The Japan International Cooperation Agency (JICA) and the African Development Fund (ADF) – the concessional arm of the African Development Bank signed a loan agreement of 73.6 billion Japanese yen ($668.1 million) to support the 15th replenishment of the African Development Fund (ADF-15).
This was disclosed by African Development Bank Group President, Dr. Akinwumi A. Adesina during a virtual signing ceremony of the loan agreement.
According to Adesina,
- “The concessional donor loan will support the 15th replenishment of the African Development Fund, approved in December 2019 by ADF donor countries. JICA is extending the loan – the largest to ADF-15 – on behalf of the Government of Japan.
- “This is a continuation of the strong leadership role of Japan in providing concessional loans to the African Development Fund. Japan was the largest provider of concessional donor loans to the African Development Fund’s 15th replenishment, just like Japan was also under the African Development Fund’s 14th replenishment.
- “Japan continues to add great value to the overall replenishment cycles of the African Development Fund.
- “The latest loan will greatly boost the liquidity of the African Development Fund and allow us to ramp up much-needed support to the ADF countries…especially now at this critical time when they are struggling to cope with and recovery from the COVID-19 pandemic.”
What they are saying
The Japanese Ambassador to Côte d’Ivoire, Kuramitsu Hideaki said “I sincerely hope that this loan in yen will allow the (African Development Fund) to execute concessional financing and grants for African countries facing emerging challenges caused by COVID-19 and contribute to the economic and social development of these countries.”
According to JICA President, Kitaoka Shinichi,
- “The COVID-19 crisis has accelerated global structural changes. Africa is still in the midst of this crisis, facing serious challenges from coronavirus variants and the cold storage requirements for vaccines”.
- “Only a united Africa can defeat this threat to humanity. We should not allow this virus to jeopardize the steady progress of freedoms, independence and democracy that African countries have made so far”.
- “I firmly believe that today’s contribution to ADF-15 will further boost our cooperation with African countries and strengthen our partnership with the African Development Bank Group.”
According to Mimura Atsushi, Deputy Director-General/ADF Deputy, International Bureau, Ministry of Finance Japan,
- “The African Development Fund is a key source of financing for Africa’s low-income countries heavily affected by COVID-19”.
- “The Yen Loan we are providing today has a higher grant-element compared to the Yen Loan provided for the last ADF replenishment, with a lower interest rate and longer maturity. Going forward, I would like to see our partnership further developed with the African Development Bank Group.”
What you should know
- Concessional donor loans are loans offered to development partners by donors at interest rates significantly lower than market rates to supplement available grant resources.
- The fifteenth replenishment of the ADF will deliver investments to support Africa’s poorest countries in building economic resilience and reducing systemic vulnerability.
- By the end of the ADF-15 period (2020-2022), it is expected that the ADF’s projects will have changed the lives of millions of Africans
- The African Development Fund is made up of 32 contributing states. It benefits 37 countries, including fragile states that need special support to ensure basic service delivery, and countries that in recent years experienced higher growth rates. The Fund’s resources are replenished every three years.
- AfDB’s partnership with the Government of Japan, including the Enhanced Private Sector Assistance Initiative was formally launched in 2005.
- As of February 2021, Japan’s total contribution to the initiative amounts to $4.6 billion.
- According to Dr. Adesina, “ Japan’s concessional donor loan was almost 10% of the total ADF-15 resources of $7.5 billion”
- AfDB Group President, Dr. Akinwumi A. Adesina and Japanese Ambassador to Côte d’Ivoire Kuramitsu Hideaki signed an Exchange of Notes.
- The loan agreement was signed by the JICA Chief Representative in Côte d’Ivoire, Fujino Kojiro, and Acting African Development Bank Group Senior Vice President Swazi Tshabalala, in her capacity as Chief Financial Officer.
FG moves to appoint fund manager for $37 billion infrastructure company
The FG has arranged to engage an asset manager for its newly set up Infrastructure Company of Nigeria Ltd.
The Federal Government has concluded plans to engage an asset manager for its newly set up Infrastructure Company of Nigeria Ltd. (Infra-Co), to raise about N15 trillion ($36.7 billion) for projects and accelerate growth in Africa’s biggest economy.
This is coming barely 2 weeks after President Muhammadu Buhari approved the government’s N1 trillion initial seed capital for the Infrastructure company, which will be set up under a Public-Private Partnership.
According to a report from Bloomberg, a source who wants to remain anonymous said that the Central Bank of Nigeria (CBN) and its funding partners, Africa Finance Corporation (AFC) and state-owned Nigeria Sovereign Investment Authority, are seeking proposals from companies to independently manage the infrastructure company’s fund-raising plan.
The sought after fund manager will be responsible for coordinating the total equity capital and associated debt raise required by the company with the asset managers seeking the role expected to have been active in infrastructure financing.
The CBN Governor, Godwin Emefiele, had earlier said that the government needs to be innovative in its approach to developing infrastructure in the country and believes that InfraCorp will be a major game-changer in this regard.
Some firms such as PricewaterhouseCoopers, Boston Consulting Group, McKinsey and KPMG have expressed interest in getting the role of transaction advisers on the deal with Ukiri Lijadu and Co. and Kenna Partners appointed legal advisers.
This is as the report says that the firms were either not available to confirm the development or could not make any comment yet.
What you should know
- It can be recalled that President Muhammadu Buhari, had earlier approved the government’s seed capital of N1 trillion for InfraCo, an infrastructure company, which will be wholly focused on critical infrastructure investment in the country, under a Public-Private Partnership.
- The President had said that InfraCo will be raising funds from the CBN, Nigeria Sovereign Investment Authority, Pension funds, and local and foreign private sector development financiers.
- This will help boost infrastructure investments to stimulate economic growth after exiting its second recession in 4 years in the fourth quarter and bridge the infrastructural gap in the country, with Nigeria needing at least $3 trillion over 30 years to close its infrastructure deficit.
Afreximbank sets up a $500 million fund to support Africa’s creative industries
African Export-Import Bank has set up a $500 million fund to support Africa’s creative industries.
The African Export-Import Bank (Afrexim Bank) has set up a $500 million fund to support Africa’s creative industries as the continent faces a challenge to effectively monetize its creative output.
This disclosure was made by Afreximbank President, Benedict Oramah at a virtual “fireside chat” on Tuesday organized by the Africa Soft Power Project, entitled “The New Face of African Collaboration.”
According to Africa Investment Forum Senior Director, Chinelo Anohu,
“Digital platforms in Africa should scale up to take advantage of the continent’s surging demand for creative content, and the African Development Bank flagship entity is providing advisory services and investment support to creative players.
“The Africa Investment Forum was working to promote content deals as well as digital infrastructure projects to advance creative industries, including support to smaller players.
“At AIF 2019, we had a very interesting entrepreneur scheme which saw those that were not as big get the kind of funding they needed to get beyond getting a feasibility study done.
“Data is one of the African Development Bank’s strong points. They have a fantastic research division, and what we’re trying to do is mainstream that data culled from 55 countries and distill it in such a manner that the investors can easily access the information they need.
“Support for intellectual property rights and equipping investors with the data they need to tackle negative perceptions about investing in Africa are key priorities for Africa Investment Forum.
What you should know
- The event was held against the backdrop of the recent coming into force of the African Continental Free Trade Agreement (AfCFTA).
- Discussion at the event primarily focused on the role of infrastructure and connectivity in advancing Africa’s creative industries, including film, textiles and design.
- It is important to note that 2021 is also the African Union’s year of arts, culture and heritage.
- In January 2020, Afreximbank set up a $500 million fund to support Africa’s creative industries.
- It is strongly believed that AfCFTA would help address some of the key challenges to boosting Africa’s creative output.
- The Africa Investment Forum, championed by the African Development Bank and its founding and institutional partners, works to accelerate the closure of the continent’s investment gaps. The Forum currently has a growing portfolio of 118 deals valued at $114 billion.
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