Review of the performance of national development banks in Africa

Abstract

National development banks hold important keys to most of Africa’s economic and social development agendas, including sustainable economic growth, inclusive growth, employment, productivity, and industrialization. By delivering on their mandate to support economic development through medium- and long-term lending, national development banks can contribute to financial development in various ways. Provided that they have efficient balance sheet management and synergies with other financial institutions, national development banks can contribute to domestic bond markets and financial sector development by leveraging their comparative advantage in long-term lending. They can also enhance financial inclusion, notably by directly and indirectly channeling resources to credit-rationed sectors, especially those where small and medium-sized enterprises and youth and women-owned enterprises are prevalent. National development banks also have a critical role in complementing the activities of multilateral development banks. In this regard, in-depth bank and country case studies would shed light on the full potential of national development banks to contribute to economic growth, industrialization, financial inclusion, and development of the financial sector in Africa. In the study conducted for the present report, a triangulation approach was taken, in which multiple methods or data sources were used as part of operational research to develop a comprehensive understanding of certain phenomena (Patton, 1999). Triangulation has been viewed as a research strategy to test validity through the convergence of information from various sources.