Kenya is set to increase its stake in three major African financial institutions, including the African Development Bank (AfDB), with a $100 million investment. This significant financial commitment was announced by President William Ruto during the opening ceremony of the AfDB annual meetings in Nairobi on Wednesday.
The capital injection will also benefit the African Export-Import (Afrexim) Bank and the Trade and Development Bank (TDB). President Ruto emphasized that this move is designed to demonstrate Kenya’s confidence in these institutions and to encourage more financing from within and beyond Africa.
President Ruto underscored the importance of African nations investing in their institutions to attract external investment. “We must believe in ourselves for others to believe in us, and we must invest in these institutions for others to invest in them,” he stated.
The exact allocation of the $100 million among the three banks was not detailed, although Kenya has already made additional investments in Afrexim Bank. Afrexim Bank reported a 66 percent profit increase last year, with earnings reaching $756.1 million and a dividend payout of $264 million.
The AfDB, which focuses exclusively on lending to African countries, saw its earnings from loans and investments in treasury securities rise by 123 percent last year to $1.73 billion, with net income before distribution hitting a record $545 million. “I was motivated by the profits I saw and the dividends that will be paid. It’s a very worthwhile investment,” President Ruto said.
AfDB’s ownership is predominantly African, with member states holding 60 percent of the shares. The remaining 40 percent is owned by countries including the United States, Japan, and India, with Nigeria being the largest single shareholder at about 10 percent.
TDB, another beneficiary of Kenya’s new investment, is owned by member countries of the Common Market for Eastern and Southern Africa (Comesa), including Kenya.
Additionally, Kenya is committing an extra $20 million to the AfDB’s concessional window, aimed at lending to fragile states within Africa. “This demonstrates Kenya’s confidence in the African Development Bank’s concessional window,” President Ruto added, highlighting the need to show commitment to raise $25 billion in investments.
