The Association of African Development Finance Institutions (AADFI) has published the report on the 11th Peer Review and Rating of the African development finance institutions (DFIs) for 2021, following its approval by the AADFI Board of Directors (BOD) at its 101st meeting, held on December 8, 2021. The Annual Peer Review and Rating of African DFIs is based on the AADFI Assessment Mechanisms for DFIs that comprises of the following tools: The Prudential Standards, Guidelines, and Rating System (PSGRS); the Technical Standards, Guidelines, and Rating System (TSGRS); and the Development Impact Criteria and Rating System (DICRS).
The report on the 2021 Peer Review contains essential information on the assessment results for compliance with the guidelines and standards and the assessment results for the rating based on development impact criteria. The report upholds the reform introduced in 2020 aimed at improving the effectiveness of the PSGRS assessment mechanisms, which includes:
1• Verifying that the self-assessment results submitted by participating institutions correspond to the approved guidelines and standards;
2• Assessing and incorporating the assessment results for institutions that met the criteria for the rating in the three categories;
3• Approving the issuance of Certificates of Compliance to DFIs that submitted their self-assessments, as well as Rating Certificates to deserving DFIs.
For the 2021 Peer Review, 37 DFIs submitted their self-assessments, which was an improvement compared to 27 DFIs in the previous year. The 37 DFIs comprised 24 ordinary members, 8 regional members, and 5 non-members. The increase in the number signals gradual recovery from the disruptive impact of covid-19 on the operations of DFIs.
The results from the assessment show that the highest overall compliance performance of the three areas (governance, operational management, and financial management) of the PSGRS is assigned to governance with an average compliance performance of 87%. While for the 18 sectors, the highest overall compliance performance is assigned to “Management Independence and Incentives” and “Supervision and Collection Policies”.
A total of 32 DFIs, representing 86% of the 37 participating DFIs, were eligible for the rating exercise. However, the assessment for the rating involved 18 of the 32 eligible DFIs that returned the questionnaire for specific data collection focusing on evaluating development impact potential. The 18 DFIs that were eligible for rating was further assigned to rating categories following their performance at the rating assessment, which include:
- Category A: 7 DFIs, or 39.5%
- Category B: 9 DFIs, or 50.2%
- Category C: 2 DFIs, or 11%
The full report on the 11th Peer Review of African DFIs following the AADFI Assessment Mechanisms can be accessed via this link.