Oliver Kazunga, Acting Business Editor
THE African Development Bank (AfDB) has launched a non-sovereign operations (NSO) policy which seeks to render direct support to private sector development on the continent over the next 10 years.
NSO refers to financing and investment operations that are not guaranteed by a State, covering mostly private sector transactions.
In a statement, the AfDB said the NSO policy was launched in Abidjan, Cote d’Ivoire last week where delegates met to be conscientised on the approach.
The policy provides the general framework and modalities required for lending and investment without sovereign guarantee to private and public entities that meet specific eligibility requirements on non-concessional terms.
“The workshop, held in Abidjan, was attended by government officials, diplomats, private sector representatives, partner organisations and the civil society.
“Bank officials engaged with key stakeholders and partners on its policy stance in support of private sector development in Africa.
“Our annual private sector investment lending has increased significantly from just about US$300 million 10 years ago to over US$2 billion today and represents the fastest growing segment of the bank’s operations,” AfDB group senior vice president Mr Charles Boamah said in his opening remarks at the launch of the NSO policy.
It is hoped that information and dissemination workshops on the policy across the continent will be held this year.
Mr Boamah said AfDB’s overall approach would be driven by a desire to remain more attentive to the bank’s clients’ needs while becoming more responsive and efficient by leveraging its on-the-ground presence in regional member countries.
Through its various instruments and platforms such as the Africa Investment Forum, AfDB will continue to be proactive in identifying and developing viable projects on the continent’s private sector.
The bank’s engagement in its selected non-sovereign operations will aim to maximise the catalytic impact of its limited resources, while seeking to promote inclusive growth and the gradual transition to ‘green growth.’
Under the NSO policy, the regional financier would provide financing subject to four conditions namely, the borrower is a private enterprise or an eligible public sector enterprise; the operations are financially sound; the operations should result in satisfactory development outcomes, including supporting or creating opportunities for private sector development; and the bank brings additionally, which could be either financial or non-financial. — @okazunga