Africa Finance Corporation (AFC) said optimal value addition for Africa’s vast resources and closing the crippling energy deficit on the continent is its outlook for the next growth phase.
The pan-African multilateral institution said in its full-year 2022 results call that its next growth phase includes closing the crippling energy deficit on the continent responsibly and efficiently, with the continent’s development aspirations and resources top of mind.
AFC also said it intends to mobilise African capital towards solving the continent’s challenges and build resilience in the continent’s existing and future infrastructure.
While speaking about key business highlights in 2022, Africa Finance Corporation said “investor confidence in AFC’s strong credit risk profile and established market presence in 2022, resulted in total net borrowing of $1.4 billion and the further diversification on the $7.6 billion borrowing book.”
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In the penultimate year of Africa Finance Corporation’s five-year strategy between 2018 till 2023, AFC said it met and, in some cases, surpassed its strategic goals which include doubling the corporation’s total assets from $4.5 billion to $10.5 billion.
“We also achieved a major milestone in mobilising African capital towards infrastructure development on the continent with a robust equity capital injection of $240 million including The Public Investment Corporation ($100 million), Arab Republic of Egypt ($95 million),” AFC said.
AFC added that it continued to deploy a mix of effective risk mitigation tools to preserve asset quality, this includes non-payment insurance on the portfolio.
Kingsley Obiora, chairman of Africa Finance Corporation said AFC increased total comprehensive income and total assets by 51.6 percent and 22.9 percent respectively, to $285.3 million and $10.5 billion, with total assets exceeding the $10 billion mark for the first time.
Africa Finance Corporation’s operating income grew 54 percent to $400.4 million in 2022 from $259.5 million in 2021.
“Operating income in 2022 was $400.4 million and shareholders total equity ended the year at $2.7 billion, reflecting increases of 54.3 percent and 20.6 percent respectively,” AFC chairman said.
“During 2022, we welcomed five new equity shareholders who made a combined US$235 million equity injection, ” Obiora said, adding that “in addition, two existing shareholders upsized their equity contributions by an additional $13 million, bringing the total equity injection in 2022 to $248 million.”
Profit increased by 36 percent to $285.9 million in 2022 from $209.7 million in 2021. The corporation said that it passed the $0.25 billion mark for the first time in its history.
Africa Finance Corporation said it pursues a highly conservative financial policy adopted by its board of directors in order to ensure business sustainability, underpin its credit rating and reduce its cost of financing.
Capital adequacy ratio stood at 34.3 percent in 2022, 130 basis points increase from 33 percent in 2021. The liquidity coverage ratio stood at 202 percent, 300 basis points increase from 199 percent in the period reviewed.
“Capital adequacy remains at a strong level AFC maintains strong liquidity buffers, invested conservatively,” AFC said.
