Minister of Finance, Ngozi Okonjo Iweala
The International Finance Corporation (IFC) , a member of the World Bank Group and Standard Chartered yesterday announced the inauguration of a bond-issuance program that would increase the availability of local-currency financing for private sector development in Africa.
A statement explained that the pan-African medium-term note programme would initially focus on Botswana, Ghana, Kenya, South Africa, Uganda, and Zambia.
The IFC further revealed that it would work with the respective authorities in the earlier mentioned countries to obtain their consent to be part of the programme.
Standard Chartered was also appointed as the sole arranger for the programme and the banks would also be the lead manager for many of the inaugural bond transactions under the programme. Other financial institutions may co-lead individual bond issues.
Bonds issued through the programme, according to the statement, would raise funds that IFC would use to provide long-term, local-currency finance for African businesses, protecting them from foreign-exchange risks.
Executive Vice President/Chief Executive Officer, IFC, Lars Thunell, was quoted to have said: “A vibrant, local-currency capital market is essential for any country to achieve its full economic potential. Ensuring the development of such markets is a cornerstone of IFC’s strategy. By expanding long-term currency finance, we help businesses mitigate currency risks when they borrow capital to grow and create jobs.”
On his part, Standard Chartered’s Chief Executive Officer, Peter Sands said: “Standard Chartered shares IFC’s commitment to supporting the development of local capital markets in Africa, which has been a core part of our business for nearly 150 years. We are delighted to put our capital markets expertise, extensive Africa presence and knowledge of local markets to work in partnership with IFC on this landmark initiative.”
The statement also declared that IFC had built partnerships with regulators and local authorities to establish and strengthen local capital markets.
In Africa, it said the IFC had previously worked with Ghana, Zambia, and eight members of the West African Monetary Union to establish local-currency bond programs.
“IFC’s aim in sub-Saharan Africa is to improve the investment climate, promote the growth of small and medium enterprises—the foundation of economies across the continent—and support key infrastructure and agriculture projects,” it added.