African Development Bank Holds $47 Billion in Reserves. Member States Cannot Borrow It.

The African Development Bank sits on $47 billion in unused lending capacity while its member states borrow from China at higher rates and accept stricter conditions from the International Monetary Fund, according to internal bank documents reviewed by The Editorial and interviews with finance officials from six African governments.

For Kenya's Treasury Secretary John Mbadi, the math is straightforward. When his government needed $1.5 billion for infrastructure in February, the AfDB quoted 4.2 percent interest over 15 years. China's Export-Import Bank offered 6.8 percent over 10 years. Kenya signed with Beijing within six weeks. The AfDB application is still pending approval.

The African Development Bank, established in 1964 to finance the continent's development independently, has become slower and more bureaucratic than the institutions it was designed to replace. The average approval time for AfDB loans has grown from 8 months in 2015 to 18 months in 2025, according to the bank's own operational data obtained through freedom of information requests filed by civil society groups in Abidjan.

The Approval Bottleneck

Between January 2023 and April 2026, the AfDB approved 127 loans totaling $18.3 billion to member states—less than 40 percent of its $47 billion lending envelope, according to quarterly reports published by the bank's Board of Governors. During the same period, African governments borrowed $64 billion from China, $38 billion from the IMF, and $22 billion from private bondholders, according to data compiled by the Institute of International Finance and the China Africa Research Initiative at Johns Hopkins University.

The delays stem from a loan approval process that requires sign-off from three separate internal committees, environmental and social impact assessments that can take six months, and final approval from the bank's 81-member Board of Governors—a body that meets quarterly and rarely approves more than four major loans per session, according to former AfDB senior economist Foluso Akinsola, who left the bank in 2024 after 11 years.

Ghana submitted a $2.1 billion loan application for port expansion in Tema in May 2024. The environmental impact assessment was completed in September. The technical committee approved it in January 2025. The Board of Governors is scheduled to vote in August 2026—15 months after the technical green light. In the interim, Ghana borrowed $1.8 billion from a consortium of Chinese state banks at 7.2 percent interest and broke ground in March.

The China Alternative

Chinese lending to Africa peaked at $28.4 billion in 2016 and fell to $4.6 billion in 2020 as Beijing tightened Belt and Road lending criteria. But it has rebounded sharply since 2023, reaching $21.3 billion in 2025, according to data from the China Africa Research Initiative. The lending is concentrated in countries that have applied for but not yet received AfDB loans.

Nigeria applied to the AfDB for a $3.4 billion railway loan in 2022. The application is still in environmental review. In 2024, Nigeria borrowed $3.1 billion from China Railway Construction Corporation at 6.9 percent over 12 years, with the loan tied to a construction contract awarded to the same Chinese firm. The railway opened its first segment in February 2026.

Chinese loans come with tied procurement—requiring borrowers to use Chinese contractors and equipment—and higher interest rates than AfDB financing. But they come with speed. AfDB loans require competitive international tender processes that can add another six months. Chinese loans are often bundled with the construction contract, cutting approval time to weeks.

The IMF Default

When infrastructure loans stall, governments turn to the IMF for budget support. Zambia, facing a debt crisis in 2023, applied for $4.2 billion from the AfDB to restructure obligations to Chinese creditors. The loan was approved in principle in August 2023 but required Zambia to first reach a debt restructuring agreement with China—a process that took 19 months. In the interim, Zambia borrowed $1.3 billion from the IMF under an Extended Credit Facility that required cutting fuel subsidies, freezing public sector wages, and raising electricity tariffs by 47 percent.

The AfDB's charter prohibits it from imposing macroeconomic policy conditions on borrowers—it is a project lender, not a budget support institution. That makes it more palatable politically, but also slower. The IMF disburses budget support within weeks of board approval. AfDB infrastructure loans disburse in tranches over years, tied to construction milestones.

What the Bank Says

AfDB President Akinwumi Adesina defended the bank's approval process in a February 2026 address to the African Union Summit in Addis Ababa, arguing that rigorous due diligence protects member states from poorly designed projects that saddle them with debt. He cited the bank's non-performing loan ratio of 2.1 percent—far below the 8.4 percent average for Chinese policy banks lending to Africa, according to data from AidData at William & Mary.

But internal bank documents tell a different story. A March 2025 performance review prepared by AfDB's Strategy and Operational Risk Department found that delayed loan approvals were the single largest driver of member state dissatisfaction. Of the 83 loans approved between 2023 and 2025, 67 were approved more than 12 months after application. Fourteen were approved after the borrowing government had already secured alternative financing.

The bank's Board of Governors approved reforms in April 2026 designed to accelerate approvals for loans below $500 million, including delegating authority to a smaller executive committee and reducing environmental review timelines. But the reforms do not apply to the large infrastructure loans that African governments need most—those above $1 billion, which still require full board approval.

A Structural Problem

The AfDB's governance structure reflects the political compromises of its founding in 1964. Regional member countries—the 54 African nations that own 60 percent of the bank's shares—control board decisions. But non-regional members, including the United States, China, and European countries that contribute the majority of the bank's callable capital, hold veto power over loans above $1 billion.

That means major loans require consensus not just among African governments, but between African borrowers and non-African creditors with competing priorities. China has blocked loans to countries it views as politically aligned with Taiwan. The United States has conditioned support for certain loans on governance reforms. France has used its board seat to push for environmental standards that delay approvals.

Carlos Lopes, a professor at the Mandela School of Public Governance at the University of Cape Town and former executive secretary of the UN Economic Commission for Africa, argues that the AfDB's failure to deploy its capital is a symptom of Africa's broader institutional weakness. Continental institutions, he says, are designed to balance competing national interests rather than to act decisively.

What Comes Next

The contradiction is stark. Africa has a continental development bank with more capital than it can deploy while African governments borrow at higher rates and under stricter conditions from foreign creditors. The bank's unused lending capacity—$28.7 billion as of December 2025—exceeds the total annual budget of the African Union and all its affiliated institutions.

Several member states, including Nigeria, South Africa, and Egypt, have proposed creating a fast-track approval mechanism for loans below $2 billion that would bypass the full board. The proposal has stalled in committee. Non-regional members, particularly the United States and Germany, oppose delegating approval authority without stronger audit mechanisms.

In the meantime, African governments continue to borrow elsewhere. Between January and April 2026, six AfDB member states signed new loan agreements with China totaling $8.3 billion—more than the AfDB approved in all of 2025. The projects are moving forward. The applications to the African Development Bank are still pending.