Africa has an unprecedented opportunity to accelerate development by aligning its abundant renewable energy resources with solutions for its infrastructure deficiencies. This is a key conclusion from a new annual study on the State of Africa’s Infrastructure initiated by the Africa Finance Corporation (www.AfricaFC.org).

The report highlights critical gaps in key sectors including power, transport, logistics, digital communications, and commodity-based value chains. It aims to quantify the extent of Africa’s infrastructure opportunities and provide strategic guidance for prioritizing investments essential for sustainable growth.

Among the key findings: despite decades of progress, Africa’s infrastructure development has not kept up with the growing needs of its population. The continent’s dependence on outdated pit-to-port models is hindering economic growth. However, global economic shifts in supply chains and the transition to green energy present an opportunity for Africa to redefine its economic role by leveraging its rich raw materials and youthful population.

For Africa to capitalise on this pivotal moment, decisive and urgent action is required to develop the infrastructure and value chains that will enable industrialisation and climate-adaptive development.

Focusing on energy access as a cornerstone to development, the report highlights the disparity in access to electricity as the most significant barrier to industrial growth. For this reason, progress in the crucial area of energy access should be measured not just by reductions in household energy poverty, but also by the capacity to provide sustainable energy solutions that support industrial and economic development. The potential for growth by bridging Africa’s energy deficit is illustrated using new metrics such as the Modern Energy Minimum, and application to the processing needs for commodities like bauxite and copper.

Taking Guinea as a case study, the report observes that despite possessing the world’s largest bauxite reserves and being a top producer, Guinea cannot fully capitalize on its resources without receiving significant investments to boost its energy systems and processing facilities. By contrast, Australia, with similar bauxite volumes, extracts more than twice the economic value thanks to advanced refining and smelting capacities supported by a robust natural gas-powered energy infrastructure. This disparity underscores the urgent need for West Africa to develop robust energy systems and processing infrastructure. Investments in cross-border electricity and gas networks, leveraging existing ECOWAS treaties, could enable the region to build new industrial supply chains and move beyond raw material extraction.

Coordinating transport and logistics networks is crucial to reducing high transportation costs, which currently inflate the price of goods by up to 40%. Significant investments in port infrastructure need to be matched by improvements in connecting road and rail networks. The report identifies opportunities to support trade corridors with new cross-border rail and road networks and to expand cargo handling at airports.

“This report is not just about identifying challenges; it’s about unlocking the immense potential that lies within our collective resolve,” said AFC President&CEO Samaila Zubairu. “The State of Africa’s Infrastructure Report is a call to action for stakeholders across the continent to collaborate for a smarter, more targeted, and better coordinated investment approach.”

Read the full report here (https://apo-opa.co/3ywnOW2).

Distributed by APO Group on behalf of Africa Finance Corporation (AFC).

Media Enquiries:
Yewande Thorpe
Communications
Africa Finance Corporation
Mobile: +234 1 279 9654
Email: yewande.thorpe@africafc.org

About AFC:
AFC was established in 2007 to be the catalyst for private sector-led infrastructure investment across Africa. AFC’s approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development, and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth.

Seventeen years on, AFC has developed a track record as the partner of choice in Africa for investing and delivering on instrumental, high-quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications. AFC has 43 member countries and has invested US$13 billion across Africa since inception. www.AfricaFC.org

By Miranda Abraham, Head of Loan Syndication at RMB (www.RMB.co.za) in London.

Over the past few years, African debt markets have faced significant challenges due to a combination of factors including soft global economic conditions, the COVID-19 pandemic and related supply chain failures.

These factors led to a decrease in demand for African debt and a dramatic rise in borrowing costs, placing sovereign borrowing in particular in a difficult position.

In fact, in 2023, there was no issuance at all in Sub-Saharan Africa, marking the first time since 2008 that this happened.

The global bond market was effectively frozen for Africa.

The funding squeeze and the closure of the bond market forced African countries to seek alternative sources of financing, such as domestic capital markets, multilateral institutions, and bilateral agreements.

But in January and February 2024, everything changed. 

Suddenly there was a rush of deals. First Cote d’Ivoire reopened the market with a bumper $2.6bn of bond issuance. Even more encouragingly, the sale was oversubscribed more than three times, with a combined demand of $8 billion.

Then Benin came to market with a smaller issuance of $750m at a yield of just under 9%. Kenya issued a hefty $1.5bn at a yield of 10.4%, the proceeds of which will be used to buy back most of its debt which falls due in June this year. First Quantum Minerals issued $1.6bn, closely following Kenya.

Moreover, these bonds actually all priced lower than initial guidance – indicating that investor demand was far stronger than initially anticipated.  The issuance was proof positive that the market had turned a corner and confidence had returned.

This confidence spread to the loan market, with banks suddenly rushing to pitch loan bridges to bond issuance and / or medium-term financing at more attractive loan pricing than borrowers have been offered over the last 2 years.

As we approach the midway point of the year, the prospect of further interest rate cuts from central banks seems less and less likely. Debt capital markets issuance however is continuing with recent deals for Puma Energy for $500m and phosphate miner OCP S.A., which successfully completed a bond issue on the international markets for $2bn. There are more in the pipeline which suggest the African bond markets are alive and well again.

These recent debt sales in Africa show that investors are buying riskier bonds. This trend is likely to continue as more high-yield borrowers return to sub-Saharan Africa, seeking to capitalise on the region’s growth potential.

The cost of borrowing remains high in Africa, but with projections that most of the central banks will be reducing their base rates in hard currency, borrowers will immediately start to see the benefits as costs fall.

Encouraging too, is that the debt levels in sub-Saharan Africa have largely stabilised at around 60%, and this could begin to ease slightly from 2024, halting a nearly decade-long upward trend.

We are also optimistic of a rise in event-driven financing this year.

Event driven financing refers to strategies where investment decisions are made based on specific corporate events, such as mergers, acquisitions, spin-offs and bankruptcies.

In the context of Africa’s economic development, event-driven financing can play a crucial role. We expect event-driven financing in Africa to leverage innovative financing instruments to crowd-in private climate investments and support sustainable development and green initiatives.

Importantly, the African Development Bank Group has actively promoted the use of philanthropic and other forms of capital to create an ecosystem of green growth.

This approach has been highlighted at the World Economic Forum (WEF) earlier this year.

Additionally, the African Union has hosted the Conference of Ministers of Finance, Planning, and Economic Development (COM2024) in Victoria Falls, Zimbabwe, with a theme focused on financing Africa’s green and inclusive transition. The event brought together experts to discuss ways to mobilise climate finance at national, regional, and global levels.

Events such as the African Economic Outlook 2023 launch and the Conference Internationale De Lome Sur Le Financement also focused on venture capital and infrastructure financing for African projects and businesses as the continent looks towards a new financial landscape to support green industrialisation and sustainable growth.

African countries are seeking to address global development challenges and are calling for a fair financial system to handle climate shocks and implement their development agenda.

Debt remains a headwind and inequalities in the international financing architecture make access to finance inadequate and expensive.

In other developments, the African Union has emphasised the need for global reforms, concessional finance, Special Drawing Rights, and Africa’s voice in decision-making to address debt, risk ratings, and the cost of capital.

We are also seeing a significant uptick in activity around underwriting, not only for clients who want fund certainty for general loans, but for M&A activity as well, which clearly demonstrates renewed investor appetite.

While M&A deals tend to have a long lead time before coming to market, they are eagerly anticipated and often represent new borrowers and new transactions, along with renewed investor activity in a challenging market.

All the signs point to a positive turnaround for both bonds and loans in 2024.

There is plenty of pent-up demand from both borrowers and investors, and as the year got off to a strong start there are clear grounds for cautious optimism. 

Distributed by APO Group on behalf of Rand Merchant Bank.

Today, a group of African multilateral institutions including members of the Alliance for African Multilateral Financial Institutions (AAMFI) paid a courtesy visit on His Excellency, Mohamed Ould Cheikh Al-Ghazouani, the President of the Islamic Republic of Mauritania, and Chairperson of the African Union to convey their support and commitment to the AU in implementing transformative initiatives to support Africa’s developmental agenda.

The Institutions present included African Export-Import Bank (Afreximbank), Shelter Afrique Development Bank (SHAFDB), the Arab Bank for Economic Development in Africa (BADEA), Africa Risk Capacity (ARC), African Guarantee Fund (AGF), the Africa Capacity Building Foundation (ACBF), African Solidarity Fund (FSA), African Guarantee and Economic Cooperation Fund (FAGACE) and AfroChampions.

The delegation was led by the Chairman of AAMFI and President of Afreximbank, Prof. Benedict Oramah, who underscored the significance of AAMFI’s establishment during President Al-Ghazouani’s tenure as AU Chair. He also underscored the role of AAMFI in advancing Agenda 2063 as a rallying platform for financing trade and development in Africa, especially under a strained international financial architecture. Considering the 2024 AU theme; Educate an African fit for the 21st Century, the meeting explored ways the continent can build the capacity of its growing youthful population, and pledged to mobilise USD 2 billion to go towards vocational training and driving digital literacy, especially amongst the youth and women.

The Institutions, which collectively represented an aggregate balance sheet of over USD 75 billion affirmed their support for the financial sustainability of the African Union.

The Institutions also reaffirmed their support to the AU in fulfilling its role as a member of the G20 and pledged to put their full weight behind the continental body towards amplifying the African voice on critical global matters, such as climate action. In this regard, the Institutions acknowledged the unique needs and priorities of Africa on climate which should be advocated cohesively on global platforms such as COP29 and COP16.

H.E. Mohamed Ould Cheikh Al-Ghazouani welcomed the backing and commitment of the Institutions to Africa, in particular their resolve to finding “African Solutions to African Problems” (ASAP) while pursuing sustainable development. He endorsed the call by President Nana Akufo-Addo for African governments to invest a minimum of 30% of their sovereign reserves in African multilateral institutions as a means of strengthening these institutions to better serve the continent. Such undertaking will also allow the Institutions to mobilise concessional resources.  

Distributed by APO Group on behalf of Afreximbank.

About Afreximbank:
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance, facilitate and promote intra and extra-African trade. For over 30 years, the Bank has been deploying innovative instruments to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the AfCFTA, Afreximbank has in partnership with the African Union Commission and AFCFTA Secretariat launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the Free Trade Agreement. The AFCFTA Secretariat and the Bank have created a USD 10 billion Adjustment Fund to support countries to effectively participate in the AfCFTA.

At the end of December 2023, Afreximbank’s total assets and guarantees stood at US$ 37.3 billion, and its shareholder funds amounted to US$ 6.1 billion. The Bank disbursed more than US$ 104 billion between 2016 and 2023 through various interventions for the advancement of the continent. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). Afreximbank has evolved into a group entity comprising the Bank, its impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure, (together, “the Group”).

For more information, visit: www.Afreximbank.com

Media contact:
Vincent Musumba
Media Relations Manager
Email: press@afreximbank.com
Tel : +20 2 24564100 /1/2/3

Promotion of Cancer Awareness took the center stage at the High-level Seminar on Promoting Cancer Awareness and Advocacy Programs in the OIC African Member States (www.new.OIC-oci.org), which commenced on Wednesday 15th May 2024 in Abuja, Federal Republic of Nigeria.

The two-day event sponsored by the Organization of Islamic Cooperation (OIC) in collaboration with the Office of the First Lady of Nigeria, relevant OIC institutions, and international partners, focused on finding innovative approaches to prevention, early detection, and treatment of cancer in OIC African Member States. The participating First ladies, under the leadership of the First Lady of Nigeria, and stakeholders undertook to make a case for greater funding and massive efforts to cut down the infection claiming hundreds of thousands of lives, especially in the African region.

In her welcome remarks, the First Lady of Nigeria commended the OIC for organizing this important Seminar and for choosing Nigeria as a host. She further called for closer collaboration among all the stakeholders to fight the scourge of cancer.

In his speech, the representative of the OIC Secretary-General, H.E. Dr. Ahmad Kawesa Sengendo, Assistant Secretary-General for Economic Affairs/ Science&Technology underscored the fact that the OIC General Secretariat remains committed to providing all assistance to pursue this fight against cancer till the very end. He further highlighted the need to identify, document and preserve all the available indigenous knowledge and plant species that are used in the traditional treatment of cancer in our countries.

The First Lady of Türkiye H.E. Mrs Emine Erdoğan who attended the Seminar as a Special Guest lamented the abandonment of the fundamental life lessons that have been transmitted across generations for millennia as a result of the consumption culture that this age has instilled in people. She pointed out that Asia, Anatolia, and Africa, there was once a prevalent way of life centred on healing. “In the past, medicinal practices were individualized in accordance with an individual’s temperament at healing homes situated in Anatolia along trade routes traversed by caravans which transported not only cultures but also epidemic diseases and the indigenous way of life and dietary practices that had protected them.” She said. 

The Seminar was addressed by, among others, the First Ladies of Türkiye, Sierra Leone, The Gambia; the Director General of the International Atomic Agency (IAEA), the Federal Minister of State for Health and Social Welfare and the Speaker of the Nigerian House of Representatives.

The First Ladies adopted the Abuja Declaration on the First Ladies’ Leadership on cancer control, which was read out by the First Lady of Nigeria and signed by all the participating First Ladies.  

Distributed by APO Group on behalf of Organisation of Islamic Cooperation (OIC).