The Nation Newspaper

Tag: AfDB

  • AfDB gives $22m loan to Zambia

    AfDB gives $22m loan to Zambia

    THE Board of Directors of the African Development Bank (AfDB) Group has approved a $22.49 million loan to Zambia for the development of Lake Tanganyika.

    This project has been formulated as part of the long-term vision for Zambia (Vision 2030) by which it intends to become “a prosperous middle-income country by 2030”.

    Its aim is help implement the amended Sixth National Development Plan, which covers 2013-2016 and to facilitate and accelerate “economic growth and development in the service of the people”.

    Accordingly, it aims to stimulate job creation and rural development, in this way boosting inclusive growth.

    The project will be implemented over a five-year period in two districts, Mpulungu and Nsama, which surround the drainage basin of the lake and which have 157,830 inhabitants. The incidence of poverty is much higher in these districts than in other districts of Zambia.

    Specifically, the project will promote sustainable and equitable management and use of the lake’s natural resources, and it will help improve the livelihoods of local communities (in the drainage basin of the lake), by encouraging the development of economic infrastructure and human resources, and by strengthening market linkages and the development of value chains for the products of natural resources.

    The project should improve the fish supply (catches) by 20 to 25 per cent. In addition, it will help members of the local population adopt sustainable practices and technologies for the management of land, forests and water, with the goal of limiting land degradation and deforestation, and boosting agricultural production.

    Furthermore, the project should have a positive, virtuous impact on the conservation and preservation of the area’s wildlife and heritage and on specific resources – particularly the national park – which can play a role in local economic development.

    Unleashing the full potential of the lake’s resources will increase the incomes of rural households. Project implementation will be participative, so that local people take ownership of it and ensure its sustainability.

    The total estimated cost of the project is $29.62 million. In addition to AfDB, the Global Environment Facility (GEF) is making a contribution with a $7 million donation and the Zambian government is committing $190,000.

     

  • AfDB puts intra- Africa’s trade value at $110b

    The Africa Development Bank (AfDB) has said the share of intra-African trade accounts for 11 per cent ($110 billion) of the value of total African trade.

    The Trade Finance in Africa released by the bank at the weekend explained that given the estimated rejection rates of trade finance applications, the conservative estimate for the value of unmet demand for bank-intermediated trade finance is $110 billion to $120 billion, significantly higher than estimated earlier figures of about $25 billion. These figures, it said, suggest that the market is significantly underserved.

    It said that African banks face numerous constraints in meeting the demand for trade finance. “The survey reveals that the main constraints are limited dollar availability (by far the dominant currency in international trade, and by extension, trade finance) and insufficient limits with confirming banks for confirming letters of credit. Other constraints include small balance sheets, which tends to make single obligor limits frequently binding. These constraints also suggest that the AfDB’s trade finance program, as well as those implemented by other international financial institutions, are needed and well suited to relaxing some of the most binding constraints,” it said.

    It however, insisted that the outlook of banks for trade finance remains positive, with 72 per cent expecting to increase their trade finance activities in the immediate future.

    “However, banks foresee obstacles to their trade finance portfolio growth such as low US dollar liquidity, regulation compliance, slow economic growth in some markets, and the inability to assess the credit-worthiness of potential borrowers,” it said.

  • AfDB to invest $12.7m in private equity firm

    The Board of Directors of the African Development Bank (AfDB) has approved a $12.73 million equity investment in the African compartment of the Moringa Private Equity Fund.

    Moringa will invest in scalable, replicable agroforestry projects in Sub-Saharan Africa and Latin America. The Fund will invest in projects that combine plantation forestry (producing biomass, fuel wood, or timber) with agricultural elements (producing staple food crops for local markets and/or niche export crops) to capture most of the value chain.

    The Fund will also be associated with a grant-based Technical Assistance Facility.

    Sponsored by La Compagnie Benjamin de Rothschild (CBR), and ONF International (ONFI), the international subsidiary of the French Office National des Forêts, the Fund will benefit from CBR back-office and investment platform, while ONFI contributes agroforestry technical expertise and regional presence in the Fund’s targeted geographies.

    The Moringa investment strategy is well aligned with the African Development Bank’s Ten-Year Strategy (2013 to 2022), focusing on inclusive green growth as the pathway to sustainable development and creating broad-based prosperity, as well as the Bank’s Climate Change Action Plan, which aims to make investments to reduce the continent’s vulnerability to climate change.

    This strategic fit will allow the bank to provide a significant boost to Moringa’s operations via its high public profile, sector expertise and network across the African continent.

    Agroforestry generates a strong and diversified platform for the development of forestry sector businesses, whilst also paying attention to the need for agricultural production. Smallholders benefit from an income diversification supported by an investor with a long time horizon.

    The Fund will drive better land management, higher and more sustainable income for local populations, and a positive environmental impact on carbon storage, soil/water management and biodiversity. By investing in sustainable agroforestry solutions, the Fund will assist Governments in meeting their adaptation and mitigation targets.

    The AfDB will provide an equity investment of up to $12.73 million to an African-based vehicle, which has been established for investments located in Sub-Saharan Africa.

    The bank’s investment brings its total commitments to Moringa to  about $85 million and, as the first investor from the continent, it provides further validation of the fund’s African strategy and prospects as the fund enters the final fundraising phase.

  • Africa’s trade value hits $110b, says AfDB

    The Africa Development Bank (AfDB) has said the share of intra-African trade accounts for 11 per cent ($110 billion) of the value of total African trade.

    The Trade Finance in Africa released by the bank at the weekend, explained that given the estimated rejection rates of trade finance applications, the conservative estimate for the value of unmet demand for bank-intermediated trade finance is between $110 billion and $120 billion, significantly higher than estimated earlier figures of about $25 billion. These figures, it said, suggest that the market is significantly underserved.

    It said African banks face numerous constraints in meeting the demand for trade finance.

    It said: “The survey reveals that the main constraints are limited dollar availability (by far the dominant currency in international trade, and by extension, trade finance) and insufficient limits with confirming banks for confirming letters of credit. Other constraints include small balance sheets, which tends to make single obligor limits frequently binding. These constraints also suggest that the AfDB’s trade finance program, as well as those implemented by other international financial institutions, are needed and well suited to relaxing some of the most binding constraints.”

    It however, insisted that the outlook of banks for trade finance remains positive, with 72 per cent expecting to increase their trade finance activities in the immediate future.

    “However, banks foresee obstacles to their trade finance portfolio growth such as low US dollar liquidity, regulation compliance, slow economic growth in some markets, and the inability to assess the credit-worthiness of potential borrowers,” it said.

    Also, the AfDB Board has approved $1-billion trade finance (TF) programme to support African trade and provide financing to underserved African-based financial institutions and enterprises.

    The African lender said despite its importance, there is a great deal it never knew about the trade finance market in the continent.

    This includes the size of the market, the variations across sub-regions, the scale of financing gap, the trade finance devoted to intra-African trade, the relative importance of on-balance sheet versus off-balance sheet financing, and constraints faced by banks.

    “It is based on a unique survey of the trade finance activities performed by commercial banks in Africa in 2011 and 2012. Our survey questionnaire was sent to approximately 900 banks on the continent. We received a high response rate, resulting in a dataset that covers 276 banks across 45 countries.

    distributed across sub-regions as the average trade finance assets per bank in Northern Africa dwarfs those of the other sub-regions. The share of bank-intermediated trade finance that is devoted to intra-African trade is limited, and comprises approximately 18 per cent ($68 billion) of the total trade finance assets of African banks,” it said.

  • Ex-AfDB chief urges fight against corruption

    Aformer Vice-President, African Development Bank (AfDB), Chief Bisi Ogunjobi, has identified bad governance and corruption as some of the reasons it has been difficult to engineer economic transformation in the country.

    He identified the key elements of good governance to include openness, transparency and accountability; fairness and equity in dealing with citizens.

    Other elements of good governance, he noted, include efficient and effective service provision; consistency and coherence in policy formulation; respect for the rule of law; and high standard of ethical behaviour, which he advised must be embedded in the transformational process.

    Ogunjobi, who spoke on the sideline of the Sixth Annual Conference of the Institute of Economists of Nigeria (INEN), in Lagos, pointed out that the transformation and development of the economy in all sectors is a sine qua non for the attainment of Vision 20:2020 of the Federal Government.

    He said however ambitious the goal was in reaching a $900 billion Gross Domestic Product (GDP) by 2020, the challenge of insurgency remains critical and constitutes an obstacle for successful implementation of a national transformation agenda. It is therefore important that the country should be on the right trajectory to achieve these goals even if not in 2020.

    He noted that though significant progress has been made at the macro-economic level with the aim of moving the economy forward, citizens’ welfare and insecurity remains critical challenges for economic development especially with the insurgency in the Northeastern Zone of the country.

    This development, he regrets, has further complicated challenges such as poor infrastructure, and poverty amongst the citizens, even in the mist of the vast human and natural resources.

    The failure to realise this potential in the economy, he said, was a reflection of how the economy is managed by politicians, policy makers and business entrepreneurs.

    He said in most African countries, the welfare of citizens had received inadequate attention while the pillars of good governance including accountability, transparency and responsiveness are limited.

  • AfDB to invest in people-centred innovation

    Innovation and technology can serve as a springboard for economic transformation provided they are driven by people, the African Development Bank (AfDB) said at the ninth Annual African Economic Conference (AEC)  which ended in Addis Ababa on Monday.

    Decision-makers and business leaders, economists and academics from across the globe, met for the AEC to discuss how to harness knowledge and innovation to boost youth employment, foster the adoption of new technologies, and enhance Africa’s economic transformation.

    “Investments in skills, technology, knowledge, and innovation will ensure democratic and responsive governance that can deliver effective public services and facilitate universal access to basic services, such as food and nutrition, water and sanitation, shelter, health and education,” African Union Commission Chairperson, Nkosazana Dlamini Zuma said.

    Acting Chief Economist and Vice-President of African Development Bank, Steve Kayizzi-Mugerwa said innovation is seen as an essential component for the transformation of African economies.

    “We need to stop being lazy analysts and take our challenges for ourselves; stop wasting resources and implement our own ideas. Africa must first understand where we are, what brought us here and then try to understand what to do differently to bring different results,” he said.

    Beyond technology and technology transfer, the role of innovation was discussed at the conference as a trigger for behaviour and social change. “Innovation is a key determinant of the ability of economies to sustain growth, and is critical to improving socio-economic conditions. Socio-economic transformation in Africa requires both adaption of existing technologies, and the development of home-grown innovations,” Director, UNDP Regional Bureau for Africa, UN Assistant Secretary General, Abdoulaye Mar Dieye said.

    The continent can boost its development agenda by using technology and technology transfer creatively, participants argued, creating revenue opportunities for farmers, jobs for youths in urban areas and tackling a wide diversity of challenges, from climate change adaptation to disaster risk reduction.

    M-Pesa, an innovative mobile-phone payment system, created in Kenya and expanded to Tanzania, South Africa, Afghanistan, India and Eastern Europe, has had great impact on the lives of ordinary Kenyans.

    It has increased access to financial services to 19 million Kenyans, created jobs, and positively impacted savings and money transfer patterns. In just five years, M-Pesa decreased informal savings in the country by 15 per cent, increased the frequency of transfers and remittances by 35 per cent, and increased usage of banking services by 58 per cent beyond the levels of 2006.

  • AfDB approves $12.7m for Equity Fund

    AfDB approves $12.7m for Equity Fund

    The Board of Directors of the African Development Bank (AfDB) has approved a $12.73 million equity investment in the African compartment of the Moringa Private Equity Fund. Moringa will invest in scalable, replicable agroforestry projects in sub-Saharan Africa and Latin America.

    The Fund will invest in projects that combine plantation forestry (producing biomass, fuel wood or timber) with agricultural elements (producing staple food crops for local markets and/or niche export crops) to capture most of the value chain. The Fund will also be associated with a grant-based Technical Assistance Facility.

    Sponsored by La Compagnie Benjamin de Rothschild (CBR) and ONF International (ONFI), the international subsidiary of the French Office National des Forêts, the Fund will benefit from CBR back-office and investment platform, while ONFI contributes agroforestry technical expertise and regional presence in the Fund’s targeted geographies.

    The Moringa investment strategy is well aligned with the AfDB’s Ten-Year Strategy (2013 to 2022), focusing on inclusive green growth as the pathway to sustainable development and creating broad-based prosperity, as well as the its Climate Change Action Plan, which aims to make investments to reduce the continent’s vulnerability to climate change.

    This strategic feat should allow the bank to provide a significant boost to Moringa’s operations via its high public profile, sector expertise and network across the African continent.

    Agroforestry generates a strong and diversified platform for the development of forestry sector businesses, whilst also paying attention to the need for agricultural production.

    Smallholders benefit from an income diversification supported by an investor with a long time horizon.

  • AfDB votes N24.7b for Lekki port

    AfDB votes N24.7b for Lekki port

    The African Development Bank (AfDB) has obtained its board’s approval for $150 million (about N24.7billion) funding for the Lekki Sea Port project, The Nation has learnt.

    The European Investment Bank (EIB) which is eager to invest in the project, a source said, has also got Principal Board Approval (PBA) to support the project with funds.

    The $1.5 billion deep seaport project is being executed through Public Private Partnership between the Federal Government (represented by the Nigerian Ports Authority), the Lagos State government and the Tolaram Group. A shareholder’s agreement to this effect was signed in December 2012 among all three parties.

    LASG’s equity and that of the Tolaram Group, it was gathered, are in place, while NPA, is in the process of making its equity contribution to the project.

    Findings revealed that it is standard procedure for due diligence to be conducted by shareholders before infusion of equity into a project.

    It was gathered that NPA has carried out and concluded due diligence on the project through a credible auditor, KPMG, to ensure accountability, transparency and value for money of the project, which is essential and crucial to a project of this magnitude.

    NPA, findings revealed, has also gotten its Federal government budget approved by the House of Assembly.

    Federal Executive Council (FEC) approval for the project and issuance of the finance guarantee, it was learnt, was received by NPA in December last year.

    Chief Finance Officer, Lekki Port, Sandeep Parasramka, said while commenting on major developments, particularly as they  concern the company’s drive in ensuring that  Lekki Port becomes operational by 2018, that it was not true that the project is threatened by funds.

    He said all the banks, are keen on participating in the development of the port, given its strategic importance, competitive advantage, good financial returns, strong government support, and  the unprecedented economic value it is expected to inject into the economy.

    Conventionally, projects of this magnitude are undertaken through project financing on a non-recourse basis.

    “With the magnitude of processes and resources required to complete a large infrastructure project of this magnitude, it is inevitable that there will be time overruns, and Lekki Port is no exception.

     

     

  • AfDB votes $231m for food security

    AfDB votes $231m for food security

    The African Development Bank (AfDB) says  it has approved $231 million to support the fight against food insecurity in the Sahel region.

    In a statemen, the bank said the grant was for funding of a programme tagged:  “Building Resilience to Food and Nutrition Insecurity in the Sahel (P2RS)’’.

    The News Agency of Nigeria (NAN) reports that the programme involves member-countries of the Inter-State Committee for Drought Control in the Sahel (CILLS).

    The CILIS countries include Benin, Burkina Faso, Chad, Cape Verde, Côte d’Ivoire, Gambia, Guinea, Guinea-Bissau, Mali, Mauritania, Niger, Senegal and Togo.

    “This grant will help the critical emergency operators in the Sahel to tackle the high level of food insecurity and malnutrition in the region.

    “The programme focuses on nutrition and the use of second generation ICTs, such as mobile phones, to facilitate better access to markets and prediction of crises and disasters,’’ the statement said.

    According to the statement, the P2RS specifically seeks to sustainably increase agro-pastoral and fishery productivity and production in the Sahel.

    “It will be implemented under four five-year project-segments in three components including rural infrastructure development, value chains and regional markets development  as well as project management,’’ it said.

     

  • Nigeria commits fund in AfDB to fight Ebola

    Nigeria commits fund in AfDB to fight Ebola

    • Kim meets affected countries’ leaders

    Nigeria is to commit her Trust Fund in the African Development Bank (AfDB) to ongoing efforts targeted at containing and eventually eradicating  the Ebola Virus Disease (EVD), the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, has said.

    Mrs. Okonjo-Iweala, who spoke at the weekend in a live-telecast conversation which centred on the ‘Impact of the Ebola Crisis: A Perspective from the Countries’ as part of the topical issues being discussed at the ongoing International Monetary Fund (IMF)/World Bank Group meetings in Washington DC, United States (U.S.), drew attention to the various efforts already being made by the Nigerian government to contain the EVD scourge, saying the support of the private sector was remarkable.

    She said the country has committed $3.5 million earlier to fighting the scourge through the Economic Community of West African States (ECOWAS), pointing out however that winning the war against the disease would require stronger private sector participation and strengthening of the health systems on a global scale.

    She lauded the Nigeria’s private sector for the support which enabled the Federal Government to contain the scourge, pointing out that the failure of the governments in the region and the international community to swiftly join forces in the current fight against the disease could impact negatively on the sub-regional economies.

    Mrs. Okonjo-Iweala said engaging the private sector would help in quick mobilisation of needed resources, including funds and logistics, to enable the various initiatives of the governments and other countries still battling with the crisis achieve the desired results in a timely manner.

    She said:  “The lesson we learned is that quick communication and mobilisation of logistics that the president of Liberia mentioned is key. Our private sector was very active in donating money and helping with the logistics. The additional suggestion I want to make is that we have to bring in the private sector. They have varied expertise in logistics and we need them to come in and move the logistics in these situations.”

    She said Nigeria was quick in moving resources, especially money three months ago through ECOWAS, adding that President Goodluck Jonathan donated $3.5 million to the countries. “We have been working through Redeemers University and our Centres for Disease Control to train health workers and do laboratory works. We stand to do more and are ready to do more. I have talked to Donald Kaberuka (AfDB president) about using the Nigerian Trust Fund at the AfDB to try and move quickly and my final point is short and medium term. Short term, yes humanitarian but medium term, Marshall Plan to strengthen health systems,” Okonjo-Iweala added.

    She urged the global community to help West Africa, particularly the affected countries, avert a potential crisis that could roll back the economic development achievements the sub-regional economies had recorded through various reforms in recent years.

    To underscore the seriousness the global community attached to containing the scourge, the World Bank Group President, Dr. Jim Yong Kim, met with the leaders of the three most affected states at the World Bank Group headquarters at the weekend.

    He said the leaders, made “extremely specific requests based on what they need now” to address the challenge. He admitted during a press conference that “the crisis could have an enormous impact.”

    “The World Bank Group released a new economic impact assessment that said if the epidemic is not quickly contained, and if it spreads to neighouring countries, the two-year regional financial .impact could reach $32.8billion by the end of 2015,” he said, warning “that would be catastrophic for the people of the west Africa region.”

    One of the things that Secretary of State of the Department for International Development (DFID) of the United Kingdom, Justine Greening, pointed out was that every day “we invest, every day that we don’t put money into stopping the crisis, many more dollars and pounds that we’re going to have to use later. It is an extremely good investment right now to prevent this kind of loss, to put all the money on the table right now, to get the response going.”

    He said the World Health Organisation (WHO) just estimated that Liberia alone would need 360 foreign medical workers to treat those infected. “Now, one of the sticking points of getting foreign medical staff into these three countries has been the lack of medical evacuation. We heard this from the European Commission and from the U.S. that both of those groups have now committed to medically evacuating health workers and other workers, the responders. This has been a major road block and now with the announcemen, I think that we’re on a much better path to be able to staff the response,” he stated

     

     

     

     

    Participants at the session include the President of Liberia, Ellen Johnson Sirleaf; Secretary General, United Nations, Ban Ki-Moon; Kaberuka; and President of Guinea, Alpha Conde and his Senegalese counterpart, Ernest Bai Koroma, among others.