Development finance is occupying center stage in recent effort to achieve sustainable growth and inclusive development across the globe, particularly in Africa. For the continent to make meaningful progress in attaining the targets of the global development agenda- the SDGs, the AU Agenda 2063 and the High 5s of the AfDB, Development Finance Institutions (DFIs) have important role to play.
DFIs have catalytic responsibility to mobilize and direct resources to growth sectors and development projects, helping to reduce infrastructure, energy gaps, financing MSMEs and industrialization which are pivotal for development. On infrastructure alone, it is estimated that about $48 billion is requested per annum as an addition to what is currently estimated as been spent ($45billion) on infrastructure in Africa. It is also estimated that Africa needs US$315-US$400 billion of agricultural investment over the next 10 years equivalent to roughly US$40b per year1 just to mention a few. These funding requirements are huge and will take DFIs that are well positioned to contribute in mobilizing capital and designing innovative financing instruments to fund development projects.
Often, the question is whether African national DFIs in their current form have the capacity to support their national development aspirations and going by their historical poor performance in most countries. According to a report “African DFIs have shown low levels of profitability, with estimated 2.4 percent return on average assets, and a high level of loan impairment, with a 15.8 percent of impairment loans to gross loans”2 These historical poor performance of most African national DFIs was mainly attributed to poor corporate governance, adverse interference by governments, weak risk management framework, and unviable business model among other factors. It was against this background that the AADFI Prudential Standards Guidelines and Rating System (PSGRS) for African DFIs was initiated to strengthen African DFIs.
The AADFI 2017 CEO Forum of African Development Finance Institutions will discuss the current development expectations and how DFIs could be strengthened to support efforts in achieving national development goals. It will recommend appropriate measures to strengthen development finance architecture in order to improve the performance of African development finance institutions.
The key objectives of the Forum are to:
Discuss current trends in the global DFI environment;
Discuss innovative financing mechanism and options for mobilizing resources for development projects;
Develop and strengthen partnership for cross-border investment promotion & financing, and mobilization of resources;
Support effort aimed at promoting inclusive socio-economic development in the continents through cooperation among DFIs;
Provide opportunity to engage DFI supervisory authorities and DFI community on the need to deepen DFIs` activities and make them more relevant in achieving development goals at the national and sub-national levels.
In addition, the Forum will, conduct the 7th Peer Review of African DFIs with the Prudential Standards, Guidelines and Rating System (PSGRS) and draw lessons for strengthening DFIs:
- Unveil the Revised edition of the PSGRS;
- Review the implementation and application of the PSGRS Mechanism in DFIs;
- Suggest strategy on how the Application of the PSGRS in DFIs could be strengthened;
- Review the effectiveness of implementation of PSGRS in member-institutions and share success stories;
- Come to a consensus on how to sustain stakeholders` commitment on the PSGRS;
- Share the experiences of Regulatory Authorities in supervising DFIs with the PSGRS, and other regulations;
- Network among CEOs and stakeholders in Development Financing.
Who should attend?
The Forum will bring together
- Chief Executive Officers and Senior Management Executives in African DFIs;
- Multilateral Development Finance Institutions(MDFIs);
- Officials of African DFIs` Supervisory Authorities and Government Agencies responsible for promoting financing for real economy development;
- Officials of Central Banks,
- Ministries of Finance,
- Commercial Banks,
- MFIs and other stakeholders.
Over 200 participants are expected to attend the program.