AfDB, Made in Africa Foundation to raise $22bn for Africa’s infrastructure projects
BY EDMUND SMITH-ASANTE
The African Development Bank (AfDB)
has proposed plans to float Africa’s first infrastructure bonds to member
nations to raise up to $22 billion for investments in infrastructure projects
such as ports, railways, roads and energy, across the African continent.
This follows a recommendation by
Made In Africa Foundation (MIAF) for AfDB to offer the opportunity to invest in
the infrastructure bonds to all, which would be in addition to funds committed
by member governments.
It also brings to reality, an
initiative first raised at the March 2009 conference on Growth Corridors,
hosted by MIAF’s Ozwald Boateng and UK Foreign Minister, David Miliband.
According to a statement issued by MIAF
partner - Nigerian oil company, Atlantic Energy Tuesday, September 25, by
opening up the bond offering to everyone – private institutions such as global
banks and pension funds, individuals and corporations – there would be
increased transparency, and hopefully better governance, not to mention
increased flows of money to fund projects.
It is
envisaged that the $22bn raised
would take advantage of the AfDB’s AAA rating, which would make its African
bonds a more secure investment than those issued by a number of European states
potentially, making it one of the more attractive opportunities in the global
debt capital markets.
AfDB and MIAF believe the investment
of $22bn in infrastructure projects across Africa would, if implemented
properly, have a positive effect on the continent’s GDP, raising it by an
estimated 2%.
They are also positive that this
would lift millions out of poverty and dramatically decrease regional disparity,
saying the initiative’s effect on Africa could be similar to the Marshall Plan
which was a huge stimulus for growth on the European continent in the post war
period.
Presently, the AfDB envisages that
the $22bn investment will only be offered to member states of Africa.
AfDB says its President, Donald
Kaberuka, is expected to ask African governments at the IMF summit in Tokyo
this October to commit 5% of their foreign currency reserves to take up the
opportunity.
MIAF on its part believes that the
estimated trillion dollar savings pools controlled by the African middle class
and the African Diaspora, deserve to be offered this opportunity to grow and
develop their own continent.
“If combined with favourable tax
treatment, it would be a chance for many to repatriate the ‘missing billions’ that
have dissipated from Africa’s shores to low interest tax havens over the past
decades. Let Africans have the chance to show their belief in their own continent,”
MIAF says.
For
his part, Ozwald Boateng
stated; “The global African diaspora is a trillion dollar economy already
investing $30bn in remittances to the continent every year - The AfDB’s
‘triple A’ guarantee would provide security and an excellent return for them.
How can we ignore them?”
Commenting
on the initiative, Nigerian businessman and co-founder of MIAF, Kola Aluko, said, “We have made an
Enduring Commitment to develop Africa and its abundant resources through energy
and infrastructural development“, “AfDB’s initiative will enhance Africa’s
growth potential dramatically. It is to be applauded.”
Atlantic Energy Co-Ceo, Scott Aitken
also stated; “Atlantic Energy is pleased with the AfDB’s initiative, it will
encourage infrastructural development much like Atlantic Energy and the Made in
Africa Foundation has sought to promote, foster an upswing in infrastructural
development across Africa and hopefully, lead to more initiatives like this in
the near future.”
Made In Africa Foundation (MIAF) was
founded in 2011 by Mr. Boateng, Africa’s foremost designer, together with
prominent Nigerian businessman Kola Aluko and independent Nigerian oil company,
Atlantic Energy, to support first-stage funding of infrastructure projects in
Africa.
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