[Senate Report 110-441]
[From the U.S. Government Publishing Office]
Calendar No. 937
110th Congress Report
SENATE
2d Session 110-441
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TO AUTHORIZE UNITED STATES PARTICIPATION IN, AND APPROPRIATIONS FOR THE
UNITED STATES CONTRIBUTION TO, THE ELEVENTH REPLENISHMENT OF THE
RESOURCES OF THE AFRICAN DEVELOPMENT FUND
_______
August 1, 2008.--Ordered to be printed
_______
Mr. Biden, from the Committee on Foreign Relations,
submitted the following
REPORT
[To accompany S. 3169]
The Committee on Foreign Relations, having had under
consideration the bill (S. 3169), to authorize United States
participation in, and appropriations for the United States
contribution to, the eleventh replenishment of the resources of
the African Development Fund, reports favorably thereon without
amendment and recommends that the bill do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................2
III. Discussion.......................................................2
IV. Cost Estimate....................................................3
V. Evaluation of Regulatory Impact..................................5
VI. Changes in Existing Law..........................................5
I. Purpose
The purpose of S. 3169 is to authorize United States
participation in, and appropriations for the United States
contribution to, the eleventh replenishment of the resources of
the African Development Fund.
II. Committee Action
S. 3169 was introduced by Senators Biden and Lugar on June
19, 2008. On June 24, 2008, the committee ordered S. 3169
reported favorably without amendment, by voice vote.
III. Discussion
S. 3169, the ``African Development Fund Act of 2008,''
authorizes U.S. participation in the eleventh replenishment of
the resources of the African Development Fund. The authorized
three-year appropriation (2008-2010) of $486.2 million
represents 8.9% of the total $8.9 billion replenishment.
The African Development Fund (AfDF) is a concessional
lending and grant making facility for low-income African member
countries of the African Development Bank. The African
Development Bank includes shareholders from 53 African
countries and 24 non-African countries. The AfDF was created in
1972 and began operations in 1974; there are currently 38 AfDF
borrower countries.
The AfDF is primarily financed by the non-African countries
with the United States ranked fourth in funding behind the UK,
Germany and France. Donors negotiate a replenishment agreement
every three years. In December 2007, negotiations concluded for
the eleventh replenishment of AfDF resources (AfDF-VI) that
will provide financing of $8.9 billion during 2008 to 2011. It
provides grant financing and loans on highly concessional terms
to Africa's poorest countries. The AfDF financing supports
investments in infrastructure, health, education, agriculture,
water supply and sanitation. In addition, it provides technical
assistance to facilitate basic economic policy and
institutional reforms in support of sustainable economic growth
and development.
In the previous AfDF replenishment, the Congress
appropriated $407 million out of a total replenishment of $5.4
billion. In the latest negotiations, the United States
emphasized the following priorities: managing for results,
fragile states, regional operations, and private sector-led
growth.
Managing for Results
The U.S. pushed for a results-based framework, with
concrete indicators and objectives, to guide Fund operations
through 2010. The framework encourages the Fund to focus on
measurable results rather than merely funding priorities. The
committee agrees that the Fund should base its funding on
tangible results and supports this emphasis. The committee
continues to monitor progress at the African Development Bank
on anti-corruption efforts in its projects and programs and
asserts that ensuring that development funds are not stolen or
misused will result in better project and program outcomes. The
committee continues to monitor progress at the African
Development Bank on anti-corruption and transparency promotion.
Fragile States
The Fund has established a special facility to provide
targeted assistance to countries in transition from conflict
and economic failure to stability and growth. Such assistance
will support the elimination of arrears, provide resources to
secure a peaceful and stable environment, and supplement
capacity-building efforts. Countries that will benefit include
post-conflict states such as Liberia. This committee believes
this is an important sector where the Fund can exercise a
comparative advantage. As an eminent persons group on the
African Development Bank (chaired by former Mozambican
President Juaquim Chissano and former Canadian Prime Minister
Paul Martin) advised in its final report in fall 2007, the
``AfDB has excess capacity and the AfDF has excess demand.'' It
is critical that fragile states that comprise the majority of
AfDF borrowing countries have access to sufficient capital in
order to facilitate their reconstruction and development. The
committee recognizes the increased challenges for fragile
states, especially in achieving sufficient capacity to govern
and maintain accountability within government institutions.
Fund resources in such situations must be managed with
extraordinary oversight and the tools to build similar capacity
locally should be a part of any programs implemented.
Regional Operations
The Fund will provide further resources to projects that
enhance regional integration and cross-border infrastructure.
In addition, the Fund will develop a results measurement and
development impact framework specifically for regional
projects. The committee maintains that development in Africa
cannot be achieved on a country-by-country basis. It is vital
that regions develop integrated strategies that will leverage
comparative economic regional advantages.
Private Sector-led Growth
The Fund will increase support in this area by promoting
macroeconomic, regulatory, and financial sector reform, as well
as by helping countries development stronger anti-corruption
frameworks and improved transparency. This includes helping
countries implement the Extractive Industries Transparency
Initiative. Finally, the Fund will also emphasize support to
the agriculture sector, to alleviate the impact of the global
food crisis. This represents an area of priority for the
committee. The committee also encourages the Fund to help
developing countries link programs and projects with private
sector partners in order to reduce poverty, promote growth and
foster job creation. At the same time, it is important that
recipient countries manage private sector growth in a
transparent and consistent manner, conforming to global norms
and standards, especially with regard to extractive industries,
international environmental standards, and internationally
recognized workers rights.
IV. Cost Estimate
In accordance with rule XXVI, paragraph 11(a) of the
Standing Rules of the Senate, the committee provides this
estimate of the costs of this legislation prepared by the
Congressional Budget Office.
United States Congress,
Congressional Budget Office,
Washington, DC, July 31, 2008.
Hon. Joseph R. Biden, Jr.,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 3169, a bill to
authorize U.S. participation in, and appropriations for the
U.S. contribution to, the eleventh replenishment of the
resources of the African Development Fund.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jennifer
Reynolds.
Sincerely,
Peter R. Orszag.
------
Congressional Budget Office Cost Estimate
July 31, 2008.
S. 3169
A bill to authorize United States participation in, and appropriations
for the United States contribution to, the eleventh replenishment of
the resources of the African Development Fund
AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN RELATIONS ON
JUNE 24, 2008
Summary
S. 3169 would authorize the appropriation of $468 million
to replenish the resources of the African Development Fund.
CBO estimates that implementing this bill would cost $94
million in 2009 and $468 million over the 2009-2013 period,
assuming appropriation of the authorized amounts. Enacting the
bill would not affect direct spending or revenues.
S. 3169 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated Cost to the Federal Government
The estimated budgetary impact of S. 3169 is shown in the
following table. The costs of this legislation fall within
budget function 150 (international affairs).
Changes in Spending Due to S. 3169
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2008-2013
----------------------------------------------------------------------------------------------------------------
Changes in Spending Subject to Appropriation:................
Estimated Authorization Level.............................. 156 156 156 0 0 468
Estimated Outlays.......................................... 94 156 156 62 0 468
----------------------------------------------------------------------------------------------------------------
Basis of Estimate
The bill would authorize the appropriation of $468 million
to replenish the resources of the African Development Fund,
which lends money to African countries. The President has
requested the appropriation of $468 million to implement an
agreement with the African Development Fund. International
agreements to replenish the resources of multilateral
development banks typically cover a number of years. According
to Administration documents, the replenishment agreements for
the African Development Fund cover the 2009-2011 period. CBO
assumes, for this estimate, that the replenishment amounts
would be provided in equal installments over that period. CBO
estimates that implementing this bill would cost $94 million in
2009 and $468 million over the 2009-2013 period, assuming
appropriation of the authorized amounts.
Intergovernmental and Private-Sector Impact
S. 3169 contains no intergovernmental or private-sector
mandates as defined in UMRA and would not affect the budgets of
state, local, or tribal governments.
Estimate Prepared by:
Federal Costs: Jennifer Reynolds
Impact on State, Local, and Tribal Governments: Neil Hood
Impact on the Private Sector: Jacob Kuipers
Estimate Approved by:
Theresa Gullo, Deputy Assistant Director for Budget
Analysis
V. Evaluation of Regulatory Impact
Pursuant to rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. Changes in Existing Law
In compliance with rule XXVI, paragraph 12 of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, existing law in which no change is proposed is shown in
roman).
The African Development Fund Act
* * * * * * *
SEC. 219. ELEVENTH REPLENISHMENT.
(a) The United States Governor of the Fund is authorized to
contribute on behalf of the United States $468,165,000 to the
eleventh replenishment of the resources of the Fund, subject to
obtaining the necessary appropriations.
(b) In order to pay for the United States contribution
provided for in subsection (a), there are authorized to be
appropriated, without fiscal year limitation, $468,165,000 for
payment by the Secretary of the Treasury.