• Tuesday, July 23, 2024
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BusinessDay

AFC secures $250m loan to bridge Africa’s infrastructure deficit

Africa Finance Corporation’s assets rise 17% in 2023

Africa Finance Corporation (AFC), one of Africa’s leading infrastructure solution providers has secured tier- 2 capital loan of $250 million from the United States International Development Finance Corporation (DFC) to strengthen the corporation’s investment capacity going forward.

The loan will also be used to provide competitive financing solutions for bridging Africa’s infrastructure deficit and also complement the corporation’s diversification of investor base, AFC said in a statement

With the funding coming at a time when cross-country trade in Africa has officially kicked off, experts are of the opinion that the loan facility will be used to enhance necessary infrastructure which will ensure a seamless and stress free trade activities among African countries.

Samaila Zubairu, president, AFC said that the loan issued would help the corporation fulfil its objectives despite disruptions owing to the outbreak of the coronavirus pandemic noting that it also signifies the aspiration of the United States in developing Africa

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The US Government seeks to play a greater role in Africa’s development by establishing a dedicated DFI as the AFC has partnered with the US on several infrastructure initiatives, this funding will also ensure the corporation is able to continue fulfilling its objectives in the wake of the ongoing Covid-19 pandemic, which has placed a greater responsibility on development finance institutions in helping to drive a sustainable recovery across Africa.” Samaila said.

“DFC is proud to expand our relationship with a key infrastructure investor in Africa. This financing advances DFC’S strong commitment to Africa by supporting investment in the modern infrastructure that is essential to economic growth and expanded connectivity with the world” Adam Boehler, CEO of DFC said.

Jide Babatope, a Lagos based economic analyst told BusinessDay that the loan was timely as the lack of proper infrastructure, especially road has dampened the prospects of the agreement

“Basically, the $250 million loans is meant to support investment in modern infrastructure that is essential to growing and better trade relations. One of the challenges or rather setbacks of AfCFTA is the lack of sophisticated road infrastructure from road to rail to maritime which has fostered a form of skepticism regarding the success of the trade agreement

But with the funding and expectation that it would be deployed to essential infrastructure improvement in the continent, there is hope for a better AfCFTA implementation and improved trade relations among African countries since the infrastructure is an integral aspect of cross-border trade.” Babatope said.

The corporation which principally funds and develops projects in the power, transportation and logistics, heavy industries, natural resources and telecommunications sectors has invested in 32 African countries and hopes to expand its footprints to other African countries.