The Minister of Finance, Ken Ofori-Atta has said the US$75 million facility extended by the African Development Bank (AfDB) to the Ghana Investment Infrastructure Fund (GIIF) will lead to additional resources to the Fund, in excess of US$700 million; more than double the typical rate for such a facility.
The Bank, in October, approved the facility facilitate the financing of several critical infrastructure projects in a bid to reduce the country’s estimated multi-billion-dollar infrastructure finance deficit.
Mr. Ofori-Atta made indicated this, whilst responding to questions, following the signing of a Memorandum of Understanding (MoU) between the government of Ghana and AfDB, for the hosting of the Bank’s 2022 Annual General Meeting (AGM) in Accra, where he said the recent performance of the Fund will result in a crowding-in effect from investors.
“The issue of the US$75 million to GIIF is very exciting because whilst AfDB is able to get a multiplier of four when we look at GIIF’s performance since it came, we we are able to multiply by ten, with regards to getting other investors to support its investments. So a US$75 million transaction could lead to crowding in another $700 million or so,” he said.
The Minister added that the failure of initiatives such as the Debt Service Suspension Initiative (DSSI) and the G-20’s Common Framework for Debt Treatments to address the peculiar challenges, mostly of African countries “partly because we are mostly not at the table where solutions are crafted” has made the role of AfDB in driving development on the continent even more paramount.
“The urgency of AfDB becoming a key pillar in our strategy for eliminating poverty and improving the productivity of our people is becoming clearer,” he said.
Ghana will be playing host to AfDB’s AGM for two consecutive years, following the 56th Annual Meeting of the Board of Governors of the African Development Bank and the 47th Annual Meeting of the African Development Fund, the concessional arm of the Bank Group, which were held in Accra, albeit virtually, in response to the ongoing pandemic.
The Finance Minister, in his remarks, said despite the significant progress being recorded on the proposals from last year’s meeting, the current pace of advancement remains inadequate for
us to secure a green, inclusive, and robust recovery.
“Our upcoming Annual Meetings are of increased importance in forging ahead on the path to addressing the devastating impact of the climate, health, and economic crises brought on by COVID-19,” he said.
“Responding to the massive challenges which confront our continent will not be easy. The 2022 AGM thus affords us the opportunity to strategize and advance our cause to recover and build forward better,” he added, whilst indicating the State’s preparedness to host the seminal event.
On his part, Secretary-General of AfDB Group, Professor Vincent O. Nmehielle, who signed on behalf of the Bank noted that due to the change in format for the 2021 meetings, the Board of Governors resolved to extend the current 2017 to 2021 cycle to 2022 to enable Ghana host the Annual Meetings next year, which will be in a hybrid format as it takes into consideration “the evolving context regarding the COVID-19 pandemic.”
Prof. Nmehielle, noted that as a statutory event, the Meetings would not serve as a fountain for solutions of all the ills on the continent but expressed optimism that knowledge-sharing sessions, will go a long way in proffering home-grown answers to prevailing and emerging socio-economic problems. “We will continue to engage with the country team through the preparatory process until the end of the Annual Meetings,” he assured. The signing was witnessed by a delegation from the Ministry of Finance, on behalf of the government and the Bank.