WAEC 2022 Economics · Question 7

The main function of the African Development Bank (AFDB) is to

Options

  1. A.promote free trade and development among members
  2. B.provide loans to finance balance of payment problems
  3. C.provide loans to members to finance viable projects
  4. D.help members overcome their internal problems

Answer: C. provide loans to members to finance viable projects

Explanation written with AI and checked against the answer key

Step 1: Analyze the question The question asks for the main function of the African Development Bank (AfDB). Think about what kind of institution it is.

Step 2: Explain the concept The AfDB was established in 1964 (headquartered in Abidjan, Côte d'Ivoire, and now operating from there after a temporary stay in Tunis). It is a development finance institution, similar to the World Bank but focused on Africa. Its main aim is to promote the economic development and social progress of its regional member countries. It does this mainly by lending money and providing technical support for development projects such as roads, power, agriculture, water supply, and education.

Step 3: Evaluate the options

  • A. Promote free trade and development among members: Free trade promotion is more the role of bodies like ECOWAS, the AfCFTA, or the WTO. Not the AfDB's main function.
  • B. Provide loans to finance balance of payment problems: This is the role of the IMF, not the AfDB.
  • C. Provide loans to members to finance viable projects: This matches the AfDB's core mandate of financing development projects such as infrastructure and agriculture.
  • D. Help members overcome their internal problems: This is too vague and is not a specific function of the bank.

Step 4: Answer The correct option is C.

Tip: Remember the contrast:

  • IMF → balance of payments problems and short-term support
  • World Bank / AfDB → long-term loans for development projects

If you see "projects" and "development," think AfDB or World Bank. If you see "balance of payments," think IMF.

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