BY EMEKA EJERE
Africa Finance Corporation (AFC), has defied harsh operating environment occasioned by Covid and commodity-driven headwinds to deliver record performance in its latest full-year earnings.
According to the financials issued at its Annual General Meeting (AGM) in Lagos on Friday, the Corporation saw its annual profits increase by 26.6% to US$209.7 million in 2021, passing the US$200 million mark for the first time in its 15-year history, from US$165.5 million in 2020. Total assets rose by 16.3% to a record US$8.56 billion.
The statement noted that the dramatic increase can be attributed to investments in high impact assets in targeted sectors across Africa and its strong credit profile.
The Corporation leveraged on its investment-grade credit rating and reputation to mobilise finance from international markets to help reduce Africa’s infrastructure deficit.
“This has been a year of solid progress in our core objectives of building value to Africa’s economies through instrumental infrastructure driving growth and job creation,” said Samaila Zubairu, President and CEO of AFC.
“As the proverb goes, the best time to plant a tree was 20 years ago; the second-best time is today. We have proven over our 15-year history that you can successfully build a track record in infrastructure investment in Africa—and there has never been a better time to do so.”
Addressing a press conference after the AGM, Zubairu revealed that the Corporation had invested about $1.6 billion in Nigeria, adding that it is presently partnering with the federal government in building a rail line to Niger.
He disclosed that AFC has launched a $2billion facility to help countries in serious need of liquidity to recover from the shocks of the pandemic.
AFC’s reach on the continent is now larger than it has ever been, with investments expanding to 35 countries and cumulative disbursements rising by 14% to US$9.9 billion (2020: US$8.7 billion). AFC increased Member States by five to 33, with the accession of Burkina Faso, Democratic Republic of Congo, Egypt, Morocco and Niger.
Among projects during 2021, AFC invested US$150 million for the development of cashew and cotton integrated industrial parks in Benin and Togo; provided a US$200 million corporate facility to BUA Industries Limited for the construction of a sugar refinery and ethanol plant in Nigeria; and invested US$175 million in the Baomahun Gold Project in Sierra Leone.
AFC Capital Partners (ACP) opened as an independent asset management business and launched its first product, the Infrastructure Climate Resilient Fund, with a target to raise US$500 million in 12 months and US$2 billion over the next three years for investment in robust energy, transport, buildings and other infrastructure.
The past year also saw AFC successfully launch two new products through the Syndications unit – the A/B Bond and Credit Insured B Loans – both of which will significantly deepen capacity to channel capital from global investment markets into the African continent.
The Corporation continued to diversify funding, with a 21.5% boost to borrowing year-on-year at US$6.19 billion (2020: US$5.09 billion). AFC successfully accessed the global debt markets by issuing US$1.8 billion in new loans and bonds during the year. This included:
Established in 2007 to catalyse private sector-led infrastructure investment across Africa, AFC is the second highest investment grade rated multilateral financial institution in Africa.
Its approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth.