Importance for Africa of support from banks like the AfD goes far beyond money – Fitch

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Importance for Africa of support from banks like the AfD goes far beyond money – Fitch

1:31 CAT | 10 Jun 2019

File photo: AfDB headquarters in Tunis.

The head of the African department of the financial news agency Fitch, Jan Friederich, said today that the importance of support from multilateral financial institutions such as the African Development Bank (AfDB) goes far beyond the amounts of money they lend.

“Looking only at the numbers, there is a tendency to underestimate the importance of these institutions, which give invaluable help beyond to funding because they provide technical support, support to budget management and to the designing of reforms,” Friederich said.

In an interview with Lusa about the Annual Meeting of the African Development Bank, which runs until Friday in Malabo, capital of Equatorial Guinea, Friederich warned that one should not “look only at the numbers in loans to attest to the importance of agencies like the AfDB,” adding that the importance of their support “is much greater than funding: it is also about giving policy advice and policy support”.

Happening now: @AfDB_Group 2019 Annual Meetings Press Conference in Malabo, Equatorial Guinea. pic.twitter.com/nynTdbpgKA

— Josephine Ngure (@JosephineNgure) June 10, 2019

Looking at the past few years, the rating agency analyst believes that “multilateral financial institutions have become more important to African countries in recent years” because of the financial difficulties in which, for various reasons, countries such as Angola and Mozambique have found themselves.

“Previously, when the price of oil was rising, multilateral loans were not as significant, but now they are an important source of financing,” he noted.

“The Angolan programme with the International Monetary Fund has reopened access to financing and budget support for multilateral financial institutions, including the AfDB, which is an important source of funding, but not the only one,” Friederich told Lusa.

“Many African governments have relied more heavily on private markets in recent years, including the issuance of ‘eurobonds’, and we have also seen the growing importance of China, which is very important, particularly in Angola,” he concluded.

Addressing the media in #Malabo for the #AfDBAM2019, President @akin_adesina lists the Bank’s four main sectors to #IntegrateAfrica: integrating financial markets; infrastructure; ICT development; and the free movement of goods and people. pic.twitter.com/f8C9LeruNZ

— African Development Bank Group (@AfDB_Group) June 10, 2019