Arab-Africa Financial Consortium Established
-To enhance economic dev, foster deeper ties
By Daniel NONOR, Accra
A new financial consortium has been forged between African and Arab banks in a major move to enhance economic development and foster deeper ties between the two regions. The goal is to establish a coordination platform to facilitate the exchange of development finance pillars and align the common development agenda between financial institutions in both regions.
The partnerships were formalized yesterday in Accra at the Jubilee anniversary celebration of the Arab Bank for Economic Development in Africa (BADEA).
Other key partnerships include a memorandum of understanding (MoU) with the Secretary General of AfCFTA, Wamkele Mene, to establish a unified African trade facility. Additionally, a partnership aimed at enhancing the competitiveness of African exports was signed, alongside the launch of a joint report with the Africa Capacity Building Foundation (ACBF).
The event, hosted by President Nana Addo Dankwa Akufo-Addo, brought together influential leaders and institutions from both regions to celebrate and project a collaborative vision for the future.
Dr. Fahad Aldossari, Chairman of BADEA’s Board of Directors, outlined BADEA’s impactful projects across Africa, including the financing of airports and extensive road networks, as well as support for healthcare and education services.
He acknowledged the crucial partnerships with institutions like the African Development Bank and the Arab-Africa Trade Bridges Programme, emphasizing the bank’s commitment to addressing development challenges, including responses to COVID-19 and climate change.
Dr Fahad Aldossari pointed out that from now to 2074 (the next 50 years), BADEA would take immediate steps to institutionalise the AAFC by establishing a secretariat to host and coordinate its activities
He promised that BADEA would spare no effort in ensuring this consortium succeeds in realising the vision of Arab – Africa financial institution collaboration and coordination for leveraging of resources for the continent.
Dr. Sidi Ould Tah, President of BADEA, emphasized the historical significance of BADEA’s establishment and pride in its achievements over the past five decades.
“Today, as we celebrate the 50th anniversary of the bank, we are not only reflecting on the journey that began five decades ago but also envisioning the future,” he stated.
He highlighted BADEA’s unique position as an institution dedicated solely to the African continent, showcasing the strong historical, geographical, and demographic ties between Africa and the Arab world.
He emphasized the importance of enhancing economic, financial, and trade relationships between the regions, culminating in the establishment of the joint consortium.
In an earlier media engagement, he outlined BADEA’s strategic plans to support the African Continental Free Trade Area (AfCFTA) through two main mechanisms.
The first is the African Trade Facility, which aims to support cross-border trade by providing financing at favourable rates to African exporters, thus enhancing intra-African trade.
“This facility is meant to support cross-border trade, providing financing under good conditions to support the cross-border trade within Africa,” he explained.
The second mechanism is the Capacity Development Grants, which provide training, establish digital platforms, conduct feasibility studies, and support other activities that facilitate the implementation of the AfCFTA.
“BADEA is already providing grants and will continue to provide more to support these types of activities,” he said.
He also highlighted BADEA’s efforts to bring more equity into Africa to develop infrastructure projects, value chains, and small and medium enterprises (SMEs).
“Africa needs more equity and less debt to develop its infrastructure, value chains, and SMEs,” he noted.
This includes creating equity funds to support African development without increasing debt, a crucial step for sustainable growth.
President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, praised BADEA’s role in advancing socio-economic development in Africa.
He underscored the strategic partnership between the two banks, which has co-financed projects worth $835 million across nine African countries.
Dr. Adesina outlined five key areas for further collaboration: energy, green metals and minerals, food security, financial partnerships, and leveraging the African Investment Forum.
He emphasized the growing investments by Gulf Cooperation Council (GCC) countries in Africa, noting that in 2023 alone, GCC countries announced 73 foreign direct investments worth over $53 billion.
He called for structured and coordinated approaches to pool financial resources and address critical issues such as food security, energy transition, youth employment, and infrastructure development.
