USD 1.5bn to cushion Africa`s banks - AfDB

2009-02-04 11:04:16
By Joyce Kisaka, Addis Ababa

The African Development Bank (AfDB) has set up a USD 1.5billion Emergency Facility to meet urgent liquidity needs of various sectors and institutions, which the global financial crunch will hit.

AfDB President Dr Donald Kaberuka told journalists here after giving a statement at the Assembly of the African Union on the Economic Impact of the Global Financial Crisis that, as a bank, they have taken several initiatives to rescue the continent`s financial sector in case of liquidity problems.

He said the Fund would be available to African banks facing liquidity problems.

Regarding the procedure to follow when applying for support, the AfDB boss said, the particular financial institution will be required to request from the bank specifically for ``rescue money.``

Kaberuka said the AfDB has also set aside a USD 1 billion trade financing facility, aimed at ensuring there is no disruption of operations of the sector taking into account that the global credit crunch has crippled the ability and appetite of international banks to finance trade in Africa and elsewhere in the world.

He said the bank has the capacity to scale up its activities because it has emerged from the on-going crisis as a strong institution, adding that over the next few months the bank will examine ways to stimulate global growth, get credit moving and ensure transparency.

``Its now widely accepted that in this process Africa must be a full partner to ensure that the debate is extended to those issues on which our countries have a stake,`` said Kaberuka.

He said African countries have done all the right things for two decades to reform their economies and that efforts were being made to overcome emerging challenges brought by globalization and international economic integration.

On growth of African economies in general, he said, the bank`s assessment is that in 2009 African economies as a whole will grow at about 4 per cent, with Sub Sahara Africa growing at around 1 per cent.