The Arab Bank for Economic Development in Africa (BADEA) is set to significantly boost its annual financing to reach $2.5 billion by the end of 2024, according to Director-General Dr. Sidi Ould Tah. This marks a steady rise from $2 billion in 2022 and $2.23 billion in 2023.
“We’ve seen a consistent increase in our financing capacity,” Dr. Ould Tah said in a statement to Emirates News Agency (WAM). He highlighted BADEA’s commitment to sustainable development, revealing that 30% of the bank’s financing over the past decade has been directed towards such projects across Africa. Notably, BADEA supports 44 African nations that are not members of the Arab League.
Dr. Ould Tah challenged the perception of high-risk associated with African investments. “There’s an overestimation of risk in Africa,” he stated, “which has led to inflated interest rates on financing for the continent.” This applies to both traditional bank loans and bond issuances.
However, Dr. Ould Tah pointed to a recent positive trend. “We’ve noticed that African countries unable to issue bonds in the past two years have successfully returned to the market in 2024,” he said. Countries like Ivory Coast and Benin secured bonds at reasonable rates, defying predictions of double-digit interest. This paves the way for a broader return of African nations to the global financial market in the coming months.
While BADEA boasts strong liquidity, it recently issued social bonds worth €500 million specifically for the African social sector, particularly focusing on countries using the CFA franc. The initiative received overwhelming market response, exceeding the target amount by threefold.
Looking ahead, BADEA’s five-year plan (2025-2029) explores diversifying financing mechanisms beyond the bank’s own resources. Dr. Ould Tah hinted at the possibility of issuing sustainable or green bonds in the future, depending on evolving needs.
On the topic of economic growth, Dr. Ould Tah predicts a 4% average growth rate for Africa in 2024. He expects some countries to achieve even higher rates (up to 8%), while others might experience slower growth. Factors contributing to this positive outlook include the completion of development projects, favorable agricultural seasons, and the potential benefits of anticipated global interest rate cuts.
The Director-General also highlighted Africa’s dominance in cocoa production, with three African nations – Ivory Coast, Ghana, and Nigeria – accounting for over 75% of the global market.