Arab Bank For Economic Development Targets $2.5 Billion Financing In Africa For 2024

Dr. Sidi Ould Tah, Director-General of the Arab Bank for Economic Development in Africa (BADEA), has announced an optimistic forecast for the bank's annual financing, projecting it to reach US$2.5 billion by the end of 2024. This projection marks a significant increase from the US$2 billion recorded in 2022 and the US$2.23 billion expected in 2023. In a recent interview with the Emirates News Agency (WAM), Ould Tah shared insights into the bank's strategic focus and its impact on sustainable development across Africa.

Over the past decade, BADEA has dedicated approximately 30 percent of its financing to sustainable development projects across the African continent. This funding has been distributed among 44 African countries that are not members of the Arab League, showcasing BADEA's commitment to fostering economic growth and sustainability in these regions.

Ould Tah addressed misconceptions regarding the risk levels associated with financing in Africa, noting that exaggerated risk assessments have historically led to higher interest rates for the continent in global financial markets. However, he highlighted a positive shift, with countries like Ivory Coast and Benin successfully issuing bonds at reasonable interest rates, defying previous expectations of double-digit rates.

The Director-General also revealed BADEA's robust liquidity position, which has not deterred the institution from issuing social bonds aimed at supporting social sectors in Africa. A recent issuance raised €500 million, attracting three times the requested amount, indicating strong market confidence in BADEA's initiatives.

Looking ahead, BADEA's ninth five-year plan (2025-2029) includes plans for further bond issuances, potentially including sustainable or green bonds, to meet evolving financing needs. Ould Tah also shared his economic growth expectations for Africa, forecasting an average growth rate of 4 percent in 2024. He noted that while some countries might achieve growth rates as high as 8 percent, others may experience more modest growth.

The anticipated economic expansion is attributed to several factors, including the progression of development projects into production stages, favourable agricultural conditions, and the positive effects of expected global interest rate cuts. Additionally, Ould Tah highlighted the booming cocoa market in Africa, where Ivory Coast, Ghana, and Nigeria collectively produce over 75 percent of the world's cocoa.

Ould Tah proudly reflected on BADEA's track record of no losses through its operations in Africa over the past 50 years. This achievement underscores the bank's successful strategy in strengthening its relationships with African countries and addressing their development needs, particularly in vital sectors.

Established in 1974 by 18 member states of the Arab League, BADEA serves as a key development financing institution for non-Arab African countries south of the Sahara. Its ongoing efforts to support sustainable development and economic growth in these regions highlight its pivotal role in fostering mutual prosperity between Arab and African nations.

With inputs from WAM