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Free Malaysia Today
29-05-2025
- Business
- Free Malaysia Today
Mauritanian elected as Africa's new ‘super banker'
Sidi Ould Tah secured the president's post in three rounds of voting. (AFP pic) ABIDJAN : Mauritania's former economy minister Sidi Ould Tah was, on Thursday, elected to succeed Nigeria's Akinwumi Adesina as president of the African Development Bank (AfDB) and tackle the withdrawal of US financing from the institution. In 2015, Adesina took six rounds of voting to become Africa's 'super banker' but Tah, 60, secured the prestigious post in only three, winning 76.18% of votes. Zambian economist Samuel Munzele Maimbo trailed well behind in second on 20.26%, with Senegal's Amadou Hott third on 3.55%. The winner had to secure both a majority of votes from all 81 member countries and a majority of votes from the 54 African nations who are part of the AfDB. Tah, who headed the Arab Bank for Economic Development in Africa (BADEA) for 10 years, secured 72.37% of African votes. 'I wish to congratulate Dr Sidi Ould Tah on his successful election as the President-elect of the African Development Bank Group,' Maimbo said in a statement. 'I entered this race driven by love and deep concern for our continent, and offered a vision for Africa's future. 'Today, the Governors have chosen the leader they believe will best deliver the vision of the Africa we want at this pivotal moment.' With several north African states members of the AfDB, Tah's experience at the BADEA could be a bridge with sub-Saharan Africa. In his pitch for the AfDB leadership, he vowed to strengthen regional financial institutions, assert Africa's financial independence on global markets, use population growth as a development lever and build climate change-resistant infrastructure. Five priorities The AfDB, founded in 1964, is one of the world's largest multilateral development banks and is funded by member subscriptions, loans raised on global markets as well as repayments and income from loans. But, Tah will immediately face a disrupted international economic environment, notably due to announcements from the US Trump administration. Beyond tariffs, the AfDB is also facing the threat of losing US$500 million in US funding for its projects to support low income countries on the continent. All five candidates in the running for the top job promised to make the AfDB even more effective to transform Africa, continuing Adesina's five priorities to light up, feed, industrialise, integrate and improve quality of life. 'I am proud of the legacy we are leaving behind for… my successor, for the bank and for Africa,' the outgoing president said in a speech on Tuesday. 'We have built a world-class financial institution that will continue to advance Africa's position within a rapidly changing global development and geopolitical environment,' he added. Adesina said 565 million people had benefited from AfDB projects during his decade in charge. Major projects include support for the construction of the Gabal El Asfar wastewater treatment plant in Egypt – the largest in Africa. The bank also helped finance a bridge connecting Senegal and the Gambia, expanded the port of Lome in Togo and supported sanitation projects in Lesotho and access to electricity in Kenya, he said. From 2015 to this year, the bank's capital more than tripled from US$93 billion to US$318 billion, he added.
IOL News
29-05-2025
- Business
- IOL News
South Africa's Tshabalala is running in line up for Africa's next 'super banker'
Bajabulile Tshabalala Image: Social Media Five candidates are in the running to succeed Nigeria's Akinwumi Adesina as president of the African Development Bank (AfDB). They are: Bajabulile Swazi Tshabalala (South Africa) The AfDB has only ever been headed by men but Tshabalala aims to change that. The 58-year-old South African was until the end of last year a vice president at the bank and could emerge as a continuity candidate. "Africa is at an inflection point. It's time for bold leadership that turns vision into action. I'm ready to lead the AfDB towards a more integrated, resilient, and prosperous continent," she said last month. Tshabalala wants to accelerate infrastructure development, boost private sector growth and make the AfDB more efficient. She argues that the bank must look beyond public funding to "smart finance". South Africa backs her candidacy but southern African unity could be split, as it had previously rallied behind Zambia's Maimbo. Amadou Hott (Senegal) Hott was Senegal's economy minister from 2019 to 2022 under the presidency of Macky Sall and until September last year was Adesina's special envoy for green infrastructure in Africa. But he is not necessarily a natural successor, as the position usually goes to a candidate from another region and the candidacy of Mauritania's Sidi Ould Tah will split the west African vote. In his pitch for the leadership, Hott, 52, has called for "a more inclusive, integrated and resilient Africa", positioning himself in particular as a supporter of AfCFTA, the African Continental Free Trade Area. He is also in favour of deepening relations with the private sector. Hott also wants to quicken the pace of investment in sustainable energy infrastructure using Africa's vast renewable resources. Samuel Munzele Maimbo (Zambia) Maimbo, 52, was most recently vice president for budget, performance review and strategic planning at the World Bank. He has also been chief of staff to World Bank presidents David Malpass and Ajay Banga. He will also have to contend with a split regional vote during the election, as South Africa -- one of the biggest AfDB's contributors -- is also fielding a candidate. But his experience at the World Bank could help him secure US support, which carries weight in the vote. Maimbo, who highlights 30 years of experience in development and finance, wants the AfDB to play "a leadership role" in supporting the many countries strangled by debt. Having grown up on a farm on the outskirts of Lusaka, he emphasises the importance of agricultural mechanisation and the development of the agro-industry. "Africa needs significantly higher rates of growth to successfully navigate today's development challenges and capture tomorrow's opportunities," he said in his mission statement. Sidi Ould Tah (Mauritania) Tah, who has headed the Arab Bank for Economic Development (BADEA) for 10 years, was the last candidate to declare. Several north African Arab states are members of the AfDB and if elected, his experience at BADEA could be a bridge with sub-Saharan Africa. He said in his mission statement that he had transformed BADEA into "one of the best capitalised and most highly-rated DFIs" (development finance institutions). He has vowed to strengthen regional financial institutions, assert Africa's financial independence on global markets, use population growth as a development lever and build climate change-resistent infrastructure. Tah, 60, is a former economy minister in Mauritania. Abbas Mahamat Tolli (Chad) Central Africa has never had a president of the AfDB but Tolli, a 53-year-old Chadian, could be its first. The former governor of the Bank of Central African States has served as a finance and infrastructure minister and is also proposing a transformative vision. He wants to achieve food sovereignty through sustainable agricultural investments, speed up financing for essential infrastructure, improve governance, promote renewable energies, and develop domestic financial markets.
Gulf Today
28-02-2025
- Business
- Gulf Today
Many African nations facing ‘debt distress'
African leaders' push to mobilise domestic sources of cash to help fund billions in sovereign borrowing will face slow progress until low savings rates rise and African investors step up, experts and analysts say. The drive to tap their own bourses, pensions and savings funds comes after punishing years when spiralling costs locked many African countries out of international debt markets and a soaring US dollar drove up their debt-servicing costs. Borrowing at home, advocates say, would reduce reliance on volatile international markets, lower exposure to foreign currencies, and let African investors more familiar with local risks play a bigger role. Samuel Maimbo, a development finance expert running to head the African Development Bank (AfDB) – the continent's largest development finance institution – said leaders must fix Africa's 'entire plumbing of financing' to unlock more cash. 'I want to look at domestic sources of financing,' he said. A growing number of people agree with Maimbo on how to move the 54-nation continent on from a spate of sovereign debt defaults and ongoing cash-crunch worries, according to Reuters. Africa's financing concerns are also a topic at the G20 finance ministers and central bankers meeting underway in Cape Town amid heightened investor uncertainty following Donald Trump's return to the White House. 'Many countries on the African continent are almost facing debt distress,' Lesetja Kganyago, governor of the South African Reserve Bank told Reuters on the sidelines of the meeting in Cape Town. 'All the countries on the African continent are small, open economies, and small, open economies depend on global trade.' Africa's financing needs are huge. The AfDB puts the annual financing gap for structural transformation at more than $400 billion - or nearly 14% of the continent's projected GDP by 2030. Adding to the urgency are rising debt repayments due from 2026, with analysts saying an overall structural weakening of riskier African economies is raising the spectre of more debt strains ahead. Debt levels are high: external public debt surpassed $1 trillion in 2023, from less than half that in 2010, UNCTAD figures showed. Debt-servicing costs stood at $163 billion in 2024, having nearly trebled since 2010, according to AfDB calculations.. Only two countries - Botswana and Mauritius - have investment-grade credit ratings. Lower ratings elsewhere add to high borrowing costs, a phenomenon some leaders call an 'Africa premium.' 'A shared experience is disproportionately high costs of securing credit compared with other regions of the world,' said Rugare Mukanganga, economic adviser at Development Reimagined, the Reuters report adds. Africa's public debt in local-currency domestic bonds was just over $800 billion in 2020, according to the International Capital Market Association, with 40% of that in South Africa alone. It pales compared with the roughly $6 trillion in Asia Pacific excluding China and Japan. Banji Fehintola, executive director of the Africa Finance Corporation (AFC), said the continent's central banks hold $450 billion in hard currency reserves while sovereign wealth funds, pension funds and insurance firms have another $600 billion. In September, the AFC helped the Nigerian government raise $900 million through its first-ever domestic dollar bond. But raising billions domestically won't be easy. Sub-Saharan Africa has a savings rate of 18%, World Bank data shows – less than half the 36% global average, due partly to its youthful population having limited disposable income. The IMF has warned that low liquidity hinders cash mobilisation. Borrowing at home can also put people's own money at risk. Ghana restructured local debt, damaging the savings of the nascent middle class and feeding anger that led to the ruling party's defeat in last year's presidential election. Kenyan Finance Minister John Mbadi said the country – which has struggled to contain high commercial interest rates – was 'overborrowing domestically'. But leaders, including current AfDB President Akinwumi Adesina, say there are solutions. Ethiopia, which defaulted on international bonds in 2023, opened Africa's newest capital market last month, part of far-reaching, IMF-backed economic reforms.
Zawya
26-02-2025
- Business
- Zawya
Low savings, shallow markets stymie African leaders' push to mobilise local cash
NAIROBI - African leaders' push to mobilise domestic sources of cash to help fund billions in sovereign borrowing will face slow progress until low savings rates rise and African investors step up, experts and analysts say. The drive to tap their own bourses, pensions and savings funds comes after punishing years when spiralling costs locked many African countries out of international debt markets and a soaring U.S. dollar drove up their debt-servicing costs. Borrowing at home, advocates say, would reduce reliance on volatile international markets, lower exposure to foreign currencies, and let African investors more familiar with local risks play a bigger role. Samuel Maimbo, a development finance expert running to head the African Development Bank (AfDB) - the continent's largest development finance institution - said leaders must fix Africa's "entire plumbing of financing" to unlock more cash. "I want to look at domestic sources of financing," he said. A growing number of people agree with Maimbo on how to move the 54-nation continent on from a spate of sovereign debt defaults and ongoing cash-crunch worries. Africa's financing concerns are also a topic at the G20 finance ministers and central bankers meeting underway in Cape Town amid heightened investor uncertainty following Donald Trump's return to the White House. "Many countries on the African continent are almost facing debt distress," Lesetja Kganyago, governor of the South African Reserve Bank told Reuters on the sidelines of the meeting in Cape Town. "All the countries on the African continent are small, open economies, and small, open economies depend on global trade." Africa's financing needs are huge. The AfDB puts the annual financing gap for structural transformation at more than $400 billion - or nearly 14% of the continent's projected GDP by 2030. Adding to the urgency are rising debt repayments due from 2026, with analysts saying an overall structural weakening of riskier African economies is raising the spectre of more debt strains ahead. Debt levels are high: External public debt surpassed $1 trillion in 2023, from less than half that in 2010, UNCTAD figures showed. Debt-servicing costs stood at $163 billion in 2024, having nearly trebled since 2010, according to AfDB calculations. AFRICA PREMIUM? Africa is reeling from the nearly two years up to 2024 when the global interest rate-hiking cycle priced it out of the market and helped push Ghana and Zambia into default. Only two countries - Botswana and Mauritius - have investment-grade credit ratings. Lower ratings elsewhere add to high borrowing costs, a phenomenon some leaders call an "Africa premium." "A shared experience is disproportionately high costs of securing credit compared with other regions of the world," said Rugare Mukanganga, economic adviser at Development Reimagined. Africa's public debt in local-currency domestic bonds was just over $800 billion in 2020, according to the International Capital Market Association, with 40% of that in South Africa alone. It pales compared with the roughly $6 trillion in Asia Pacific excluding China and Japan. Banji Fehintola, executive director of the Africa Finance Corporation (AFC), said the continent's central banks hold $450 billion in hard currency reserves while sovereign wealth funds, pension funds and insurance firms have another $600 billion. "Why can't that capital fund Africa's development?" he said. "Africa actually has options and those options are available domestically even in hard currency." In September, the AFC helped the Nigerian government raise $900 million through its first-ever domestic dollar bond. NO PANACEA But raising billions domestically won't be easy. "This is not a magic solution," said Charlie Robertson, head of macro strategy at FIM Partners. "The structural challenge is a shortage of local savings." Sub-Saharan Africa has a savings rate of 18%, World Bank data shows - less than half the 36% global average, due partly to its youthful population having limited disposable income. The IMF has warned that low liquidity hinders cash mobilisation. The market capitalisation of securities exchanges in sub-Saharan Africa, excluding South Africa, averaged less than 20% of GDP, compared with 50% in other developing economies and 126% in advanced ones. "Markets remain shallow and underdeveloped," an IMF spokesperson said. Borrowing at home can also put people's own money at risk. Ghana restructured local debt, damaging the savings of the nascent middle class and feeding anger that led to the ruling party's defeat in last year's presidential election. Increased local government borrowing can also create competition with private borrowers, driving up interest rates. Kenyan Finance Minister John Mbadi said the country - which has struggled to contain high commercial interest rates - was "overborrowing domestically". WORKING TO THE SOLUTION But leaders, including current AfDB President Akinwumi Adesina, say there are solutions. Ethiopia, which defaulted on international bonds in 2023, opened Africa's newest capital market last month, part of far-reaching, IMF-backed economic reforms. Kenya's regulator also licensed last year the East Africa Bonds Exchange, which will compete with the Nairobi Securities Exchange where annual bond-trading turnover averages 700 billion shillings ($5.4 billion). The Nairobi bourse is part of an AfDB-backed push by 10 African exchanges to deepen local debt markets. "If you look at the interest rate, they are actually paying for access to (international) capital markets. That tells me there is an issue for Africa," said AfDB's Adesina. ($1 = 129.1500 Kenyan shillings)
Reuters
25-02-2025
- Business
- Reuters
Low savings, shallow markets stymie African leaders' push to mobilise local cash
NAIROBI, Feb 25 (Reuters) - African leaders' push to mobilise domestic sources of cash to help fund billions in sovereign borrowing will face slow progress until low savings rates rise and African investors step up, experts and analysts say. The drive to tap their own bourses, pensions and savings funds comes after punishing years when spiralling costs locked many African countries out of international debt markets and a soaring U.S. dollar drove up their debt-servicing costs. Borrowing at home, advocates say, would reduce reliance on volatile international markets, lower exposure to foreign currencies, and let African investors more familiar with local risks play a bigger role. Samuel Maimbo, a development finance expert running to head the African Development Bank (AfDB) - the continent's largest development finance institution - said leaders must fix Africa's "entire plumbing of financing" to unlock more cash. "I want to look at domestic sources of financing," he said. A growing number of people agree with Maimbo on how to move the 54-nation continent on from a spate of sovereign debt defaults and ongoing cash-crunch worries. Africa's financing concerns are also a topic at the G20 finance ministers and central bankers meeting underway in Cape Town amid heightened investor uncertainty following Donald Trump's return to the White House. "Many countries on the African continent are almost facing debt distress," Lesetja Kganyago, governor of the South African Reserve Bank told Reuters on the sidelines of the meeting in Cape Town. "All the countries on the African continent are small, open economies, and small, open economies depend on global trade." Africa's financing needs are huge. The AfDB puts the annual financing gap for structural transformation at more than $400 billion - or nearly 14% of the continent's projected GDP by 2030. Adding to the urgency are rising debt repayments due from 2026, with analysts saying an overall structural weakening of riskier African economies is raising the spectre of more debt strains ahead. Debt levels are high: External public debt surpassed $1 trillion in 2023, from less than half that in 2010, UNCTAD figures showed. Debt-servicing costs stood at $163 billion in 2024, having nearly trebled since 2010, according to AfDB calculations. AFRICA PREMIUM? Africa is reeling from the nearly two years up to 2024 when the global interest rate-hiking cycle priced it out of the market and helped push Ghana and Zambia into default. Only two countries - Botswana and Mauritius - have investment-grade credit ratings. Lower ratings elsewhere add to high borrowing costs, a phenomenon some leaders call an "Africa premium." "A shared experience is disproportionately high costs of securing credit compared with other regions of the world," said Rugare Mukanganga, economic adviser at Development Reimagined. Africa's public debt in local-currency domestic bonds was just over $800 billion in 2020, according to the International Capital Market Association, with 40% of that in South Africa alone. It pales compared with the roughly $6 trillion in Asia Pacific excluding China and Japan. Banji Fehintola, executive director of the Africa Finance Corporation (AFC), said the continent's central banks hold $450 billion in hard currency reserves while sovereign wealth funds, pension funds and insurance firms have another $600 billion. "Why can't that capital fund Africa's development?" he said. "Africa actually has options and those options are available domestically even in hard currency." In September, the AFC helped the Nigerian government raise $900 million through its first-ever domestic dollar bond. NO PANACEA But raising billions domestically won't be easy. "This is not a magic solution," said Charlie Robertson, head of macro strategy at FIM Partners. "The structural challenge is a shortage of local savings." Sub-Saharan Africa has a savings rate of 18%, World Bank data shows - less than half the 36% global average, due partly to its youthful population having limited disposable income. The IMF has warned that low liquidity hinders cash mobilisation. The market capitalisation of securities exchanges in sub-Saharan Africa, excluding South Africa, averaged less than 20% of GDP, compared with 50% in other developing economies and 126% in advanced ones. "Markets remain shallow and underdeveloped," an IMF spokesperson said. Borrowing at home can also put people's own money at risk. Ghana restructured local debt, damaging the savings of the nascent middle class and feeding anger that led to the ruling party's defeat in last year's presidential election. Increased local government borrowing can also create competition with private borrowers, driving up interest rates. Kenyan Finance Minister John Mbadi said the country - which has struggled to contain high commercial interest rates - was "overborrowing domestically". WORKING TO THE SOLUTION But leaders, including current AfDB President Akinwumi Adesina, say there are solutions. Ethiopia, which defaulted on international bonds in 2023, opened Africa's newest capital market last month, part of far-reaching, IMF-backed economic reforms. Kenya's regulator also licensed last year the East Africa Bonds Exchange, which will compete with the Nairobi Securities Exchange where annual bond-trading turnover averages 700 billion shillings ($5.4 billion). The Nairobi bourse is part of an AfDB-backed push by 10 African exchanges to deepen local debt markets. "If you look at the interest rate, they are actually paying for access to (international) capital markets. That tells me there is an issue for Africa," said AfDB's Adesina. ($1 = 129.1500 Kenyan shillings)
