AfDB, Seven Other Partners Commit To Enhance Trade, Investment Across Africa
The African Development Bank (AfDB), Afreximbank and six other partners, have affirmed their commitments for better leverage guarantee and insurance products.
The aim, according to the partners, is to ensure more trade and investment across Africa.
In a statement issued on its website, AfDB, said the six partners were collaborating under the Africa Co-Guarantee Platform (CGP).
It listed the partners to include; African Trade Insurance Agency (ATI), African Union Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD), and GuarantCo (part of the Private Infrastructure Development Group).
The other partners are the Islamic Corporation for the Insurance of Investment and Export Credit Insurance (ICIEC).
In his opening remarks, Kofi Asumadu-Addo, Afreximbank’s Director of Guarantees and Specialised Finance said the CGP was needed more than ever, especially with the macroeconomic challenges facing the continent.
“This is a critical moment and the CGP is needed more than ever.
“The COVID-19 pandemic, the Ukraine crisis and the consequent effects require urgent action on our part as risk mitigation providers.
“Collectively, we have the capacity among the Platform partners to respond adequately and appropriately to help de-risk and attract investments into and across Africa.
“We need to bring this to bear in order to reduce the trade and investment financing gap,” he said.
Asumadu-Addo also reiterated the support of the Afreximbank to the CGP to deliver “concrete results”.
Also speaking, Max Ndiaye, AfDB’s acting Director of Syndications, Co-Financing and Client Solutions, said the platform was inaugurated in 2018 by the bank’s President, Dr Akinwumi Adesina.
Ndiaye said the inauguration was also with the senior leadership of the other partners.
The acting director said the platform was to help overcome the clear risk mitigation gap in Africa, which stood in the way of closing more trade and investment deals.
“The urgency has only become greater since then. We need a transaction-focused platform that really delivers for our stakeholders.”
Furthermore, ATI’s Chief Underwriting Officer, Benjamin Mugisha, said the platform would leverage each member’s strengths to provide proactive solutions to address Africa’s needs.
He said: “the Co-Guarantee Platform has a unique opportunity to synergise its members’ shared vision and mandate and has committed to proactively do this going forward.”
Also, Ibrah Wahabou, AUDA-NEPAD’s Head of Infrastructure and Connectivity, said platform was Africa’s response to deal with the perception of Africa as a risky place for investors.
“The Co-Guarantee Platform is Africa’s bold response by Africa-based Development Finance Institutions and the African Union Development Agency to deal with the exaggerated, unjustified perception of Africa as a risky place for investors.
“Together, through the CGP, we are changing the narrative based on concrete deals.”
However, GuarantCo Associate Director Ben Storrs said the platform hoped to build local capacity to enable use of innovative solutions.
“We look forward to supporting the development of the Co-Guarantee Platform and institutional partnerships to address Africa’s infrastructure challenges at a greater scale.
“Collectively, we hope to continue building local capacity to enable greater use of innovative credit mitigation solutions to unlock critical infrastructure financing.”
Bessem Soua, ICIEC’s Division Manager for Sub-Saharan Africa and Europe, said the platform was an opportunity for multilateral partners to work together.
“The Co-Guarantee Platform is a unique opportunity for multilateral partners to work together on scaling up risk mitigation capacity to de-risk investments and trade in Africa.
“Priorities and concrete steps have been agreed among the partners to take the platform to the next level and ensure a collective and coordinated response to the continent’s needs.”
The partners also inaugurated the CGP’s web presence to provide information about the platform and its partner institutions.
The site also contains an email address to submit transactions and queries.
According to the statement, the partners pledged to extend direct transaction support for specific projects, including infrastructure development and optimising balance sheets by sharing risk.
They would develop new and hybrid products to address issues such as intra-regional trade, and the current food and fertiliser crises.
They would also address enhanced coverage for infrastructure investments, Public-Private Partnerships (PPP), and fragile/transition states and situations.
The CGP would also work with stakeholders to build capacity in the use of risk mitigation instruments that strengthen project preparation and bankability.
The Africa Co-Guarantee Platform is a transaction-based mechanism created to overcome Africa’s risk perception gap and increase financing for trade and investment projects through more effective use of guarantees and insurance.
Created in 2018, the platform’s current pipeline includes trade and investment projects in the energy, agriculture, health and infrastructure sectors across Africa. The AfDB hosts the CGP secretariat.