Senior staff have been replaced, its headquarters has been modernised and shareholder faith restored. The AfDB annual meeting in Abidjan from May 27 to 29 should see the culmination of this process, with African and non-African country shareholders approving a capital increase.

In the early 1990s, some non-regional shareholders were wondering aloud whether they wanted to stay in the Bank.

"Now that group is very enthusiastic about a capital increase," Chanel Boucher, AfDB vice president for corporate management, said. "That is the most tangible demonstration that the bank is seen as having turned around.

"Executive directors from the 24 non-African shareholding countries agree broadly, and say that the decision in 1996 to put fresh money into the bank's soft loan arm, the African Development Fund (ADF), was already a sign ofapproval.

The ADF was effectively frozen in 1994 after a damning external report was presented to the Nairobi annual meeting.

Western countries, horrified by managerial lapses, rising arrears and political intrigue inside the AfDB, said they would not provide fresh funds until the bank put its house in order.

Financial and institutional reforms were set in train, the pace picking up with the appointment of Omar Kabbaj, a former Moroccan minister, as president in August 1995. Kabbaj seems sure to win shareholder approval for a capital increase of 35 per cent, some $8 billion. The voting strength of African countries will fall to 60 per cent from 66 per cent, that of non-African states will rise to 40 per cent from 34. Officials say the money is not needed for operational reasons, and that its main purpose is to strengthen capital ratios and consolidate the Bank's standing with rating agencies.

The AfDB is rated AAA by all the big agencies with the exception of Standard & Poor's, which rates it AA+.Bank officials are optimistic about an upgrade later this year. Ironically, a previous 200 per cent capital increase in 1987 played a part in undermining the AfDB. The Bank stepped up its lending to countries that never had a hope of repaying, like Zaire, now renamed Democratic Republic of the Congo, which today owes the AfDB group some $517 million in arrears -- more than 60 per cent of the total $808 million.

Most arrears are owed by countries that have been through some form of civil strife, like Angola and Liberia. The situation has now been stabilised, because of what one executive director called the introduction of "the strictest arrears sanctions of any multilateral development bank".

All disbursements are stopped to a country that is 30 days overdue with payments, and only 14 countries are now eligible to borrow non-concessional funds from the AfDB itself. The other 39 African states have to be content with the limited amount of money in the ADF pot -- hence the importance of the $3.2 billionreplenishment withheld from 1994 to 1996.