African countries call for collaborative solutions to indebtedness

Representatives from four African countries today called for a balanced approach to growing debt vulnerabilities to help low-income African countries meet their commitments to lenders.

Ministers of finance and economy and representatives from several African countries attended the consultation along with development partners

The calls were made at a high-level consultative meeting to discuss debt vulnerabilities in Africa, jointly convened by the African Development Bank and the World Bank, in Abidjan, Cote d’Ivoire.

Adama Koné, Minister of Finance, Cote d’Ivoire, praised the World Bank and the International Monetary Fund for their assistance but appealed for more “innovative and strategic sources of funding”.

“We want to have CFA-denominated bonds on markets … Since we are not known, we have to pay a premium. If we have a guarantee mechanism, this will allow us to issue those bonds at a lower price,” he said during a panel discussion.

Representatives from Zambia and Senegal said they were taking steps to address their debt situation, while Richard Evina Obam, Minister Finance, Cameroon, supported the call for broader sources of financing, including the Islamic world.

Charles Boamah, Senior Vice-President of the African Development Bank, said the dialogue around debt sustainability “couldn’t come at a better time”.

“It is at the center of many conversations taking place currently … We here at the African Development Bank are engaged in a couple of very important discussions … a 7^th GCI [General Capital Increase] and the 15^threplenishment of the AFD [African Development Fund],” Boamah said in his opening remarks.

He said debt management had to take into account investment and development needs.

To reach the SDGs [Sustainable Development Goals] such as health, education and infrastructure, “you need half a trillion US dollars to do that,” Boamah said.

“The World Bank Group’s International Development Association (IDA) and the African Development Fund (ADF) are working together with a common mission to better address debt vulnerabilities in IDA and ADF countries,” said Akihiko Nishio, World Bank Vice President of Development Finance.  “We need to provide our clients with the resources and support needed to achieve the Sustainable Development Goals,” he added.

Over the past seven years, the public debt profile of most low and low middle-income African countries has deteriorated substantially. Twice as many countries are now regarded as facing severe debt challenges.

As of January 2019, 17 borrowing countries from the International Development Association and the African Development Fund (IDA and ADF) are deemed at high risk of external debt distress or are viewed as being in debt distress. That is double the number of countries who were in these categories in 2013.

AfDB President reaffirms stronger ties and increased support for Congo

African Development Bank President Akinwumi Adesina has reaffirmed stronger ties and increased support for Congo during a three-day visit to the Republic of Congo on 12 May 2019.

At a meeting with Congolese President Denis Sassou-Nguesso in his hometown, Oyo, some 460 km from the capital, Brazzaville, Adesina declared the Bank’s support for the country’s development plans.

“I wish to inform you that the African Development Bank will continue to support the Government of Congo and the implementation of the National Development Plan. I have great confidence in your leadership and the excellent work and efforts of the government,” Adesina said.

Congo is the fourth largest Sub-Saharan oil producer, with an output of 360,000 barrels-per-day from reserve estimates of around 1.6 billion barrels. It produces around 240 million cubic feet of gas daily from reserves estimated at 111 billion cubic feet.

While commending the country’s bold steps to deal with internal debt, Adesina said the government needed to create incentives in the non-oil sector to spur manufacturing and industry to boost private sector investments and small-to-medium businesses.

The African Development Bank delegation, led by Adesina, and accompanied by President Nguesso, visited the Port of Oyo and other projects including a High School of Technology with the capacity to enroll up to 10,000 students.

He commended the school project and suggested it should be renamed a ‘Regional Institute of Science and Technology of Congo’ to enable it to serve the region.

The Bank delegation also visited the Oyo Museum, a bio milk processing unit, a large cattle ranch and an ostrich farm. The ranch, which has close to 1,900 cattle and 245 Congolese employees, could be a major employer in the region, Adesina noted. 

The Bank’s delegation also met with Congolese Premier Clement Mboumba, the Minister of Planning, the Governor for Congo, and private businessmen and development partners.

Global partners announce $61.8 million allocation to boost AfDB initiative for women entrepreneurs

“This substantial support from the Women Entrepreneurs Finance Initiative, We-Fi, will help us scale up our actions and achieve greater results for women entrepreneurs across the continent” – Vanessa Moungar, Bank’s Director for Gender, Women and Civil Society.

The Governing Committee of the Women Entrepreneurs Finance Initiative (We-Fi) has approved a funding allocation of $61.8 million for the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program.

We-Fi is a partnership among 14 donor governments, eight multilateral development banks, and other public and private sector stakeholders, established in October 2017 and hosted by the World Bank Group.

“This substantial support from the Women Entrepreneurs Finance Initiative, We-Fi, will help us scale up our actions and achieve greater results for women entrepreneurs across the continent. Our ambition with AFAWA goes beyond regular assistance to women in business,” Vanessa Moungar, the Bank’s Director for Gender, Women and Civil Society said about the announcement.

With the We-Fi funding, AFAWA intends to improve access to finance for 40,000 women-owned/led small and medium enterprises in 21 African countries, mainly in low-income and fragile countries, where women entrepreneurs face greater challenges in accessing finance, markets, knowledge, and mentoring programs. Specifically, the program’s activities will be implemented in Botswana, Burundi, Chad, Comoros, Côte d’Ivoire, Democratic Republic of Congo, Ethiopia, Kenya, Mali, Mauritania, Mozambique, Niger, Nigeria, Senegal, Sierra Leone, South Africa, Tanzania, Tunisia, Uganda, Zambia, and Zimbabwe.

The activities funded by We-Fi will be aligned with AFAWA’s three-pronged approach to holistically addressing the $42 billion financing gap between women and male entrepreneurs.

The first AFAWA pillar aims to increase access to finance for women through innovative and tailored financial instruments, including guarantee mechanisms to back up women entrepreneurs.

In collaboration with strategic partners, the second pillar focuses on providing capacity-building services to women entrepreneurs, including access to mentoring and entrepreneurship training courses. AFAWA also helps financial institutions address the specific needs of women-owned/led businesses through tailored financial and non-financial products.

The third pillar concentrates on improving the business environment for women by engaging in policy dialogue with central banks and other relevant authorities and stakeholders.

Lastly, the We-Fi funding will reinforce initiatives of the Bank and partners, such as UN Women and CARE International, in favor of women entrepreneurs in various sectors that are frequently overlooked by traditional financiers, donors and governments. These special initiatives include Fashionomics Africa and the African women tech entrepreneurs program.

Mozambique: African Development Bank comes through with climate risk insurance solutions post cyclone

“We are committed to supporting Mozambique to seek sustainable solutions to climate vulnerabilities, through access to sustainable financial products”Atsuko Toda – Bank Agriculture, Finance and Rural Development Director

Following the devastating cyclones, Idai and Kenneth, which hit the central and northern parts of Mozambique, its government requested support from the African Development Bank for long-term assistance on the management of climate disasters.

A high-level mission led by Atsuko Toda, Director of the Department of Agriculture, Finance and Rural Development visited Maputo, Mozambique, from 28^th  to 29^th of April – the second mission by the Bank to the nation in the same month.

While in Mozambique, the delegation met with the Minister of Finance, Adriano Maleiane and other government institutions such as the Meteorological Institute and the National Disasters Management Institute (INGC). The delegation also met development partners, local banks and financial intermediaries.

“We want to create a coalition of partners that can assist the country to be more resilient to climate change,” Toda said.

During the mission, a funding package of $1 m for emergency aid was officially delivered to INGC through the Ministry of Finance, as a first phase response from the Bank to the Mozambique government. The funds will be used to purchase tents and supplies for homeless in the areas most affected by cyclone Idai.

In the aftermath of the cyclone, the Bank announced a special relief fund of $1.7 million for Mozambique, specifically for the immediate humanitarian relief effort in the worst affected areas. In the second phase, the Bank will set up a response and reconstruction programme, committing up to $100 million for Mozambique, Malawi and Zimbabwe to kick-start economic recovery and rehabilitation.

Speaking at the ceremony, Adriano Maleiane, Minister of Finance, said, “As this ceremony takes place, humanitarian assistance to victims of Cyclone Idai is continuing, while in the north, more specifically, in the province of Cabo Delgado, search and rescue operations for those affected by the Kenneth cyclone, that struck parts of our country last week are ongoing.”

Other support to Mozambique will include technical assistance to the government – in collaboration with the United Nations, the European Union and the World Bank – for the survey of the damage caused by the cyclones, and a resource mobilization effort led by Bank President Akinwumi Adesina. The Bank will also lend support to capacity building in disaster risk management by the African Risk Capacity (ARC) and provide assistance with disaster risk insurance options.

Maleiane said more than 1.5 million people were affected by Idai, most of whom lost their homes completely. In addition to the deaths, the cyclone destroyed over 600 public and private infrastructure such as schools, health facilities and access roads.

Nigeria: Investors say African Development Bank’s Special Agro-Industrial Processing Zones will drive agricultural revolution

Senior Nigerian government officials and key investors have endorsed the African Development Bank’s Special Agro-Industrial Processing Zones (SAPZ) initiative, describing it as a pathway to Africa’s agricultural revolution.

SAPZs are designed to concentrate agro-processing activities within areas of high agricultural potential in order to increase productivity and competitiveness. The initiative will provide millions of youth and rural men and women with employment and entrepreneurship opportunities.

Speaking at an investment forum held Tuesday at the Bank’s office in Abuja, Nigeria’s Minister of Agriculture and Rural Development, Audu Ogbeh, said the country was eager to work with the Bank to develop SAPZs.

“I can’t thank the African Development Bank and all the investors gathered here today enough.

“We need to make agriculture work again. It is with initiatives like this that we can truly create wealth and employment for our teeming youth population,” Ogbeh said.

The investment forum was an opportunity to secure the commitment of key agribusiness companies and banks in the planning, investment and implementation of priority SAPZs in Nigeria.

Key participants included top government officials and big industry players, including the Dangote Group, the Manufacturers Association of Nigeria (MAN), Flour Mills of Nigeria, Olam International, the Nigeria Private Sector Alliance (NiPSA), the International Labour Organization (ILO), commercial and development banks, the United Nations Industrial Organization (UNIDO), and the Cocoa Association of Nigeria.

Professor Banji Oyelaran-Oyeyinka, Special Adviser on Industrialization to the African Development Bank President, said the initiative could boost the gross domestic product (GDP) of rural regions and bridge the rural-urban divide.

“Nigeria currently trails in the supply of quality agro-processing products. Nigeria must take advantage of the opportunities in this sector to create non-oil sector jobs and raise its GDP,” he said.

Africa could become a net exporter of agricultural commodities, potentially replacing imports worth $110 billion. The continent could also double its market share for select processed commodities. The value of Africa’s agribusiness sector is expected to reach $1 trillion by 2030 and has been described the next “oil sector”.

“This investors’ forum is extremely critical. Those of us working in the sector will work closely with the African Development Bank and the government of Nigeria on this huge opportunity,” said businessman Mansur Mohammed Ahmed, Executive Director of the Dangote Group and Chairman of the Manufacturers Association of Nigeria (MAN).

“We support the SAPZs intervention of the African Development Bank. Our Group is interested in investing in agri-inputs production and supply across the Special Agro-Industrial Processing Zones to be set up,” said Sadiz Kassim, Director at Tropical General Investments Group (TGI Group) − a major industry player.

Together with its development partners, the Bank is investing heavily to rapidly scale up agricultural production. The SAPZ’s depend on strong public and private sector partnerships.

President Buhari commends African Development Bank’s transformative role

(L-R) AfDB president Akinwumi Adesina and Nigeria President Muhammadu Buhari

At a meeting with the African Development Bank President in Abuja, Nigeria’s President Muhammadu Buhari commended the Bank for its successes and pledged Nigeria’s continuous support for the institution.

“I want to recognize the support that the African Development Bank has given Nigeria in recent times. I remember the Bank’s critical gesture in 2016 during the difficult period of economic recession through a US$600 million budget support facility. We appreciate this and assure you that we will continue to work towards a diversified Nigeria,” President Buhari said at the meeting with Bank President, Akinwumi Adesina, which was attended by some of the country’s Ministers and senior government officials.

President Buhari commended the Bank’s interventions in infrastructure and agriculture, and encouraged the institution to keep supporting countries like Nigeria to grow agriculture as a business through the promotion of agro-industrial zones in the country.

African Development Bank President Akinwumi Adesina thanked President Buhari for his support to the Bank and pledged the Bank’s commitment to fast track Africa’s development.

Adesina also highlighted several reforms at the Bank and strategic efforts to move the Bank’s operations closer to countries.

“The African Development Bank’s robust operations in Nigeria have had significant results and impacts on the ground, and continue to accelerate the country’s economic transformation as well as improve the lives of millions.”

At the end of March 2019, the Bank’s active portfolio in Nigeria comprises 60 operations with total commitments of US$4.5 billion. These include 28 public sector operations with total commitments of US$1.7 billion (21 national and 7 regional); 34 non-sovereign operations with total commitments of US$2.8 billion.

Following Nigeria’s request to the African Development Bank, Adesina reported that the United Nations Secretary-General, Antonio Guterres, has accepted to co-chair a multi-billion fund-raising  session to revive the Lake Chad – a strategic effort that has major climate, economic, agricultural and employment implications for the region.

AfDB boosts cyclone response with emergency relief package and measures to combat climate change

Malawi’s recovery and reconstruction plans in the aftermath of Cyclone Idai has received a boost from the African Development Bank (www.AfDB.org), which is supporting the country with an emergency relief package and measures to combat the effect of climate change in the Southern African region.

Cyclone Idai in Southern Africa. An aerial view of Mozambique’s Sofala province shows standing water. Photo credit World Vision

Mateus Magala, the Bank’s Vice President for Corporate Services and Human Resources, led a delegation to Lilongwe this week, to discuss the institution’s intervention plans with public and civil society officials in Malawi.

Magala had meetings with government officials in Lilongwe, including Hon. Goodall E. Gondwe, Minister of Finance, Economic Planning and Development; Hon. Nicholas Dausi, Minister of Homeland Security; and Dr. Dalitso Kabambe, Governor of the Reserve Bank of Malawi.

Magala conveyed Bank President Akinwumi Adesina’s sympathies to Malawian President Peter Mutharika and the people of Malawi.

“We have come to express our support to Malawi and to partner with the Government of Malawi in its ongoing efforts to provide immediate relief and reconstruction in affected sections of the country,” he said.

Magala informed officials that the development finance institution had set up an Emergency Recovery Fund, which will disburse US$100 million to jumpstart reconstruction efforts in Malawi, Mozambique and Zimbabwe. The Bank is also planning to redirect funding, totaling $1.4 million, to the immediate relief effort, reallocated from savings and extensions of ongoing Bank projects in Malawi’s water, roads and agriculture sectors.  

Responding to Magala, a visibly elated Gondwe said, “The African Development Bank couldn’t have come at a better time, to join us in our efforts which are now focused mainly on providing humanitarian relief and reconstruction…We were looking forward to bumper harvests in Malawi this year, but we have lost our entire crop to the cyclone.”

The Bank has already availed $250,0000 to Malawi, from its Emergency Relief Fund, for the purchase of emergency food items to avert hunger following the loss of crops damaged by the severe floods. Gondwe acknowledged receipt of this fund during his meeting with the Bank delegation.

The Bank’s Climate Fund will also release $150,000.00 to Malawi to enable authorities to assist communities and internally displaced persons impacted by the cyclone. The Bank’s long-term plans include designing and developing mechanisms for climate insurance and mitigating climate change.

Close to sixty people have died, and about 1 million persons across 15 districts have been displaced by the severe floods, mostly in the south of the country, where entire villages were submerged in water. Private sector activities and operators in the land-locked nation of about 18 million people were also severely impaired by the cyclone.

“Now is the time to talk about long-term and permanent solutions to the problems of floods in Malawi. We need to build houses and new structures but, above all, we ought to take advantage of this calamity to accelerate our irrigation development systems,” Gondwe remarked.

The Bank delegation also discussed the need for long-term cooperation on economic development and resilience strategies with donors and development partners in Malawi, including the World Bank, World Food Program Malawi, and top diplomats representing the American, Chinese, Egyptian, German, Japanese, Nigerian, Norwegian and Zimbabwean governments in Malawi.

Cyclone Idai hit Malawi, Mozambique and Zimbabwe in mid-March 2019. Hardest hit was Mozambique, where the cyclone killed about 600 people. More than 1,600 people were injured, according to the UNHCR, the UN refugee agency. Malawi’s Homeland Security Minister Dausi estimates that about $365 million will be needed immediately for the reconstruction of bridges, schools, hospitals and homes.

The Bank’s delegation also included Patrick Zimpita, Executive Director for Malawi, Zambia and Mauritius; Heinrich Gaomab II, Executive Director for Angola, Mozambique, Namibia and Zimbabwe; Kapil Kapoor, Director General, Southern Africa Regional Development and Business Delivery Office; and Eyerusalem Fasika, Officer-In-Charge of the Bank’s Malawi Country Office.