such as the African 
Development Bank (AfDB), as well as other multinationa l stakeholders on appropriate mechanisms to 
operationalize the AfT initiative.   
3. The AfDB set up a Task Force on the Aid for Trade Initiative in March 2006 aimed at 
arriving at a common position on the Bank's pr oposed perspectives on the WTO Initiative.   
4. The Task Force made a number of proposals on the Aid for Trade Initiative, including nature, 
extent and scope of the AfT, managing the AfT,  delivery of the AfT to recipient countries and 
oversight functions, discussed below.   
5. Section 2 of this paper summarizes the exis ting trade-related activities of the AfDB.  
Section 3 presents the Bank's proposed persp ectives on the WTO AfT initiative, and Section 4 
highlights the road map for the Bank's trade-related activities.   WT/AFT/W/7 
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  II. TRADE-RELATED ACTIVITIES OF THE AFRICAN DEVELOPMENT BANK 
(AFDB) 
6. The AfDB attaches great importance to trade a nd regional integration in Africa, and it has 
been engaged in a number of trade-related techni cal assistance and capacity building activities.  Some 
of these include the following: 
• The Bank plays an active role in supporting domestic reforms in its RMCs and in providing 
direct support for private sector development th rough its private sector window with the goals 
of supporting job creation, national capacity development, and produc tion for exports.  A 
major component has been the loans provided to both private and public banks for on-lending to small and medium enterprises (SMEs) and other private sector enterprises.   
 
• In the run up to the Sixth WTO Ministerial Summit in Hong Kong in December 2005, the 
Bank organized a one-week course on "Improving  Africa's Position in the International 
Trading System" (28 November – 2 December 2005).  This has now become an annual Bank-JAI trade-related capacity building exercise.   
 
• The Bank, in collaboration with the ECA and AU, periodically hosts a High-Level 
Brainstorming Meeting for African Trade Nego tiators.  The Bank hosted the November 2004 
meeting in Tunis.   
 
• The Bank, in partnership with other multilatera l organizations including the World Bank, the 
AU, and the ECA, organized a high-level workshop in Tunis on "Accelerating and Diversifying Export Growth in Africa" (20-21 October 2005).  The outcomes of the workshop 
were used to inform and give fresh impetu s to the Doha Round of trade negotiations.  
 
• The Bank recently organized a week long re gional seminar on "Franchising" (in Egypt, 
November 2005).  Franchising is one of the elements of the TRIPS Agreement under the 
WTO.  
 
• The Bank sits on the Advisory Board of the A frican Trade Policy Centre (ATPC) of the UN 
ECA, whose objective is to strengthen the cap acity of African governments to formulate, 
analyze, and implement sound trade policies and programmes and to participate more 
effectively in bilateral and multilateral nego tiations, as well as to support and facilitate 
effective involvement of the private sector and civil society in this process.   
 
• The Bank strives to support regional cooperatio n and integration efforts by financing 
multinational projects, and by helping to st rengthen regional economic communities.  More 
recently, the NEPAD initiative has given more im petus to the integration agenda and the 
ADB is playing a key role in banking and financial standards and in infrastructure 
development.  The Bank is gearing itself up to host the Africa Infrastructure Consortium 
Secretariat.  It will facilitate close collaboration on infrastructure development between the Consortium, the African Union, NEPAD, regional economic communities and the Bank, 
while establishing a Regional Integration and Trade Division that would enhance both 
regional integration/cooperation and trad e intervention work of the Bank.  
 
• The Bank provides grants to research and capac ity building institutions, such as the African 
Economic Research Consortium (AERC), to  undertake trade-related research and 
training/capacity building activities.   
 
  WT/AFT/W/7 
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  III. AFDB'S PROPOSED PERSPECTIVES ON THE AID FOR TRADE INITIATIVE 
A. NATURE AND EXTENT OF THE AFT 
7. The AfDB welcomes the new Aid for Trade initiative of the WTO Ministers, as most of the 
potential beneficiaries from the scheme will be th e Bank's Regional Member Countries (RMCs).   
8. The Bank appreciates the motivation behind the scheme and notes the pledges already made 
by key bilateral donors such as the US, the EU, Japan  and G8 on the AfT initiative and calls on other 
bilateral and multilateral donors to contribut e generously to the AfT initiative.   
9. However, for the AfT to be effective, it mu st have an "additionality" element involving 
substantial increases in resources, not reshuffling or substituting existing development assistance.  It 
must also be predictable, transparent and well c oordinated and monitored.  AfT should therefore be 
subjected to the Paris declaration principles on aid effectiveness.   
10. AfT should not be a subject of negotiation in the WTO but should be seen as an essential 
complement to the development dimension of an am bitious Doha outcome – not as a substitute to the 
market access negotiations.   
B. SCOPE OF THE AFT 
11. The AfT should be directed towards addressing trade-related regional infrastructure 
constraints, behind-the-border issues, trade-relate d institutional reforms (such as customs reforms), 
adjustment costs associated implementation of WTO agreements, and complementary domestic reforms in developing and least developed countri es.  Trade-related capacity building is another 
important area for channeling aid for trade resources,  but experience has shown that capacity building 
is effective only when pursued together with ot her trade reforms.  The AfDB has created a new 
Department for NEPAD, Regional Integration and Trade  to consolidate and strengthen the Bank's 
trade-related interventions.   
C. M
ANAGING AND DELIVERING THE AFT 
12. The supports the creation of a Global Aid for Trade Fund or Facility, and in view of the fact 
that African countries constitute the largest concen tration of the potential beneficiaries of the AfT 
initiative, the Fund or Facility should be headquartered at the AfDB.   
13. Even if the proposed Global Aid for Trade F und or Facility cannot be headquartered at the 
Bank, it should be set up indepe ndently and should allow regional development banks to draw from 
its resources to implement trade-related priority projects, based on the effe ctive demand and priorities 
of their regional member countries.   
14. The Aid for Trade to recipient countries should be based on a mixture of grants and 
concessional loans to address specific trade re lated needs for which AfT was sought.   
15. A monitoring body, consisting of the WTO, multilateral development banks, NGOs, and civil 
society, similar to the Africa Partnership Forum, should be established to ensure transparency and 
effective monitoring of pledges of AfT by donors and utilization of AfT by recipient countries.   
16. The Task Force believed that the AfT progra mme should be demand-driven rather than 
donor-driven – country ownership should be the guiding principle, with individual countries 
identifying areas of AfT needs which would then be  looked into critically by the AfT disbursement 
body.   WT/AFT/W/7 
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  17. The WTO can and should play an active advocacy  and facilitation role through its current 
mandate as well as through its Trade Policy Review mechanism to ensure the mainstreaming of trade 
in national development strategies.   
IV. PROPOSED AFDB ROAD MAP ON THE AID FOR TRADE TO ITS RMCS 
18. The AfDB intends to scale up its trade-related activities to help its RMCs overcome their 
supply-side constraints and behind-the-border issues.  The newly created Department of NEPAD, 
Regional Integration and Trade  aims to mainstream trade into th e Bank's operations and to strengthen 
the Bank's trade-related activities.   
19. Priority will be accorded to the promotion and development of regional infrastructure.  The 
Bank's Country Strategy Papers (CSPs) will be an  important vehicle for operationalizing the trade-
related infrastructure development.   
20. Increased aid for trade resources will be devoted  to reducing the high costs of doing business 
in African countries.  This will be channeled through increased support for trade related reforms, 
including reforms of customs and other agen cies responsible for trade facilitation.   
21. Scaling up of support to address adjustment cost  issues arising from implementation of WTO 
agreements, including issues relating to product/ser vice standards requirements, regulatory issues, 
temporary loss of revenue, preference erosion, and cost of high food prices resulting from elimination 
of agriculture export subsidies.   
22. Promotion and strengthening of private sector tr ade-related support, and creation of enabling 
environment for private sector participation in gene ral and attraction of foreign direct investment in 
particular.   
23. Increased support to research and capacity build ing institutions in Africa to enable them 
undertake research that will complement the Bank's trade-related research work that will inform the 
Bank's policy on trade mainstreaming both in the Bank's operations and th e national development 
strategies of individual RMCs.   
24. The Bank, in partnership with the African Union (AU), ECA, and the Regional Economic 
Communities (RECs), will assist in the rationalizati on and capacity building of African RECs with a 
view to making them effective building blocks fo r the promotion and acceleration of intra-African 
trade.  This will require the widening and deepen ing of coordination and harmonization of regional 
integration and trade related activities of the three partner institutions.   
 
 
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