In response to economic challenges created by the global pandemic and the Russia-Ukraine conflict, the Africa Finance Corporation (AFC), yesterday launched a S$2billion facility to support recovery and resilience in Africa.
Making the announcement at the AFC Live Infrastructure Solutions Summit in Nigeria’s Federal Capital Territory, Abuja, the Corporation also committed to funding up to 50% of the new African Economic Resilience Facility, and mobilising the remainder through its network of international partners and investors.
The facility will be disbursed through loans from AFC to selected commercial banks, regional development banks and central banks in various African countries, providing them with much needed hard currency liquidity to finance trade and other economic activities in their jurisdictions.
These institutions will be able to leverage AFC’s proven access to global funding to receive financing at competitive rates, while applications for Facility will open this month through its website (www.africafc.org).
The facility will provide them (Africa) with much needed hard currency liquidity to finance trade and other economic activities in their jurisdictions.
Robust energy, infrastructure
In his address, the AFC Board Chairman and Deputy Governor (Economic Policy), Central Bank of Nigeria (CBN), Dr. Kingsley Obiora, said that energy and infrastructure were highly important to the growth of the continent.
He said: “Climate Change demands greater robustness in our buildings and infrastructure and as energy transition requires rethinking of power supplies, transportation and living.
“The key is unlocking new sources of funding both international and domestic. Be assured such capital is available. It is locked in pension funds, insurance companies, sovereign wealth funds and mutual funds. We are limited only by our ability to reduce risk for investors and provide stable, steady and competitive returns.”
“In fact the reason that we are all here today brought together by the African Finance Corporation is a case in point. The CBN deployed an initial $500million in investment in AFC.
“Fifteen years on, the Corporation has a balance sheet of over $10billion in investments in 35 countries. Last year, the CBN together with the AFC and the Nigerian Sovereign Investment Authority (NSIA), under our Vice President launched the Infrastructure Corporation of Nigeria, focused on a world class infrastructure development vehicle focused on tackling Nigeria’s $100billion annual infrastructure needs.”
Also, AFC’s Head, Treasury and Financial Institutions, Banji Fehintola, said: “The COVID-19 pandemic set back Africa’s economic growth trajectory and widened the trade financing gap, while the Russia-Ukraine conflict has added a further set of challenges negatively impacting growth prospects across the continent.
“We are determined to play a leading role in helping the continent’s recovery and resilience, not only though the work we do in bridging Africa’s infrastructure gap, but also through targeted interventions such as this $2billion Economic Resilience Facility.”
Be assured such capital is available. It is locked in pension funds, insurance companies, sovereign wealth funds and mutual funds. We are limited only by our ability to reduce risk for investors and provide stable, steady and competitive returns.
Through this funding intervention, AFC will accelerate its developmental impact in Africa, helping to drive the continent to a new phase of growth that is focused on maximum resource value capture and domestic job creation.
On his part, the Chairman, Transcorp Group, Tony Elumelu, during the panel discussion canvassed the decimation of the insecurity monster currently ravaging the Niger Delta, amid unprecedented level of oil theft bleeding Nigeria’s economy.
Elumelu said insecurity was a total disincentive for foreign direct investment needed for economic diversification.
In support of the country’s economic resilience, the Dangote Group announced plans to diversify into the steel sector to boost job creation.
The Group Managing Director, Dangote Group, Olakunle Alake, who made the disclosure, said: “Our focus is two things. One, we make sure we look at things that can be produced locally, we create employment that way, and we create value that way.
“For us, steel is one of the key areas. You recall that years back, the government decided that steel was major and set up the Ajaokuta Steel and Delta Steel.”
Alake noted that with Dangote’s business diversification efforts, “In another couple of years, we will not go to the Central Bank for foreign exchange for any of our activities. Because, at the end of the day, it’s a double situation, you import products, which means you are creating jobs outside Nigeria and you struggle to get the FX.”