Established in 1963, the Abidjan-based African Development Bank has played a significant role in mobilizing development capital in an unusually harsh lending environment. This expert and candid review presents a balance sheet of the ADB's accomplishments and shortcomings and recommends ways to strengthen its comparative advantage as an institution with the indigenous expertise and rapport too often lacking among larger multilateral lenders. Challenges facing the ADB in the 1990s are legion, including the unrelenting debt burden of most African countries and growing demands for policy-based lending (making loans conditional on such nontraditional criteria as governance standards, environmental impact, and gender equity). Handicaps also plague the institution itself: inadequate research capacity, tensions between African and non-African board members, and a hands-off attitude toward project management that sometimes leaves inexperienced borrowers floundering. Nevertheless, the authors stress the bank's positive achievements in financial management and capacity-building, and urge the institution to strive for leadership in finding indigenous answers to Africa's development problems.