Agreement Establishing the African Development Bank (ADB) [*]
Done at: Khartoum
Date enacted: 1963-08-04
In force: 1964-12-10
Content
- Chapter I - Purpose, functions, membership and structure
- Chapter II - Capital
- Chapter III - Operations
- Chapter IV - Borrowing and other additional powers
- Chapter V - Organization and management
- Chapter VI - Withdrawal and suspension of members; temporary suspension and termination of operations of the Bank
- Chapter VII - Status, immunities, exemptions and privileges
- Chapter VIII - Amendments, interpretation, arbitration
- Chapter IX - Final provisions
Preamble
The Governments on whose behalf this Agreement is signed,
Determined to strengthen African solidarity by means of economic co-operation between African States,
Considering the necessity of accelerating the development of the extensive human and natural resources of Africa in order to stimulate economic development and social progress in that region,
Realizing the importance of co-ordinating national plans of economic and social development for the promotion of the harmonious growth of African economies as a whole and the expansion of African foreign trade and, in particular, inter-African trade,
Recognizing that the establishment of a financial institution common to all African countries would serve these ends,
Convinced that a partnership of African and non-African countries will facilitate an additional flow of international capital through such an institution for the economic development and social progress of the region, and the mutual benefit of all parties to this Agreement,
Have agreed to establish hereby the African Development Bank (hereinafter called the “Bank”) which shall be governed by the following provisions:
Chapter I - Purpose, functions, membership and structure
Article 1
Purpose
The purpose of the Bank shall be to contribute to the sustainable economic development and social progress of its regional members individually and jointly.
Article 2
Functions
1. |
To implement its purpose, the Bank shall have the following functions:
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2. |
In carrying out its functions, the Bank shall seek to co-operate with national, regional and sub-regional development institutions in Africa. To the same end, it should co-operate with other international organizations pursuing a similar purpose and with other institutions concerned with the development of Africa. |
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3. |
The Bank shall be guided in all its decisions by the provisions of Articles 1 and 2 of this Agreement. |
Article 3
Membership and geographical area
1. |
Any African country which has the status of an independent State may become a regional member of the Bank. It shall acquire membership in accordance with paragraph 1 or paragraph 2 of Article 64 of this Agreement. |
2. |
The geographical area to which the regional membership and development activities of the Bank may extend (referred to in this Agreement as “Africa” or “African”, as the case may be) shall comprise the continent of Africa and African islands. |
3. |
Non-regional countries which are, or become, members of the African Development Fund, or which have made, or are making, contributions to the African Development Fund under terms and conditions similar to the terms and conditions of the Agreement Establishing the African Development Fund, may also be admitted to the Bank, at such times and under such general rules as the Board of Governors shall have established. Such general rules may be amended only by decision of the Board of Governors by a two-thirds majority of the total number of governors, including two-thirds of the governors of non-regional members, representing not less than three-fourths of the total voting power of the member countries. |
Article 4
Structure
The Bank shall have a Board of Governors, a Board of Directors, a President, at least one Vice-President and such other officers and staff to perform such duties as the Bank may determine.
Chapter II - Capital
Article 5 [1]
Authorized capital
1. |
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2. |
The authorized capital stock shall be divided into paid-up shares and callable shares. The proportion between the paid-up shares and the callable shares shall be determined by the Board of Governors from time to time. The callable shares shall be callable for the purpose defined in paragraph 4(a) of Article 7 of this Agreement. |
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3. |
Subject to the provisions of paragraph 4 of this Article, the authorized capital stock may be increased as and when the Board of Governors deems it advisable. Unless that stock is increased solely to provide for the initial subscription of a member, the decision of the Board shall be adopted by a two-thirds majority of the total number of Governors, representing not less than three-quarters of the total voting power of the members. |
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4. |
The authorized capital stock and any increases thereof shall be allocated for subscription to regional and non-regional members in such proportions that the respective groups shall have available for subscription that number of shares which, if fully subscribed, would result in regional members holding sixty percent of the total voting power and non-regional members holding forty percent of the total voting power. |
[1] |
Paragraph 1(a) of this Article set forth only the initial amounts and values at the date of the creation of the Bank. Following the five general capital increases of 1974, 1979, 1984, 1987, and 1998, the authorized capital currently is twenty-one billion eight hundred and seventy million units of account (UA 21,870,000,000). |
Article 6
Subscription of shares
1. |
Each member shall initially subscribe shares of the capital stock of the Bank. The initial subscription of each member shall consist of an equal number of paid-up and callable shares. The initial number of shares to be subscribed by a State which acquires membership in accordance with paragraph 1 of Article 64 of this Agreement shall be that set forth in this respect in Annex A to this Agreement, which shall form an integral part thereof. The initial number of shares to be subscribed by other members shall be determined by the Board of Governors. |
2. |
In the event of an increase of the capital stock for a purpose other than solely to provide for an initial subscription of a member, each member shall have the right to subscribe, on such uniform terms and conditions as the Board of Governors shall determine, a proportion of the increase of stock equivalent to the proportion which its stock theretofore subscribed bears to the total capital stock of the Bank. No member, however, shall be obligated to subscribe to any part of such increased stock. |
3. |
A member may request the Bank to increase its subscription on such terms and conditions as the Board of Governors may determine. |
4. |
Shares of stock initially subscribed by States which acquire membership in accordance with paragraph 1 of Article 64 of this Agreement shall be issued at par. Other shares shall be issued at par unless the Board of Governors decides in special circumstances to issue them on other terms. |
5. |
Liability on shares shall be limited to the unpaid portion of their issue price. |
6. |
Shares shall not be pledged nor encumbered in any manner. They shall be transferable only to the Bank. |
Article 7
Payment of subscriptions
1. |
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2. |
Payments of the amounts initially subscribed by the members of the Bank to the paid-up capital stock shall be made in convertible currency. The Board of Governors shall determine the mode of payment of other amounts subscribed by the members to the paid-up capital stock. |
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3. |
The Board of Governors shall determine the dates for the payment of amounts subscribed by the members of the Bank to the paid-up capital stock to which the provisions of paragraph 1 of this Article do not apply. |
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4. |
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5. |
The Bank shall determine the place for any payment under this Article provided that, until the first meeting of its Board of Governors provided in Article 66 of this Agreement, the payment of the first instalment referred to in paragraph 1 of this Article shall be made to the Trustee referred to in Article 66. |
Article 8
Special funds
1. |
The Bank may establish, or be entrusted with the administration of, Special Funds which are designed to serve its purpose and come within its functions. It may receive, hold, use, commit or otherwise dispose of resources appertaining to such Special Funds. |
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2. |
The resources of such Special Funds shall be kept separate and apart from the ordinary capital resources of the Bank in accordance with the provisions of Article 11 of this Agreement. |
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3. |
The Bank shall adopt such special rules and regulations as may be required for the administration and use of each Special Fund, provided always that:
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Article 9
Ordinary capital resources
For the purposes of this Agreement, the expression “ordinary capital resources” of the Bank shall include:
a. |
Authorized capital stock of the Bank subscribed pursuant to the provisions of Article 6 of this Agreement; |
b. |
Funds raised by borrowing of the Bank, by virtue of powers conferred in paragraph (a) of Article 23 of this Agreement, to which the commitment to calls provided for in paragraph 4 of Article 7 of this Agreement applies; |
c. |
Funds received in repayment of loans made with the resources referred to in paragraphs (a) and (b) of this Article; |
d. |
Income derived from loans made from the aforementioned funds; income from guarantees to which the commitment to calls provided for in paragraph 4 of Article 7 of this Agreement applies; as well as |
e. |
Any other funds or income received by the Bank, which do not form part of its special resources. |
Article 10
Special resources
1. |
For the purposes of this Agreement, the expression “special resources” shall refer to the resources of Special Funds and shall include:
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2. |
For the purposes of this Agreement, the expression “special resources appertaining to a Special Fund” shall include the resources, funds and income which are referred to in the preceding paragraph and are -as the case may be- contributed to, borrowed or received by, accruing to, or at the disposal of the Special Fund concerned in conformity with the rules and regulations governing that Special Fund. |
Article 11
Separation of resources
1. |
The ordinary capital resources of the Bank shall at all times and in all respects be held, used, committed, invested or otherwise disposed of, entirely separate from special resources. Each Special Fund, its resources and accounts shall be kept entirely separate from other Special Funds, their resources and accounts. |
2. |
The ordinary capital resources of the Bank shall under no circumstances be charged with, or used to discharge, losses or liabilities arising out of operations or other activities of any Special Fund. Special resources appertaining to any Special Fund shall under no circumstances be charged with, or used to discharge, losses or liabilities arising out of operations or other activities of the Bank financed from its ordinary capital resources or from special resources appertaining to any other Special Fund. |
3. |
In the operations and other activities of any Special Fund the liability of the Bank shall be limited to the special resources appertaining to that Special Fund which are at the disposal of the Bank. |
Chapter III - Operations
Article 12
Use of resources
The resources and facilities of the Bank shall be used exclusively to implement the purpose and functions set forth in Articles 1 and 2 of this Agreement.
Article 13
Ordinary and special operations
1. |
The operations of the Bank shall consist of ordinary operations and of special operations. |
2. |
The ordinary operations shall be those financed from the ordinary capital resources of the Bank. |
3. |
The special operations shall be those financed from the special resources. |
4. |
The financial statements of the Bank shall show the ordinary operations and the special operations of the Bank separately. The Bank shall adopt such other rules and regulations as may be required to ensure the effective separation of the two types of its operations. |
5. |
Expenses appertaining directly to ordinary operations shall be charged to the ordinary capital resources of the Bank; expenses appertaining directly to special operations shall be charged to the appropriate special resources. Other expenses shall be charged as the Bank shall determine. |
Article 14
Recipients and methods of operations
1. |
In its operations, the Bank may provide or facilitate financing for any regional member, political subdivision or any agency thereof or for any institution or undertaking in the territory of any regional member as well as for international or regional agencies or institutions concerned with the development of Africa. Subject to the provisions of this chapter, the Bank may carry out its operations in any of the following ways:
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2. |
The provisions of this Agreement applying to direct loans which the Bank may make pursuant to sub-paragraph (a) or (b) of the preceding paragraph shall also apply to its participation in any direct loan undertaken pursuant to any of those sub-paragraphs. Equally, the provisions of this Agreement applying to guarantees of loans undertaken by the Bank pursuant to sub-paragraph (d) of the preceding paragraph shall apply where the Bank guarantees part of such a loan only. |
Article 15
Limitations on operations
1. |
The total amount outstanding in respect of the ordinary operations of the Bank shall not at any time exceed the total amount of its unimpaired subscribed capital, reserves and surplus included in its ordinary capital resources. |
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2. |
The total amount outstanding in respect of the special operations of the Bank relating to any Special Fund shall not at any time exceed the total amount of the unimpaired special resources appertaining to that Special Fund. |
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3. |
In the case of loans made out of funds borrowed by the Bank to which the commitment to calls provided for in paragraph 4(a) of Article 7 of this Agreement applies, the total amount of principal outstanding and payable to the Bank in a specific currency shall not at any time exceed the total amount of principal outstanding in respect of funds borrowed by the Bank that are payable in the same currency. |
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4. |
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Article 16
Provision of currencies for direct loans
In making direct loans, the Bank shall furnish the borrower with currencies other than the currency of the member in whose territory the project concerned is to be carried out (the latter currency hereinafter to be called “local currency”), which are required to meet foreign exchange expenditure on that project; provided always that the Bank may, in making direct loans, provide financing to meet local expenditure on the project concerned:
a. |
Where it can do so by supplying local currency without selling any of its holdings in convertible currencies; or |
b. |
Where in the opinion of the Bank local expenditure on that project is likely to cause undue loss or strain on the balance of payments of the country where that project is to be carried out and the amount of such financing by the Bank does not exceed a reasonable portion of the total local expenditure incurred on that project. |
Article 17
Operational principles
1. |
The operations of the Bank shall be conducted in accordance with the following principles:
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2. |
The Bank shall adopt such rules and regulations as are required for the consideration of projects submitted to it. |
Article 18
Terms and conditions for direct loans and guarantees
1. |
In the case of direct loans made by the Bank, the contract:
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2. |
In the case of loans guaranteed by the Bank, the contract of guarantee:
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3. |
In the case of direct loans made or loans guaranteed by the Bank, the Bank:
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Article 19
Commission and fees
Deleted
Article 20
Special reserve
Deleted
Article 21
Methods of meeting liabilities of the Bank (ordinary operations)
1. |
Whenever necessary to meet contractual payments of interest, other charges or amortization on the borrowing of the Bank, or to meet its liabilities with respect to similar payments in respect of loans guaranteed by it and chargeable to its ordinary capital resources, the Bank may call an appropriate amount of the unpaid subscribed callable capital in accordance with paragraph 4 of Article 7 of this Agreement. |
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2. |
In cases of default in respect of a loan made out of borrowed funds or guaranteed by the Bank as part of its ordinary operations, the Bank may, if it believes that the default may be of long duration, call an additional amount of such callable capital not to exceed in any one year one per cent of the total subscriptions of the members, for the following purposes:
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Article 22
Methods of meeting liabilities on borrowings for Special Funds
Payments in satisfaction of any liability in respect of borrowings of funds for inclusion in the special resources appertaining to a Special Fund shall be charged:
i. |
First, against any reserve established for this purpose for or within the Special Fund concerned; and |
ii. |
Then, against any other assets available in the special resources appertaining to that Special Fund. |
Chapter IV - Borrowing and other additional powers
Article 23
General powers
In addition to the powers provided elsewhere in this Agreement, the Bank shall have power to:
a. |
Borrow funds in member countries or elsewhere, and in that connexion to furnish such collateral or other security as it shall determine provided always that:
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b. |
Buy and sell securities the Bank has issued or guaranteed or in which it has invested provided always that it shall have obtained the approval of any member in whose territory the securities are to be bought or sold; |
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c. |
Guarantee or underwrite securities in which it has invested in order to facilitate their sale; |
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d. |
Invest funds not needed in its operations in such obligations as it may determine and invest funds held by the Bank for pensions or similar purposes in marketable securities; |
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e. |
Undertake activities incidental to its operations such as, among others, the promotion of consortia for financing which serves the purpose of the Bank and comes within its functions; |
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f. |
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g. |
g. Exercise such other powers as shall be necessary or desirable in furtherance of its purpose and functions, consistent with the provisions of this Agreement. |
Article 24
Special borrowing powers
1. |
The Bank may request any regional member to loan amounts of its currency to the Bank in order to finance expenditure in respect of goods or services produced in the territory of that member for the purpose of a project to be carried out in the territory of another member. |
2. |
Unless the regional member concerned invokes economic and financial difficulties which, in its opinion, are likely to be provoked or aggravated by the granting of such a loan to the Bank, that member shall comply with the request of the Bank. The loan shall be made for a period to be agreed with the Bank, which shall be in relation to the duration of the project which the proceeds of that loan are designed to finance. |
3. |
Unless the regional member agrees otherwise, the aggregate amount outstanding in respect of its loans made to the Bank pursuant to this Article shall not, at any time, exceed the equivalent of the amount of its subscription to the capital stock of the Bank. |
4. |
Loans to the Bank made pursuant to this Article shall bear interest, payable by the Bank to the lending member, at a rate which shall correspond to the average rate of interest paid by the Bank on its borrowings for Special Funds during a period of one year preceding the conclusion of the loan agreement. This rate shall in no event exceed a maximum rate which the Board of Governors shall determine from time to time. |
5. |
The Bank shall repay the loan, and pay the interest due in respect thereof, in the currency of the lending member or in a currency acceptable to the latter. |
6. |
All resources obtained by the Bank by virtue of the provisions of this Article shall constitute a Special Fund. |
Article 25
Warning to be placed on securities
Every security issued or guaranteed by the Bank shall bear on its face a conspicuous statement to the effect that it is not an obligation of any government unless it is in fact the obligation of a particular government in which case it shall so state.
Article 26
Valuation of currencies and determination of convertibility
Whenever it shall become necessary under this Agreement:
i. |
To value any currency in terms of another currency or in terms of the unit of account defined in paragraph l (b) of Article 5 of this Agreement, or |
ii. |
To determine whether any currency is convertible, |
such valuation or determination, as the case may be, shall be reasonably made by the Bank after consultation with the International Monetary Fund.
Article 27
Use of currencies
1. |
Members may not maintain or impose any restrictions on the holding or use by the Bank or by any recipient from the Bank, for payments anywhere, of the following:
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2. |
Members may not maintain or impose any restrictions on the holding or use by the Bank or by any recipient from the Bank, for payments anywhere, of currency of a member received by the Bank which does not come within the provisions of the preceding paragraph, unless:
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3. |
Members may not maintain or impose any restrictions on the holding or use by the Bank, for making amortization or anticipatory payments or for repurchasing --in whole or in part -- its obligations, of currencies received by the Bank in repayment of direct loans made out of its ordinary capital resources. |
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4. |
The Bank shall not use currencies which it holds for the purchase of other currencies of its members except:
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Article 28
Maintenance of value of the currency holdings of the bank
1. |
Whenever the par value of the currency of a member is reduced in terms of the unit of account defined in paragraph l(b) of Article 5 of this Agreement or its foreign exchange value has, in the opinion of the Bank, depreciated to a significant extent, that member shall pay to the Bank within a reasonable time an amount in its currency required to maintain the value of all such currency held by the Bank on account of its subscription. |
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 on account of its subscription. |
3. |
The Bank, in the case envisaged by paragraph 1, or the member, in the case envisaged by paragraph 2, may waive its rights under this Article. |
Chapter V - Organization and management
Article 29
Board of Governors - Powers
1. |
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. |
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2. |
The Board of Governors may delegate to the Board of Directors all its powers except the power to:
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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. |
Article 30
Board of Governors - Composition
1. |
Each member shall be represented on the Board of Governors and shall appoint one governor and one alternate governor. They shall be persons of the highest competence and wide experience in economic and financial matters and shall be nationals of the member States. Each governor and alternate shall serve for five years, subject to termination of appointment at any time, or to reappointment, at the pleasure of the appointing member. No alternate may vote except in the absence of his principal. At its annual meeting, the Board shall designate one of the governors as Chairman. The Chairman shall hold office until the election of a successor at the next annual meeting of the Board, unless otherwise decided by the Board of Governors. |
2. |
Governors and alternates shall serve as such without remuneration from the Bank, but the Bank may pay them reasonable expenses incurred in attending meetings. |
Article 31
Board of Governors - Procedure
1. |
The Board of Governors shall hold an annual meeting and such other meetings as may be provided for the Board or called by the Board of Directors. Meetings of the Board of Governors shall be called, by the Board of Directors, whenever requested by five members of the Bank, or by members having one-quarter of the total voting power of the members. Annual Meetings of the Board of Governors shall be held in regional and non-regional member States. |
2. |
A quorum for any meeting of the Board of Governors shall be a majority of the total number of governors or their alternates, representing not less than seventy percent of the total voting power of the members. |
3. |
The Board of Governors may by regulation establish a procedure whereby the Board of Directors may, when it deems such action advisable, obtain a vote of the governors on a specific question without calling a meeting of the Board. |
4. |
The Board of Governors, and the Board of Directors to the extent authorized, may establish such subsidiary bodies and adopt such rules and regulations as may be necessary or appropriate to conduct the business of the Bank. |
Article 32
Board of Directors - Powers
Without prejudice to the powers of the Board of Governors as provided in Article 29 of this Agreement, the Board of Directors shall be responsible for the conduct of the general operations of the Bank and for this purpose shall, in addition to the powers provided for it expressly in this Agreement, exercise all the powers delegated to it by the Board of Governors, and in particular:
a. |
Prepare the work of the Board of Governors; |
b. |
In conformity with the general directives of the Board of Governors, take decisions concerning particular direct loans, guarantees, investments in equity capital and borrowing of funds by the Bank; |
c. |
Determine the rates of interest for direct loans and of commissions for guarantees; |
d. |
Submit the accounts for each financial year and an annual report for approval to the Board of Governors at each annual meeting; and |
e. |
Determine the general structure of the services of the Bank. |
Article 33
Board of Directors - Composition
1. |
The Board of Directors shall be composed of eighteen members who shall not be governors or alternate governors. Twelve members shall be elected by the governors of the regional members and six members shall be elected by the governors of the non-regional members. They shall be elected by the Board of Governors in accordance with Annex B to this Agreement. In electing the Board of Directors, the Board of Governors shall have due regard to the high competence in economic and financial matters required for the office. The Board of Governors may determine to change the number of members of the Board of Directors only by a three-fourths majority of the total voting power of the member countries, including with respect to provisions relating exclusively to the number and election of directors by the regional member countries, by a two-thirds majority of the governors of regional members, and with respect to the provisions relating exclusively to the number and election of directors by non-regional member countries, by a two-thirds majority of the governors of non-regional members. |
2. |
Each director shall appoint an alternate who shall act for him when he is not present. Directors and their alternates shall be nationals of member States; but no alternate may be of the same nationality as his director. An alternate may participate in meetings of the Board but may vote only when he is acting in place of his director. |
3. |
Directors shall be elected for a term of three years and, subject to the limitation set forth in paragraph 4 of this Article, may be re-elected. They shall continue in office until their successors are elected. If the office of a director becomes vacant more than 180 days before the end of his term a successor shall be elected in accordance with Annex B to this Agreement, for the remainder of the term by the Board of Governors at its next session. While the office remains vacant the alternate of the former director shall exercise the powers of the latter except that of appointing an alternate. |
4. |
No director shall serve on the Board of Directors for more than two terms of three years each. A director whose term of office commences between two general elections shall be eligible to be elected director for a cumulative period not exceeding six years in total from the date of his first election; provided always that a director who at the time of his election shall have served two terms of three years each as an alternate director shall not be eligible for re-election. |
Article 34
Board of Directors - Procedure
1. |
The Board of Directors shall function in continuous session at the principal office of the Bank and shall meet as often as the business of the Bank may require. |
2. |
A quorum for any meeting of the Board of Directors shall be a majority of the total number of directors representing not less than seventy percent of the total voting power of the members. |
3. |
The Board of Governors shall adopt regulations under which, if there is no director of its nationality, a member may be represented at a meeting of the Board of Directors when a request made by, or a matter particularly affecting, that member is under consideration. |
Article 35
Voting
1. |
Each member shall have 625 votes and, in addition, one vote for each share of the capital stock of the Bank held by that member, provided, however, that in connexion with any increase in the authorized capital stock, the Board of Governors may determine that the capital stock authorized by such increase shall not have voting rights and that such increase of stock shall not be subject to the pre-emptive rights established in paragraph 2 of Article 6 of this Agreement. |
2. |
Save as otherwise expressly provided in this Agreement, voting in the Board of Governors shall be as specified in this Article. Each governor shall be entitled to cast the votes of the Member that such governor represents. All matters before the Board of Governors shall, in general, be decided by a majority of sixtysix and two-thirds percent of the voting power of the members represented at the meeting, except that in respect of an issue declared by a member as being of great importance, touching upon a substantial interest of that member, such important issue shall be decided, at the request of the member, by a majority of seventy percent of the total voting power. |
3. |
Save as otherwise expressly provided in this Agreement, voting in the Board of Directors shall be as provided in this Article. Each director shall be entitled to cast the number of votes that counted towards the election of such director, which votes shall be cast as a unit. All matters before the Board of Directors shall, in general, be decided by a sixty-six and two-thirds percent majority of the voting power represented at the meeting, except that in respect of an issue declared by a member as being of great importance, touching upon a substantial interest of that member, such important issue shall be decided, at the request of the director concerned, by a majority of seventy per cent of the total voting power. |
Article 36
The President - Appointment
1. |
The Board of Governors shall elect by a majority of the total voting power of the members, including a majority of the total voting power of the regional members, the President of the Bank. He shall be a person of the highest competence in matters pertaining to the activities, management and administration of the Bank and shall be a national of a regional member state. While holding office, he shall not be a governor, a director or alternate for either. The term of office of the President shall be five years. It may be renewed; provided, however, that no person may be elected or serve as President for more than two successive terms of five years each. The President shall be suspended or removed from office if the Board of Governors so decides by a majority of the total voting power of the members, including a majority of the total voting power of the regional members. The Board of Governors shall, upon the suspension or removal of the President from office, appoint an Acting President or, as the case may be, elect a President. |
2. |
The Chairman of the Board of Governors, after consultation with the Bureau, shall convene a meeting of the Board of Governors to consider the suspension of the President upon the written requests of at least five Governors representing not less than five constituencies. |
Article 37
The office of the President
1. |
The President shall be Chairman of the Board of Directors but shall have no vote except a deciding vote in case of an equal division. He may participate in meetings of the Board of Governors but shall not vote. |
2. |
The President shall be chief of the staff of the Bank and shall conduct, under the direction of the Board of Directors, the current business of the Bank. He shall be responsible for the organization of the officers and staff of the Bank, including Vice-Presidents, whom he shall appoint, fix their terms of employment, and release in accordance with the rules and regulations adopted by the Bank, provided that he shall act in consultation with the Board of Directors in the exercise of his powers of appointment and release of Vice-Presidents. |
3. |
The President shall be the legal representative of the Bank. |
4. |
The Bank shall adopt regulations which shall determine who shall legally represent the Bank and perform the other duties of the President in the event that he is absent or that his office should become vacant. |
5. |
In appointing the officers and staff, the President shall make it his foremost consideration to secure the highest standards of efficiency, technical competence and integrity, and recruit them on as wide a geographical basis as possible, paying full regard to the regional character of the Bank, as well as the participation of non-regional states. |
Article 38
Prohibition of political activity - the International Character of the Bank
1. |
The Bank shall not accept loans or assistance that could in any way prejudice, limit, deflect or otherwise alter its purpose or functions. |
2. |
The Bank, its President, Vice-Presidents, officers and staff shall not interfere in the political affairs of any member; nor shall they be influenced in their decisions by the political character of the member concerned. Only economic considerations shall be relevant to their decisions. Such considerations shall be weighed impartially in order to achieve and carry out the functions of the Bank. |
3. |
The President, Vice-Presidents, officers and staff of the Bank, in discharge of their offices, owe their duty entirely to the Bank and to no other authority. Each member of the Bank shall respect the international character of this duty and shall refrain from all attempts to influence any of them in the discharge of their duties. |
Article 39
Office of the Bank
1. |
The principal office of the Bank shall be located in the territory of a regional member State. The choice of the location of the principal office of the Bank shall be made by the Board of Governors at its first meeting, taking into account the availability of facilities for the proper functioning of the Bank. |
2. |
Notwithstanding the provisions of Article 35 of this Agreement, the choice of the location of the principal office of the Bank shall be made by the Board of Governors in accordance with the conditions that applied to the adoption of this Agreement. |
3. |
The Bank may establish branch offices or agencies elsewhere. |
Article 40
Channel of communications - Depositories
1. |
Each member shall designate an appropriate authority with which the Bank may communicate in connexion with any matter arising under this Agreement. |
2. |
Each member shall designate its central bank or such other institution as may be agreed by the Bank, as a depository with which the Bank may keep its holdings of currency of that member as well as other assets of the Bank. |
3. |
The Bank may hold its assets with such depositories as the Board of Directors shall determine. |
Article 41
Publication of the Agreement, working languages, provision of information and reports
1. |
The Bank shall endeavour to make available the text of this Agreement and all its important documents in the principal languages used in Africa. The working languages of the Bank shall be, if possible, African languages, English and French. |
2. |
Members shall furnish the Bank with all information it may request of them in order to facilitate the performance of its functions. |
3. |
The Bank shall publish and transmit to its members an annual report containing an audited statement of the accounts. It shall also transmit quarterly to the members a summary statement of its financial position and a profit and loss statement showing the results of its operations. The Annual Report and the Quarterly Statements shall be drawn up in accordance with the provisions of paragraph 4 of Article 13 of this Agreement. |
4. |
The Bank may also publish such other reports as it deems desirable to carry out its purpose and functions. They shall be transmitted to the members of the Bank. |
Article 42
Allocation of net income
1. |
The Board of Governors shall determine annually what part of the net income of the Bank, including the net income accruing to its Special Funds, shall be allocated --after making provision for reserves --to surplus and what part, if any, shall be distributed. |
2. |
The distribution referred to in the preceding paragraph shall be made in proportion to the number of shares held by each member. |
3. |
Payments shall be made in such manner and in such currency as the Board of Governors shall determine. |
Chapter VI - Withdrawal and suspension of members; temporary suspension and termination of operations of the Bank
Article 43
Withdrawal
1. |
Any member may withdraw from the Bank at any time by transmitting a notice in writing to the Bank at its principal office. |
2. |
Withdrawal by a member shall become effective on the date specified in its notice but in no event less than six months after the date that notice has been received by the Bank. |
Article 44
Suspension
1. |
If a member fails to fulfil any of its obligations under this Agreement or any other obligation to the Bank arising from the Bank’s operations under this Agreement, the Board of Governors may suspend such member by a decision of the Board of Governors representing not less than seventy per cent of the total voting power of the members. The Board of Governors may, in lieu of suspension of membership, order suspension of the voting rights of such member upon such terms and conditions as may be established by the Board of Governors, pursuant to regulations adopted under paragraph 4 of this Article. |
2. |
The member suspended from membership shall automatically cease to be a member of the Bank one (1) year from the date of its suspension unless the Board of Governors, during the one year period, decides by the same majority necessary for suspension to restore the member to good standing. |
3. |
While under suspension from membership, a member shall not be entitled to exercise any rights under this Agreement, except the right of withdrawal, but shall remain subject to all obligations. |
4. |
The Board of Governors shall adopt regulations as may be necessary for the implementation of this Article. |
Article 45
Settlement of accounts
1. |
After the date on which a State ceases to be a member (hereinafter in this Article called the “termination date”), the member shall remain liable for its direct obligations to the Bank and for its contingent liabilities to the Bank so long as any part of the loans or guarantees contracted before the termination date is outstanding; but it shall cease to incur liabilities with respect to loans and guarantees entered into thereafter by the Bank and to share either in the income or the expenses of the Bank. |
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2. |
At the time a State ceases to be a member, the Bank shall arrange for the repurchase of its shares as a part of the settlement of accounts with that State in accordance with the provisions of paragraphs 3 and 4 of this Article. For this purpose, the repurchase price of the shares shall be the value shown by the books of the Bank on the termination date. |
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3. |
The payment for shares repurchased by the Bank under this Article shall be governed by the following conditions:
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4. |
If the Bank terminates its operations pursuant to Article 47 of this Agreement within six months of the termination date, all rights of the State concerned shall be determined in accordance with the provisions of its Articles 47 to 49. |
Article 46
Temporary suspension of operations
In an emergency, the Board of Directors may suspend temporarily operations in respect of new loans and guarantees pending an opportunity for further consideration and action by the Board of Governors.
Article 47
Termination of operations
1. |
The Bank may terminate its operations in respect of new loans, guarantees and equity investments by a decision of the Board of Governors exercising a majority of seventy-five per cent of the total voting power. |
2. |
After such termination, the Bank shall forthwith cease all activities, except those incident to the orderly realization, conservation and preservation of its assets and settlement of its obligations. |
Article 48
Liability of Members and payment of claims
1. |
In the event of termination of the operations of the Bank, the liability of all members for uncalled subscriptions to the capital stock of the Bank and in respect of the depreciation of their currencies shall continue until all claims of creditors, including all contingent claims, shall have been discharged. |
2. |
All creditors holding direct claims shall be paid out of the assets of the Bank and then out of payments to the Bank on calls on unpaid subscriptions. Before making any payments to creditors holding direct claims, the Board of Directors shall make such arrangements as are necessary, in its judgment, to ensure a pro rata distribution among holders of direct and contingent claims. |
Article 49
Distribution of assets
1. |
In the event of termination of operations of the Bank, no distribution shall be made to members on account of their subscriptions to the capital stock of the Bank until: i. All liabilities to creditors have been discharged or provided for; and ii. The Board of Governors has taken a decision to make a distribution. This decision shall be taken by the Board exercising a majority of the total voting power of the members, including a majority of the total voting power of the regional members. |
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2. |
After a decision to make a distribution has been taken in accordance with the preceding paragraph, the Board of Directors may decide to make successive distributions of the assets of the Bank to members until all assets have been distributed. This distribution shall be subject to the prior settlement of all outstanding claims of the Bank against each member. |
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3. |
Before any distribution of assets is made, the Board of Directors shall fix the proportionate share of each member according to the ratio of its shareholding to the total outstanding shares of the Bank. |
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4. |
The Board of Directors shall value the assets to be distributed at the date of distribution and then proceed to distribute in the following manner:
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5. |
Any member receiving assets distributed by the Bank in accordance with the preceding paragraph shall enjoy the same rights with respect to such assets as the Bank enjoyed before their distribution. |
Chapter VII - Status, immunities, exemptions and privileges
Article 50
Status
To enable it to fulfil its purpose and the functions with which it is entrusted, the Bank shall possess full international personality. To those ends, it may enter into agreements with members, non-member States and other international organizations. To the same ends, the status, immunities, exemptions and privileges set forth in this chapter shall be accorded to the Bank in the territory of each member.
Article 51
Status in Member Countries
In the territory of each member the Bank shall possess full juridical personality and, in particular, full capacity:
a. |
To contract; |
b. |
To acquire and dispose of immovable and movable property; and |
c. |
To institute legal proceedings. |
Article 52
Judicial proceedings
1. |
The Bank shall enjoy immunity from every form of legal process except in cases arising out of the exercise of its borrowing powers when it may be sued only in a court of competent jurisdiction in the territory of a member in which the Bank has its principal office, or in the territory of a member or non-member State where it has appointed an agent for the purpose of accepting service or notice of process or has issued or guaranteed securities. No actions shall, however, be brought by members or persons acting for or deriving claims from members. |
2. |
The property and assets of the Bank shall, wherever located and by whomsoever held, be immune from all forms of seizure, attachment or execution before the delivery of final judgement against the Bank. |
Article 53
Immunity of assets and archives
1. |
Property and assets of the Bank, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation, expropriation or any other form of taking or foreclosure by executive or legislative action. |
2. |
The archives of the Bank and, in general, all documents belonging to it or held by it, shall be inviolable, wherever located. |
Article 54
Freedom of assets from restriction
To the extent necessary to carry out the purpose and functions of the Bank and subject to the provisions of this Agreement, all property and other assets of the Bank shall be exempt from restrictions, regulations, controls and moratoria of any nature.
Article 55
Privilege for communications
Official communications of the Bank shall be accorded by each member the same treatment that it accords to the official communications of other members.
Article 56
Personal immunities and privileges
All governors, directors, alternates, officers and employees of the Bank and experts and consultants performing missions for the Bank:
i. |
Shall be immune from legal process with respect to acts performed by them in their official capacity; |
ii. |
Where they are not local nationals, shall be accorded the same immunities from immigration restrictions, alien registration requirements and national service obligations, and the same facilities as regards exchange regulations as are accorded by members to the representatives, officials and employees of comparable rank of other members; and |
iii. |
Shall be granted the same treatment in respect of travelling facilities as is accorded by members to representatives, officials and employees of comparable rank of other members. |
Article 57
Exemption from taxation
1. |
The Bank, its property, other assets, income and its operations and transactions shall be exempt from all taxation and from all customs duties. The Bank shall also be exempt from any obligation relating to the payment, withholding, or collection of any tax or duty. |
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2. |
No tax shall be levied on or in respect of salaries and emoluments paid by the Bank to directors, alternates, officers and other professional staff of the Bank. |
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3. |
No tax of any kind shall be levied on any obligation or security issued by the Bank, including any dividend or interest thereon, by whomsoever held:
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4. |
No tax of any kind shall be levied on any obligation or security guaranteed by the Bank, including any dividend or interest thereon, by whomsoever held:
|
Article 58
Notification of implementation
Each member shall promptly inform the Bank of the specific action which it has taken to make effective in its territory the provisions of this chapter.
Article 59
Application of immunities, exemptions and privileges
The immunities, exemptions and privileges provided in this chapter are granted in the interests of the Bank. The Board of Directors may waive, to such extent and upon such conditions as it may determine, the immunities and exemptions provided in Articles 52, 54, 56, and 57 of this Agreement in cases where its action would in its opinion further the interests of the Bank. The President shall have the right and the duty to waive the immunity of any official in cases where, in his opinion, the immunity would impede the course of justice and can be waived without prejudice to the interests of the Bank.
Chapter VIII - Amendments, interpretation, arbitration
Article 60
Amendments
1. |
Any proposal to introduce modifications to this Agreement whether emanating from a member, a governor or the Board of Directors, shall be communicated to the Chairman of the Board of Governors, who shall bring the proposal before that Board. If the proposed amendment is approved by the Board, the Bank shall, by circular letter, facsimile or telegram, ask the members whether they accept the proposed amendment. When twothirds of the members, having three-quarters of the total voting power of the members, including two-thirds of the regional members having three-quarters of the total voting power of the regional members, have accepted the proposed amendment, the Bank shall promptly certify the fact by formal communication addressed to the members. |
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2. |
Notwithstanding paragraph 1 of this Article, the voting majorities provided in Article 3(3) may be amended only by the voting majorities stated therein. |
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3. |
Notwithstanding paragraph 1 of this Article, acceptance by all the members is required for any amendment modifying:
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4. |
Amendments shall enter into force for all members three months after the date of the formal communication provided for in paragraph 1 of this Article unless the Board of Governors specifies a different period. |
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5. |
Notwithstanding the provisions of paragraph 1 of this Article, three years at the latest after the entry into force of this Agreement and in the light of the experience of the Bank, the rule according to which each member should have one vote shall be examined by the Board of Governors or at a meeting of Heads of State of the member countries in accordance with the conditions that applied to the adoption of this Agreement. |
Article 61
Interpretation
1. |
The English and French texts of this Agreement shall be regarded as equally authentic. |
2. |
Any question of interpretation of the provisions of this Agreement arising between any member and the Bank or between any members of the Bank shall be submitted to the Board of Directors for decision. If there is no director of its nationality on that Board, a member particularly affected by the question under consideration shall be entitled to direct representation in such cases. Such right of representation shall be regulated by the Board of Governors. |
3. |
In any case where the Board of Directors has given a decision under paragraph 2 of this Article, any member may require that the question be referred to the Board of Governors, whose decision shall be sought --under a procedure to be established in accordance with paragraph 3 of Article 31 of this Agreement --within three months. That decision shall be final. |
Article 62
Arbitration
In case of a dispute between the Bank and a former member, or between the Bank and a member upon the termination of the operations of the Bank, such dispute shall be submitted to arbitration by a tribunal of three arbitrators. Each party shall appoint one arbitrator, and the two arbitrators so appointed shall appoint the third, who shall be the Chairman. If within 30 days of the request for arbitration either party has not appointed an arbitrator or if within 15 days of the appointment of two arbitrators the third arbitrator has not been appointed, either party may request the President of the International Court of Justice, or such other authority as may have been prescribed by regulations adopted by the Board of Governors, to appoint an arbitrator. The procedure shall be fixed by the arbitrators. However, the third arbitrator shall have full power to settle all questions of procedure in case of disagreement with respect thereto. A majority vote of the arbitrators shall be sufficient to reach a decision which shall be final and binding upon the parties.
Chapter IX - Final provisions
Article 63
Signature and deposit
1. |
This Agreement, deposited with the Secretary-General of the United Nations (hereinafter called the “Depositary”), shall remain open until 31 December 1963 for signature by the Governments of States whose names are set forth in Annex A to this Agreement. |
2. |
The Depositary shall communicate certified copies of this Agreement to all the Signatories. |
Article 64
Ratification, acceptance, accession and acquisition of membership
1. |
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2. |
Regional States which do not acquire membership of the Bank in accordance with the provisions of paragraph 1 of this Article may become members-after the Agreement has entered into force-by accession thereto on such terms as the Board of Governors shall determine. The Government of any such State shall deposit, on or before a date appointed by that Board, an instrument of accession with the Depositary who shall notify such deposit and the date thereof to the Bank and to the Parties to this Agreement. Upon the deposit, the State shall become a member of the Bank on the appointed date. |
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3. |
A member may, when depositing its instrument of ratification or acceptance, declare that it retains for itself and its political subdivisions the right to tax salaries and emoluments paid by the Bank to that member’s citizens, nationals or residents. |
Article 65
Entry into force
This Agreement shall enter into force upon the deposit of instruments of ratification or acceptance by twelve signatory Governments whose initial subscriptions, as set forth in Annex A to this Agreement, in aggregate comprise not less than sixty-five percent of the authorized capital stock of the Bank; provided always that 1 January 1964 shall be the earliest date on which this Agreement may enter into force in accordance with the provisions of this Article.[2]
[2] |
According to the Memorandum on the interpretation of Article 65 of the Agreement, the words “authorized capital stock of the Bank” shall be understood to refer to such authorized capital stock of the Bank as is equivalent to 211.2 million units of account and as corresponds to the aggregate initial number of shares to be subscribed by the States that may acquire its membership in accordance with paragraph 1 of Article 64 of the Agreement. For the text of the Memorandum, see page 97 of the Final Act of the Conference of Finance Ministers on the Establishment of an African Development Bank held under the auspices of the United Nations Economic Commission for Africa. |
Article 66
Commencement of operations
1. |
As soon as this Agreement enters into force, each member shall appoint a governor, and the Trustee appointed for this purpose and for the purpose indicated in paragraph 5 of Article 7 of this Agreement shall call the first meeting of the Board of Governors. |
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2. |
At its first meeting, the Board of Governors:
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3. |
The Bank shall notify its members of the date of the commencement of its operations. |
Done in Khartoum, this fourth day of August nineteen hundred and sixty-three, in a single copy in the English and French languages.
Annex A
Initial suscriptions to the authorized capital stock of the Bank
[Omitted]
Annex B
Election of directors
1. |
Non -divi sible vote At the election of directors each governor shall cast all votes of the member he represents for a single person. |
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2. |
Regional Directors
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3. |
Non -regional Directors
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[*] |
* General Counsel’s note: The adoption of the amendment to Article 33 whereby the membership of the Bank’s Board of Directors was increased from nine to eighteen, and provision was made for the exclusive election of twelve directors by regional members and six by non-regional members, necessitated the establishment in Annex B to the Agreement of separate rules for the election of the regional and non-regional directors. The same amendment also made it necessary for the Board of Governors to reconsider the minimum and maximum percentages established in the original version of Annex B for the election of a director. The Board of Governors, during the consideration of this amendment, decided that in the section of Annex B that deals with the election of regional directors, the respective percentages should be eight and ten instead of ten and twelve as in the original rules, and at the same time fixed the minimum and maximum percentages for the election of nonregional directors at fourteen and nineteen respectively. These decisions having been taken before the adoption of the resolution amending the Bank Agreement, the resulting amendment is deemed to have included the adoption of the new minimum and maximum percentage figures. However, reference should be made to the Rules for the Election of Executive Directors and the relevant resolution authorizing their election, which may include variations of the minimum and maximum percentages contained in this Annex B. |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
[See ibid. General Counsel’s note] |
[*] |
As amended by Resolution N 05-79 adopted 1979-05-17, in force 1982-05-07, Resolution B/BG/92/06 adopted 1992-05-13, in force 1994-09-01, Resolution B/BG/97/05 adopted 1997-05-29, in force 1998-05-02, Resolution B/BG/98/04 adopted 1998-05-29, in force 1999-09-13 and Resolution B/BG/2001/08 adopted 2001-05-29, in force 2001-05-29. |