Africa Finance Corporation unveils US$2bn facility to speed up Africa’s economic recovery
The Africa Finance Corporation (AFC) has established a US$2 billion facility to promote bank-driven economic recovery in Africa and the resilience of African economies in the face of global crises such as the COVID-19 pandemic and, more recently, the Russia-Ukraine conflict.
The AFC will fund up to half of the facility and raise the balance through its global network of partners and investors. This was announced at the AFC Live Infrastructure Solutions Summit today.
The “African Economic Resilience” facility will be funded by AFC loans to commercial banks, regional development banks, and central banks in several African countries, providing much-needed hard currency liquidity to finance trade and other economic activity in their respective jurisdictions.
These institutions will be able to take advantage of the AFC’s established worldwide financial network to obtain financing at competitive rates.
“The COVID-19 pandemic put Africa’s economic growth trajectory back and further expanded the trade finance deficit,” Banji Fehintola, Head of Treasury and Financial Institutions, stated during the AFC live summit. Before the continent could recover, the Russia-Ukraine conflict posed a new set of obstacles, all of which had the same negative influence on the continent’s growth prospects. As a result, we’re committed to playing a key role in shaping Africa’s recovery and resilience, not just through our efforts bridging Africa’s infrastructure gap, but also through targeted initiatives like the $2 billion COVID-19 economic resilience facility.”
AFC’s development impact in Africa will be accelerated as a result of this funding, propelling the continent into a new phase of growth centered on maximum resource value capture and domestic employment creation.
With several bond issuances in the last two years, including a 10-year US$500 million Eurobond in 2019, a 5-year US$700 million Eurobond in 2020, and a 7-year $750 million Eurobond at its lowest yield in 2021, AFC has built experience mobilizing global capital for critical infrastructure projects in Africa. AFC Capital Partners, an independent asset management arm, was recently formed with the goal of raising $2 billion to fund climate adaption infrastructure projects in Africa.
It is this same fund mobilization experience that AFC will leverage to support COVID-19 economic recovery in Africa through the Rebuilding Economic Resilience facility.
