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AFC, TDB, Africa50, Others Partner To Promote Bankable Projects

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Africa’s largest development finance institutions said they would use their cooperation with development partners to promote bankable projects in the continent.

They made this known during a panel to discuss their organisations’ roles in a post COVID-19 environment, according to a statement from African Development Bank (AfDB) on Wednesday.

The institutions are Africa Finance Corporation (AFC), Eastern and Southern African Trade and Development Bank (TDB) and Africa50.

It said AfBD’s acting Senior Vice President, Bajabulile Swazi Tshabalala, was joined by Samaila Zubairu, President and Chief Executive Officer (CEO) of AFC; Admassu Tadesse, President and CEO of TDB, and Alain Ebobissé, CEO of Africa50 for the session.

The statement said the session, organised by the U.S. International Development Finance Corporation (DFC) and the Atlantic Council, was moderated by Edward Burrier, DFC’s Executive Vice President of Strategy.

The DFC, inaugurated in 2019, with an investment cap of 60 billion dollars had selected Africa as a priority region for future investments.

The finance institutions noted that a sustained and collaborative approach among development partners would among others scale up project development activities and boost the number of bankable projects in the continent.

They added that the projects would attract investors’ interest and contribute to closing the infrastructure finance gap in Africa.

The panellists highlighted the importance of project development and a supply of bankable projects as being key for private sector investors.

They said that the project development required an active approach in investing capital into the early stages of project preparation and accepting the risk.

They identified these elements as one of the most important deterrents to attracting foreign investment into Africa.

They also said that most of the participating institutions offered a wide variety of financial instruments and products to help de-risk such investments.

Zubairu spoke of the AFC’s Kigali Innovation City (KIC) technology hub project which was already changing the narrative about Africans only consuming technology rather than being developers.

“Its risky business, but extremely impactful,” Zubairu said.

Tadesse also added that the “blended” returns of dividends and the development impact of some of these projects made any risks worthwhile.

Also, Ebobissé said: “we develop very close relationships with our government shareholders and as a result project implementation is speeded up, especially in the context of the COVID-19 pandemic”.

Africa50’s unique niche is focused on solving Africa’s infrastructure gap through a strong emphasis on both the project development and project financing of infrastructure projects.

“The institution ensures a healthy supply of bankable projects through the mainstreaming of project preparation activities.’’

Tshabalala, however, spoke on how the AfDB’s High 5 priorities represented a significant investment opportunity for U.S. investors in a variety of projects spanning several sectors.

The sectors included energy, agriculture and food security, regional integration and private sector.

She noted that AfDB and DFC were currently collaborating on energy projects in Senegal and Madagascar.

“We see that as the beginning of our stronger engagement and partnership,” she said.

Tshabalala also highlighted the growing partnership on the Africa Investment Forum with the other institutions represented on the panel and their collective efforts to bring bankable projects to private sector investors.

She further added that sovereign lending was crucial “especially in the development of basic infrastructure that is a pre-requisite for development’’.

According to the statement, this also includes the provision of concessional financing to transition countries through the African Development Fund.

The bank also engages in enhanced policy dialogue and provides knowledge products which enable governments to create the right environment for private sector investment.

Tshabalala added that the bank had “over the years been increasing our direct investment in the private sector which has grown to become a significant component of our overall lending portfolio.’’

In an earlier panel moderated by DFC’s CEO Adam Boehler, African Heads of State shared their insights on opportunities for trade and investment.

The panel included Presidents Macky Sall of Senegal, Filipe Nyusi of Mozambique, and Mahamadou Issoufou of Niger, who was represented by his Chief of Staff.

The statement said no fewer than 2,000 participants were in attendance.

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Business Edge | Petroleum Industrial Bill Passes Second Reading In The House Of Representatives

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PIB has passed second reading at the House of Representatives. The PIB in many quarters appears to be the most politicized piece of legislation in Nigeria’s legislative history. It was conceived by the Executive Arm of government some 18 years ago to principally inject transparency and stimulate growth in the country’s oil industry. But controversies arising from vested interests have continued to bog it down, making it one of the longest bills in the National Assembly that had been subjected to legislative fireworks.

To get it passed in the first attempt, the document was balkanised by the two chambers of the Nigerian National Assembly, the Senate, and the House of Representatives which called it “Petroleum Industry Governance Bill, PIGB”. With the new name, the Bill was passed simultaneously in both chambers in January 2018.

It was later forwarded to President Muhammadu Buhari for presidential assent. But the President expressly declined his assent, citing anomalies, particularly the reduction of Powers of the Minister of Petroleum over Nigerian National Petroleum Corporation, NNPC. The refusal then necessitated the return of the Bill to the National Parliament.

Also, Ethiopia plans to sell a 45% stake in its Ethio Telecom monopoly, an adviser to the state minister of finance said, as the government pursues the liberalization of the sector despite an armed conflict in the north of the country. Ethiopia’s telecoms industry is considered the big prize in a push to liberalize the African country’s economy because of a vast protected market, which serves around 100 million people. Tolulope Adeleru Balogun discussed these with Nasir Afolabi Agbalaya and Ralph Malik

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South Africa Records Boost In Business Confidence

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Following the easing of lockdown restrictions imposed by the South African government to check the spread of COVID-19, the country has enjoyed a new boost in business confidence.

According to a quarterly assessment of business confidence in the country, conducted by FirstRand Ltd.’s Rand Merchant Bank unit, it on Wednesday, said business confidence country has increased to 40 from 24. It is the country’s highest since Q2/2018. The index is compiled by Stellenbosch University’s Bureau for Economic Research.

The improvement shown is another proof to the data that suggests the South African economy may be recovering gradually from its low ebb.

The country’s output contracted by an annualized 51% and 2.2 million jobs were lost in the second quarter.

“It only signifies an economy that’s out of intensive care, and not out of high care,” an RMB chief said. “The strong rise in confidence among consumer-facing sectors could easily turn out to be temporary if the ‘kicker’ having come from pent-up demand peters out.”

The confidence boost for businesses may however not be long-lasting due to the overall effects of the pandemic.

South Africa is one of Africa’s worst-hit countries and has been rallying back, following its recession in March. The country has faced two recessions in two years.

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Nigeria Suffers The Worst Economic Recession In 33 Years

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The news of Nigeria sinking into its worst recession in 33 years has left most Nigerians asking how the giant of Africa got here. News Central speaks with Muktar Mohammed, a finance analyst who further explains the implication of this recession.

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