Ghana joins Africa Finance Corporation with 50 million dollars

Accra, Nov. 30, GNA - Parliament on Tuesday gave government the approval to join and subscribe to shares in the African Finance Corporation (AFC), a public private partnership investment bank. By this approval, the government of Ghana will release an amount of 50,000,000 dollars which will be divided into 50 million shares to enable her to have a seat on the board.

The bank, established by Nigeria, Ghana, The Gambia and Guinea Bissau, has a total authorized share capital of two billion dollars totaling two billion shares of one dollar each.

Article two of the Charter that established the bank states among other things its objectives to foster economic growth and industrial development of African states collectively and individually. It is also to support and promote infrastructure development in Africa through the precision of investment funds.

AFC is to facilitate African trade generally and contribute to the development of the energy and extractive industries in Africa. AFC will also provide lending and refinancing loans to African financial institutions and engage in any kind of banking and financial business intended to promote investment in Africa. Mr James Klutse Avedzi, Chairman of the Finance Committee, presenting the report, said the bank had its headquarters in Nigeria and would enter into branch office agreements with the respective countries where it would operate.

He said the bank had developed key guiding corporate governance principles against global investment banking and multilateral development finance institutions to ensure good corporate governance. Mr Avedzi said the AFC had adopted a disciplined cost structure and a lean organization designed along product, industry and advisory business groups and functions.

He noted that the structure of the AFC was designed to have its members confer international status on it like the International Finance Corporation (IFC) and African Development Bank (ADB). He said the signatory countries of the bank were required to confer on the AFC diplomatic privileges and legal immunities as applicable to multilateral financial institutions.

Mr Avedzi explained that article 12 of the Charter stated that unless otherwise decided by the board of directors and subject to the restrictions and limitations set forth, shares shall be transferable by means of lodging with the corporation, a duly signed and stamped instrument of transfer in any form prescribed by the board of directors. He said the AFC had since its formation, been involved in some notable transactions including submarine fibre optic cable from South Africa to Ghana and Nigeria to improve regional connectivity and reduce broadband cost to local businesses and consumers.

Mr Avedzi said AFC had also involved in financing indigenous oil and gas exploration companies with proven reserves owned in Nigeria and managed by an internationally experienced team. He noted that AFC also supported Ghana's Jubilee Field with an amount of 50 million dollars in various loans, a project expected to have a major impact on the macroeconomic profile of Ghana while expanding regional oil and gas industry.

He said the AFC was also in conjunction with major local and international partners working to develop 340MW combined cycle thermal power plant in Ghana to meet existing demands and to utilise Ghana's discovered gas resources.

According to the Finance Committee chairman, Article 15 section 1 of the AFC Charter stated that; "The Corporation, its assets income operations and transactions shall be exempted from all taxations and customs duties". He said due to its international status, AFC would avoid tedious market entry formalities and regulatory requirements such as listing requirements. Papa Owusu-Ankomah, New Patriotic Party (NPP) member for Sekondi, said one of the reasons Ghana must support the establishment of this bank was its aim to promote infrastructural development. However, Mr Paul Collins Appia-Ofori, NPP member for Asikuma/Odoben/Brakwa, said in every step Parliament took it must weigh its cost benefits to ensure that Ghana's interest was guaranteed. He said he did not understand why many projects undertaken could not be completed for lack of funds and that such a huge amount would be used as shares in a bank. Mr Rashid Pelpuo, Deputy Majority Leader, said Ghana stood a great chance to serve on the AFC board by this amount of shares. Mr Ambrose Dery, Deputy Minority Leader, said the bank would enhance true African integration and called for the support of all Ghanaians. 30 Nov. 10