AfDB Seeks Arab Funding Partners as Western Aid Declines

The African Development Bank has begun formal cooperation with Arab development finance institutions to boost funding as Western donors cut back aid. AfDB President Sidi Ould Tah said a structured partnership with the Arab Coordination Group could help close Africa’s growing development finance gap, estimated at $402 billion annually, by supporting long-term investments in infrastructure, industrialisation and job creation.

The African Development Bank (AfDB) has held its first formal meeting with a group of Arab development finance institutions in Abidjan, as it seeks to attract increased funding at a time when Western donors are scaling back their overseas development spending. The meeting, which took place on Tuesday, marked a significant step toward strengthening cooperation between African and Arab financial institutions to address widening development financing gaps across the continent.
The new president of the AfDB, Sidi Ould Tah, said closer engagement with the Arab Coordination Group (ACG) would be critical to sustaining development efforts in Africa as traditional donor nations, including the United States, reduce their foreign aid budgets. He stressed that Africa now requires more reliable and long-term sources of development finance to maintain momentum in key sectors.
“What is necessary now is a more structured partnership which is quite strategic,” Tah said, emphasizing the need for deeper collaboration rather than ad hoc funding arrangements. He noted that working more closely with the ACG could help mobilise substantial long-term financing for priority areas such as industrialisation, infrastructure development and job creation.
The Arab Coordination Group includes major institutions such as the Arab Bank for Economic Development in Africa, the OPEC Fund for International Development and the Saudi Fund for Development. During the meeting, the AfDB and the Arab development institutions signed a formal declaration outlining new terms of engagement. These include clearer co-financing priorities and mechanisms aimed at aligning funding strategies and maximising development impact across African countries.
Rami Ahmad, Vice President for Operations at the OPEC Fund for International Development, said the new approach would involve establishing a coordination platform designed to support large-scale, long-term investments across regions. He explained that this model would move away from isolated, country-specific projects toward broader initiatives capable of delivering sustained economic transformation.
Arab financial institutions have already contributed billions of dollars to Africa’s development over the years, funding projects in areas such as transport infrastructure, sanitation, agriculture and water systems. However, Tah said global economic pressures and “external shocks” have significantly widened Africa’s development financing gap — the difference between current levels of funding and the amount needed to build critical infrastructure such as ports, agricultural systems and industrial facilities.
In December, Tah estimated that Africa faces an annual development financing shortfall of about $402 billion, a gap he said must be urgently addressed to support economic growth and resilience across the continent. Strengthened partnerships with Arab development lenders, he added, could play a vital role in closing that gap and ensuring sustained investment in Africa’s long-term development goals.