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Africa Investment Forum 2018: a new bold vision tilts capital flows into Africa
November 15, 2018 | 0 Comments
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“This is a watershed moment for Africa.” Deputy Chairperson shares insights on the ongoing financial reforms of the Union.
November 12, 2018 | 0 Comments

African Union Headquarters; 12th November 2018: At 31st Ordinary Session of the African Union Summit held in Nouakchott, Mauritania in July 2018, a budget of US$681,485,337 was approved for the financial year 2019. The budget covers three components operational, programme and peace support operations. The Deputy Chairperson of the African Union Commission, Amb. Kwesi Quartey, shares the five key takeaways of the adoption of the 2019 budget in what he describes as a watershed moment for Africa.

1. Give us a brief on the 2019 budget of the Union.
Amb. Kwesi; The Assembly of the Union adopted the 2019 budget for the Union at a total of US$681,485,337 at the African Union Summit held in Nouakchott, Mauritania in July 2018. This amount reflects a significant decrease of the annual budget by 12%, compared to the 2018 budget. It is also a reflection that the share of AU member states financing the budget has substantially increased compared to the partner funding in previous years. If you look at the 2019 budget, excluding the peace support operations, member states will contribute 66% of the budget while 34% is expected to be secured from our development Partners.
This increase of member states contribution has come about by implementing the decision on financing of the Union to fund the activities and agenda of the Union. Through this mechanism, we can see that the continent is gradually realizing its vision of reliable, predictable and sustainable funding of its agenda. The 2019 budget also demonstrates an enhanced process of domestic resources mobilization but most importantly, stringent measures are now in place to ensure the prudent use of these resources to meet the development needs of our Continent
The breakdown of the 2019 budget is as follows; US$161.4 million will go into financing the operational budget of the Union, US$252.8 million will go into the program budget while US$273.3 million will finance Peace Support operations.

2. The preparation of the 2019 budget is said to be significantly different from the previous budget preparations, why is that?
Amb. Kwesi; Yes, the 2019 budget is different because the Union has adopted new ways of programme planning and budget process, to ensure greater accountability in line with the implementation of the decision of Financing on the Union.

This is the first time we had joint sittings of the AU Commission and organs, the Committee of Finance Ministers (F15) technical experts and the Permanent Representatives’ Committee sub-Committees of General Supervision and Coordination on Budget, Finance and Administrative matters and of Programs and Conferences, to prepare the budget. The preparation took about five weeks consecutively, looking carefully at the budget of each spending unit of the Union to ensure it complied with the nine golden rules.

During the 2019 budget, we also introduced the budget ceilings for departments and organs based on their track record on prudent execution rate, the ability to reach their targets and aligning their programmes strictly, to the priorities of the Union. This will greatly enhance the budget execution and ensure the expenditure is linked to results.

These joint sittings were also held at the ministerial level by the Committee of Ministers of Finance (F15) before the budget was presented to the Executive Council and the Assembly for adoption. The Committee of Ministers of Finance has since assumed responsibility for oversight of the African Union budget and Reserve Fund.

Related article- Financial reforms at the African Union lead to massive cuts of the Union’s Budget. https://au.int/en/pressreleases/20180706/financial-reforms-african-union…

3. You have made reference to the nine golden rules, tell us more about that.
Amb. Kwesi; The nine golden rules are financial management and accountability principles adopted by the Assembly of the Union in January 2018. These rules are meant to ensure financial discipline within the Union to enable us decisively address issues of low execution rates, identify undetected wastages and instances of over-budgeting by departments or organs, as well as ensure full compliance with the African Union financial rules and regulations.

So far, we have fully implemented four of the nine golden rules. There is an interlinking factor on the application of all the nine rules with the progress in the implementation of the decision on financing of the Union and therefore we will soon have the other five rules applied.

The nine golden rules speak to the fact that;
a) Member states’ contributions should cover a minimum threshold of the budget to ensure the Union’s self-sufficiency and sustainability, thereby decreasing dependence on external funding.
b) The rules recognize the need for major changes to be effected to ensure revenues are predictable. This touches on elements such as the full payment of assessed contributions by Member States and partners’ contribution, for the revenue streams to be centrally coordinated.
c) The rules also speak to the credibility of the AU budgeting system which must be based on a fully integrated and automated financial management system.
d) As I mentioned earlier, one of the rules is the annual budget ceiling which is communicated to department and organs before they submit their budget proposals.
e) Also, it is important that expenditure must at all times, be authorized for virements, surplus budgets and spending that exceeds approved budgets.
f) Another key rule, is seeing to it that resource flows and transactions are reliable and efficient. Funds must be provided to departments and organs in the agreed amounts at the agreed times.
g) Institutional accountability is of utmost importance, to ensure the flow of funds is tracked to service delivery units. This requires the harmonization of all the different management systems we use.
h) Reporting is also an integral part of the financial management process. The Financial Rules and Regulations requires that departments and organs report all activities for which funds have been received, as part of the compliance and quarterly performance reports.
i) Finally, there is also the aspect on centralizing the process for engaging partners to avoid unilateral engagements for partner funded programmes.
These rules are currently being translated into AU policy and procedures and will also be reflected in the AU’s updated Financial Rules and Procedures.

4. In regards to the decision on Financing of the Union, what is the progress on that since its adoption in 2016?
Amb. Kwesi; There is commendable progress in the collection of the 0.2% levy by member states. 11 of our member states paid their 2018 assessed contributions to the AU, either partially or in full, through the new financing arrangement. We have 24 States that are at various stages of domesticating the Kigali Decision on Financing the Union and of these, 14 are actually collecting the levy.

Let me also add that there is flexibility built into the implementation of the 0.2%. Member States have the ability to determine the appropriate form and the means they will use to implement the decision in line with their national and international obligations. It is for this reason that Member States that are, for example, members of the World Trade Organization have implemented the 0.2% levy without contravening their international trade obligations.

Also, as I mentioned earlier, the introduction of the golden rules and the joint sittings have provided stronger technical oversight of the AU budget.

Lastly, I think I would highlight the operationalization of the Peace Fund as a remarkable milestone. This year our Member States have contributed over US$55.9 million to the Peace Fund, which is the largest amount of money Member States have ever contributed to the Peace Fund since it was established in 1993.

5. What are your projections in advancing the ongoing financial reforms?
Amb. Kwesi; Looking at the progressive developments in Africa’s self-financing agenda, I believe this is a watershed moment for Africa. Our focus is to gradually move towards funding 100% of the Union’s operational budget, 75% of the programme budget and 25% of peace support operations by 2021, for the full ownership of the Union’s agenda.
We are working on revising the Scale of Assessment as currently, 48% of the Union’s budget is dependent on the contributions of only 5 member states under “Tier 1” of the scale of assessment. This presents clear risks to the stability of the budget. It is for this reason that in a meeting held in August 2017, Ministers of Finance recommended the introduction of ‘caps’ and ‘minima’ to our existing scale of assessment, in order to improve overall burden-sharing and risk reduction.

We also want to strengthen the sanctions regime for non-payment of contributions to ensure AU Member States payments are made on time. Under the current sanctions regimes, Member States non-payment are classified to be in default only if they are in arrears for two full years. This has led to a trend where about 33% of the assessed contributions are regularly held in arrears.

Finally, we are working towards developing a credible medium-term budget framework (2019-2021) based on revenue forecasts and capacity to spend. This will enable the Union to improve the credibility of its budget, strengthen financial management capacity and accountability and demonstrate value for money and results to its Member States. We are committed to ensure the highest standards of finance and budget management as well as seeing to it that we have a credible budget based on capacity to spend and proper revenue forecasts.

For more information, contact:
Ms. Doreen Apollos | Communication Advisor | Bureau of the Deputy Chairperson.
E-mail: ApollosD@africa-union.org | Tel: +251 115182737

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Adesina shares vision to transform Africa through investment not aid
November 12, 2018 | 0 Comments

President Cyril Ramaphosa officially opened the inaugural edition of the Africa Investment Forum on Thursday saying Africa was not only on the rise but Africa is on the move, referring to the continent as a destination for investments.

The Africa Investment Forum is an unprecedented gathering of pension funds, Sovereign wealth funds, capital markets, project sponsors, institutional and financial investors seeking to invest in Africa.

Describing Africa as the “next global frontier for investment,” Ramaphosa said: “May the deals be concluded. May we all be part of the deals that are going to be made here.”

Four African Heads of State –  President Alpha Conde of the Republic of Guinea; President Macky Sall of Senegal;  President Nana Dankwa Akufo-Addo of Ghana and President Sahle-Work Zewde of Ethiopia, made the trip to South Africa for the Forum. Other officials included the Vice President of Nigeria; the Prime Ministers of Rwanda, Edouard Ngirente and Cameroon, Philémon Yang, as well as ministers representing the Kingdom of Morocco, Cote d’Ivoire, Tanzania, Niger, and Gabon. In attendance also were Governors and Board members of the African Development Bank.

In his opening remarks, Adesina lauded the “impressive gathering” of stakeholders, indicating that their “presence here shows you care about Africa, and that you have confidence to take up more investments in Africa.”

Giving an overview of existing opportunities in the power and agriculture sectors, President Adesina said: “we always asked what’s the next China after China? Well, appropriately, China figured it out. It’s Africa.”

He acknowledged that Africa has massive infrastructure deficits, from ports to railways, roads, energy, and information and communication technology infrastructure needed to spur its competitiveness in global markets. The African development bank estimates the continent has a financing gap of $68-108 billion per year for infrastructure.

Adesina said, “But it’s all about how you see it: a glass half empty or a glass half full. Let’s see the challenges as a glass half full. That means Africa has an investment opportunity of $68-108 billion a year for infrastructure alone.”

“Which continent will have consumer and business expenditures that reach $5.6 trillion in just 7 short years,” he added. “Don’t think far: think Africa!”

The power sector alone provides a US$30 billion annual investment opportunity, tapping into Africa’s vast resources of gas, solar, hydro, wind and geothermal. Huge investment opportunities abound to make Africa the leading region on renewable energy in the world.

The African Development Bank is spearheading the development of the Desert to Power to develop 10,000 MW of solar across the entire Sahel region. This will become the largest solar zone in the world.

At the Africa Investment Forum, 306 project transactions valued at US$208.8 billion have been developed.  Over the next three days, 60 projects and deals worth US$40.4 billion will be discussed in Boardroom sessions by investors and promoters to fast track closure of deals or to remove policy and regulatory constraints to deal closure. An additional US$28 billion of projects will be showcased in “gallery walks” which have yet to move to boardroom investment conversations.

Over 330 investors will be in the Boardroom investment conversations and  “I must say the demand by investors has been overwhelming, so much so that 92% of the investments Boardrooms have been oversubscribed.That’s remarkable for a first inaugural investment forum,” Adesina said.

The Africa Investment Forum is seeking to help reduce intermediation costs, improve the quality of project information and documentation, and increase active and productive engagements between African governments and the private sector.
The Forum will feature projects from various sectors such as energy, infrastructure, transport and utilities, industry, agriculture, ICT and Telecoms, water and sanitation, funds and financial services, health, education, hospitality and tourism, housing, and aviation.

*AFDB

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Africa agribusiness, a US$1 trillion business by 2030
November 9, 2018 | 0 Comments
Agribusiness will become the ‘new oil” on the continent, African Investment Forum participants said
JOHANNESBURG, South Africa, November 9, 2018/ — As project sponsors, borrowers, lenders and investors gathered at the Africa Investment Forum  to make deals on investment opportunities, leaders of the continent’s  top agribusiness companies shared their thoughts on the future of the industry. With its vast agricultural potential, Africa’s agribusiness sector is predicted to reach US$1 trillion by 2030. Agribusiness will become the ‘new oil” on the continent, African Investment Forum participants said, fueling the motor of inclusive growth.

“Agriculture is a key priority for the African Development Bank, through our Feed Africa strategy,” said Jennifer Blanke, the African Development Bank Vice President for Agriculture, Human and Social Development.  “Understand that by transforming Africa’s agriculture sector it will become the engine that drives Africa’s economic transformation through increased income, better jobs higher on the value chain, improved nutrition, and so on,” she said in her opening remarks at an Africa Investment Forum session titled, Agribusiness: investment conversation with industry leaders.

Some agribusiness leaders said there is a need to invest US$45 billion per year to harness the power of agriculture and move up the value chain to create jobs and wealth. At present, only US$7 billion is invested in the sector. Investments from the private sector, leaders said, will create the adequate environment and enhance the emergence of locally owned agro-processing industries, capable of creating jobs and increasing incomes in rural Africa. The continent could become a net exporter of agricultural commodities, replacing US$110 billion worth of imports, as well as doubling its share of market value for select processed commodities.

The full-capacity session was a highlight of the Africa Investment Forum, organised by the African Development Bank. The event brought representatives from multilateral financial institutions, pension funds, sovereign wealth funds, government officials and private investors to Johannesburg, South Africa for three days.

Participants in the agribusiness session discussed the industry’s entire value chain. Leading the ‘fireside chat’ was a roundtable of experts that included Aliko Dangote, President and CEO of the Dangote Group; Zainab Shamsuna Ahmed, Minister of Finance of Nigeria; William Asiko, CEO, Grow Africa; John George Coumantaros, Chairman, Flour Mills of Nigeria and TP Nchocho, CEO, Land and Agricultural Bank of South Africa

“We need to do the research to produce the right solutions to the issues we might face along the value chain. Youth are particularly involved in this aspect as they know how to develop tools addressing issues such as water management and release”, said Aliko Dangote.

Agribusiness can also promote industrialisation and urban employment, break the ‘productivity gap’ of development, and improve the quality of life for all Africans. Attendees said Africa’s agricultural potential needs to be unlocked.

Session participants said they want to bring African agriculture to the next level. For the small and medium scale farmers, the main challenge remains access to finance. Zainab Shamsuna, Nigeria’s Minister of Finance urged investors and development partners to adapt their policies to accommodate more participants in the agriculture value chain,

“I want us to eat what we grow and consume what we produce”, Shamsuna said.

In closing the session, Edward Mabaya, Manager of Agribusiness Development at the African Development Bank highlighted the vast investment opportunities in Africa’s agribusiness including seed, fertilizer, mechanization, processing and storage.

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Africa Investment Forum: All Set to Tilt the Tide of Investments into Africa
November 5, 2018 | 0 Comments
Forum to advance projects to bankable stages, raise capital, and accelerate financial closure of deals
Adesina

Adesina

JOHANNESBURG, South Africa, November 5, 2018/ — The Africa Investment Forum kicked off on Monday with a media briefing in the South African capital. The game changing event, aimed at attracting multi-billion-dollar deals across the continent, is set to usher in a new era for Africa’s investment landscape.

Regional and global investors and institutional investors, private sector leaders, prominent government officials, and representatives of State are converging in South Africa, for what is billed as an unprecedented gathering to mobilize and crowd in global investment capital for the continent’s ambitious development agenda.

Dubbed by the African Development Bank President Akinwumi Adesina as the “collective deal of the century for investment in and the development of Africa,” the forum will focus on advancing projects to bankable stages, raising capital and accelerating the financial closure of deals.

“This is the beginning of a new conversation, a new way of doing things,” Victor Oladokun, the African Development Bank Director of Communications told reporters, a day before the Forum, which will be held at the Sandton Convention Centre in Johannesburg.

South African Deputy Director of the National Treasury Vuyelwa Vumendlini said the Africa Investment Forum provides a continental complement to the country’s recent investment forum which successfully attracted more than 200 billion Rand in investments.

The Government of South Africa, the African Development Bank and several multi-lateral development partners are hosting the Forum expected to become a key springboard for investment and an annual event.

Global financial institutions such as Africa Finance Corporation, Development Bank of South Africa, Africa 50, Afreximbank, European Investment Bank, Trade and Development Bank and the Islamic Development Bank, have come together to form solid strategic alliances around this new venture.

The Africa Investment Forum, is a unique platform where already curated projects, advanced and de-risked and are brought in front of investors. This innovative partnership of key global and continental players will focus on transactions and deals, Oladokun said.

Between US $130-170 billion a year is needed to finance infrastructure for Africa’s growing population, according to the African Development Bank’s Economic Outlook 2018. While global assets under management amount to an estimated US$131 trillion dollars, most of that is not invested in Africa; even one percent of that could provide the investment gap Africa needs.

“There is an urgent need to close the gap and for that to happen ‘it has to be business unusual. This is the first and biggest African investment market place, nothing like this has even been done before,” Oladokun, told reporters.

Guateng Province officials and government representatives in attendance included Muzi Mathema, of Guateng Growth and Development Agency, Ms Vuli Vumendlini, Deputy Director of the Nationa Treasury and Ayanda Holo, Director of Media engagement for the South African government. African Development Bank Executive Director Mmakgoshi Lekhethe was also in attendance.

Ronnie Ntuli, Executive Chairman Thelo, described the Forum as “a unique opportunity for Africans to partner with global capacity and the private sector. “It is an investor market…where all these partners converge to take advantage of tremendous opportunities,” he said.

Africa Investment Forum moving Africa’s investment agenda forward

African businesses are rapidly growing in number and sophistication, presenting excellent investment opportunities with relatively high returns, but the challenge of positioning themselves for consideration in front of institutional investors and global corporates remains.

The Forum has curated a total pipeline of 230 projects worth over US$208 billion spanning several sectors – energy, infrastructure, transport and utilities, industry, agriculture, ICT and Telecoms, water and sanitation and health and education.

Twenty-eight boardroom sessions will curate, screen and ensure the projects are bankable and reach financial close. A total of 61 deals estimated at more than US$40 billion will feature in Boardroom Sessions, while another US$28 billion worth of deals will be showcased to investors at a marketplace Gallery Walk.

The Forum also includes a co-guarantee platform that will develop and deploy innovative instruments to de-risk private sector investments at scale, thus boosting investor confidence.

Discussions will focus on specific projects, sectors, investors, and themes. Others will have country or regional focus. Co-financing and collaborations between investors will also be a key focus area at this event.

The inaugural Africa Investment Forum will feature a session on Championing Investments− an investment conversation with African Heads of State to highlight concrete and transformative actions for a new business landscape in Africa, including collective efforts to facilitate private investments.

The Africa Investment Forum takes place from November 7 to 9, 2018 at the Sandton Convention Centre, Johannesburg.

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Afe Babalola University Confers Honorary Doctorate Degree on African Development Bank President Akinwumi Adesina
October 22, 2018 | 0 Comments
In his acceptance address, Adesina lauded the Institution as an epitome of academic excellence commended its high standards of discipline
ADO EKITI, Nigeria, October 22, 2018/ — The Afe Babalola University, Ado-Ekiti,  Nigeria, has conferred a Doctor of Letters, Honoris Causa on the President of the African Development Bank (www.AfDB.org), Akinwumi Adesina in recognition of his immense contributions to socio-economic development on the continent.

John Olachy Momoh, Chairman of Channels Media Group, Nigeria’s multi award-winning television station also received an Honoris Causa at the  6thConvocation ceremony of the University held on Sunday 21 October 2018 at the University Campus in Ado Ekiti.

“The honorary recipients are Nigerian ambassadors who have conquered the world due to the quality and functional education they received,” said Aare  Afe Babalola, Founder of the University.

“They were chosen on the basis of their distinguished reputations, outstanding achievements, exemplary leadership and extraordinary contributions to humanity. This is the highest honour an academic institution can give and today, they are richly-deserved,” he added.

In his acceptance address, Adesina lauded the Institution as an epitome of academic excellence commended its high standards of discipline. To the graduating students,”invest your time and energy in making the right decisions. The story and history of this great institution is one of the right decisions that should be well-studied by those involved in tertiary education globally,” he said.

Afe Babalola University is a private university established in 2010 in Ado Ekiti, Nigeria, with the ambition to address the disconnect between curricular programs and labor market demands.  The University operates through five colleges for undergraduates (Science, Social & Management Sciences, Law, Engineering and Medicine & Health Science) as well as a Post graduate school. In November 2013, it was appointed to mentor the College of Industrial Development (UID), Accra, Ghana thereby becoming the first university in Nigeria to mentor a foreign university. This year, a total of 4013 students graduated, including 43 pioneer medical doctors.

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African Development Bank showcases investment opportunities in Africa to Nordic investors
October 16, 2018 | 0 Comments
The Bank presented its strategy for the transformation of African economies and showcased investment opportunities on the continent
ABIDJAN, Ivory Coast, October 15, 2018/ — The African Development Bank (www.AfDB.org) in a multidisciplinary team roadshows has presented financial products and investment opportunities to Nordic investors to leverage more access to financing. The roadshows brought together more than 50 private sector companies, investors and government and public institutions in Norway, Sweden, Finland, and Denmark.

The aim of the event was to bring the Bank closer to customers in order to increase awareness of key private sector stakeholders to understand the Bank’s financial and risk mitigation products for investment projects. The roadshows also generated significant interests of businesses to the Africa Investment Forum, the Bank’s maiden market place, scheduled for November 7-9 in Johannesburg, South Africa.

The first roadshow took place in Norway on 24-25 September, followed by Sweden on September 27- 28. In Finland, the Bank met key private sector companies, private funds, and pension funds from 1-2 October and the final event was in Denmark on October 4-5.

The Bank presented its strategy for the transformation of African economies and showcased investment opportunities on the continent. The highly interactive event targeted commercial banks, institutional investors including pension funds, asset managers and insurers as well as individual investors across the Nordic region.

“Nordic countries are very important for the development of Africa and we want to see more investments coming from these countries. Hence, the roadshow organized to showcase African investment opportunities and to present the Bank as a gateway for their investments”, said Olivier Eweck, Director, Syndication, Co-financing and Client Solutions Department, adding that “several private investors and companies have shown keen interest in the Africa Investment Forum”.

The African Development Bank team discussed key roles in accelerating Africa’s investment opportunities across the Nordic region in line with the Bank’s development priorities for Africa as enshrined in the High 5s.

The Bank sees its partnership with long-term investors from the Nordic region as important and welcomes their perspective and visions to support new investments in infrastructure, and to foster sustainable development initiatives in Africa.

The Africa Investment Forum is a novel platform for international business and social impact investors looking to transact and invest funds in Africa. It will connect investors with both public and private sector projects throughout the continent.

The Bank expects that holding the event under one roof would provide an ideal platform for interfacing with its partners, reduce intermediation costs, improve the quality of project information and documentation, and increase action-oriented engagements between African governments and the private sector.

 

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The Status Quo is Unacceptable: It’s time to normalize the narratives on African Migration, Experts Urge
September 25, 2018 | 0 Comments
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African Development Bank Launches first Africa-to-Africa (A2A) Investment Report
September 25, 2018 | 0 Comments
Africa-to-Africa Investment Report: A first look, finds that more African companies are investing in Africa
ABIDJAN, Ivory Coast, September 24, 2018/ — Opportunities for investment in Africa outweigh the obstacles, according to a report by leading African companies covered in the African Development Bank’s (www.AfDB.org) new Africa-to-Africa (A2A) Investment Report, the first ever report on inter-African trade published by the Bank.

The report unearths the realities African companies face when investing in the continent, the emerging trends in A2A investment and the steps African policymakers can take to accelerate intra-African investment.

Africa-to-Africa Investment Report: A first look (https://bit.ly/2Q3p3kh), finds that more African companies are investing in Africa. These companies have confidence in the continent’s long-term growth potential; they are at the cutting edge of their industries, and are capitalizing on their knowledge of local markets to generate higher returns and impact.

In line with the Bank’s High 5s  for transforming Africa and the African Union’s Agenda 2063, the A2A Report aims to take the conversation on investing in the continent a step further. It shows what African multinationals are doing to drive investments in Africa, d how they are expanding their African footprint, and gives insights into how to scale-up investments more widely.

As global foreign direct investment to Africa falls, intra-African investments are picking up pace,” said Akinwumi A. Adesina, President of the African Development Bank Group. “Africa’s big companies are increasingly on the move and expanding their African footprint. It is through more investments that the continent can build inclusive, sustainable growth and development. We have made this our collective commitment in the High 5s”.

The A2A Report features eight publicly-listed and privately-owned African companies operating in consumer services, finance, industry, media and diversified portfolios and investment, with home bases in North Africa (Morocco), West Africa (Nigeria, Togo), East and Central Africa (Ethiopia, Kenya) and Southern Africa (Mauritius, South Africa).

Highlights from the Report’s intra-African investment stories include the importance of having a clear long-term vision, getting up-to-date investment facts, building local partnerships to deliver on the ground and tapping into talent in the local labour force.

The business case for A2A investment is strongly connected to the continent’s integration, growth and prosperity. Although challenges remain, the A2A Report is the start of a broader discussion to fast-track investments, move beyond the wish list and make deals happen. The continent’s policymakers can inspire a greater level of confidence and promote A2A investments by highlighting their role as dependable business partners for African investors.

The Report is part of the Bank Group’s continued championing of investment across Africa, along with the first Africa Investment Forum (AIF) (AfricaInvestmentForum.com), scheduled to take place in Johannesburg, South Africa from 7-9 November 2018.

The African Development Bank Group (AfDB) (www.AfDB.org) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 37 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 54 regional member states.

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African Development Bank, mariner investment group, and africa50 price landmark $1 billion impact securitization
September 20, 2018 | 0 Comments
Structured as a synthetic securitization by Mizuho International, Room2Run transfers the mezzanine credit risk on a portfolio of approximately 50 loans from among the African Development Bank’s non- sovereign lending book, including power, transportation, financial sector, and manufacturing assets
MONTREAL, Canada, September 19, 2018/ —

  • With “Room2run,” AfDB Launches Securitization Market for Multilateral Development Bank Sector
  • Transaction is in Direct Response to G20 Action Plan for Mdb Balance Sheet Optimization
  • AfDB Commits to Reinvest freed up Capital into New African Infrastructure Lending, Making Room2run one of the Largest Impact Investments ever
  • Transaction is supported by New European Union Guarantee Tool (European Fund For Sustainable Development)

The African Development Bank (www.AFDB.org), the European Commission (http://EC.Europa.eu/growth/industry/innovation/funding/efsi_en), Mariner Investment Group (www.MarinerInvestment.com), LLC (Mariner), Africa50 (www.Africa50.com), and Mizuho International plc  (www.Mizuho-EMEA.com) today announce the pricing of Room2Run, a US $1 billion synthetic securitization corresponding to a portfolio of seasoned pan-African credit risk. Room2Run is the first-ever portfolio synthetic securitization between a Multi-Lateral Development Bank (MDB) and private sector investors, pioneering the use of securitization and credit risk transfer technology to a new and previously unexplored segment of the financial markets.

Structured as a synthetic securitization by Mizuho International, Room2Run transfers the mezzanine credit risk on a portfolio of approximately 50 loans from among the African Development Bank’s non-sovereign lending book, including power, transportation, financial sector, and manufacturing assets. The portfolio spans the African continent, with exposure to borrowers in North Africa, West Africa, Central Africa, East Africa, and Southern Africa. Mariner, the global alternative asset manager and a majority-owned subsidiary of ORIX USA, is the lead investor in the transaction through its International Infrastructure Finance Company II fund (“IIFC II”). Africa50, the pan-African infrastructure investment platform, is investing alongside Mariner in the private sector tranche. Additional credit protection is being provided by the European Commission’s European Fund for Sustainable Development in the form of a senior mezzanine guarantee.

“Room2Run gives us fresh resources to invest in the projects Africans need most,” said Akinwumi Adesina, President of the African Development Bank Group. “Africa has the most promise, the greatest natural resources, and the world’s youngest population. But we also have the world’s most persistent infrastructure deficits. The African Development Bank has the strategy to address these infrastructure finance gaps—and Room2Run gives us the capacity to make it happen.”

Structured as an impact investment, Room2Run is designed to enable the African Development Bank to increase lending in support of its mission to spur sustainable economic development and social progress. In connection with Room2Run, The Bank has committed to redeploy the freed-up capital into renewable energy projects in Sub-Saharan Africa, including projects in low income and fragile countries.

“On the Impact scale, Room2Run is off the charts,” said Dr. Andrew Hohns, Lead Portfolio Manager and head of the Mariner Infrastructure Investment Management team. “Room2Run answers the call of the G20 for private sector participants to step in and facilitate development finance, providing a template for attracting significant private sector capital into urgently needed projects in developing economies.”

Raza Hasnani, Head of Infrastructure Investment at Africa50 commented, “Room2Run provides an innovative and commercially viable solution to the African Development Bank’s risk management and lending objectives, while paving the way for commercial investors to support and benefit from the growth of infrastructure on the continent. Africa50 is very pleased to participate in this landmark transaction, which is in line with our mandate to drive increased investment in infrastructure in Africa, and to create pathways for long-term institutional capital to flow into this space.”

Room2Run enjoys the support and participation of the European Commission with an investment from the European Fund for Sustainable Development, in the form of a senior mezzanine guarantee. “Only a few days after announcing our renewed Alliance with Africa for sustainable investments and jobs, I am very happy to announce that we are, together with the African Development Bank, launching Room2Run,” commented Neven Mimica, the European Commissioner for International Cooperation and Development. “This initiative is a perfect example of what we are doing to support investments in African low income and fragile countries through the External Investment Plan. Through Room2Run, we provide an additional protection to investments in the field of renewable energy. Through our Guarantee, investments under Room2Run will translate into extending supply to many people currently without electricity whilst creating much-needed new jobs.”

Room2Run also directly responds to calls by the G20 that MDBs use their existing resources to full capacity, as articulated in the 2015 G20 MDB Action Plan to Optimize Balance Sheets, as well as calls for greater MDB efforts to crowd-in private investment. The G20 has called on MDBs to share risk in their non-sovereign operations with private investors, including through structured finance, mezzanine financing, credit guarantee programs, and hedging structures.[1],[2]

The Government of Canada has been a global leader in advocating for MDBs to use their existing resources more efficiently and to mobilize private capital for global development. The goal of the G20 MDB Action Plan to Optimize Balance Sheets is to catalyze significant new development financing from the MDBs throughout the real economy in key development regions.  “Attracting more private capital into global development efforts is critical to building economies that work for more and more people around the world,” said Bill Morneau, Canada’s Minister of Finance, “that’s why Canada and our G20 partners have been calling on multilateral development banks to use their existing resources as efficiently as possible, and to look for new ways to attract more private capital.  We are pleased to see the African Development Bank come forward with a transaction that directly responds to both of these objectives.  Room2Run is an innovative solution to a long-standing challenge.”

Juan Carlos Martorell, Co-Head of Structured Solutions at Mizuho International, adds, “Compared to other synthetic securitizations, a major achievement of Room2Run has been to ensure that ratings agencies, and in particular S&P, reflect the merits of the risk transfer into their rating assessments for multilateral development banks. The Bank’s leadership through this transaction has now set the stage for broader adoption of the instrument throughout the MDB community.”

Distributed by APO Group on behalf of African Development Bank Group (AfDB).

 

Media contacts:

AfDB: Nafissatou Diouf, Manager, Media Relations, N.Diouf@AFDB.org
Mariner Investment Group, LLC: David Press, Tel: (917) 721-7046, David@FeverPress.com
Africa50: Fleur Tchibota, Tel: +212666171099,F.Tchibota@Africa50.com
Mizuho International plc: Gayle Rodrigues, Corporate Communications, Tel: +44 207090 6213,
Gayle.Rodrigues@UK.Mizuho-sc.com
European Commission: Carlos Martin Ruiz de Gordejuela, Tel: + 32 229-65322

About the African Development Bank Group

The African Development Bank (AfDB) Group (www.AFDB.org) is the premier development finance institution in Africa with a mandate to spur sustainable economic development and social progress in the continent, thereby contributing to poverty reduction. The Bank Group achieves this objective by mobilizing and allocating resources for investment in the continent; and providing policy advice and technical assistance to support development efforts. The African Development Bank’s authorized capital of around USD 100 billion is subscribed to by 80 member countries made up of 54 African countries and 26 non-African countries.

www.AFDB.org

Media contacts:

AfDB: Nafissatou Diouf, Manager, Media Relations, N.Diouf@AFDB.org
Mariner Investment Group, LLC: David Press, Tel: (917) 721-7046, David@FeverPress.com
Africa50: Fleur Tchibota, Tel: +212666171099,F.Tchibota@Africa50.com
Mizuho International plc: Gayle Rodrigues, Corporate Communications, Tel: +44 207090 6213,
Gayle.Rodrigues@UK.Mizuho-sc.com
European Commission: Carlos Martin Ruiz de Gordejuela, Tel: + 32 229-65322

About the African Development Bank Group

The African Development Bank (AfDB) Group (www.AFDB.org) is the premier development finance institution in Africa with a mandate to spur sustainable economic development and social progress in the continent, thereby contributing to poverty reduction. The Bank Group achieves this objective by mobilizing and allocating resources for investment in the continent; and providing policy advice and technical assistance to support development efforts. The African Development Bank’s authorized capital of around USD 100 billion is subscribed to by 80 member countries made up of 54 African countries and 26 non-African countries.

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African Development Bank boosts Cameroon livestock and fish farming with €84 million loan
September 13, 2018 | 0 Comments
The loan, approved by the Bank’s Board on Wednesday, will support the modernization of beef, pork and fish production, with significant improvements to food and nutrition in the country
Crossbred cows in a dairy farm in Cameroon. (Photo: Mario García Podesta /IAEA)

Crossbred cows in a dairy farm in Cameroon. (Photo: Mario García Podesta /IAEA)

ABIDJAN, Ivory Coast, September 13, 2018/ — The African Development Bank Group (www.AfDB.org) has extended a loan of €84 million to Cameroon to support livestock and fish production in the central African country in line with the Bank’s strategies to create jobs and raise household incomes.

The loan, approved by the Bank’s Board on Wednesday, will support the modernization of beef, pork and fish production, with significant improvements to food and nutrition in the country.

Both the Bank and the Government of Cameroon are implementing strategic policies aimed at improving food and nutritional security, reducing poverty and improving production infrastructure in rural areas. The Bank’s signature High 5s strategy includes policies to feed Africa, industrialize the continent and improve the quality of life of its people.

The project approved by the Board will specifically target raising standards and competitiveness in such key livestock value chains as genetics improvement, feeding, slaughter, processing, conservation and transportation. For fish production, the focus will be on rearing, conservation, storage, and processing.

While the project has a national scope, the Cameroon government has identified three main target areas – the North-West for production, and Central and Coastal for consumption. The impact of the cross-cutting actions involved will, however, be felt in the other regions of the country as well.

Key beneficiaries of the project will be stockbreeders and their cooperatives who constitute 45% of the pastoral sector labour force; fish farmers, input producers and sellers, traders, women wholesale fishmongers and processing operators. In addition, up to 350 higher education graduates will be trained and settled as business leaders.

The project’s total cost is estimated at €99.27million (CFAF 65.113 billion. The bank will provide a loan of € 84.00 million (CFAF 55.100 billion) (while the government will contribute €15.27 million (CFAF 10 billion) in counterpart funding.

*AFDB

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Could the future of food in the world depend on what Africa does with agriculture?
September 3, 2018 | 0 Comments
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