The Africa Finance Corporation (AFC) is the first private sector-led African investment bank with the capacity to leverage infrastructural spending for the entire continent. Created in 2007, its mere existence is already putting pressure on the African Development Bank (AfDB) and the IFC to increase their investments in Africa. The AFC aims to be the go-to institution for the funding of economic development on the African continent. But, despite the incredible future potential of this institution for the continent, it appears that the AFC is currently experiencing a serious attack in Nigeria. And this attack, if not halted, could prove to be the undoing of some seriously good work being done for the future of every African.
The AFC is a new investment bank and development financial institution that will be the equivalent of the IFC (World Bank). One of it's stated intentions is to
"mobilise and channel capital towards driving Africa’s economic development through projects that address its needs in a profitable way, creating benefits for both investors and the societies and people on the African continent."According to Austine Ometoruwa, the President and CEO, "reducing poverty on the African continent through private-sector initiative is [the AFC's] mission." He goes on to state that,
"[t]he AFC is promoting [private sector] investment, based on a new development-oriented banking style in Africa that involves the proactive creation and management of infrastructure, industrial, and financial assets, including the six leading industrial sectors: power, transport infrastructure, telecoms, oil and gas, mining, and heavy industries. These areas offer the greatest development impact and the most attractive returns to investors.The institution is located in Lagos, Nigeria but will also have headquarters in Gambia, Ghana and possibly other locations on the continent. It is currently financing an 88km ring road around the city of Port Harcourt in Rivers State and has partnered with the governments of Sierra Leone and Guinea Bissau to develop the infrastructure of those nations. The AFC is bringing development to Africa right now, at this very minute, and as the Governor of the Central Bank of Nigeria (CBN), Chukwuma Soludo, said at a September 2007 lecture in Maryland, US, "[w]e cannot afford to crawl, we do not have the luxury of time." The AFC appears to be an instrument that will allow the continent to 'run'.
An AFC-led consortium is financing a project that will develop Sub-Saharan Africa’s first deep-sea container port on the Atlantic coastline area of Olokola, Nigeria. The completion of this $1 billion landmark project is expected to transform Africa’s shipping and port capacity dramatically."
WHY IS THE AFC UNDER ATTACK?
The AFC has been the subject of great discourse and disagreement in Nigeria over the last few months. The institution was created by Nigeria, under the guidance of Soludo, in an effort to ensure that Africans have the self-help that the continent needs to pull itself up from its bootstraps and ensure that Africa does not remain the poster child for charity. The goal of the AFC and its partners is to do the hard work necessary to prepare Africa to be a continent ready for business.
The fact is that the very concept of the AFC is threatening to many and in particular, institutions that depend on African poverty for their existence. There are others who dislike the AFC because it's existence limits the normal corrupt kickbacks and other practices that many have relied on for years to line their wallets. Specifically, the AFC is now charged with solving Nigeria's power crisis and intends to use best practices to accomplish this goal. Yar'Adua recently accepted an offer from members of the AFC to allow the institution to rebuild Nigeria's failed power sector using private funds. Such an act, if successful, will exclude many who have depended on the top heavy Nigerian bureaucracy to make money off the backs of average Nigerians. Therefore, it is no wonder that many are bent on crippling the institution before it truly begins its mission.
However, some Nigerians question Nigeria's investment of approximately $462 million which was withdrawn from the CBN and placed into an AFC account. This investment, and in fact the entire banking sector, is now the subject of another public National Assembly probe. In addition, Michael Aondoakaa created a 5 person committee to investigate the institution and under this authority, the ICPC has picked up certain members of the AFC board for 'questioning' with very little concern for due process. Some Nigerians incorrectly argue that because former president Obasanjo (OBJ) signed the investment bank into existence, Soludo must seek permission to run the institution from current president Yar'Adua. Others argue that because it received OBJ's stamp of approval, there must automatically be something wrong with it and hence it is a target for attack.
WHY WE SHOULD ALL BE CONCERNED ABOUT THE AFC ATTACK
A resounding refrain amongst Nigerians is that we are too quick to take down our own. This concerning attitude is not merely a cliche, the average Nigerian that I know is very conscious of this apparently Nigerian characteristic and fear that any good work they do for themselves or the nation and its future will be ripped to shreds by those with bad intentions. As a nation intent in re branding itself and creating opportunities for young Nigerians, we must refrain from discouraging Nigerians from achieving success via hard work and determination, but must instead encourage and support those who are doing good things and bringing pride to the nation.
Already the Association of Corporate Affairs Managers of Banks (ACAMB) advised that the ongoing probe of the AFC must be done with "extreme caution" so as "not to be seen by the international community as a cog in the wheel of the Corporation's progress." The association also suggested that the CBN should instead be commended for its "proactive-ness" in spearheading the AFC's creation and noted that there were no allegations of impropriety against the institution thus making the current probe " a distraction ... capable of undermining the reputation and strides made so far by the AFC..."
The AFC is an opportunity for Africa, with Nigeria at the helm, to completely transform the continent. And even though this process will eliminate the "chop chop" that has gone on in the past, that is not reason enough for Nigeria to not support the institution wholeheartedly. I understand that Yar'Adua prides himself in not interfering with the National Assembly, but it is clear that his influence would go a long way to deter detractors from unnecessarily erasing the good work that has been done for the nation. This is especially the case with the Attorney General, Aondoakaa, who instead of clearing Soludo's name further fueled the 'rumorville' by stating that Soludo had not yet been indicted by his 5-person panel and left open the possibility that such indictment could happen. There is little reason to discredit Soludo given his tireless effort in revamping Nigeria's financial industry resulting in 16 Nigerian banks ranking in the world's top 1000. His hard work should not be flushed down the drain, especially as we know that there is 'history' between Aondoakaa and Soludo.
Furthermore, the attacks against the AFC will dissuade private investors, many of whom have plunked millions of their money and others who want to invest in the institution because they believe that it can re-brand the continent into a continent ready for business and capable of competing with other economic powers.
I am not claiming that AFC is the magic pill Africa needs to develop and become the continent that every African dreams about, but I do believe that it has the necessary foundation to achieve its mandate and allow African nations to compete on a global scale. Besides, after many failed starts and attempts, it is about time we try this new approach of leveraging private funds to achieve African development and success. This is an opportunity for Nigeria to go down in the history books, once again, for taking the lead in creating a better continent that we can all be proud of.
- Political Soap Operas: Nigerian Style
- Sabotage: Aondoakaa vs. Ribadu et. al.
- The Nigerian Kase