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President Sirleaf Urges EBID to Open up Capital Portfolio to Non-Regional and Institutional Investors

pressirleaf thPresident Ellen Johnson Sirleaf is calling on the Board of Governors of the ECOWAS Bank for Investment and Development (EBID) to open up capital portfolio to non-regional members and other institutional investors in the face of the slow payments of capital by regional members.

“The admission of non-regional members will enable EBID to contribute to the economic and social development of Member States through low interest loans,” the Liberian leader suggested adding, “With a larger membership, the Bank will be endowed with greater expertise, and the credibility of its partners would allow it to have access to the markets of non-regional Member States.”

 

According to an Executive Mansion release, President Sirleaf was speaking on Monday, June 16, when she formally opened the 12th Ordinary Meeting of the Board of Governors of the ECOWAS Bank for Investment and Development (EBID) at the ROYAL Grand Hotel in Monrovia.

 

Citing the African Development Bank (AfDB) as an example of its viability since it opened up capital portfolio to non regional members, President Sirleaf said its admission in 1982 of non-regional members has greatly enhanced the Bank’s capital base. She said though there were many objections then, today the AfDB enjoys triple “A” ratings from all the main international ratings agencies. “The Bank and Afreximbank experiences should counter any fear we might have that we would lose control over our institution if we were to consider the idea of including non-regional members,” he stressed.

 

The Liberian leader said, while ECOWAS Member States have worked over the years in positioning the Bank to be an active player in the regional economy, there is much more to be done if the sub-region must realize the collective vision of making the Bank, the principle driver of private sector growth and an effective instrument for poverty alleviation, wealth creation, and job promotion for the people in the sub-region.

 

She said 2014 marks the end of the EBID’s strategic plan, which aimed to inject about US$1.5 billion into the regional economy over the course of the Plan. However, as a result of resource constraint, especially the lack of concessional resources, the rate of realization of key indicators, such as loan approvals, new commitments, disbursements and resources mobilized, remain below expectation. “An analysis of the performance of the Plan as at 31st December 2013 shows less than satisfactory realization,” she pointed out; citing as examples, loan approvals (66%), new commitments (51%), disbursements (34%), and mobilized resources (25%).

 

President Sirleaf indicated that with the implementation scheduled to end in December 2014, and given the current rate, it is clear that the sub-region needs to do more if the objectives of the institution will be achieved. “We must all analyze very keenly some of the issues underpinning these result, as we work to derive a more realistic but aggressive strategic direction for the bank, going forward,” she urged.

 

The Liberian President noted that ECOWAS Heads of State and Government at its 40th Session in Abuja, Nigeria on February 17, 2012, mandated the ECOWAS Commission to give a certain portion of the Community Levy to carry out development projects within the sub-region. Unfortunately, to date, this has not been operationalized. She said if EBID is to play a key role envisioned for it in regional growth and development, the Bank must be properly resourced. This means that Members State should act in concert to ensure that the Bank is well funded and should be seen by regional institutions and foreign partners as an important player within the sub-region.

 

Earlier, the President of EBID, Mr. Bishir Ifo, providing a update of the Bank’s assets, said in 2013 the total assets of the Bank increased by 12.3 % from UA 359.5 million at the end of December 2012, to UA 403.6 million at the end of December 2013. He disclosed that during the period under review, the Board of Directors approved 21 projects in the amount of UA 153.7 million or roughly US$232.9 million; adding that on a yearly basis, now approvals increased by 17%. “These approvals of new facilities bring total commitments in respect of operations approved by the Board of Directors to UA 1.15 billion for 177 projects in favor of Member States of the Community, between January 1, 2004 and December 31, 2013,” Mr. Ifo stated, adding that new commitments amounted to UA 118.7 million (US$180 million) for 15 projects in 2013, indicating an increase of 40% over the level recorded in 2012.

 

He said in view of the sustained growth in the volume of the Banks commitments and the financing needs of Member States, the Bank continued its policy of mobilizing long-term resources both within and outside the ECOWAS sub-region. In addition, Mr. Ifo said the Bank strengthened its collaboration with technical partners. The Bank’s President warned that if EBID is to remain an important partner in the sub-region’s quest for development, it has to be properly endowed. “The prompt payment of capital subscriptions by Member States will therefore send a very strong signal to our partners and other investors about the Bank’s credibility,” he said.

 

He reminded Member States that the deadline for the payment of the second tranche of capital called-up in October 2011 is at the end of September 2014. “The availability of concessional resources to the Bank is key in ensuring that it attends to the enormous developmental needs within the sub-region,” he said, adding further, “Considering that most of our countries have debt management policies that espouse a high level of grant element in their borrowings, the availability of concessional resources to the Bank will go a long way in helping both the countries and the Bank achieve their developmental objectives.”

 

Finance Minister, Mr. Amara Konneh, who assumes the chairmanship of the Board of Governors of EBID, welcomed Member States to the meeting. He said holding the meeting here in Monrovia was a demonstration of Government’s firm commitment to the ECOWAS family and to the achievement of the ambitious goals that the sub-regional economic family has set for itself.

 

He said that this year marks a crucial period of reflection for the Bank as they review progress over the last four years, consistent with the Bank’s strategic plan which expires at the end of the year. “Looking at our agenda, we have set for ourselves a clearly ambitious target and I am very confident we will derive the required outcomes to move the Bank forward,” he said, adding, “Though we have been challenged over the last few years, particularly in addressing capitalization and the resource requirements for the Bank, we have still seen remarkable progress as we continue to sustain the foundation for growth and expansion.”

 

Minister Konneh said the one-day meeting is for them to review some of the issues, not with all the answers, but with a unity of purpose that would ensure that they make the hard choices and take the tough decision, both policy and operational in helping shape the future of this institution.

 

“My fellow Governors, as we witness economic and social stress all across the region and in our respective countries, along with the growing exposure of our collective economies to external shocks, it is now time that we approach the future of the EBID with renewed urgency,” he admonished the participants.

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