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Public Development Banks Call For New Financing For Africa’s Recovery Post-Covid-19

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A global coalition of public development banks has emphasized the urgency of immediate resources for Africa’s recovery post-Covid 19. Together, they committed to deepening cooperation to boost investment opportunities across the continent.

Participants in the meeting, hosted by the African Development Bank on May 12, brainstormed on joint actions that could help boost a strong and inclusive recovery in Africa. This would be recovery grounded in a dynamic private sector.

The African Association of Development Finance Institutions co-organized the meeting in collaboration with the International Development Finance Club, which is hosted by the Agence Française de Développement.

The meeting was held virtually and follows the first Finance in Common Summit held in November 2020. At that summit, public development banks committed to work together to support the transformation of the global economy and society towards sustainable and resilient development.

During the three principal sessions of the meeting, heads of public development banks and international partners focused on concrete proposals and innovative financial solutions to unlock the potential of African financial institutions to promote sustainable development investments in Africa.

“The African Development Bank is strongly supportive of public development banks,” African Development Bank president Dr. Akinwumi A. Adesina said in opening remarks.

He added: “As public development banks, we must deepen our ability to reach all parts of Africa. To ensure financial inclusion, especially for the unbanked, and expand access to finance, savings and insurance products and services, we need to work as one unified system. Public development banks must strengthen their capacity to deepen domestic capital markets and stock exchanges. He said this would hasten access to financing and unlock new opportunities.”

Rémy Rioux, chairperson of the International Development Finance Club, said: “African challenges, more than anywhere else, require us all to go seek coordinated responses and actions. Because in Africa, we need to leave no one behind. Let’s Finance in Common and build now a common and positive story of innovation and investment in Africa, leveraging ODA and mobilizing all willing stakeholders. The days of pure aid are over. Africa is ready for sustainable investment.”

Public development banks have a key role to play in Africa. From the beginning of the Covid-19 pandemic, institutions like the African Development Bank have channeled resources to various sectors and clients, particularly underserved areas like health, social investments, housing, agriculture and climate.

The African Development Bank’s $10 billion Covid-19 Response Facility has been instrumental in mitigating macroeconomic shocks for African countries. The Bank also announced a $3 billion social bond to support its Covid-19 funding efforts.

The Covid-19 pandemic has led to an unprecedented global health and economic crisis, affecting African economies, particularly in sub-Saharan Africa, most deeply.  A historic recession of 2.1%, the largest contraction for the sub-Saharan region in more than half a century, is threatening gains made over the last decade and attainment of the UN Sustainable Development Goals.

The pandemic has negatively impacted the debt situation for African countries. Without a resolution of Africa’s $700 billion external debt, the continent’s economic recovery will be delayed and financial market stability will be affected in the short and medium term.

“Think of the impact that this debt is having: in 2019, Africa paid $221 billion for debt service, which is 44% of the total government revenue of $501 billion in the same year,” said Dr. Adesina.

Discussions covered measures that could be taken to strengthen the balance sheet of African public development banks and provide financing and additional tools to support the private sector in Africa. Participants also discussed challenges faced by African public development banks.

The African Development Bank president will convey the outcomes of the Spring Meeting to a May 18 Summit on Financing African Economies in Paris. That summit is being convened by French President Emmanuel Macron. It is expected that there will be further pledges and announcements of financial and technical assistance to support the commitments made by the African public development banks.

African public development banks, in a  joint declaration (https://bit.ly/3vZUTmP), called for the heads of state and international organizations to support our role in the African financial system and provide us with the necessary means and incentives: a clearer mandate for climate and SDGs, additional capacity building, greater access to concessional resources as well as reinforcement of our capital bases, taking advantage of the expected SDRs issuance by the International Monetary Fund (IMF)”.

The following public development banks and partners participated in the panel discussions:

Association of African Development Finance Institutions (AADFI), Association of European Development Finance Institutions (EDFI), African Development Bank, African Export-Import Bank (Afreximbank), Agence Française de Développement (AFD), Development Bank of Southern Africa (DBSA), European Commission (EC), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Foreign, Commonwealth and Development Office (FCDO), International Development Finance Club (IDFC), KfW Development Bank, Trade and Development Bank Group (TDB), and West African Development Bank (BOAD).

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Mozambique Scandal: Credit Suisse & U.S. Conclude Deal

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Credit Suisse Group AG is nearing an agreement with the U.S. government that would resolve a criminal probe regarding its role in a U$2 billion Mozambique bond scandal, according to people familiar with the matter.

The discussions with the U.S. Justice Department involve a deferred prosecution agreement that would include a fine, according to the people, who asked not to be identified because the talks are confidential. An agreement is expected to be announced Tuesday.

Any deal with U.S. prosecutors would be the latest action in a multi-year, international legal saga arising out of the 2013-14 deals that were supposed to fund a new coastal patrol force and tuna fishing fleet in Mozambique, one of the world’s poorest countries.

In a 2018 indictment, the U.S. Justice Department alleged the contracts were a front for government officials and bankers to enrich themselves.

Three former Credit Suisse bankers have pleaded guilty to U.S. charges stemming from the scheme.

Credit Suisse declined to comment on any agreement, as did the U.S. Justice Department.

A deal could help put to bed one scandal, even as the bank has been punished this year by investors for its stumbles with Archegos Capital Management and Greensill Capital, which have spurred broad management shakeups.

Mozambique has filed suit against Credit Suisse and shipbuilder Privinvest, one of several cases in U.K. courts that involve the bond deal.

Unlawful Conduct’

In defending its London lawsuit, Credit Suisse has insisted that it was deceived by rogue bankers and couldn’t be held responsible for their “unlawful conduct” when it arranged the loans in early 2013.

The Swiss bank has said it carried out its usual due diligence before the transactions and was aware of the risk of bribery and corruption.

Andrew Pearse, who led the global financing group in the bank’s London office, testified at a federal trial in Brooklyn, New York that he’d pocketed at least U$45 million in illicit payments for his role in the arrangement of the loans.

The Credit Suisse loans were for three separate maritime projects including a tuna fishing fleet, the building of a shipyard and surveillance operation to protect Mozambique’s coastline and protect against pirates, according to Pearse.

Mozambican government officials, corporate executives and investment bankers stole about U$200 million, prosecutors said.

Both Pearse and his successor at the bank, Surjan Singh, who also pleaded guilty, testified at the 2019 trial of Jean Boustani, a Privinvest Group executive accused by the U.S. of being behind the plan to get Mozambique to borrow billions of dollars and overpay for dubious maritime projects.

A third banker, Datelina Subeva, Pearse’s subordinate, also pleaded guilty but didn’t testify.

All three bankers await sentencing. After a six-week trial in late 2019, a federal jury cleared Boustani of all charges.

Bloomberg

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DRC Opposition Protests Against Phone Tax

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Martin Fayulu, DRCs leader of opposition coalition LAMUKA has called upon all citizens to take to the streets and demand for the abolition of a controversial mobile phone tax.

In June 2020, the DRC government set up – through the ICT, Post and Telecoms Ministry – a CEIR system (Central Equipment Identification Register), with the aim to fight fake devices and the theft of mobile devices.

However, Telephony mobile users claim the Mobile Device Registry (RAM), a controversial new tax is robbing them of their units and making them poorer.

In terms of RAM, mobile operators are cutting a big chunk of units monthly from their customers’ mobile devices, which many users believe is too high and unnecessary.

“We are calling for the immediate withdrawal of RAM. Because it’s theft, a scam. That no one is demobilized. Let’s march and denounce it because it is outright  theft. Once withdrawn, all money collected must be returned, ”said Martin Fayulu.

During a meeting this Saturday, October 16, 2021 in Kinshasa, Martin Fayulu called for the outright abolition of this fee.

During the rally, the leader of Lamuka pinpointed other topical issues, including the issue of appointing the leaders of the Independent National Electoral Commission (CENI).

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Tanzania’s Economy Records 4.3% Expansion in 2nd Quarter

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Tanzania’s economic outlook seems very impressive as the country registered a 4.3% expansion between April and June according to the country’s National Bureau of Statistics (NBS).

Compared to the country’s economic performance in the same period last year, there has been a 0.3% upward expansion.

Briefing the media on Friday, Daniel Masolwa NBS Director of Economics Statistics, said, “Real GDP increased to Shs 33.4trillion from Shs 32trillion in the corresponding period in 2020, an equivalent to a 4.3% growth,” he said.

During the second Quarter of 2020, Tanzania’s economy registered the lowest growth rate of 4.0% since 2017 mainly due to the devastating effects of Covid-19 pandemic following the introduction of lockdowns and many countries to mitigate spread of this pandemic.

However, Masolwa tried to cool down any skepticism saying, the annual economic growth in 2021 is projected at a 5.0% rate. In terms of economic activities, he  said, during the period under review, information and communication attained the highest growth of 12.3%, followed by electricity generation at 12.1%.

Meanwhile, other services include arts and entertainment and households as employers (10.8%), accommodation and food services (10.1%), water (8.4%), and mining and quarrying (7.3%).

According to Masolwa, the expansion of economy by 4.3% during the second Quarter of 2021 was spearheaded by key drivers of growth which include Agriculture (13%), transport and storage (8.4%), trade and maintenance (8.1%), manufacturing (7.6%) and construction (7.1%).

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