IDB Group President Ahmad Muhammed Ali.
Published: Dec 26, 2010 23:50 Updated: Dec 26, 2010 23:50
Under the MoU, the two MDBs will commit to contribute $500 million each in a $1 billion cooperation spanning three years starting in 2011 and based on the AfDB's medium term strategy and the IDB special program for the development of Africa (SPDA), whose main focus is to assist in scaling-up interventions in Africa in agriculture, infrastructure, water and sanitation, education and healthcare.
A few years ago the IDB also launched the Ouagadougou Declaration signed in Burkino Faso in the mid-2000s during the IDB board of governors annual meeting. The Ouagadougou Declaration is a $2 billion 5-year program investing in education, primary healthcare, technical assistance and capacity building. The program has in fact disbursed over $2.38 billion to date and has been rolled over.
"The objective of this co-financing MoU will be to foster economic development and social progress in order to coordinate co-financing projects and to promote economic development and technical cooperation in common member countries. This is aimed at reducing poverty level in the African continent and uplifting the level of revenues", said AfDB vice-president Kamal El-Kheshen.
Africa is a major constituency for the IDB, which its critics also stress is its weakest link because of the entrenched governance problems in these countries. Some 27 of the IDB's 57 member countries come from Africa including some 21 from sub-Saharan Africa. Indeed these latter member countries are some of the poorest on earth according to UN criteria and are classified as Least Developed Countries (LCDs).
African member countries of the IDB are diverse and do not have to be Muslim majority countries. For instance Mozambique and Uganda, both of which have smallish Muslim minorities, are both member countries and benefit from IDB financing and investment. On the other hand most of the southern and central African countries, Kenya and one or two West African countries are not members and as such are losing out on this extra source of development finance.
Despite the cast economic disparities between the different IDB member countries ranging from oil and commodity producing rich nations to LCDs, the IDB, under the tenure of the President Ahmad Muhammed Ali, has done much for poverty alleviation in Africa.
Africa's influence in the IDB received a major boost in June this year when the IDB board of governors approved the increase of Nigeria's subscription in the IDB capital to reach 1.384 billion Islamic dinars (One Islamic dinar equals one unit of the IMF Special Drawing Rights). Following that increase, Nigeria was afforded the right to appoint a permanent executive director representing it in the board of executive directors subject to paying the first share of the announced subscription in IDB capital. This will immediately result in the increase of the number of executive directors from 16 to 18; of which, 9 are appointed, representing the nine countries with the largest shares, and 9 are elected by virtue of the decision taken by the board of governors.
According to Walid Abdelwahab, director for infrastructure at the IDB, to date the IDB has financed 1,321 projects in sub-Saharan Africa totaling $7.499 billion. The IDB financed its first project in Africa way back in 1976 - a $7 million financing facility toward the Song-Loulou Hydroelectric power project in Cameroon.
Today the IDB has several development programs for Africa. Apart from the SPDA and the Ouagadougou Declaration, the MDB also has several related programs in place to finance member countries in Africa. These include the Program for Infrastructure in Africa (PIDA) which is specifically targeted to support regional infrastructure integration initiatives; the $10 billion Islamic Solidarity Fund for Development (ISFD) which is an endowment fund to reduce poverty and which targets pro-poor interventions in LCDs and which has thus far disbursed $2.6 billion; and the $1.5 billion Jeddah Declaration for Food Security, which once again targets LCDs especially the 21 in Africa and is aimed at strengthening food supply by7 assisting small farmers in acquiring agricultural inputs.
The IDB's MoU with the AfDB in fact mirrors that of a similar MoU signed last year with the Manila-based Asian Development Bank (ADB) whereby the IDB committed to invest $2 billion in cooperation with the ADB in infrastructure and development projects in member countries common to both. The ADB will match the IDB's contribution on a project by project basis.
In fact, under the framework of the MoU the two MDBs also launched a joint $500 million Islamic Infrastructure Fund, which will invest in the equity of infrastructure companies of member countries common to both the ADB and IDB, and also directly in infrastructure projects in these countries.
The two sponsors also appointed CIMB Standard, a joint venture between Malaysia's CIMB Group and South Africa's Standard Bank, to act as manager and adviser to the fund. The ADB and IDB invested $125 million each, and the rest was put out to subscription to market players.
Countries whose membership are common to both developments banks include Azerbaijan, Bangladesh, Pakistan, Indonesia, Kazakhstan, Malaysia, Turkmenistan, Kirghizstan, Tajikistan, Uzbekistan and Brunei.
The IDB also supports the empowerment of women in development especially in African and Asian member countries. IDB President Ali in fact addressed the 6th meeting of the IDB women's advisory panel which was held in Kampala, Uganda, in November under the patronage of Janet Museveni, wife of the Ugandan president. "It is the belief of the (Ugandan) government that the Islamic Development Bank as a development partner would be an important ally toward this process (of women's economic empowerment) through technical assistance, training, business planning, capacity building and microfinance," stressed Museveni at the Meeting.
Ali reiterated in his keynote speech that the role of women in social, economic and cultural aspects of life is a major building block in the IDB's new strategy for human development and that IDB is keen to finance operations directly and indirectly benefiting women giving them access to finance, employment and education thus improving the case of women in our society.
In another move, the Islamic Corporation for the Development of the Private Sector, the private sector funding arm of the IDB Group, has launched a joint venture holding company with Turkey's Asya Participation Bank, called Tamweel Africa SA, whose main aim is to support Islamic financial institutions in sub-Saharan Africa, especially to extend financing to small-and-medium-sized enterprises (SMEs).
Tamweel Africa, which has a capital of $50 million and is based in Dakar in Senegal, and which bought the shares of the three former banks in West Africa owned by Dar Al-Maal Al-Islamic (DMI), headed by Prince Muhammed Al-Faisal, started operations in January this year. ICD holds 60 percent of the equity and Asya Participation Bank owns 40 percent of the equity, for which it paid $15 million.
According to Unal Kabaca, president and CEO of Asya Bank, Tamweel Africa owns 66 percent of Islamic Bank of Niger; 77.5 percent of Islamic Bank of Senegal; 100 percent of Islamic Bank of Guinea; and 100 percent of Islamic Bank of Mauritania. Asya Participation bank is providing the technical expertise, the management system, the knowledge base, for Tamweel Africa.
According to ICD CEO Khaled Al-Aboodi, who is also the chairman of Tamweel Africa, the latter also has other plans for the continent. "Another way we can enter other countries in Africa is if we set up a bank in the region, then that bank may be able to finance or do business in other countries, irrespective of whether they are member countries. For example, in East Africa we only have Uganda as a member country. We are planning to set up a bank in Uganda which will serve the entire East African region including Tanzania and Kenya, which are not member countries. The headquarters has to be in a member country but it can do business anywhere," he added.
Source : http://arabnews.com/economy/islamicfinance/article223978.ece - Dec 26, 2010
A few years ago the IDB also launched the Ouagadougou Declaration signed in Burkino Faso in the mid-2000s during the IDB board of governors annual meeting. The Ouagadougou Declaration is a $2 billion 5-year program investing in education, primary healthcare, technical assistance and capacity building. The program has in fact disbursed over $2.38 billion to date and has been rolled over.
"The objective of this co-financing MoU will be to foster economic development and social progress in order to coordinate co-financing projects and to promote economic development and technical cooperation in common member countries. This is aimed at reducing poverty level in the African continent and uplifting the level of revenues", said AfDB vice-president Kamal El-Kheshen.
Africa is a major constituency for the IDB, which its critics also stress is its weakest link because of the entrenched governance problems in these countries. Some 27 of the IDB's 57 member countries come from Africa including some 21 from sub-Saharan Africa. Indeed these latter member countries are some of the poorest on earth according to UN criteria and are classified as Least Developed Countries (LCDs).
African member countries of the IDB are diverse and do not have to be Muslim majority countries. For instance Mozambique and Uganda, both of which have smallish Muslim minorities, are both member countries and benefit from IDB financing and investment. On the other hand most of the southern and central African countries, Kenya and one or two West African countries are not members and as such are losing out on this extra source of development finance.
Despite the cast economic disparities between the different IDB member countries ranging from oil and commodity producing rich nations to LCDs, the IDB, under the tenure of the President Ahmad Muhammed Ali, has done much for poverty alleviation in Africa.
Africa's influence in the IDB received a major boost in June this year when the IDB board of governors approved the increase of Nigeria's subscription in the IDB capital to reach 1.384 billion Islamic dinars (One Islamic dinar equals one unit of the IMF Special Drawing Rights). Following that increase, Nigeria was afforded the right to appoint a permanent executive director representing it in the board of executive directors subject to paying the first share of the announced subscription in IDB capital. This will immediately result in the increase of the number of executive directors from 16 to 18; of which, 9 are appointed, representing the nine countries with the largest shares, and 9 are elected by virtue of the decision taken by the board of governors.
According to Walid Abdelwahab, director for infrastructure at the IDB, to date the IDB has financed 1,321 projects in sub-Saharan Africa totaling $7.499 billion. The IDB financed its first project in Africa way back in 1976 - a $7 million financing facility toward the Song-Loulou Hydroelectric power project in Cameroon.
Today the IDB has several development programs for Africa. Apart from the SPDA and the Ouagadougou Declaration, the MDB also has several related programs in place to finance member countries in Africa. These include the Program for Infrastructure in Africa (PIDA) which is specifically targeted to support regional infrastructure integration initiatives; the $10 billion Islamic Solidarity Fund for Development (ISFD) which is an endowment fund to reduce poverty and which targets pro-poor interventions in LCDs and which has thus far disbursed $2.6 billion; and the $1.5 billion Jeddah Declaration for Food Security, which once again targets LCDs especially the 21 in Africa and is aimed at strengthening food supply by7 assisting small farmers in acquiring agricultural inputs.
The IDB's MoU with the AfDB in fact mirrors that of a similar MoU signed last year with the Manila-based Asian Development Bank (ADB) whereby the IDB committed to invest $2 billion in cooperation with the ADB in infrastructure and development projects in member countries common to both. The ADB will match the IDB's contribution on a project by project basis.
In fact, under the framework of the MoU the two MDBs also launched a joint $500 million Islamic Infrastructure Fund, which will invest in the equity of infrastructure companies of member countries common to both the ADB and IDB, and also directly in infrastructure projects in these countries.
The two sponsors also appointed CIMB Standard, a joint venture between Malaysia's CIMB Group and South Africa's Standard Bank, to act as manager and adviser to the fund. The ADB and IDB invested $125 million each, and the rest was put out to subscription to market players.
Countries whose membership are common to both developments banks include Azerbaijan, Bangladesh, Pakistan, Indonesia, Kazakhstan, Malaysia, Turkmenistan, Kirghizstan, Tajikistan, Uzbekistan and Brunei.
The IDB also supports the empowerment of women in development especially in African and Asian member countries. IDB President Ali in fact addressed the 6th meeting of the IDB women's advisory panel which was held in Kampala, Uganda, in November under the patronage of Janet Museveni, wife of the Ugandan president. "It is the belief of the (Ugandan) government that the Islamic Development Bank as a development partner would be an important ally toward this process (of women's economic empowerment) through technical assistance, training, business planning, capacity building and microfinance," stressed Museveni at the Meeting.
Ali reiterated in his keynote speech that the role of women in social, economic and cultural aspects of life is a major building block in the IDB's new strategy for human development and that IDB is keen to finance operations directly and indirectly benefiting women giving them access to finance, employment and education thus improving the case of women in our society.
In another move, the Islamic Corporation for the Development of the Private Sector, the private sector funding arm of the IDB Group, has launched a joint venture holding company with Turkey's Asya Participation Bank, called Tamweel Africa SA, whose main aim is to support Islamic financial institutions in sub-Saharan Africa, especially to extend financing to small-and-medium-sized enterprises (SMEs).
Tamweel Africa, which has a capital of $50 million and is based in Dakar in Senegal, and which bought the shares of the three former banks in West Africa owned by Dar Al-Maal Al-Islamic (DMI), headed by Prince Muhammed Al-Faisal, started operations in January this year. ICD holds 60 percent of the equity and Asya Participation Bank owns 40 percent of the equity, for which it paid $15 million.
According to Unal Kabaca, president and CEO of Asya Bank, Tamweel Africa owns 66 percent of Islamic Bank of Niger; 77.5 percent of Islamic Bank of Senegal; 100 percent of Islamic Bank of Guinea; and 100 percent of Islamic Bank of Mauritania. Asya Participation bank is providing the technical expertise, the management system, the knowledge base, for Tamweel Africa.
According to ICD CEO Khaled Al-Aboodi, who is also the chairman of Tamweel Africa, the latter also has other plans for the continent. "Another way we can enter other countries in Africa is if we set up a bank in the region, then that bank may be able to finance or do business in other countries, irrespective of whether they are member countries. For example, in East Africa we only have Uganda as a member country. We are planning to set up a bank in Uganda which will serve the entire East African region including Tanzania and Kenya, which are not member countries. The headquarters has to be in a member country but it can do business anywhere," he added.
Source : http://arabnews.com/economy/islamicfinance/article223978.ece - Dec 26, 2010
