COVID-19 pandemic bolsters case for technology-based economic resilience

AfDB NEWS & EVENTS

by Stefan Nalletamby

16-Apr-2020

As the COVID-19 pandemic continues to have a devastating impact globally, the African continent, while less affected, is preparing to undergo its own severe social and economic crisis. As of April 7, over 10,000 cases have been reported across 52 countries in Africa (less than 1% of cases globally).

Yet despite the slow onset, Africa’s fragile health systems will be overwhelmed if the virus continues to spread. To avoid this scenario, governments are implementing contingency measures with striking collateral damage in the form of shops and factories closing, workers being sent home, and jobs being cut, with the effect that an economic recession is looming.

In response, the African Development Bank has raised an exceptional $3 billion, three-year bond to help alleviate the economic and social impact of the COVID-19 pandemic. A portion of these funds will help finance access to health and other essential goods and services as well as the infrastructure needed to address the crisis and create favourable conditions for resilience.

The Bank believes that digital technologies can and will play a critical role in strengthening resilience by enabling fast responses to this crisis while helping alleviate its impact.

There are a number of specific use cases where digital technologies help create an enabling environment for human resilience during these difficult times.

A shift to a cashless economy

Physical money currently acts as a vector for the virus’ spread whereas technology makes payments possible and safe. Governments and start-ups across Africa are implementing measures to shift payment transactions toward mobile money and away from cash, as recommended by the World Health Organization. A case in point is Kenya, the pioneer of mobile money, where the payments industry has collaborated to ensure that digital payments can be made across the board, especially by the most vulnerable. For a three-month period, digital transactions below 1,000 Kenya Shillings ($10) will be free.

Ghana too has instituted measures to drive digital payments and combat the virus. The Central Bank of Ghana has directed mobile money providers to waive fees on transactions of 100 Ghana Cedis ($18) or less and has allowed for the opening of mobile money accounts using existing subscriber registrations with mobile operators. South African fintech start-ups are encouraging the use of contact-less payments through point-of-sale devices.

Online business (e-commerce)

Online business and e-commerce platforms help maintain social distancing and reduce the potential spread of COVID-19. Online delivery applications have become the ideal medium to order food, groceries and medical supplies. E-commerce platforms, whether web-or app-based, are gaining new users.

Digital health infrastructure is helping communities safely navigate the pandemic. Telemedicine platforms based on chatbots enable people to ask questions about symptoms and treatment. These platforms also allow the public to assess the probability of infection. Other innovations, such as medical tips generated via sms or WhatsApp, advise recipients on responsible behaviors. Chatbots can also direct patients to nearby hospitals and enable healthcare professionals to track the pandemic’s spread in real-time.

Digital work and learning spaces linked by internet infrastructure and virtual platforms have increasingly become a mainstay for businesses and learning institutions as they connect remote workers and students across countries, regions and globally.

The pandemic has spurred innovative approaches that are helping society respond to and minimize its impact. Even before the global pandemic however, digital technology in general and digital financial services in particular had begun accelerating economic resilience, particularly for the most vulnerable. In 2019, the Bank partnered with the Bill & Melinda Gates Foundation, the Government of Luxembourg and Agence Française de Développement to set up the Africa Digital Financial Inclusion Facility (ADFI). ADFI is a blended finance vehicle that aims to scale up digital financial services in Africa to accelerate financial inclusion and ensure that digital financial systems include and empower everyone, especially women. 

Boost Africa is another initiative that is leveraging technology to spur inclusive growth. A partnership of the Bank, the European Commission and the European investment Bank, Boost Africa uses venture capital to support high growth SMEs that are tech-enabled and driven by disruptive technologies.

 The Social Impact Investment Program (SIIPA), a joint initiative of the Bank and the European Commission, leverages technology to deliver social goods and services to underserved populations.

The COVID-19 pandemic is severe, and its economic effects are only just beginning to be felt in Africa. Still, innovative solutions and technology tools offer a glimmer of hope for human efforts to boost resilience and slow or halt the spread of the virus. We must seize upon the current urgency to rapidly develop and deploy digital services that are universal and inclusive, and which will help shield Africa’s most vulnerable from future economic shocks.

African Development Bank Group approves $10 million equity in Razorite Healthcare Fund for Africa

AfDB NEWS & EVENTS

10-Apr-2020

The Board of Directors of the African Development Bank has approved a $10-million equity investment in Razorite Healthcare Africa Fund 1 (RHAF1) to help improve healthcare infrastructure delivery across the continent.

The 10-year deal, approved on 26 February, will resource the Fund to address growing demands for affordable and quality healthcare services in several countries of Sub-Saharan Africa faced with lack of  access to low cost, first-class healthcare. RHAF1, to be registered in Mauritius, will provide growth capital to operating healthcare infrastructure facilities which show high potential for growth, as well as build new facilities, where identified as necessary. 

To date, there have been over 9,000 cases of COVID-19 in Africa and over 500 deaths.

The Bank on 8 April unveiled a COVID-19 Response Facility that will mobilise up to $10 billion to assist regional member countries in fighting the pandemic. The Facility will be the institution's primary channel for addressing the crisis.

The advent of the Novel Coronavirus pandemic (COVID-19) has highlighted the need to boost Africa’s healthcare infrastructure system to curb  the spread of the pandemic and any future similar crises and build long term resilience. Healthcare-focused private equity funds in Africa with the capability to build equipment and an integrated eco-system across healthcare facilities and service providers are very limited. Target groups include low and middle-income class and vulnerable sectors.

The Fund is expected to increase bed capacity in Africa by over 1,500 and create over 500 jobs over its life span. It will also support the development of local enterprises and private infrastructure in the healthcare infrastructure sector.  The Fund targets final capitalization of $100 million. The Bank expects its equity investment of $10 million to catalyze financing from other development finance institutions (DFIs) and commercial investors. As an advisory Board member, the Bank will ensure that the Fund and its portfolio of projects adhere to social, environmental and corporate governance best practices.

The African Development Bank and its partners want your ideas for beating the COVID-19 pandemic

AfDB NEWS & EVENTS

10-Apr-2020

The African Development Bank and partners are set to host an online #AfricaVsVirus Challenge from 16 to 19 April 2020. The 72-hour competition is a global hackathon – or “ideathon” – to develop effective solutions to the coronavirus pandemic. 

The Challenge is open to entrepreneurs, companies, civil society organizations and governments with bankable solutions or ventures to address the pandemic. The top pitches will be eligible to win thousands of dollars’ worth of financial, technical and skills-learning support to advance their implementation. Details on competition qualifications and methods of participation can be found here: www.africavsvirus.com.  

“COVID-19’s impact on the global economy is pushing millions of people, especially women and young people, into unemployment, underemployment and working poverty. Part of our response is  the #AfricaVsVirus Challenge,” said Tapera Muzira, Coordinator of the African Development Bank’s Jobs for Youth in Africa Strategy. “This online Challenge will channel youth creativity and innovation to real life solutions that mitigate the impact of the coronavirus on health, the economy, SMEs and jobs,” he added.

The #AfricaVsVirus Challenge opens on Thursday, 16 April at 6:30 pm CET and runs non-stop through to Sunday, 19 April at 6:30 pm CET. Entrants can choose to submit ideas under one of the following sectors: public health and epidemiology; vulnerable populations; businesses and economy; community; education; entertainment; government support; environment and energy; and food security. Alternatively, they may choose their own theme. 

An expert panel will select the twenty best solutions submitted, and these finalists will be invited to take part in a one-month educational program by Seedstars. The top three winning ideas will receive up to $50,000 worth of in-kind prizes. 

#AfricaVsVirus Challenge is part of the Bank’s strategy to support young African entrepreneurs – especially young women entrepreneurs – and their SMEs and startups by providing an enabling environment to innovate appropriate solutions to the COVID-19 crisis. The Bank’s Innovation and Entrepreneurship Lab, working closely with the Youth Entrepreneurship & Innovation Multi-Donor Trust Fund is hosting the ideathon, with partners Seedstars, digital agency WAAT and development consultants Luvent Consulting.

Rollout of the Challenge follows the African Development Bank’s launch on 8 April of a $10 billion COVID-19 response facility, and the sale of a record $3 billion debt issue last month to raise financing to help African countries confront the pandemic, which is already wreaking havoc on their economies.

Interested parties can follow the global conversation about the competition by following #AfricaVsVirus on social media, or by logging on to www.africavsvirus.com.

African Development Bank Group unveils $10 billion Response Facility to curb COVID-19

AfDB NEWS & EVENTS

08-Apr-2020

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.

World Health Worker Week: Amid a global pandemic, we must celebrate “Leaders on the Front Line”

08-Apr-2020

During World Health Worker Week 2020 (5-11 April), the African Development Bank joins the global community to celebrate and recognise the contributions of health workers, including nurses and midwives, on the frontlines of the ongoing international response to the COVID-19 pandemic.

 The week’s theme Leaders on the Front Line recognizes that health workers often put themselves and their families at great risk as they work to save and improve lives. The ongoing pandemic provides further incentive to prioritize investments in health workers. Africa needs well trained health workers that can respond effectively during pandemics and other health crises.

“From nutrition to maternal care and sanitation to countless other interventions, health workers are at the frontlines in the prevention of – and defense against – health crises facing communities and governments across the continent,” said Jennifer Blanke, the Bank’s Vice President for Agriculture, Human and Social Development. “Our support to health workers is even more crucial at this time as we fight to mitigate the impact of coronavirus in Africa,” she added. 

World Health Worker Week 2020 also underscores the need to extend greater opportunities for leadership to frontline health workers—particularly women, who make up over 70% of the global health workforce.

Yesterday, on World Health Day, we recognized nurses and midwives specifically among all health workers, for their vital role in advancing national and global health targets relating to universal health coverage, maternal and child health, and infectious and non-communicable diseases. And yet in 2018, Africa had 1.06 nurses and midwives for every 1,000 people. Given the continent’s surging population, this is far short of what is required to achieve universal health coverage as well as health-related Sustainable Development Goals.

As COVID-19 continues to threaten lives, livelihoods and health systems across Africa, the Bank has begun to deploy financial resources to assist African countries in fighting the pandemic. Last week the Bank approved a $2 million grant for the WHO Africa region to use in bolstering the capacity of 41 African countries on infection prevention, testing and case management.

The Bank will continue to leverage its financial resources and its expertise to promote the development of healthcare workers across the continent. And as the global community celebrates World Health Worker Week, the Bank urges communities and governments across Africa to recognize the extraordinary service and achievements of nurses and midwives in Africa and across the globe. Investing in their education, training and employment must be a development priority for all countries.

Appointment of Acting Chief Risk Officer (PGRF)

AfDB NEWS & EVENTS

06-Apr-2020

The African Development Bank Group is pleased to announce the appointment of Mr. Nourredine Lafhel as Acting Chief Risk Officer, effective 6th April 2020.

Lafhel, a Canadian national, is currently the Sovereign Credit and Market Risk Division Manager (PGRF3), in the Directorate of the Group Risk Management Function of the African Development Bank Group. An experienced risk management professional, Nourredine has more than twenty (20) years of experience in finance and risk management. He is a proven leader in the development of innovative solutions and strategies for balance sheet optimization, capital adequacy and market risk management. He has worked in several continents including North America, Middle East and Africa.

In his role as Division Manager, Nourredine, has had extensive experience in reviewing market risk, sovereign portfolio reports, sovereign credit policy and the Bank’s credit policy and graduation. He has been instrumental in defining the Bank’s economic capital requirements for market, credit and operational risk. In particular, Nourredine was part of the team that developed the Room to Run initiative - the Bank’s innovative $1 billion synthetic securitization deal.

Before joining the Bank, Lafhel held senior treasury and credit risk roles at S&P Global Ratings as Director, Sovereign and International Public Finance Rating, and as Senior Director, Credit Risk Management & Rating at Acreditus, in the United Arab Emirates. In these roles, Nourredine provided strategic advice, policy guidance and analytical support to MENA sovereign entities in the area of capital markets, credit risk management and ratings on confidential basis.

Prior to this, he served at the Bank of Canada as a Principal Credit Risk officer, where he was responsible for the implementation of the internal rating methodologies and scorecards of sovereigns, GREs, supranational institutions, and banks.  He led credit risk assessments and internal ratings of investment and trading counterparties.

Lafhel is fluent in French, English  and Arabic,  and holds a Masters Degree in Applied Finance from the University of Quebec at Montreal – ESG School of Management, Canada and a Bachelor (Honours) in Financial Management from the Faculty of Law, Economics and Social Sciences, at University Hassan II of Casablanca in Morocco.

Commenting on the appointment, Dr. Akinwumi Adesina, President of the African Development Bank said: “Nourredine is an experienced and well-respected professional who has played an active role in the Bank’s asset liability management and credit risk committees. He has provided critical technical direction in the development of innovative solutions and strategies for balance sheet optimization including sovereign exposure exchange agreement, sovereign risk transfer, Room2Run and the AFAWA risk sharing mechanism. I am confident that Nourredine will continue to provide critical leadership and innovation to ensure that we maintain our triple A rating.”

Guinea: African Development Bank offers technical assistance for the development of mini green energy grids

AfDB NEWS & EVENTS

06-Apr-2020

The African Development Bank, through its Sustainable Energy Fund for Africa (SEFA) , approved a grant of 830,000 US dollars to support the Guinean Agency for Rural Electrification (AGER), in the establishment green mini-grid projects in the Republic of Guinea.

This grant will specifically finance technical, economic, financial and environmental and social pre-feasibility studies of green mini-grid projects. These are the projects identified in the Low Cost Electrification Plan drawn up by the Government of the Republic of Guinea in coordination with the World Bank and the French Development Agency (AFD).

It will provide support to AGER for the evaluation of offers from the private sector and the conduct of negotiations for contracts for the construction, operation and maintenance of mini-networks resulting from the call for tenders which will be launched by the World Bank. 

Finally, this technical assistance will help to mobilize the additional funding necessary for these mini-networks and will contribute to the development of the related regulations. These services, combined with advice and knowledge transfer, will be necessary for the AGER to better coordinate and develop the sectoral approach to mini-networks in the country.

64% of the Guinean population (8.1 million) live in rural areas where only 7% have access to electricity, compared to 34% at the national level. The probability of electric coverage in rural areas by the national network in the medium and long term therefore remains very low. Green mini-grids are thus an economical means of significantly and quickly improving access to electricity in rural areas.

The World Bank and AFD have allocated funding of around $ 7 million, and support from SEFA will help to better structure the program. This financial support follows the results of the Electrification Plan and Guinea's low-cost investment prospectus, as part of the National Economic and Social Development Plan (PNDES) 2016-2020.

"While improving the overall sectoral approach to green mini-grids in Guinea and promoting the participation of the private sector in mini-grids, it is expected that the deployment of the 57 mini-grids will give access to electricity to around 30,000 households. According to the expected results, the mini-networks should create around 100 jobs (50% of which for women) and generate productive use possibilities for at least 100 micro-small enterprises, "detailed the acting vice-president of the Bank responsible for the Electricity, Energy, Climate Change and Green Growth Complex, Wale Shonibare.

The Country Manager of the Bank in Guinea Léandre Bassolé, for his part, recalled that the Bank is a key player in the energy sector in the Republic of Guinea.

“The Bank's interventions since 2007 have made it possible to connect or improve the connection to the electricity network of nearly 500,000 people, half of whom are women, to create more than 300 new or improved electricity distribution lines and to reduce CO2 emissions of 3,274 tonnes per year, ”said Bassolé.

"This technical assistance," he continued, "will allow the Guinean Rural Electrification Agency to play its full role throughout the territory, while promoting the deployment of renewable energies".

The project is in line with the Bank's Ten-Year Strategy for Green Growth, as well as the “  New Deal for Energy in Africa  ” which pursues, among other objectives, universal access to energy from '' here in 2025.

About the Sustainable Energy Fund for Africa (SEFA)

SEFA is a special multi-donor fund with 117 million US dollars. It is funded by the governments of Denmark, Spain, the United States, Italy, Norway, the United Kingdom, and Sweden. Its purpose is to support the sustainable energy development program in Africa, by offering technical assistance and concessional financing to facilitate the preparation of medium-sized renewable energy and energy efficiency projects. SEFA is housed in the Bank's Department of Renewable Energies and Energy Efficiency. More information here .

Appointment of Acting Director, Communication and External Relations

AfDB NEWS & EVENTS

06-Apr-2020

The African Development Bank Group is pleased to announce the appointment of Mrs. Nafissatou N’diaye DIOUF as the Acting Director for Communications and External Relations Department (PCER), effective 1st April 2020.

Nafissatou, a Senegalese national, is currently a Division Manager in the Communications and External Relations Department of the African Development Bank Group. A dedicated and results driven communications professional, Nafissatou brings over twenty (20) years of experience to the role, with a comprehensive background in corporate communications, public relations, journalism, digital and media Development.

Since her appointment as Division Manager in 2018, Nafissatou has fostered agile communication strategies, consistently reflecting cohesion with the Bank’s vision. She has built and led a world-class team of editors, writers, digital and media specialists, resulting in exponential increase in coverage and awareness around the Bank’s strategic objectives and projects.

Prior, Nafissatou had served as a communications consultant with the Bank’s Private Sector and Infrastructure Complex and Trade Department from 2016 to 2018, during which she engaged with Regional Integration and Trade Department Senior Management, streamlining communication and public relations strategies across a variety of platforms.

Before joining the Bank, Nafissatou, the founder and Managing Director of 54 Communications company,in Dakar, Senegal from 2011 to 2017 provided leadership for the cross-functional development and delivery of compelling public relations, branding, communication and event management strategies for a broad spectrum of public and private entities

Nafissatou also worked as Public Relations Director for Francophone Africa ZK Advertising,Johannesburg, South Africa during which she demonstrated a keen aptitude for cross-cultural leadership, managing teams of public relations professionals, account managers and country representatives across seven African countries, including Gabon, Niger, Chad, Madagascar, Burkina Faso, the Democratic Republic of Congo and the Republic of Congo. With a creative and collaborative approach to project management within challenging markets, Nafissatou excels in strategic storytelling, content development, capacity building and mentoring.

Prior to her transition into corporate communication, Nafissatou worked as a journalist with the Associated Press (AP), covering international conflicts and crises west and central Africa including Liberia, Côte d'Ivoire, the Democratic Republic of Congo, Niger, Mauritania, and the Central African Republic. Many of her breaking news stories were featured in global newspapers such as the Washington Post, USA Today, The Boston Globe and the LA Times. Nafissatou also worked as an Open-Source Officer for the Foreign Broadcast Information Service (FBIS), a division of the Central Intelligence Agency's Directorate of Science and Technology.

A native French speaker, Nafissatou holds a Master of Arts degree in Interpreting and Translation from Salford University in the United Kingdom (UK), a Bachelor of Arts (Hons) in Applied Language Studies from Thames Valley University and a Diploma in Journalism and Newswriting from the London School of Journalism.

Commenting on the appointment, Dr. Akinwumi Adesina, President of the African Development Bank said: “Nafissatou is a respected professional in the Communications and External Relations industry. I look to Nafissatou to steer the Department at this critical moment as the Bank responds to the rapidly changing situation of COVID-19 and to continue the excellent work done to date in the Department”.

Appointment of Acting Director, Corporate Information Technology Department (CHIS)

AfDB NEWS & EVENTS

06-Apr-2020

Senior Management is pleased to announce the appointment of Mr. Pepin Vougo as Acting Director, Corporate Information and Technology Department effective 1st April 2020.

Pepin Vougo has more than 20 years of experience in technology and its application. He is a seasoned executive with depth and breadth of experience in delivering complex technology solutions on an international scale. He benefits from both private sector and MDB experience.

Pepin has been with the African Development Bank for 7 years, first as Infrastructure and Telecommunications Manager and then as Business Solutions Development Manager in charge of the Bank’s Application Development portfolio. As well as delivering numerous successful online applications to help digitize the Bank, he led the development of the 2017-2021 Digital Strategy.

Prior to the African Development Bank, Pepin was Deputy Division Chief at the International Monetary Fund (IMF) where he was responsible for IT service delivery to over 100 offices around the world. He oversaw an IT budget of USD 12 million (capital) and USD 11m (operating) and managed a team of over 100 people. He launched important initiatives while at the IMF, delivering major cost-saving successes for the institution, as well as measured improvement in IT client experience and satisfaction.

Before joining the IMF, Pepin’s career was in leading private sector companies. He was a Vice-President of Engineering with JP Morgan Chase from 2006 to 2009, in charge of the Global Software & Configuration Management Group supporting over 5,000 developers worldwide. Pepin also led a major workforce reconfiguration exercise, to allow the company to respond to a rapidly changed economic context. Pepin started his career with Symantec, as an Application Integration Engineer. He left as IT Operations Manager for the Information Security and Compliance line of business, supporting over 2000 developers globally.

Pepin holds a Masters of Business Administration from St Thomas University in Houston, Texas and a Bachelor of Science in Electrical Engineering from the University of Houston.

Opinion: The pandemic is no time for fiscal distancing By Akinwumi Adesina, for CNN

AfDB NEWS & EVENTS

03-Apr-2020

Click here to read the full OpEd on CNN.com

Editor's Note: Akinwumi Adesina is the President of the African Development Bank. He was formerly Nigeria's Minister of Agriculture and Rural Development and and is the 2017 World Food Prize laureate. The views expressed are solely those of the author.

(CNN)These are very difficult days, as the world faces one of its worst challenges ever: the novel coronavirus pandemic. And it seems almost no nation is spared. As infection rates rise, so does panic across financial markets, as economies drastically slow down and supply chains are severely disrupted. 

Extraordinary times call for extraordinary measures. As such, it can no longer be business as usual. 

Each day, the situation evolves and requires constant reviews of precautionary measures and strategies. In the midst of all this, we must all worry about the ability of every nation to respond to this crisis. And we must ensure that developing nations are prepared to navigate these uncharted waters fully. 

That's why I support the UN Secretary-General Antonio Guterres' urgent call for special resources for the world's developing countries. 

In the face of this pandemic, we must put lives above resources and health above debt. Why? Because developing economies are the most vulnerable at this time. Our remedies must go beyond simply lending more. We must go the extra mile and provide countries with much-needed and urgent financial relief -- and that includes developing countries under sanctions. 

According to the independent, global think tank ODI in its report on the impact of economic sanctions, for decades, sanctions have decimated investments in public health care systems in quite a number of countries.

Today, the already stretched systems as noted in the 2019 Global Health Security Index will find it difficult to face up to a clear and present danger that now threatens our collective existence.

Only those that are alive can pay back debts.  

Sanctions work against economies but not against the virus. If countries that are under sanctions are unable to respond and provide critical care for their citizens or protect them, then the virus will soon "sanction" the world.

In my Yoruba language, there is a saying. "Be careful when you throw stones in the open market. It may hit a member of your family."  

That's why I also strongly support the call by the UN Secretary-General that debts of low-income countries be suspended in these fast-moving and uncertain times. 

But I call for even bolder actions, and there are several reasons for doing so. 

First, the economies of developing countries, despite years of great progress, remain extremely fragile and ill equipped to deal with this pandemic. They are more likely to be buried with the heavy fiscal pressure they now face with the coronavirus. 

Second, many of the countries in Africa depend on commodities for export earnings. The collapse of oil prices has thrown African economies into distress. According the AFDB's 2020 Africa Economic Outlook, they simply are not able to meet budgets as planned under pre-coronavirus oil price benchmarks.

The impact has been immediate in the oil and gas sector, as noted in a recent CNN news analysis.

In the current environment, we can anticipate an acute shortage of buyers who, for understandable reasons, will reallocate resources to addressing the Covid-19 pandemic. African countries that depend on tourism receipts as a key source of revenue are also in a straightjacket. 

Third, while rich countries have resources to spare, evidenced by trillions of dollars in fiscal stimulus, developing countries are hampered with bare-bones resources. 

The fact is, if we do not collectively defeat the coronavirus in Africa, we will not defeat it anywhere else in the world. This is an existential challenge that requires all hands to be on deck. Today, more than ever, we must be our brothers and sisters' keepers.  

Around the world, countries at more advanced stages in the outbreak are announcing liquidity relief, debt restructuring, forbearance on loan repayments, relaxation of standard regulations and initiatives.

In the United States, packages of more than $2 trillion have already been announced, in addition to a reduction in Federal Reserve lending rates and liquidity support to keep markets operating. In Europe, the larger economies have announced stimulus measures in excess of 1 trillion Euros. Additionally, even larger packages are expected. 

As developed countries put in place programs to compensate workers for lost wages for staying at home for social distancing, another problem has emerged -- fiscal distancing.

Think for a moment what this means for Africa. 

The African Development Bank estimates that Covid-19 could cost Africa a GDP loss between $22.1 billion, in the base case scenario, and $88.3 billion in the worst case scenario. This is equivalent to a projected GDP growth contraction of between 0.7 and 2.8 percentage points in 2020. It is even likely that Africa might fall into recession this year if the current situation persists.

The Covid-19 shock will further squeeze fiscal space in the continent as deficits are estimated to widen by 3.5 to 4.9 percentage points, increasing Africa's financing gap by an additional $110 to $154 billion in 2020. 

Our estimates indicate that Africa's total public debt could increase, under the base case scenario, from $1.86 trillion at the end of 2019 to over $2 trillion in 2020, compared to $1.9 trillion projected in a 'no pandemic' scenario. According to a March 2020 Bank report, these figures could reach $2.1 trillion in 2020 under the worst case scenario.

This, therefore, is a time for bold actions. We should temporarily defer the debt owed to multilateral development banks and international financial institutions. This can be done by re-profiling loans to create fiscal space for countries to deal with this crisis.  

That means that loan principals due to international financial institutions in 2020 could be deferred. I am calling for temporary forbearance, not forgiveness. What's good for bilateral and commercial debt must be good for multilateral debt.

That way, we will avoid moral hazards, and rating agencies will be less inclined to penalize any institution on the potential risk to their Preferred Creditor Status.  The focus of the world should now be on helping everyone, as a risk to one is a risk to all.

There is no coronavirus for developed countries and a coronavirus for developing and debt-stressed countries. We are all in this together.  

Multilateral and bilateral financial institutions must work together with commercial creditors in Africa, especially to defer loan payments and give Africa the fiscal space it needs.

We stand ready to support Africa in the short term and for the long haul. We are ready to deploy up to $50 billion over five years in projects to help with adjustment costs that Africa will face as it deals with the knock-on effects of Covid-19, long after the current storm subsides. 

But more support will be needed. Let's lift all sanctions, for now. Even in wartime, ceasefires are called for humanitarian reasons. In such situations, there is a time to pause for relief materials to reach affected populations. The novel coronavirus is a war against all of us. All lives matter.

For this reason, we must avoid fiscal distancing at this time. A stitch in time will save nine.  

Social distancing is imperative now. Fiscal distancing is not. 

African Development Bank celebrates milestone with first social bond listing on London Stock Exchange

AfDB NEWS & EVENTS

Record-breaking $3 billion Fight Covid-19 social bond launches on LSE: a first for the Bank

03-Apr-2020

The African Development Bank’s “Fight Covid-19” social bond, the largest social bond to date to be issued in the capital markets, listed on London Stock Exchange on Friday 3 April 2020, and is now available through its Sustainable Bond Market.

The listing marks an important milestone as the Bank launches its first bond on London Stock Exchange.

The over-subscribed transaction, which attracted $4.6 billion of interest in the book and raised an exceptional $3 billion, was launched to alleviate the impact of Covid-19 on Africa’s economies and livelihoods.

The three-year maturity bond, garnered interest from central banks and official institutions, bank treasuries and asset managers including Environment, Social and Governance (ESG) investors.

Several high-quality ESG investors actively supported this remarkable transaction, including Affirmative Investment Management (UK), Breckinridge, Columbia Threadneedle (USA), the Government Pension Investment Fund, the International Fund for Agricultural Development, Pension Boards – United Church of Christ, PineBridge Investments, Praxis Impact Bond Fund, TIAA/Nuveen and the United Nations Development Program.

“The international community must work together to successfully tackle the coronavirus pandemic. The UK, along with partners like the African Development Bank and London Stock Exchange Group, is supporting the most vulnerable countries to invest in their own health systems and avoid economic hardship,” International Development Secretary Anne-Marie Trevelyan said about the listing.

“While we invest in areas like vaccine research to help end the pandemic sooner, this private investment through the AfDB, and our support for emergency lending through the IMF, will also help limit its impact on the global economy,” Trevelyan further noted.

The London Stock Exchange, at the heart of London’s vibrant financial hub, is championing forward-looking initiatives aimed at deepening and diversifying the market. Its dedicated Sustainable Bond Market (SBM) draws innovative issuers and improves access, flexibility and transparency for investors.

Eligible social or sustainability bonds with use of proceeds aligned to mitigating the impact of Covid-19 will be admitted on the exchange with admission fees waived for an initial period of three-months, London Stock Exchange has announced.

Such social and sustainability bonds fund essential services such as healthcare, water and sanitation, supporting employment, or with a link to the relevant UN Sustainable Development Goals.

Nikhil Rathi, CEO, London Stock Exchange plc and Group Director of International Development, said: “We welcome the first bond from African Development Bank to list on our market and support them in their vital efforts to mitigate the impact of Covid-19 across Africa. This bond highlights the important role that social and sustainability bonds can play in directing funding to those countries, sectors and people across the world heavily impacted by this pandemic.”

The Bank established its Social Bond framework in 2017 and raised the equivalent of $5 billion through issuances denominated in US dollars, Euro and Norwegian krone.

The President of the African Development Bank, Akinwumi Adesina, said: “We are proud to announce that our first listing on London Stock Exchange is a social bond. This is only the beginning of a stronger partnership between the African Development Bank and London Stock Exchange. We will mobilize all we can on the capital market to fight the coronavirus in Africa.”

The Bank’s previous activity in the social bond market has seen financing to build hospital capacity, boost access to health and healthcare services, strengthen health systems, provide improved access to water and sanitation, and create jobs across the continent.

Commenting on the listing, Martin Scheck, CEO of The International Capital Market Association or ICMA, said: “We believe Social and Sustainability Bonds can provide an immediately actionable channel for the market to finance projects that directly contribute to alleviating the social and economic impact of the Covid-19 crisis.”

Swazi Tshabalala, Acting Senior Vice President, African Development Bank Group, said: “The African Development Bank is at the forefront of helping African countries fight this pandemic with innovative financing solutions. We welcome this partnership with London Stock Exchange which will help us expand the horizon of investors that are interested and committed to Africa’s sustainable development.”

Hassatou N’Sele, Treasurer, African Development Bank Group, said: “We appreciate the partnership with London Stock Exchange as we strive together to move the African continent forward. Today more than ever, Africa and the world need to stand as one to ride out the Covid-19 crisis.”

African Development Bank Group approves Gender Equality Trust Fund and Risk-Sharing Mechanism to improve women’s economic empowerment in Africa

AfDB NEWS & EVENTS

03-Apr-2020

The Board of Directors of the African Development Bank Group have approved a new Gender Equality Trust Fund (GETF) aimed at pushing forward gender equality and women’s empowerment across the continent.

Funded by donors, the GETF will support the delivery and scale-up of the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) programme and promote gender transformative lending and non-lending operations. It is the first thematic fund on gender in the Bank Group’s history. The Fund will be established for an initial period of 10 years.

AFAWA is the Bank’s flagship pan-African initiative which aims to bridge the $42 billion financing gap facing women in Africa. Through AFAWA, the Bank is spearheading a major push to unlock women’s entrepreneurial capacity and economic participation for maximum development impact.

Also on Tuesday 31 March, the Board of Directors of the Bank approved a Risk-Sharing Mechanism – an innovative financial instrument to de-risk women-empowered businesses, enhance their profile with banks and support them to grow and thrive as entrepreneurs.

Anchor investors in the GETF are the governments of France, the Netherlands and the United Kingdom.

“It’s a great day for us as a Bank. It is a great day for the continent and the women of Africa as this facility provides innovative ways to tackle the access to finance challenges for African women business owners,” said African Development Bank President Akinwumi Adesina.

The African Guarantee Fund (AGF) has been chosen as the first implementing partner to facilitate access to finance for women-owned small and medium-sized enterprises (SMEs). AGF is a pan-African entity that provides financial institutions with guarantees and other financial products to support SMEs in Africa. AGF has a network spread out over 42 African countries and 150-plus financial institutions, which AFAWA will leverage. This first transaction is expected to unlock up to $2 billion in credit for women-empowered businesses across the continent.

Vanessa Moungar, Bank Director, Gender, Women and Civil Society, described the approval as “the largest effort ever to bridge the gap in access to finance for women in Africa’s history” and said the Fund’s resources and the Risk-Sharing Mechanism would prioritize women’s economic empowerment and high-impact women’s initiatives.

Moungar said the partnership with AGF is a starting point for mobilizing other financial institutions and increasing access to finance for women entrepreneurs on the continent.Apart from the G7 donors and the Netherlands, other countries are showing strong interest in contributing to the initiative, including Rwanda and Sweden. The Bank Group will continue to mobilize resources in order to unlock $5 billion worth of financing for women-empowered businesses in Africa. AFAWA is also an implementing partner of the Women Entrepreneurship Finance (We-Fi) Initiative.