Minister for Roads and Highways, Governs Kwame Agbodza, has held discussions with the African Development Bank (AfDB) Country Manager, Eyerusalem Fasika, as part of efforts to secure funding for critical road projects across Ghana.
The meeting, which took place yesterday, focused on strengthening collaboration between the government and AfDB to enhance road infrastructure development. The discussions emphasized Ghana’s commitment to improving its road networks to facilitate trade, boost economic activities, and improve transportation nationwide.
Key projects that featured prominently in the talks included the Eastern Corridor Development Programme (Phases 1 and 2), the Dambai Bridge Project, and the Abidjan-Lagos Corridor Road Project. Other topics on the agenda included the government’s Big Push Initiative, the proposed reintroduction of road tolls, and strategies to enhance road maintenance.
Mr. Agbodza made a strong case for financial support, particularly for the reconstruction of the Techiman-Wa road, which serves as a major transportation link in northern Ghana. He expressed appreciation for AfDB’s continuous support while stressing the need for sustainable funding mechanisms to ensure consistent road development and maintenance.
“The reintroduction of road tolls will be crucial in generating additional revenue for road infrastructure projects,” he noted, reaffirming the government’s dedication to finding long-term financing solutions.
AfDB Country Manager Eyerusalem Fasika assured the Minister of the Bank’s commitment to supporting Ghana’s infrastructure development agenda. She highlighted the vital role of well-maintained roads in promoting economic growth and facilitating regional trade.
Amid worsening debt and financial instability, African nations have agreed to create a fund aimed at offering low-cost financing to governments facing economic hardship.
Named the African Financial Stability Mechanism (AFSM), this initiative will be administered by the African Development Bank (AfDB), as reported by Reuters on Tuesday.
With an independent credit rating, the fund will have the ability to raise capital from global financial markets, according to a statement from the bank.
The proposal for this facility first emerged in 2022 when the economic fallout from the Covid-19 pandemic and the Ukraine conflict pushed several developing countries into debt crises.
Participation in the initiative is voluntary, and all African Union member states will have the opportunity to join, the bank confirmed.
A $1 billion exposure exchange agreement has been signed between the African Development Bank (AfDB) and the Asian Development Bank, designed to strengthen AfDB’s capital and expand its sustainable lending capabilities across Africa.
This agreement, finalized during the IMF/World Bank Annual Meetings in Washington DC on October 25, marks the third transaction under AfDB’s Balance Sheet Optimization strategy.
Through this partnership, the AfDB will optimize its capital by redistributing sovereign exposures, minimizing portfolio concentration risks, and providing a cushion against potential credit changes among its member nations.
By diversifying sovereign exposure, the exchange agreement enhances the AfDB’s capacity to support all borrowing countries, even amidst global economic challenges affecting African economies.
This transaction builds on previous agreements with the Inter-American Development Bank and the International Bank for Reconstruction and Development in 2015, and another with the Asian Development Bank in 2023, all of which have helped the AfDB reduce concentration risks, boost lending, and maintain a balanced financial profile.
“This transaction is a continued demonstration of multilateral development banks'(MDBs) cooperation as recommended by the G20 International Financial Architecture working group and remains in line with the G20 call for development institutions to optimize and leverage their balance sheets.
“We appreciate the continued corporation with our peers in fulfilling our respective development agendas,” said Hassatou N’Sele, African Development Bank’s Vice President for Finance and Chief Financial Officer.
In addition, the African Development Bank will be able to maintain capital flexibility without compromising its risk profile, while supporting the Bank’s Ten-Year Strategy.
“As MDBs, we play a crucial role in stabilizing and supporting the financial needs of developing nations. This agreement underscores our commitment to maximizing our capital resources and collaborating with our peers to sustain growth across Africa,” said Max Ndiaye, Senior Director of the Syndications, Client Solutions and Africa Investment Forum department of the African Development Bank.
“Through this exchange, we continue to lead in innovation, enabling us to deliver on our mission with a strengthened capital position that serves our Regional Member Countries effectively.”
MDBs use exposure exchange agreements as a diversification and capital management tool to optimize their balance sheets by synthetically exchanging a portfolio of loan exposures with exposure to countries where credit exposure is less or non-existent.
This latest transaction brings the total exchange exposure agreements executed by the African Development Bank to $6.5 billion.
Ghana is poised to receive a $45 million grant from the African Development Bank (AfDB) next year to support a project focused on the growth and digitalization of Small and Medium-sized Enterprises (SMEs).
This funding is part of the AfDB’s strategy to enhance private sector development, emphasizing a unified approach to advancing the Bank’s agenda, with a strong emphasis on SME growth and digital transformation.
“Our initiatives, such as providing technical assistance, enhancing digital financial inclusion, and supporting specialised agro-industrial zones are designed to address the unique challenges faced by SMEs in Africa,” said Mr. Solomon Quaynor, the Vice President of the African Development Bank, responsible for private sector, infrastructure and industrialization at the SME growth and Opportunity Summit organised by the Ministry of Finance and the Ministry of Trade and Industry.
The event held on the theme “Breaking Barriers to SME, growth” brought together selected participants from the private sector, academia, business regulatory and compliance institutions, media, industry, multilateral and bilateral partners as well as financial service providers.
It includes initiatives spanning finance, governance, and industrialization to enhance SME access to capital and markets, with a focus on value chain creation, productivity improvements, and market facilitation.
At the event, the President also unveiled the GH₵8.2 billion SME GO program, aimed at strengthening support for SMEs nationwide.
Kyle Kelhofer, Senior Country Manager at the International Finance Corporation (IFC), revealed that the IFC has contributed over $400 million to Ghana, with more than $120 million allocated to the financial sector to support lending, stimulate growth, and aid SMEs.
He noted Ghana’s strong track record in SME development but suggested that the government could accelerate progress by providing SMEs with a more accessible and transparent business environment, enabling them to formalize and access the benefits available to established companies.
“Supporting the SMEs does not just mean we are supporting small businesses, but rather we’re investing in the future large local corporates for Ghana. It is today’s SMEs that are tomorrow’s large-scale job creators, economic transformation, and leadership.
Dr Humphrey Kwesi Ayim-Darke, President of the Association of Ghana Industries (AGI), said breaking barriers for SME growth was a shared responsibility that required the collective effort of entrepreneurs, policymakers, financial institutions and other stakeholders.
He emphasized the importance of uniting efforts and embracing innovative strategies to advance the sector, enabling it to effectively navigate the complexities of contemporary markets and global competition.
In the short term, he encouraged the government to partner with the private sector to reevaluate tax policies that impede SME growth.
“We must strive to simplify the tax regulatory framework, ensuring it is conducive to the unique needs of SMEs. We therefore pledge our commitment to coordinate with the Government to harness the full benefits of this programme,” he said.
Police used pepper spray and batons on Saturday to halt a large group of protesters attempting to breach a cordon in Essen, western Germany, where a two-day congress by the far-right Alternative for Germany (AfD) party is underway.
It remains unclear if any demonstrators were injured in the 5:45 am incident, but police reported several arrests and attacks on officers.
Authorities urged protesters to avoid violence and disruptive behavior.
An estimated 100,000 protesters are expected to participate in demonstrations against the anti-immigration AfD, which has been gaining traction, particularly in former communist East Germany.
While organizers promised peaceful protests, police expressed concerns about potential violence from around 1,000 leftist extremists planning to demonstrate.
Approximately 600 AfD delegates are meeting in an indoor arena, with party co-leaders Alice Weidel and Tino Chrupalla seeking re-election ahead of next year’s German parliamentary elections.
Several hundred protesters blocked a motorway exit ramp and occupied streets near the congress venue in an attempt to hinder delegates.
Addressing the meeting, Weidel criticized the protests as undemocratic and asserted the party’s resolve to continue.
Several thousand police officers were deployed to ensure security, with a major demonstration scheduled to start at 10 am at the main train station.
On Friday evening, 5,000 protesters gathered for a music rally themed “Bass against hate.”
Some AfD politicians reported being escorted by police from their hotels to the venue, while others managed to reach the arena without incident.
The AfD is under surveillance by Germany’s domestic intelligence agency as a suspected right-wing extremist group, due to concerns over its racist, antisemitic, and anti-democratic tendencies.
Despite controversies, the party secured second place nationwide in the recent European Parliament elections and first place in the five former communist eastern states.
It is projected to emerge as the strongest party in September elections in Saxony, Thuringia, and Brandenburg, raising fears of potential coalition challenges for other political parties.
The African Development Bank (AfDB) has reported that Ghana’s youth unemployment rate reached 7.16% in 2023, with the issue being particularly severe among those aged 15 to 24.
This information comes from the AfDB’s updated 2024 Africa Economic Outlook, which underscores a significant gender disparity in youth unemployment rates.
According to the report, unemployment is notably higher among young women than their male counterparts. Female youth unemployment reached 36.7%, while the rate for males was 29.3%.
The report also highlights a slight increase in multidimensional poverty, rising from 46% in 2017 to 46.7% in 2022, a trend largely attributed to the lingering effects of the Covid-19 pandemic.
Rising youth unemployment in Ghana has become a growing concern, leading to calls for intensified structural transformation.
The AfDB report points out that productivity in the services sector, the largest employer in the country, has stagnated. Meanwhile, gains in industry and agriculture have remained modest.
The report notes a significant shift in employment shares across sectors. Agriculture’s share of employment fell from 53.9% in 2007 to 29.8% in 2019. In contrast, industry’s share increased from 14.1% to 21.0%, and the services sector saw its share rise from 31.9% to 49.2%.
To accelerate Ghana’s structural transformation, the AfDB suggests several measures. These include enhancing competitiveness by addressing infrastructure bottlenecks, accelerating agro-industrialization through skills development and value addition, and bolstering private sector growth.
Additionally, the report emphasizes the need for a robust policy framework to support technology adoption and innovation.
The African Development Bank (AfDB) indicates that Ghana’s youth unemployment rate was 7.16% in 2023, with the issue being particularly severe among individuals aged.
The bank’s revised 2024 Africa Economic Outlook emphasizes that unemployment is notably higher among women in this age bracket compared to men.
The report observes a slight rise in multidimensional poverty, increasing from 46% in 2017 to 46.7% in 2022, primarily due to the ongoing effects of the Covid-19 pandemic.
The figures show that female youth unemployment reached 36.7%, while the rate for males was 29.3%.
The increasing youth unemployment in Ghana is a growing concern, prompting demands for enhanced structural transformation.
The report highlights that productivity in the services sector, the largest employer, has stagnated, while improvements in industry and agriculture remain minimal.
Employment in agriculture dropped from 53.9% in 2007 to 29.8% in 2019.
Conversely, the industry’s share rose from 14.1% to 21.0%, and the services sector’s share increased from 31.9% to 49.2%.
The AfDB recommends several strategies to expedite Ghana’s structural transformation. These include improving competitiveness by resolving infrastructure challenges, accelerating agro-industrialization through skill development and value addition, and fostering private sector expansion.
Furthermore, the report stresses the necessity of a strong policy framework to support technology adoption and innovation.
Ghana’s inflation rate is projected to reach 20.9% by the end of 2024, according to the African Development Bank’s updated 2024 African Economic Outlook.
This figure is higher than the previously predicted 17.4%.
This indicates that inflation will remain beyond the Bank of Ghana’s target range of 8%±2.
The AfDB cited several factors influencing this outlook.
These include the impact of fiscal consolidation under the post-Covid Programme for Economic Growth, the ongoing effects of Russia’s invasion of Ukraine, restricted access to finance and foreign exchange, and global macroeconomic shocks.
However, the bank noted that prudent macroeconomic management policies could help mitigate these risks.
Additionally, the Consumer Price Index is expected to decrease to 11.1% in 2025.
In the meantime, the average consumer price inflation across Africa is estimated to have risen by 3.0 percentage points to 17% in 2023, up from 14.0% in 2022.
East Africa recorded the highest inflation at 26.5% in 2023, with Sudan leading at 245.3%. West Africa follows with the second highest rate at 20.3%, with Sierra Leone and Ghana at the top.
The report highlighted that the increased inflation acrossAfricahas undermined socioeconomic progress made prior to the COVID-19 pandemic.
The rise in inflation is due to a mix of factors, including elevated local food prices caused by drought-induced domestic supply shortages, excess liquidity from fiscal and monetary policy measures implemented during 2020–21 in response to the pandemic, and the impact of currency depreciation against a robust US dollar driven by high interest rates in the United States.
The African Development Bank has adjusted Ghana’s growth rate projections to 3.4% for 2024 and 4.3% for 2025.
This is an increase from the 2.8% forecasted in February 2024.
According to the AfDB, this revised growth rate exceeds previous expectations, portraying a positive medium-term growth outlook.
The anticipated growth is expected to be driven by the industry and services sectors on the supply side and by private consumption and investment on the demand side.
Consequently, Ghana is projected to rank 14th in West Africa, ahead of Nigeria, in terms of Gross Domestic Product (GDP) growth.
However, the outlook is challenged by several factors, including the impact of fiscal consolidation under the Post-Covid Programme for Economic Growth, the ongoing repercussions of Russia’s invasion of Ukraine, limited access to finance and foreign exchange, and global macroeconomic shocks. Nonetheless, the AfDB noted that prudent macroeconomic management policies could help mitigate these risks.
To expedite structural transformation, the African Development Bank has encouraged Ghana to boost its competitiveness by alleviating infrastructure constraints and to hasten agro-industrialization by enhancing skills development, among other measures.
“Ghana’s structural transformation needs reinforcement. Productivity has stagnated in services, the dominant employment sector, and is rising only slowly in industry and agriculture. Agriculture’s employment share declined from 53.9% in 2007 to 29.8% in 2019, while industry’s share rose from 14.1% to 21.0% and services’ share rose from 31.9% to 49.2% over the same period. To fast-track structural transformation, Ghana must enhance its competitiveness by easing infrastructure bottlenecks; accelerate agro-industrialization by strengthening skills development, value addition, and private sector development; and create a policy framework for technology adoption and innovation”.
West African growth rate to hit 4.2%
In the meantime, growth in West Africa is anticipated to accelerate, increasing from an estimated 3.6% in 2023 to 4.2% in 2024, and stabilizing at 4.4% the following year.
This marks an improvement of 0.3 percentage points for 2024 compared to the January MEO 2024 projections, driven by stronger growth forecasts in the region’s major economies—Côte d’Ivoire, Ghana, Nigeria, and Senegal.
Real GDP growth is forecasted to climb to 3.7% in 2024 and is expected to surpass the 2022 rate by 2025, reaching 4.3%, as the impacts of the aforementioned factors diminish.
The anticipated recovery in Africa’s average growth will be spearheaded by East Africa (up by 3.4 percentage points) and Southern Africa and West Africa (each increasing by 0.6 percentage points).
Notably, 40 countries are projected to experience higher growth in 2024 compared to 2023, and the number of countries with a growth rate exceeding 5 percent will rise to 17.
Ghana and the African Development Bank (AfDB) have signed the Indicative Operations Programmes, outlining the projects to be implemented between 2024 and 2025.
These projects include support for Small and Medium Enterprises (SMEs), agriculture, and skills development, including digitalisation, with a total grant of US$103 million.
Additionally, a five-year country strategy document for 2024-2029 was signed, defining the sectors and projects that will receive support from the Bank.
The signing ceremony took place on the sidelines of the ongoing 2024 Annual General Meeting of the AfDB in Nairobi, Kenya.
Ghana’s Minister for Finance, Dr. Mohammed Amin Adam, commended the AfDB for its continuous commitment to the growth and development of African countries.
Dr. Adam emphasized the importance of effective monitoring and supervision of projects to ensure value for money for the people of Ghana. He expressed concern over the slow disbursement of project funds by agencies, describing the situation as unacceptable and in need of change.
“so I am committing to set up a monthly review on all project loans and funds that are to be disbursed and the reports will inform us on challenges we face in the execution of these projects. We will then engage the relevant MDAs to see how we can solve the challenges in other for disbursement to quicken up” he said.
“this time around, we will be focused, selective and will be mobilising resources from other partners for identified projects, and for the next five years, we will benefit from the African Development Fund resources” the AfDB Country representative indicated.
AfDB Country Manager, Eyerusalem Fasika, who signed on behalf of the Bank, noted that the AfDB has been supporting Ghana through grants under the African Development Fund.
She explained that the Bank conducted extensive consultations with various stakeholders, including CSOs, MDAs, NDPC, private sector representatives, and other institutions, to gather expert opinions for the Country Strategy Document.
Ms. Fasika assured the government of the Bank’s commitment to building on the achievements of the previous Country Strategy Document once the current one is approved by the AfDB Board of Directors. She highlighted that the approval would lead to the release of funds in the third quarter of this year.
“so we will again work with the Ghana Investment and Infrastructure Fund and the Public Investment and Assets Division of the Ministry of Finance to come out with potential public sector partnership projects that can be presented at African Investment Forums” she noted.
Present at the signing ceremony were Dr. Alex Ampaabeng, Deputy Minister for Finance; Ghana’s Ambassador to Kenya, H.E Damptey Bediak Asare; 2nd Deputy Governor of the Bank of Ghana, Mrs. Elsie Addo Awadzi; and officials from the Ministry of Finance, Bank of Ghana, and the Ghana Investment and Infrastructure Fund.
President Akufo-Addo has suggested allocating 30 percent of Africa’s sovereign reserves, currently held in foreign banks, to be invested in the continent’s financial institutions.
During the Presidential Dialogue on the African Union‘s (AU) Financial Institutions, held on the sidelines of the 37th Ordinary Session of the AU Assembly in Ethiopia, President Akufo-Addo highlighted the importance of strengthening the capital base of institutions like the African Development Bank (AfDB) and Afreximbank.
“We should decide that a minimum of 30 per cent of the reserves of each one of us, should, be invested in the multilateral institutions,” he said, citing the African Development Bank (AfDB) and Afreximbank.
The President emphasized that increasing the financial power of African institutions could significantly contribute to financing the continent’s development and growth.
Currently, many countries hold their reserves in foreign banks, attracting predominantly negative interest rates.
President Akufo-Addo urged African leaders to consider ratifying the decision to designate Afreximbank as a specialized agency of the AU.
He acknowledged the critical role played by institutions like AfDB and Afreximbank, citing their contributions during the COVID-19 pandemic.
“The fundamental fact is that, if we find a way that we can increase the financial power of our own institutions, we are in a better place to finance our development,” he echoed.
“These are institutions which are ours, and which we can trust. So, if we can find a way of strengthening them, we strengthen ourselves,” he noted.
While championing global financial architecture reforms, the President stressed the need for a monitoring mechanism to ensure accountability in the utilization of funds invested in African banks.
He called for collaborative efforts among leaders to develop a robust global financial architecture that prioritizes African development and addresses illicit financial flows from the continent.
The recent push by African Union Heads of State and Government for the establishment of an African Monetary Union, including the African Central Bank, African Monetary Fund, African Investment Bank, and Pan-African Stock Exchange, aligns with the continent’s aspirations for economic transformation.
The 37th Ordinary Session of the AU will also witness the launch of the Alliance of African Multilateral Financial Institutions, known as the Africa Club, aimed at fostering collaboration and finding solutions to financing challenges for sustainable economic development in Africa.
The African Development Bank (AfDB) has projected a modest growth rate of 2.8% for Ghana in 2024, a slight improvement from the estimated 1.5% forecast in 2023.
This anticipated growth is expected to be the lowest in West Africa for the year.
The Bank attributes Ghana’s modest growth to the ongoing fiscal consolidation efforts and the impact of high inflation on household budgets. The disclosure was made on February 16, 2024, in Addis Ababa, Ethiopia, during the presentation of Africa’s Macroeconomic Performance and Outlook for 2024 by the AfDB.
“In Ghana, growth is projected to rise from an estimated 1.5% in 2023 to 2.8% in 2024, with modest growth reflecting the ongoing fiscal consolidation and high inflation weighing on household budget”.
The forecast aligns with the expectations of the Government of Ghana.
The AfDB emphasizes that the ongoing International Monetary Fund program will have repercussions on the private sector and household consumption, leading to limitations on spending. Additionally, it foresees that the prices of goods and services will remain elevated.
In the West African region, Ghana and Nigeria are projected to experience growth below the regional average of 4.0%, with Nigeria’s economy expected to expand by 2.9%.
Meanwhile, Niger is anticipated to record the highest growth rate in Africa for 2024, reaching 11.2%, driven by hydrocarbon production and exports.
TheAfrican Development Bank’s projection indicates that Ghana’s inflation rate is anticipated to remain above 44.7 percent until the year 2024.
The recently published West Africa Economic Outlook Report by the Bank also forecasts that the country’s interest rates will persistently stay above 25 percent.
The report noted that, “Within the West Africa region, inflation is projected to be highest in Ghana (45%), Nigeria (17%), Sierra Leone (27%), and the Gambia (12%).
Except for Nigeria, local currencies in the three other countries experienced double digit depreciation in 2022. This is expected to continue in the medium term.”
For the 2024 fiscal year, the AfDB maintains that Ghana’s inflation is expected to drop to about 20.4 percent while cautioning that the Bank of Ghana’s monetary policy rate could, however, hamper growth prospects.
“Therefore, amid already high policy rates (e.g., a policy rate of 18% in Nigeria, 29% in Ghana, and 19% in Sierra Leone), further rate hikes might do more harm than good to growth prospects,” the Bank said.
In order to address the ongoing economic difficulties in the nation, the AfDB highlighted several measures.
These include seeking international financial support,strengthening fiscal consolidation efforts, promoting economic diversification, and fostering growth in the private sector to stimulate the economy.
Fitch Ratings has maintained the African Development Bank (AfDB)’s Long-Term Issuer Default Rating (IDR) at the highest level of ‘AAA’, with a Stable Outlook.
The rating agency attributes AfDB’s ‘AAA’ rating to the exceptional support it receives from its non-regional shareholders, which Fitch assesses as ‘aaa’.
“The shareholders’ ‘strong’ propensity to support the bank translates into a zero-notch adjustment to our assessment of the capacity to support (aaa). The rating is also supported by the bank’s Standalone Credit Profile (SCP), reflecting the lower of its assessments of ‘aa’ for solvency and ‘aaa’ for liquidity”, it explained.
Fitch Ratings has placed the United States’ ‘AAA’ Long-Term Issuer Default Rating (IDR) on Rating Watch Negative (RWN).
The United States is the second-largest shareholder of the African Development Bank (AfDB), accounting for 6.3% of total capital and 38% of the callable capital rated ‘AAA’ as of the end of 2022.
This rating action creates pressure on the coverage of net debt by ‘AAA’ rated callable capital, which is a crucial metric for assessing support according to Fitch’s criteria.
However, the coverage of net debt by ‘AAA’ rated callable capital improved from 189% at the end of 2021 to 217% at the end of 2022, reflecting new capital subscriptions resulting from the bank’s seventh general capital increase (GCI).
Fitch anticipates that the net debt of the bank will continue to be fully covered by callable capital from ‘AAA’ rated member states throughout the forecast period, even in the event of a downgrade of the United States’ rating.
This expectation assumes that AfDB will receive additional support from its remaining ‘AAA’ rated shareholders, as it did in 2021 when the Outlook on the US rating was Negative and other shareholders subscribed to temporary callable capital.
Strengthening capitalisation
In 2022, AfDB’s capitalisation metrics markedly improved owing to capital payments under the seventh GCI plan.
This contributed to the improved equity to assets (E/A) ratio of 26% at end-2022, up from 24% at end-2021.
Fitch’s usable capital-to-risk-weighted assets (FRA) ratio also improved to 52% at end-2022 from 49% at end-2021.
High Credit Risks Mitigated:
The weighted average rating of loans and guarantees before any adjustments for preferred credit status (PCS) was estimated at ‘B+’ at end-2022, unchanged from the previous year.
AfDB implemented a risk transfer mechanism (“Room2Run”) to cover UA1.5 billion of sovereign loans in 2022.
The transaction is with Lloyd’s of London for UA300 million (on a first loss basis) and UK’s Foreign Commonwealth & Development Office for UA1.2 billion (second loss).
Ministry of Finance and the African Development Bank (AfDB) are set to provide Microfinance and Small Loans Centre (MASLOC) with a grant worth $31.34 million to cater for its operations across the country.
The ADB is donating a $28.5 million grant with the government coming in with $2.84 million. The funding aims to enhance women’s access to credit, financial literacy, and information sharing, particularly focusing on women-led Micro, Small, and Medium-Scale Enterprises (MSMEs) which will also strengthen MASLOC’s activities and help fulfill its mandate of providing micro loans to SMEs in the country.
The facility will provide affordable interest rates of 12% per annum under its project dubbed ‘post-Covid-19 Skills Development and Productivity Enhancement Project’ (PSDPEP). It will be implemented in seven regions of the country namely Greater Accra, Ashanti, Eastern, Bono, Northern, Central and Upper West.
With this funding, MASLOC is set to complete its loan management software (LMS), training and capacity building of over 550 staff members, and networking of all regional and district offices with the Head Office.
As part of government’s digitalization drive, a robust digital infrastructure that streamlines loan applications, processing, disbursements, and recoveries will be set up by MASLOC to create around 20,000 indirect jobs through skills training, self-employment opportunities, and improved access to credit facilities.
The project comprises three components: skills development in higher education for strengthening the health sector, rebuilding youth and women’s livelihoods through entrepreneurship and job creation, and project management.
The implementation of the project involves institutions such as the Social Investment Fund (SIF), Ghana News Agency (GNA), University of Ghana (UoG), and the Microfinance and Small Loans Centre.
Source: The Independent Ghana | Andy Ogbarmey-Tettey
Mr Ignatius Baffour-Awuah, the Minister of Employment and Labour Relations, Tuesday launched a Post-COVID Skills Development and Productivity Enhancement Programme (PSDPEP).
The PSDPEP is a five-year project, which seeks to build health-related skills in higher education, restore livelihoods, strengthen public communication, and create jobs among the youth and women.
It is also aimed at promoting technical and entrepreneurship for job creation.
The project is being funded from a grant facility of US $31.34 million, comprising $28.5million from the African Development Bank (AfDB), and 2.8 million from Government of Ghana.
The Minister said the project was in line with critical government development policy frameworks, such as the Ghana Shared Growth and Development Agenda, Government Coordinated Program of Economic and Social Development as well as the Country Strategy Paper (2019-2013).
This reflects the development aspirations of the Government of Ghana as required by the 1992 constitution.
The PSDPEP beneficiaries are: the Ghana News Agency, Social Investment Fund, Microfinance and Small Loans Centre, the Biotechnology Centre, the School of Nursing and Midwifery, and the Microbiology Centre.
The rest are the Ministry of Gender, Children and Social Protection, the Environmental Protection Agency, and the National Vocational Training Institute.
The project will be implemented in seven regions in Ghana – Greater Accra, Ashanti, Eastern, Bono, Northern, Central, and Upper West.
Mr Baffour-Awuah stressed the need for beneficiaries to own the project by mainstreaming it into their programmes.
That, he said, was necessary for its successful implementation.
Mr Kofi Frimpong, the Executive Director of the Social Investment Fund and Project Coordinator, indicated that the pandemic disrupted livelihoods at the individual, household and entrepreneurial levels due to lockdowns.
The project, he said, would, therefore, help to alleviate the plight of those affected.
Mr. Emmanuel Fordjour, Desk Head of AFDB at the Ministry of Finance, said the Bank was committed to assisting Ghana to recover from the hardships the people suffered as a result of the COVID-19 pandemic.
Steering and technical committees were inaugurated before the programme launched to supervise its successful implementation.
The Auditor General’s special report on Ghana’s COVID-19 expenditure has revealed that the Ministry of Health paid over GH¢10 million in insurance premiums to cover 10,000 frontline health workers and allied health professionals without a life insurance policy document.
The report which spans between March 2020 and June 2022 scrutinizes how monies received from the various institution including the World Bank, AFDB, EU and the contingency fund summing up to the tune of 21.8 billion were utilized.
“General principles of insurance require that when an employer or organisation purchases Group Life Insurance Policy to cover employees in case of death, accident, temporary/permanent disability and critical illness, the employer or organisation may keep the master agreement, but the identified employees should receive Certificate of Coverage which could be used by the beneficiary or next of kin to apply for the claims when the need arises.
Additionally, the National Insurance Commission Guidelines on Life Insurance Products require that as a standard, all Life Insurance Policy documents must have the name of the person(s) insured by the policy and the name of the policy owner, the amount of insurance coverage (face amount and sum assured) provided by the policy and the effective date of the policy.
We observed that the Ministry paid GH¢10,309,919.94 as premium for Special Life Insurance Cover for 10,000 Health Workers and Allied Health Professionals working on the COVID-19 pandemic without any Life Insurance Policy document detailing the beneficiaries, their location, next of kin in case of death, nature of the benefit and the term of the coverage.” a portion of the report read.
This development according to A-G meant that workers could not have triggered any processes to get compensation if the insurance companies had defaulted in taking care of them in the instance where they had been infected by the virus.
“Health Workers and Allied Health Professionals working on the COVID-19 pandemic who have not signed any insurance policy document will find it difficult to access any benefit under this blanket premium payment arrangement. In the event of default by the insurance companies in payment of benefit, the employees will not have the legal capacity to seek legal redress in Court” the report added.
Other Infraction by the Ministry of Health cited in the report include;
Payment of an amount of US$81,870,379.80 to UNICEF/AVAT for the supply of 16,025,650 vaccines that have still not been delivered.
“In the heat of the COVID-19 pandemic, the Government of Ghana through the Ministry of Health entered into an agreement with The United Nations Children’s Fund (UNICEF) for the procurement of COVID-19 vaccines and related supplies based on second additional credit financing of US$200,000,000.00 by the World Bank (Credit 6923-GH). Page 3 of the signed agreement stated that the Government intends to apply a portion of the proceeds of the financing, up to an amount of US$147,483,170.16 (the “total funding ceiling”) to eligible payments under this Agreement. We noted that the Ministry of Health on behalf of Government of Ghana paid an amount of US$120,192,379.80 to UNICEF/AVAT for the supply of 16,025,650 vaccines under the agreement. However, 5,109,600.00 doses of vaccines valued at US$38,322,000.00 were supplied to the National Cold Room, resulting in an outstanding amount of US$81,870,379.80 with UNICEF/AVAT” page 73 & 74 of the report captured.
The report also cited the Health Ministry for increasing the cost of five contracts with total contract sum of GH¢24,256,500.00 by GH¢4,017,000.00 through variation orders without approval of the Central Tender Review Committee and also entering into four contracts for the supply of PPEs at a cost of GH¢9,280,300.00 through single-source procurement without the approval of the Board of the Public Procurement.
Additionally, the Ministry also on 15 December 2021 entered a contract signed for the supply of 26 Toyota Hiace Deluxe Ambulances valued at US$4,049,460.12 out of which US$607,419.02 was paid on 2 September 2022 to be delivered by 15 January 2022. The ambulances remain undelivered.
The Ministry of Health is also cited for entering into a 25-year Finance Lease Agreement with QHC Project Limited at a total lease value of GH¢15,265,000.00 in April 2020 for uncompleted buildings in Adaklu in the Volta Region which was to be used as an isolation centre during the peak of the COVID-19 pandemic without recourse to the Minister of Finance and financial assessment by the Debt Management Unit. The facilities were not used for the intended purpose and is therefore being remodelling at an additional cost of GH¢20,382,247.70 out of which GH¢13,726,079.86 had been paid.
Again, medical equipment valued at US$110,088.00 and GH¢27,895.00 were issued to a private hospital by name Christleads & Specialist Hospital belonging to Dr. C. K. Amenuveve in Madina which did not serve as a COVID-19 isolation centre or did not receive any COVID-19 patient.
Also, Medical equipment valued at US$247,404.79, procured and received at the Temporary Central Medical Stores and subsequently issued to some specific health facilities between January 2021 and June 2022 are yet to be received by the health facilities.
One Isolation centre, the report reveals that three treatment, isolation and holding centre completed at a total cost of GH¢29,173,259.90 was yet to be put to use while seven isolation and treatment centres being constructed at a cost of GH¢158,072,331.23 had not been completed at the time of the audit, 30 months after the construction had commenced in April, 2020.
Meanwhile a Contractor for the design, construction and equipment of Nalerigu treatment and holding centre in North East Region awarded on 11 May 2020, at a cost of GH¢15,000,000.00 abandoned site three months after starting work after an advance mobilisation of GH¢4,500,000.00, constituting 30 percent of the contract had been paid from GoG sources.
The Public Utilities Regulatory Commission (PURC), ranked fourth in the 2022 Electricity Regulatory Index (ERI) for Africa.
This was made known when the African Development Bank (AfDB) and the World Bank (WB) on the Global Electricity Regulatory Index (GERI), launched the ERI report virtually on Thursday, December 8, 2022.
Forty-three (43) countries in Africa with forty-four regulatory institutions, participated in the assessment process, which was based on well-developed electricity regulatory frameworks, the capacity to exercise the necessary regulatory oversight and authority on the regulated entities, and the ability to achieve measurable outcomes.
These frameworks were categorized into three pillars: Regulatory Governance Index (RGI), which assesses the extent to which the laws, procedures, standards, and policies governing the electricity sector provide for a transparent, predictable, and credible regulatory framework, which meets international standards; Regulatory Substance Index (RSI), which evaluates how well electricity sector regulators are carrying out their mandate and implementing the practices and processes that affect regulatory outcomes; and the Regulatory Outcome Index (ROI), which measures the perspectives of distribution utility companies and/or consumers, and the degree to which the regulator has a positive or negative impact on the sector.
The PURC ranked fourth (4th) among the forty-four African regulatory institutions sampled, only after Uganda, Egypt and Senegal. This was achieved based on the significant progress made by the Commission in the operations of its functions as per the legal mandate, clarity of roles of independence, accountability, transparency, predictability, participation, and open access to information for various stakeholders.
For the year under review (2022) and in the interest of deepening its transparency, the Commission was able to among others, undertake consumer service clinics, which enabled the Commission to bring its complaints resolution processes closer to consumers; published the reckoner (electricity and water), which enables consumers to compute their own tariffs based on consumption levels; redesigned the Commission’s website to accommodate new developments, such as hosting the public utilities regulatory information system (PURIS); as well as constituting regulatory audit teams to undertake verification exercises, based on submitted investment needs of the Utilities.
Furthermore, the Commission made significant progress on transparency in its tariff setting processes by publishing approved guidelines for setting tariffs, quality of service measures to guide the regulated utilities, and improved considerably on its institutional capacity to enable it fulfil its mandate. Through this, the Commission was able to reverse the tariff structure, which was previously punitive for industry. This was to enhance the competitiveness of Micro, Small and Medium-Scale Enterprises (MSMEs) across the country.
The African Development Bank, since 2018, has embarked on carrying out surveys on the level of development of Regulatory Frameworks in the electricity sector in Africa. From year to year, the Bank through the ERI continues to inspire African countries to achieve better electricity sector performance through reforms that have been or are to be put in place but also through improvements to the current framework in which, the electricity sector finds itself. Africa needs investments in the energy sector, and this requires making the sector attractive, ridding it of all the administrative and organizational red tape that still hinders active private sector participation.
The ERI has evolved considerably since 2018 when only 15 countries participated in it, compared with 44 countries in 2022, which now participate in the ERI. The Director for Energy Financial Solutions, Policy and Regulation at the African Development Bank noted that “…the ERI has been influential not only in Africa but also the rest of the world”.
The World Bank on its part has also assessed the regulatory frameworks within the sector, including the report on Rethinking Power Sector Reforms in the Developing World. These efforts are aimed at providing a quantitative basis for measuring the adoption of regulatory best practices, which allows for countries to identify gaps in their regulatory framework and benchmark their performance against regional or global peers.
The African Development Bank and World Bank as a collaborative partnership joined forces to harmonize the structure of indicators under both projects, resulting in the development of the Global Electricity Regulatory Index (GERI), which was produced by the World Bank.
Whiles the AfDB, measures the level of development of electricity sector regulatory frameworks in African countries and the capacity of regulatory authorities to effectively carry out their relevant functions and duties, the World Bank measures broadly on the global space. As at the end of 2021, the GERI, reports on results from a first global survey comprising a snapshot of the regulatory context in 82 low-and middle-income countries.
According to the Executive Secretary of the PURC Dr. Ishmael Ackah, being ranked fourth this year is an improvement on the Commission’s 7th position in the previous year.
The Commission owes this to the cooperation of its numerous stakeholders to which the Commission is grateful.
The plantain processing factory established by the Trade Ministry with funding from the African Development Bank( AfDB)at Agogo in the Asante Akyem North MUNICIPALITY is not functioning.
This is contrary to an earlier impression created by the Member of Parliament for Asante Akyem North when he spoke in parliament last Thursday.
The MP, Hon Andy Appiah Kubi on the floor of Parliament claimed that the factory was operational and had started the production of processed plantain to Canada currently.
But this reporter during a tour of the facility last Saturday to fact-check the claims by the MP at the house of records was met by weeds that had grown in and around the compound.
DETAILS:
Seated on about an acre of land, the processing plant seemed complete but no activity was there as a peep through the main production room showed no sign of machinery.
With a small gate beside the main one opened, this reporter accompanied by other equally interested media houses gained unimpeded access to film and to inspect the facility.
Having been officially commissioned four months ago, the facility from careful scrutiny showed no sign of human activity and no person was present during the visit despite waiting there for two hours to ostensibly talk to a caretaker or security staff.
Noted for being a community where the growing of plantain is a mainstay business, scores of traders who spoke to this reporter at Agogo said they wished the factory was in operation to help them deal with their post-harvest losses.
MUNICIPAL CHIEF EXECUTIVE:
During an interview, the Municipal Chief Executive for Asante Akyem North, Hon Francis Oti Boateng said the Assembly was happy with the establishment of the factory but was not functional.
He noted that they were waiting for the installation of machinery at the factory for work to begin.
“The Assembly would make use of the facility as soon as machines we are waiting to see arrive in February next year,” the MCE stated.
CONTROVERSY:
Speaking to this reporter, former MCE for Asante Akyem North, Mr. George Frimpong wondered why the MP for the area would make non-factual statements about something that was not functioning.
He claimed that on Saturday morning without prompting, the MP sent some persons to take pictures of his private facility where he is into plantain processing.
Touring the facility later in the day with this reporter, Hon Frimpong said he built his facility for the processing of plantain into biscuits at Domeabra.
With the brand name Plameg, the former MCE said he would have been able to make good use of plantain in the area if Exim Bank had funded his private project which the 1D1F secretariat had planned to adopt.
“Asante Akyem North is predominantly a farming community and we are sure government could use the yet-to-function facility to assist farmers who deal in plantain to prevent post-harvest losses and same way govt could fund my project to equally help,” the former MCE noted.
The African Development Bank Group (AfDB) board of directors has approved an equity investment of US$20 million in Evolution Fund III.
Evolution Fund III is a pan-African private equity trust dedicated to clean and sustainable energy in the wake of heightened global advocacy on tackling climate change.
An equity investment is money that is invested in a company by purchasing shares of that company in the stock market.
This fund seeks to mobilize about US$400 million into renewable energy and resource-efficiency assets across sub-Saharan Africa over a decade.
Inspired Evolution Investment Management is a well-established fund manager with nearly two decades of experience and a specialty in the investment advisory business dedicated to clean energy infrastructure-type development and project finance investments, as well as energy and resource efficiency growth investments.
More than US$310 million has been invested in renewable energy projects in African countries by the company.
Through its predecessor funds, the fund manager has given grants to 21 renewable energy projects with a total generation capacity of 2 GW.
EVIII intends to broaden its geographical and technological scope to include North Africa as well as several sub-Saharan African countries, and to decentralise energy business models as a critical component of climate mitigation and energy transition.
Through the Bank’s support, 2,162 MW of renewable power generation capacity will be installed, 1.8 million tonnes of CO2 will be reduced, and green and sustainable growth will be achieved across Africa by creating 2,480 full-time jobs, adding to the track record of Evolution Funds I and II, which created 1,309 jobs, with 22% being women.
Vice President Kevin Kariuki of the AfDB’s Power, Energy, Climate Change, and Green Growth Complex intimated that, in addition to boosting its renewable energy portfolio, the bank intends to boost private investment in renewable and efficient energy sources.
According to him, “the Evolution Fund III is well placed to invest much-needed capital in long-term, low-carbon, and climate-resilient development pathways towards achieving a just, net-zero future for African countries.”
The Bank’s investment in Evolution Fund III aligns with its High Five objectives: quality, responsibility, mutuality, efficiency, and freedom, particularly “Light Up and Power Africa” under its New Deal on Energy for Africa.
Director of Energy Financial Solutions, Policy & Regulations, Wale Shonibare, believes that developing a private equity fund for renewable energy in Africa will assist regional member countries in meeting their Paris Agreement and Nationally Determined Contributions obligations.
Co-Managing Partner at Inspired Evolution, Christopher Clarke, said, “AfDB has been a consistent supporter of Inspired Evolution since 2010, and this third capital commitment evidences our trusted partnership that has been established in the delivery of the AfDB climate goals for Africa.”
Adding to this, Wayne Keast, Co-Managing Partner at Inspired Evolution, mentioned that, “The AfDB’s investment validates our track record and sophisticated investment management approach to expediting Africa’s clean energy transition.”
Microsoft has commenced the process of expanding its partnership with the African Development Bank (AfDB) to support youth entrepreneurs on the continent.
The partnership forms part of the bank’s Youth Entrepreneurship Investment Banks (YEIB) Initiative, a unique value proposition set up by the African Development Bank that anchors and integrates efforts to develop entrepreneurship ecosystems in Africa.
It seeks to bring together all relevant financial and non-financial parties and partners to play their respective roles in supporting youth entrepreneurs through mentorship, coaching, knowledge and experience sharing and more.
Partnership
The partnership also forms an important part of Microsoft African Transformation Office’s ATO’s mission to empower 10 million Small and Medium Enterprise SMEs through access to skilling initiatives and investments and to generate the capacity needed to scale and provide digital skills to 30 million Africans.
Under the partnership, Microsoft will work with the bank to develop youth entrepreneurship ecosystems, creating jobs and dramatically scaling impact in Africa through digital inclusion.
The partnership seeks to support the establishment of national-level institutions through a public-private collaboration model to scale up technical and financial support for youth entrepreneurs and build their capacity.
Under the partnership, Microsoft is expected to leverage its partner ecosystem which covers 54 countries across the continent to act on key technology solutions across four key areas including skilling, connectivity, small-to-medium enterprise (SME) digitisation and hardware.
Skilling
In the area of skills, the partnership seeks to connect youth to economic opportunity and employability skills, the partnership will provide them with career pathway and learning content.
This includes the use of existing e-learning platforms such as coding for employment.
The initiative also aims to build the capacity of enterprise services organisations benefitting youth through the training of trainers.
Connectivity
In the area of connectivity, the partnership seeks to leverage successful connectivity solutions such as Microsoft Airband, the partnership will develop effective infrastructure models to help bridge the digital divide.
At the same time, it will support other innovative solutions on the market either through direct or indirect investment.
The partnership also aims to improve (SME) digital literacy and business skills by creating access to curated learning content, certifications, business solutions, business skills and specialised digital skills. This will be driven in partnership with LinkedIn and through skilling programmes such as MS Learn and the Cloud Academy.
SME access to bundled hardware solutions will be created by Microsoft and its partners.
SMEs will also be able to purchase Microsoft technology at discounted prices.
Youth
The General Manager of Microsoft Africa Regional Cluster Wael Elkabbany, explained that his outfit believed much could be done to help foster youth entrepreneurship by collaborating with the African Development Bank, driving greater economic inclusion for this key segment of the population, and ultimately building a more prosperous society.
Development
The African Development Bank Vice-President for Private Sector, Infrastructure and Industrialisation, Solomon Quaynor, said the strengthening of the partnership with Microsoft on the YEIB was an important development in the journey towards harnessing Africa’s demographic dividend and facilitating the creation of millions of jobs for young Africans by 2025.
The Strategic Partnerships Lead, Microsoft ATO, Angela Kyerematen-Jimoh, said “We are excited about the potential of this collaboration to magnify the work Microsoft is doing around digital inclusion in Africa.”
Africa risks sliding into stagflation – a cycle of slow growth and high inflation – as it battles the lingering effects of the pandemic and rising fuel and food prices caused by the Ukraine conflict, the African Development Bank (AfDB) said on Wednesday.
Despite experiencing relatively low death rates compared to more developed regions, Africa was dealt a heavy economic blow by the COVID-19 pandemic.
While 2021 saw a continent-wide rebound, with gross domestic product (GDP) growth estimated at 6.9% after a pandemic-induced contraction of 1.6% the previous year, the Bank projects real GDP growth to slow to 4.1% this year.
“The deceleration in growth highlights the severity of the impact of the RussiaUkraine conflict on Africa’s economy,” the AfDB wrote in its 2022 African Economic Outlook.
“If the conflict persists, Africa’s growth is likely to stagnate at around 4 percent in 2023.”
Inflation is meanwhile expected to accelerate to 13.5% this year, from 13% in 2021, due to a sharp rise in energy and food prices linked to the war in Ukraine.
The AfDB estimates around 30 million Africans were pushed into extreme poverty and 22 million lost their jobs last year alone as a result of the pandemic.
Vulnerable populations, particularly in urban areas, will bear the brunt of rising prices, the report said, adding that economic disruptions stemming from the war could tip nearly 4 million more into extreme poverty this year and next.
“In the absence of measures to cushion the impact, this could stoke social tension across the continent,” the report stated. “But in many African countries, fiscal space remains constrained by the effects of the pandemic.”
The AfDB forecasts Africa’s debt-to-GDP ratio to stabilise at around 70%, down slightly from 71.4% in 2020, due to last year’s growth recovery and debt relief measures, but will remain above pre-pandemic levels.
The President of the African Development Bank, Dr Akinwumi Ayodeji Adesina, says he is innocent with regard to “trumped-up allegations that unjustly seek to impugn” his honour and integrity, as well as the reputation of the AfDB.
“I am confident that fair, transparent and just processes that respect the rules, procedures and governance systems of the Bank, and the rule of law, will ultimately prove that I have not violated the Code of Ethics of this extraordinary institution”, he said in a statement.
According to him, he sincerely appreciates the support of the bank’s shareholders.
Below is the statement
In recent weeks and over the last few days especially, I have been overwhelmed by the tremendous support received from around the world. I have absolute confidence in the integrity of the bank that I lead and its governance systems, rules and procedures.
In spite of unprecedented attempts by some to tarnish my reputation and prejudice the bank’s governance procedures, I maintain my innocence with regard to the trumped-up allegations that unjustly seek to impugn my honour and integrity, as well as the reputation of the African Development Bank.
I sincerely appreciate the support of the Bank’s shareholders.
At this time, I remain confident that ultimately and as one collective, the Bank will emerge stronger than before and continue to support Africa’s development drive. I draw great inspiration from my heroes, Nelson Mandela and Kofi Annan, whose lives have shown that through pain, we grow. As Martin Luther King Jnr. once said, “the arc of the moral universe is long, but it bends towards justice. ”
I am confident that fair, transparent and just processes that respect the rules, procedures and governance systems of the Bank, and the rule of law, will ultimately prove that I have not violated the Code of Ethics of this extraordinary Institution.
I will, therefore, continue to work with each and every one of our shareholders to ensure that the African Development Bank maintains its hard-earned global reputation; and that our credible and well-functioning institutional and governance systems are reinforced, as we collectively press on to fulfil the mission of our founders to accelerate and transform Africa’s development.
The African Development Bank Group has announced the creation of the COVID-19 Response Facility to assist regional member countries including Ghana in fighting the pandemic.
The Facility is the latest measure taken by AfDB to respond to the pandemic and will be the institution’s primary channel for its efforts to address the crisis.
It provides up to US$10 billion to governments and the private sector.
Dr. Akinwumi Adesina, President of the African Development Bank Group, said the package took into account the fiscal challenges that many African countries are facing.
“Africa is facing enormous fiscal challenges to respond to the coronavirus pandemic effectively. The African Development Bank Group is deploying its full weight of emergency response support to assist Africa at this critical time. We must protect lives. This Facility will help African countries to fast-track their efforts to contain the rapid spread of COVID-19,” Adesina said, commending the Board of Directors for its unwavering support.
The Facility entails US$5.5 billion for sovereign operations in AfDB countries, and US$3.1 billion for sovereign and regional operations for countries under the African Development Fund, the Bank Group’s concessional arm that caters to fragile countries.
An additional US$1.35 billion will be devoted to private sector operations.
Commenting on the Facility, Acting Senior Vice-President Swazi Tshabalala said: “The setting up of the Facility required a collective effort and courage by all our staff, Board of Directors and our shareholders.”
Two weeks ago, AfDB launched a record-breaking US$3 billion Fight COVID-19 Social Bond, the world’s largest US dollar-denominated social bond ever on the international capital market.
Last week, the Board of Directors also approved a US$2 million grant for the World Health Organization for its efforts on the continent.
“These are extraordinary times, and we must take bold and decisive actions to save and protect millions of lives in Africa. We are in a race to save lives. No country will be left behind,” Adesina said.
The African Development Bank Group on Wednesday announced the creation of the COVID-19 Response Facility to assist regional member countries in fighting the pandemic.
The Facility is the latest measure taken by the Bank to respond to the pandemic and will be the institution’s primary channel for its efforts to address the crisis. It provides up to $10 billion to governments and the private sector.
Akinwumi Adesina, President of the African Development Bank Group, said the package took into account the fiscal challenges that many African countries are facing.
“Africa is facing enormous fiscal challenges to respond to the coronavirus pandemic effectively. The African Development Bank Group is deploying its full weight of emergency response support to assist Africa at this critical time. We must protect lives. This Facility will help African countries to fast-track their efforts to contain the rapid spread of COVID-19,” Adesina said, commending the Board of Directors for its unwavering support.
The Facility entails $5.5 billion for sovereign operations in African Development Bank countries, and $3.1 billion for sovereign and regional operations for countries under the African Development Fund, the Bank Group’s concessional arm that caters to fragile countries. An additional $1.35 billion will be devoted to private sector operations.
Commenting on the Facility, Acting Senior Vice-President Swazi Tshabalala said: “The setting up of the Facility required a collective effort and courage by all our staff, Board of Directors and our shareholders.”
Two weeks ago, the Bank launched a record-breaking $3 billion Fight COVID-19 Social Bond, the world’s largest US dollar-denominated social bond ever on the international capital market. Last week, the Board of Directors also approved a $2 million grant for the World Health Organization for its efforts on the continent.
“These are extraordinary times, and we must take bold and decisive actions to save and protect millions of lives in Africa. We are in a race to save lives. No country will be left behind,” Adesina said.
The African Development Bank (AfDB) has raised an exceptional US$3 billion in a three-year bond to help alleviate the economic and social impact the Covid-19 pandemic will have on livelihoods and Africa’s economies.
The fight Covid-19 Social bond, with a three-year maturity, garnered interest from central banks and official institutions, bank treasuries, and asset managers including Socially Responsible Investors, with bids exceeding $4.6 billion.
This is the largest Social Bond ever launched in international capital markets to date, and the largest US Dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%.
The African Development Bank Group is moving to provide flexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries and Africa’s private sector.
“These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The African Development Bank is taking bold measures to support African countries. This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr. Akinwumi Adesina, President of the African Development Bank Group.
The order book for this record-breaking bond highlights the scale of investor support, which the African Development Bank enjoys, said the arrangers.
Coronavirus cases were slow to arrive in Africa, but the virus is spreading quickly and has infected nearly 3,000 people across 45 countries, placing strain on already fragile health systems.
It is estimated that the continent will require many billions of dollars to cushion the impact of the disease as many countries scrambled contingency measures, including commercial lockdowns in desperate efforts to contain it.
Globally, factories have been closed and workers sent home, disrupting supply chains, trade, travel, and driving many economies toward recession.
Fight Covid-19 was allocated to central banks and official institutions (53%), bank treasuries (27%) and asset managers (20%). Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%).
