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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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Most Expensive Home in America To Be Auctioned

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The One mansion of the largest private homes ever built, with a colossal 105,00sq ft of living space will go to the highest bidder tonight during a public auction.

Once valued at $500 million, The One mansion in Bel-Air is being sold for $295 million and will be on the open market until it is auctioned off by Concierge Auctions, an online auction marketplace, from February 28 to March 3.

The home will be sold without reserve, meaning it will sell to the highest bidder. Even if it sells close to the price it’s listed at, it will surely break records.

Currently, billionaire and hedge fund tycoon Ken Griffin’s $238 million New York penthouse in 2019 holds the record as the most expensive U.S. home ever sold.

Developed by Nile Niami, the massive estate took more than 10 years to build and created massive debt for Niami. His development company, Crestlloyd, filed for bankruptcy last year, forcing the home to careen towards auction as part of the bankruptcy proceedings.

However, the home still has about 12 more months of work. The buyer will have to put down nearly $340,000 as a deposit.

The Los Angeles home is one of the largest ever built, and is twice the size of the White House. It spans 105,000 square feet and the property sprawls over 3.8 acres.

Outdoor features include a moat of water on three sides of the home, five pools, a 10,000-square-foot deck and a 400-foot outdoor running track.

The home is more like a personal, private resort than a single-family home. There are a whopping 21 bedrooms, 42 full bathrooms and seven half bathrooms.

Despite its grandiose nature, there is a pared-down, neutral color palette throughout and calming water features.

Within the home, there are custom-curated artworks from artists Mike Fields, Stephen Wilson and glass artist Simoe Cenedese, to name a few. Soaring, 26-foot ceilings make the home feel even larger than it is (if that’s possible), and rooms are oversized and expansive.

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Rwanda-Uganda Full Trading Resumes

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Full trading between Rwanda and Uganda is scheduled to resume on Monday January 31st following Kigali announcement that it had opened locks on its borders shut in March 2019.

“Rwanda has taken note that there is a process to solve issues raised by Rwanda, as well as commitments made by the government of Uganda to address remaining obstacles,” Kigali said in the statement.

Since the border closure Rwanda and Uganda recorded a significant reduction in trade flows and was further worsened by the covid-19 pandemic that struck a year after Rwanda had slammed its doors to the northern neighbour.

Before the border was closed in 2019, Uganda export revenues fetched from trading with Rwanda were valued over U$600million. During 2020 Uganda Exports to Rwanda was US$2.31 Million, according to the United Nations COMTRADE database on international trade.

President Paul Kagame said in his new year address that Rwanda prospered in the economic front.

“We are beginning the year 2020 after a successful 2019.Our country remained safe as a result of our efforts”.

The Africa Development Bank in its 2019 outlook on Rwanda, projected robust growth prospects even as the standoff with Uganda heightened.

For example, Rwanda and Tanzania signed the standard gauge railway (SGR) deal dubbed, sub-Saharan Africa’s first 570 Km bullet line with Tanzania worth US$2.5 billion.

Also Rwanda by December 2019 signed a U$1.3 billion deal on Bugesera Airport with Qatar.

One of the biggest blows that Uganda suffered in its standoff with Rwanda was the emergence of Tanzania as Rwanda’s new major trading partner.

Uganda exports to Rwanda include; mineral fuels, oils, distillation products ,plastics ,textiles ,cereals , electronics, vehicles, machinery, fish, edible fruits, soaps, cement, lubricants, waxes, candles and an assortment of manufactured articles.

With the border slated for opening on Monday, the gesture is expected to boost  the movement of goods, transport, persons and services and under strict observation of restrictions against covid-19 pandemic.

How Museveni Lost to Kagame in Race For Regional Dominance

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Business

Akabanga Tycoon Diversifies to Petroleum

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Sina Gerard famed for producing the hot oiled pepper ‘akabanga’ has diversified into petroleum products, Taarifa Business desk reports.

Under a new company registered as Sina Gerard Petroleum Ltd, the tycoon’s decision indicates that he is reading from a good business book on diversification strategy.

Diversification is a business development strategy in which a company develops new products and services, or enters new markets, beyond its existing ones.  Companies diversify to achieve greater profitability.

Diversification will never be an easy game, and managers must study their cards carefully. It takes smart players to know when it’s best to raise their bets and when it’s best to fold.

Havard Business review research suggests that if managers consider the following six questions, they can push their thinking still further to reduce the gamble of diversification. Answering the questions will not lead to an easy go-no-go decision, but the exercise can help managers assess the likelihood of success.

The issues the questions raise, and the discussion they provoke, are meant to be coupled with the detailed financial analysis typical of the diversification decision-making process.

Together, these tools can turn a complex and often pressured decision into a more structured and well-reasoned one.

Thus, when managers consider whether or not to diversify, they should ask themselves the following questions:

What can our company do better than any of its competitors in its current market?

Before diversifying, managers must think not about what their company does but about what it does better than its competitors.

What strategic assets do we need in order to succeed in the new market?

To diversify, a company must have all the necessary strategic assets, not just some of them.

Can we catch up to or leapfrog competitors at their own game?

Will diversification break up strategic assets that need to be kept together?

Managers need to ask whether their strategic assets are transportable to the industry they have targeted.

Will we be simply a player in the new market or will we emerge a winner?

What can our company learn by diversifying, and are we sufficiently organized to learn it?

Like good chess players, forward-thinking managers will think two or three moves ahead.

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