NUMBER of multilateral development finance institutions are focused to increase their foothold in Tanzania and East African region that enjoy strong economic growth and heavy public investments in infrastructure development projects.
Top officials of the institutions told the Business Standard in separate interviews on the sidelines of the Africa Investment Forum held in Johannesburg, South Africa last week that they were focused on East Africa and Tanzania in particular to become central actors in investment for infrastructure projects in the region which include some of Africa’s emerging economies.
The President and Chief Executive Officer for Eastern and Southern African Trade and Development Bank, Admassu Tadesse told the Business Standard that they were looking at Tanzania as an attractive country because of its strong macroeconomic performance for over a decade.
“Tanzania is among five fastest growing economies in Africa. It is in serious growth path and it needs financing which requires partners to support,” said Mr Tadesse in an interview on the sidelines of the investment forum organised by African Development Bank to tilt the flow of investments to Africa.
The Eastern and Southern African Trade and Development Bank, is pooling resources for infrastructure development project in Tanzania, he said.
“We have approved 500 million US dollars syndicated loan for Tanzania,” said the top boss of the multilateral, treaty-based development financial institution, formerly the PTA Bank.
“We have been mandated to arrange 500 million US dollars for Tanzania by pooling resources from development and finance institutions, he said.
Africa Finance Corporation (AFC) has a strong presence in West Africa partly because it is located in that part of Africa and most of shareholders are western African countries.
However the institution is planning to open a regional office with a view to increase its footing in East Africa.
“We are interested in increasing our presence in East Africa and we’re looking for projects to finance...We have done transactions in Kenya, Uganda and Rwanda and we recently approved a transaction for Tanzania...” a Senior Director, Investment Group, for African Finance Corporation Taiwo Adeniji told the Business Standard on the sidelines of the forum.
AFC recently approved 85 million US dollars towards financing construction of infrastructure development projects.
It had joined a group of development and financial institutions which are pooling finances for infrastructure development for Tanzania.
Trade and Development Bank is raising funding for Tanzania and AFC is part of the transaction.
We have contributed 85 million US dollars,” said the head of the multilateral African financial institution that provides project structuring expertise and risk capital to address Africa’s infrastructure development needs.
It has to be joint efforts. Infrastructure development investment is so massive. It has to be joint efforts between the public and private.
“We are interested to increase our presence in Tanzania. We have looked at few other transactions... it is a very interesting country.
Our expectation is to go ahead (to) do other transactions.” He said they were also wishing Tanzania to become a shareholding member in the institution to benefit from advantages availed to shareholders. “There are benefits for countries being members.
It makes a lot easier for AFC to do projects to member countries...That is one of important advantage,” he said.
Other benefits for joining AFC as members include access to lower cost of debt on infrastructure projects due to the “Preferred Creditor Status” conferred by AFC on its Member Countries and access to AFC’s Project Development expertise.
Member countries also have an access to AFC’s partner network which includes an extensive list of lenders, investors, co-investors, project sponsors and project development companies and institutions.
Current African countries which are members include Nigeria, Benin, Cape Verde, Chad, Côte d’Ivoire, Djibouti, The Gambia, Ghana, Gabon, Guinea and Guinea-Bissau.
Others are Kenya, Liberia, Madagascar, Malawi, Mauritania, Mauritius, Uganda, Sierra Leone, Togo, Zambia and Zimbabwe.
Prospective member states include Tanzania, Mozambique, Ethiopia, Egypt, Namibia, Senegal, Mali.
East Africa is ahead of other regions on the continent in economic growth at close to 7 per cent while the overall outlook for the rest of Africa is cautious, but positive, according to African Development Bank regional economic outlook report issued in April this year.