Wednesday, June 18, 2008

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.

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."
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'.

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.

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.

Further Reading:
- Political Soap Operas: Nigerian Style
- Sabotage: Aondoakaa vs. Ribadu et. al.
- The Nigerian Kase

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Anonymous said...

Interesting....I'd urge teh AFC to keep up their good work in other African countries. That will give us a place to migrate to shey!


lol @ OZ, you are still trying to find ways to trade your green pali eh? Well, we won't let you. Nigeria needs you, so we aren't willing to let you go anytime soon. Sorry, my brotha, but na true talk be dat. =)

Saheed said...

This is the first I've heard of the AFC, but this concept is definately long overdue and a step in the right direction (i.e. if you are not pro-aid for Africa).
Firstly, we need to fill these older top tier administrators/politicians/governmemnt officials with younger and well-educated folks (no age-discrimination intended). Secondly, if saludo is on trial, then they should focus on him, if AFC is on trial, they should focus on the corporation without assuming that Saludo's actions are representative of the AFC's. We (Africans) are very wreckless when we start smearing each other and fail to separate the individual from the entity. Thirdly, I am interested in knowing how the funds deposited in AFC's account by the CBN is administered and drawn upon ( In my humble opinion, such "monies" should be credit extensions on a use-basis, requiring approval before being spent. Fourthly, politics makes me sick because, it is civilians that continue to suffer the brunt. Lastly, the AFC should strive at proving its worth via performance -too bad the govt is making this difficult.

ababoypart2 said...

There is an AFC 'bashing' article on Sahara Reporters. They usually get some of these things right

Anonymous said...
Thought you may want to see this.

brap said...

Thanks for the post. Between your blog and Jeremy's I have acquired more knowledge about nigeria than when I actually lived in it. But what if there is a fundamental flaw in this institution? I assume you would agree that people do have reasons to be suspicious of projects OBJ signed off on.
Too many times we have seen corrupt officials infiltrate well intentioned projects turning them into huge debacles. Plus I am of the opinion that Nigeria takes the notion of "Giant of Africa" too seriously. We should fix our internal affairs first before playing big brother to other nations.

Beauty said...

Privatizing Africa’s Development by Austine Ometoruwa is an example of a nice blurb without the substance. The words does not support the noble argument of using private money to rebuild national institutions. For me, the maths do not add up. To suggest that There are others who dislike the AFC because it's existence limits the normal corrupt kickbacks begs a question. What programmes have AFC delivered with measurable benefits?

Ondo allays fears over Olokola FTZ as the National Assembly became concerned about the reported road expansion that shot up the contract sum of the project to about N11bn is another issue that shows fruitlessness in all these wheel reinvention. Show us the results and sell that back to the state is a noble way for any private institution to deliver ROI to its shareholders.

I am not writing this investment bank off, we all want to change the world but how does the politics of the few help the rest? It is an investment bank. Its shareholders gets the first press of the oil and that is the bottom line, the portholes will still be there after all the money is gone must concern us all.

Anonymous said...

I heard about this recently and I actually like the concept. Soludo has done some good thhings for Nigeria's financial system, so I am willing to give him the benefit of the doubt.

We'll see if this works out or turns out to be a failure. I'm hoping that it works out because the continent needs some good news.

Anonymous said...

Great blog I am interested in African Affiars. Do you speak Yuroba, Housa, Ebo or other languages?

Eshie !

I am also looking into the cows to kilowatts project.
A greek friend of Africa.


@ Saheed: No discrimination of any sort allowed at this blog, my brother. Well, that's not true, I do discriminate against certain commenters that don't respect others, but that is a story for another day. That being said, I believe that there are specific air tight rules that govern how money is invested and disbursed. A quick peek at the AFC's site should give you an idea. If I can, I'll find the info for you and post it at a later date.

Also, politics makes most people sick, so I follow the dirt and grime of the 'game' so all you need do is swing by and read up the PG version at this site. =) Take care and thanks for stopping by.

@ Ababoy: Hmm, I am not going to lie, when I read your reference to that other website, I started to laugh. Truth be told, I don't consider them a source of verifiable information because far too often they have provided 'news' that is not properly researched but to each his own.

Nevertheless, all one can do is wait and see what happens from all this. Thank you so much for pointing out to me that they did a 'piece' on the AFC. It was an interesting read to say the least. Thanks for swinging by and don't be a stranger.

@ Oz: Thanks for the heads up on this. I read last week that Yardy specified $5billion when he was in SA. It seems that reuters is quoting a different amount. I have spent the weekend reading about the semi-fiasco this announcement has caused. Can't wait to see what happens next...

@ Omidanbelleafricaine: Thanks for the compliment. You are right if there is an inherent flaw in the AFC and its processes, then it should be open to debate and discussion. However, my research has not pointed out any flaw or accusation of such. The heightened interest of legislators seems to be due to the initial CBN investment which according to released info from the investigation, was perfectly legal. There have also been no accusations of impropriety against the institution or its staff.

Now, as to OBJ, that is the issue. I have written about OBJ's legacy and the fact that despite the accomplishments of his administration (and indeed there were some), certain decisions he made have made everything he touched open game for attack, regardless of the consequences to Nigerians. I bleieve that this current AFC attack is just another example of the depths to which legislators are going against OBJ. Justified or not, is not my concern, that is what legislators are for, and thankfully I am not one of them. But, to tarnish a young institution and its staff simply because the President who lawfully signed that institution into existence is now considered 'enemy number one' is disappointing to me, but not unexpected. As the commenter Saheed noted "makes me sick because, it is civilians that continue to suffer the brunt." That, "na true talk", indeed. thanks for stopping by and adding your insight to the discussion. I t is much appreciated.

@ Beauty: You say that the described AFC approach is "a nice blurb without the substance" but I would appreciate a little more of your thoughts on this judgment.

As I noted in the post, this is a different approach from those I am familiar with on the continent and as we can see from the majority of our respective countries, Africa lags behind in infrastructure, health, education and overall development. Thus, if the old means of development did not work in many countries, what is wrong with applying a new approach? Besides, private funds have been used sucessfully to develop the economy of many a non-African country (with some limitation, of course) but it clearly works in other parts of the world, so why not apply it to African countries that choose to 'bite'?

Additionally, you ask about specific AFC programs. As I noted, the institution is less that a year old but is working on projects around the continent. You merely have to visit the AFC website for additional info which I am sure you have done. I don't think it is overly optimistic to assume that 10 months is not enough time to produce the 'results' it seems you are searching for. I like to think that the mere fact that within that time the AFC has gathered significant investors and is already on the way to starting actual development products (as in all parties on board) is an accomplishment. Nevertheless, as with all things, time will tell, as we all watch the AFC closely to see if it will deliver on its promises.

Finally, I don't think it is fair to compare Ondo state legislators to the AFC staff. Now, no disrespect to the decision makers in my father's state, but a quick trip to Imnakoya's Grandiose Parlor will prove that there has been quite a bit of rot. I can't comment on the current governor so I can only hope that he is applying himself for the betterment of the state. I don't know if that 'rot' would transfer to the AFC but if you see that, then please share with us as we are all trying to learn from each other.

"Its shareholders gets the first press of the oil and that is the bottom line,". Well, I am not sure where you tie oil into this situation but will wait for your explanation, if you choose to offer one.

I personally think that given our current track record record, and by 'our' I am speaking of Nigeria, we only have to look at the current lack of adequate power infrastructure to know that it might be time that we allow market factors (to some extent) to produce the much needed development we seek. Besides, Yardy has signed off on this so all we can do is take a seat and watch.

Anyway, as usual, thanks for adding to the conversation and please stop by to share more of your thoughts.


@ controversial: wow, controversial and I might actually see 'eye to eye' on something? wonders shall never cease (hope you have heard of that expression).

As for Soludo, he seems to have done a good job, as you noted. The one issue I hear repeated about him is the postponed/abandoned redenomination of the Naira currency. Oh, and I once heard a rumor that he goes to work with bullion vans filled with money but something tells me that simply isn't true. Anyway, as I noted above, we can only wait and see what happens. Thanks for stopping by.

@ jeminvestonline: Howdy Greek friend. I actually speak some Yoruba so 'ese' (eshe/thanks) right back at you. Well, I am not familiar with the cows to kilowatts project of which you speak, so I don't think I can help you with that. I am glad that you are interested in African affairs and wish you luck, there are many wonderful resources online to learn from. Please feel free to peruse the archives on this site and gather as much useful information as you need. You can also use the 'Contact' button at the top of the page if you have additional questions. Thanks!

Beauty said...

SOLOMONSYDELLE, thank you for taking this up. We get to know more about you as time passes, so your Dad is from Ondo State. The Ondo State Government has said that no force is strong enough to scuttle the multimillion dollar Olokola Deep Sea Port and Free Trade Zone projects embarked upon by it in collaboration with the Ogun State Government was my meaning regarding Ondo State. They are in bed with the investrors. Usually when a government that is supposed to be playing watch dog over a private enterprise utter such strong and exotic words. A few years down the line, we see more exotic headlines about missing money. We have seen it, a lot! PHCN as case in point.

In any sales scenario, the sales man will promise anything to close the deal but you the buyer does not know that your purchase will do what has been promised until the sales man gives you his delivered examples. And until we begin to do business differently in Nigeria and stop buying "magic love potions" from the man in the "Molue" bus, we aint gonna get lovers. Again, the PHCN example where OBJ refused to put time-scales on the then NEPA project delivery.

"Its shareholders gets the first press of the oil and that is the bottom line,". Well, I am not sure where you tie oil into this situation but will wait for your explanation, if you choose to offer one. Olive oil is pressed and sold as 1st press = exra virgin, 2nd press = virgin and 3rd = Olive Oil. The 3rd is cheaply available but beautiful extraV is expensive. That is what investors get and it is the 3rd press i.e. the crumbs that get to the consumers was my flavour on the oil.

Again, I am not writing this company off, its who is who is impressive but their CVs show a collective 20 year average at the top of Nigerian business. These are the elites! Are these not the ones sitting in their plush offices while the road infrastructure deteriorated and crime waves continue unabated around them? Where do they summer and which hospitals do they visit? So, they have decided to come together to make more money? I bet, a lot of them are on the same board in several Nigerian companies. So you see my contempt for the celebration of mediocre.

wellsbaba said...

interestin!interesting!.....y is AFC underattack?!!!

t said...

Bottomline is: the country needs power. Bottleneck is: not technical, not financial, it's thievery.

Crack that question: Spend money, get electricity...not nothing. Let's pray to have some good solutions (and action!) soon. We NEED power.

TheAfroBeat said...

As i haven't scoured the website, i'll have to hold my unwarranted skepticism. I really hope for the sake of Africa that the AFC's projects are a success and that way its track record will speak for itself and silence the jaded skeptics like myself. Thanks for enlightening us Solo!

ababoypart2 said...

Another view that questions the reliability of Sahara Reporters. Gotta say I never 'believe' all they say/write/manufacture, but lately they have been 'on the money'. Anyway, I rate your opinions and articles very highly, so I will have your opinions with me the next time I read about the mansions being built in Ikoyi by Donald Duke. Thanks...

Soludo....always was a smart chap. We were in the same department, I was a freshman when he was doing his Ph.d One of the few at the time to get a first in Nsukka. It was a big deal then...

bankelele said...

The oranization have a sound foundation. It can't start with a cloud of finanaical controversy and expect to handle other people's/countries money

lamikayty said...

Nice blog! thanks for stopping by mine. Have read a number of your posts but havent had time to drop a thot!
Concerning the AFC, I heard aobut them when they were starting up and thot it was a really great idea. I became bothered when I heard/read about the probing and all but I figured, if he (Soludo) is clean then he'll come out of it unscathed.
The news these days is hardly believable but truly when all is said and done the truth will prevail. Its true a great number of grandiose schemes have been introduced that promise heaven on earth but we all finally realise their foundations are rotten, lets wait and see what the AFC will be!

Saheed said...

The good people at the AFC should do damage control! Under their media section (or press release), it would be wise if they addressed some of the accusations head on, explaining what is happening in a very transparent fashion with full disclosure. Negative publicity on an issue like this can do irreversible damage. No one should have to tell them that.

Jinta said...

"Michael Aondoakaa created a 5 person committee to investigate the institution" - this man's name always crops up anywhere there appears to be a systematic destruction of goodness in Nigeria

wellsbaba said...

it would interest you to know that Michael Aondoakaa was Ibori's lawyer n when yardy asked d gov'nors to pick their candidates most of them went for the AGF and minister of justice which eventually fell on Michael Aondoakaa

Anonymous said...

There is a serious need for credibility of the Afrocentric solutions out forward by African governments. In the West this is achieved by stimulating public (common man on the streets) discussions and approval on a matter, before implementation is considered. But in Africa, there is a blatant disregard for the people we lead. We assume we can cook anything and force it down the throats of our people and expect them to affirm its edibility. WRONG! The AFC is a brilliant idea begging for credibility. I bet you that 99% of Africans have no idea that this initiative exists and the few that know, think it's another bogus attempt of their leaders to feel important.
Our leaders should recognize that the policies that work are those the people own. If people own a thing, the will ensure its survival and workability. Can you imagine of over 50% of Africans knew about AFC and throw their weight behind it? They will fight to see its success because it is their property.
So those on the AFC have a lot of work to do: Sell the org. to Africa.

Saheed said...

I couldnt agree any further with Reginald Bassey. The system of things in Nigeria is broken.


@ Beauty: Thank you for taking the time to com back and expand upon your thoughts. I will simply confess that I agree with most of your points. Particularly, "until we begin to do business differently in Nigeria and stop buying "magic love potions" from the man in the "Molue" bus, we aint gonna get lovers."

Oh, and than you for clarifying the reference to 'oil'. I learn something new everyday.

@ t:yes, we need power and I can only hope we get it done. Maybe the privatization of the power sector will help, but all I know is that I am watching my calendar and will hope that Yardy and friends get this power problem on track by 2011. Thanks so much for stopping by. How body?

@ Afrobeat: "unwarranted skepticism". That's the thing isn't it? We Nigerians have had our hopes dashed by officials too often that our natural reaction is to be skeptical. Technically, it is the safe approach, but we cannot always allow the failures of our past to guide our impressions and hopes for the future, you know? So, thanks for stating that you will give these chaps a chance. It's the best we can do until it is necessary for us to put our skeptic hats on. Hope all is well.

@ Ababoy: Thank you so much for the kind compliment. I don't mean to be harsh to those guys, but, it is hard for me to read something that is unresearched and give it more weight than necessary. But, again, I thank you so much for the compliment. Please continue to stop by Nigerian Curiosity and if you have any suggestions for what could make the site better or more helpful to you, I would appreciate your suggestions.

God bless.

@ Bankelele: Thank you so much for rasing this point because it is a key issue that I am concerned with. If we don't give our own a chance to shine, who will? Thanks a gain for illuminating this issue and thank you so much for joining this discussion. Please, do not be a stranger!

@ lamikayty: Thank you so much for stopping by! Yes, like you I agree that others have promised heaven and earth and failed to deliver either. However, if we look at the AFC, in my opinion, the majority of the individuals involved have already delivered success as individuals in their respective fields, maybe they should be given a chance to do the same for Nigeria and Africa as a whole. Anyway, thanks so much for taking the time to join in the discussion. I truly appreciate it.

@ Saheed: I have come to learn that the AFC will do some damage control. Whether it will be sufficient to reverse the attacks, only time will tell. By the way, thank you for your assistance with my SWF research. I shall feature your insight in the post, so please, pay attention to your feed delivery system. Thanks!

@ Jinta: lol! yes, Aondoakaa constantly appears wherever there is some wahala in Nigerian politics. It is the lightening rod factor that influenced his choice as Person of 2007. Th guy's name is everywhere. Anyway, thanks so much for stopping by. Miss seeing you around here...

@ Wellsbaba: Uncle Wells! Thanks for sharing this piece of info. I wasn't aware of the latter part. You always manage to give me additional info that I can eventually use, so thank you. I hope all is well with you, my brother.

@ Reginald: **clapping** I think most of us will agree with the points you made. The issue however is how can we encourage a more 'bottom up' approach to politics and policy creation and implementation in Nigeria?

Fellow blogger Oz, once pointed out to me that if we think the Big Boys are rotten, then a closer look at local politics and the mechanisms that make it possible will truly astound us. Even at that level, it appears, the people's voice is silent. I look at the current 'debate' and criticism coming out of the Niger Delta re: the upcoming (or is it) summit and I cant help but shake my head. Nobody is willing to let their ego go in the interest of the greater good.

Anyway, I appreciate yours and everybody else's comment on this matter, it helps to see the issues from varied perspectives. Thankfully, we all just want to make Nigeria better.

Please return to share more with us.

Anonymous said...

Who in his right mind can believe in the AFC? In the task of nation and continent building, we need lessons about heroes. Mandela at 90 years old was checking out young babes in London while Mugabe was flogging everyone in Zimbabwe into keeping him in power. Who beside the footballers are role models in Africa? Forget Soludo, Yar Adua and all the other psychopaths in power. We need a new Fela and a revolution!

NairaEmployment said...

well, i was much more concern about the ondo state olokola free trade zone project, i read few comments here by my previous reader and I think i got a clue of what is really hapening here in ondo state. politics is the game. God helping us in Ondo state.
thanks bro! you are doing great.

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