AfDB SEEK TO REPATRIATE FOREIGN RESERVES
By Antonio Guerrero
The African Development Bank, (AfDB) a regional development bank based in Tunisia, is working to bring a portion of Africa’s $500 billion in foreign reserves held abroad back to the continent.
Under a plan presented by the multilateral bank during this year’s annual IMF and World Bank meeting in Tokyo, African leaders would designate a portion of their respective reserves to be managed by the AfDB and redirected to high-yielding investment platforms in Africa. Funds are currently being held mainly in low-yielding investments. African finance ministers are expected to ratify the plan.
While China continues to dominate foreign investment flows to Africa, the Zambian government is turning its sights to India. The Zambian government reports Indian companies have invested more than $3 billion in a variety of sectors, including mining, agriculture, pharmaceuticals, information technology and infrastructure. Both governments are also working to increase bilateral trade. While Indian exports to Zambia declined from $132 million in 2009 to $88 million in 2010, Zambian exports to India rose from $51million to $103 million during the same period.
Small and medium-size enterprises now account for more than 50% of jobs in Africa and generate more than 40% of the continent’s overall GDP, according to South Africa’s Standard Bank. Speaking at a media event in November, Terry Moodley, the bank’s chief executive for personal and business banking, Africa, said SMEs continue to face challenges in Africa, including poor infrastructure and complicated business environments.