AADFI releases the Results of the 12^th Peer Review of African DFIs

The Association of African Development Finance Institutions (AADFI) has released the report of the 12^th Peer Review and Rating of African DFIs based on AADFI Prudential Standards, Guidelines, and Rating System (PSGRS). The AADFI PSGRS is an assessment tool for African DFIs, focusing on governance, operation, financial management, and development Impact. It aims to help the participating institutions identify their weaknesses and strengths and provide solutions to remedy the weaknesses and consolidate the strengths.

For the 12^th Peer Review, 32 DFIs submitted to the 2022 annual self-assessment exercise. The self-assessment follows a systematic process that includes the participating institutions’ self-assessment with the PSGRS before submitting their results to their external auditors for validation. Thereafter, the results are submitted to the AADFI Secretariat for further evaluation by an independent consultant to arrive at the PSGRS compliance results.

Institutions that scored 80% and above on the compliance index are further evaluated for the AADFI rating based on their development impact performance. The rating results are classified into three categories (A, B, and C) as follows:

Category A includes institutions whose medium-term performance prospects are considered very reassuring; Category B covers institutions whose medium-term performance prospects are considered reassuring; while Category C comprises institutions whose medium-term performance prospects are considered fair and require strengthening in some areas. The Compliance and Rating results are validated by an independent consultant and approved by the AADFI Peer Review Committee.

The results from the 2022 self-assessments revealed that the highest overall compliance performance was assigned to governance, followed by operational management and financial management, which have remained unchanged in the rankings since 2021. However, the average score for the three areas combined was slightly lower in 2022, reflecting a slight decrease in the score of operational management. A total of 24 DFIs were eligible for the rating exercise in 2022, representing 75% of the participating DFIs, as opposed to 86% in 2021 and 81% in 2020, respectively.

The 2022 report is published with the randomly generated codes assigned to each institution participating in the exercise to maintain the confidentiality of the results. This measure follows the PSGRS policy on the disclosure of results and complies with the recent decision of the AADFI Board of Directors. The code for each institution is exclusively communicated to the institution concerned.

The full report on the 12^th Peer Review of African DFIs following the AADFI Assessment Mechanisms can be accessed via this link.