African Reserves

Obasanjo, Osinbajo, Soludo and others offer solutions to Africa’s infrastructure deficit

*Kyari: Continent will solve its energy problems before joining the renewable energy movement

*AFC launches $2 billion intervention for African countries
Emmanuel Addeh and James Emejo in Abuja

Several African personalities including former President Olusegun Obasanjo, Vice President Yemi Osinbajo, President Nana Akufo-Ado, Governor of Anambra State, and Professor Chukwuma Soludo converged on Abuja yesterday to discuss the deficit infrastructure on the continent.

Obasanjo asserted that if the world is to take Africa seriously, seed funding for major projects must be mobilized from within the continent, emphasizing that the issue of corruption in project financing must be eliminated completely.

Speaking at the African Finance Corporation (AFC) organized program titled: “The Infrastructure Solutions Summit 2022”, the former Nigerian leader called for continuity of projects even when leadership changes, noting that he remains the scourge of development on the continent.

He called for the commitment of African leaders in trying to strengthen major infrastructure on the continent, explaining that, for example, AFC and Transcorp were almost killed because his successor thought he was benefiting from both organisations.

“You can see why many projects fail. There must be this reader. Do you have the will to get the project off the ground and literally execute it? There has to be continuity. We almost had AFC and Transcorp as you heard killed by my successor (because he thought they belonged to Obasanjo and Soludo.),” Obasanjo said.
He explained that after laying the foundations of the railway system, if the next administration had continued it, Nigeria would now have sufficed in the field of railway transport.

“If we had managed to make the railways work, like we made AFC and Transcorp work, the situation would not be what it is today. There has to be continuity and that is very important.

“You need the driver at the top, but also the people who make things happen. It’s a team. I can bulldoze, but if I bulldoze and the team doesn’t follow, the land that has been bulldozed will be overgrown with weeds,” he explained.
Obasanjo insisted that Africa must provide seed funding as he did with AFC when it was established, explaining that until then the world will not take the continent seriously.

“We need that seed money and we did it with AFC, raising money in Africa. When I called a summit on HIV, I put in 10 million dollars, Bush junior (then American president) put in 200 million dollars. This initial money then raised more than $45 billion,” he said.

Speaking on energy transition, Group Managing Director, Nigerian National Petroleum Company (NNPC), Mele Kyari, said that while Africa needs to be aware of the energy transition, it needs to sort out its particular needs before moving on. rush to join the moving train.

“We miss the point if we don’t recognize that there is abject energy poverty in Africa and you see that reflected everywhere. I’m sure on your way here you’ve seen fuel queues outside. It tells you the level of energy poverty in that country. We have a very thin supply chain, and a small disruption can cause any problem, just like our own nation.

“Having said that, the energy transition is not about stopping hydrocarbons or fossil fuels, but we are going to become carbon neutral and that means we are going to have a cleaner use of hydrocarbons so that ultimately the negative impact on the environment is minimal,” he noted.
According to Kyari, Africa should not be rushed into the frantic race for renewable energies, stressing that the continent’s contribution to global emissions remains very low.

“In Africa, our contribution is probably 3-4% maximum in carbon emissions, but we are a very resource-dependent continent. In Nigeria we have over 203 TCF of proven gas reserves and potentially around 600 TCF of gas, but this can actually fuel and ignite Africa.

“But we can’t do much other than first address the energy poverty challenge we face, which means we have to transition gradually. The world has agreed that gas is a transition fuel of choice as we move towards carbon neutrality.

“We are very clear that NNPC is the largest NOC on the continent. We will become a fully CAMA business in a month or two, and that means we have the opportunity to use this huge business to close Africa’s energy gap in every way.

“What Africa needs to focus on today is to seek gas finance first and create wealth from liquids. There is a frontal approach from African countries that it needs to there is energy justice.
“There must be a way to address Africa’s energy deficit and eventually get to net zero by 2060. We agree there is an emissions problem but we cannot move forward on the pace of others and our contribution is actually not the same,” he argued.

In his intervention, Akufo-Ado, insisted that there was a structural problem in obtaining capital for major projects on the continent, such as the risk premium imposed on Africa.
“You’re not defaulting on your debt, but you’re paying a higher rate than countries that have, like Argentina,” he said.
According to him, unless Africa grabs the gauntlet, no one will come to develop the continent. “No one is going to come and develop this continent except ourselves. Let’s take up the challenge.

” We do not have the choice. There have been models of development outside the continent, more sensitive to the wants and needs of others. We need our own models.
“Those who hold the wealth of the world are not in Africa. This is an area that is essential to change, “said the Ghanaian president.

According to him, while Ghana and Ivory Coast produce two-thirds of the world’s cocoa, they receive only 6-7% in the value chain. “These statistics cannot continue,” he noted.
Also speaking, the former Governor of the Central Bank of Nigeria (CBN) and Governor of Anambra, Soludo, described Africa as the last frontier in terms of development, emphasizing that Africa cannot afford growth progressive organic.

“We have to run at 1000 km/h if others are running at 100 or 200 km,” he said.
He added: “We need serious disruptive thinking and extraordinary execution and that’s what the AFC sums up. We need leadership, we need a capable team, vision then execution, we need long-term funding, then infrastructure,” he argued.

According to him, part of the problem in the public sector is the question of “what does it bring me or what is it worth for him”.
“Many valuable projects have been killed for this reason. What drove us was the public purpose, Soludo said, adding that the influence of political forces remains the bane of public projects on the continent,” he noted.
Also speaking, Osinbajo said that “in the next few years we will have to see more innovation in finance, for example in the area of ​​climate change”.

According to him, “We are crying out for innovation in climate finance. There is a huge gap. If we are innovative enough, we can do a lot.
Founder of Heirs Holdings and Chairman of United Bank for Africa (UBA), Mr. Tony Elumelu, said in his comments that there are huge opportunities in Africa, stressing that the continent needs massive investments in infrastructure.
“These issues that arise in our environment affect the overall perception of our continent and private capital investment decisions.

“We want to see intra-African trade grow, but we need to see some things first to make it work. Is Africa hardwired into the 21st century so that we can trade with each other? The answer is no.
“The feeling on our continent is not so positive. It is our responsibility as Africans to share our stories with the world and position our continent to attract global private capital.
“We need to have industries out of Africa. For you to trade with a country, you have to have what the country needs,” he said.

The highlight of the occasion was the launch of a $2 billion facility by AFC in response to the economic challenges created by the global pandemic and the Russian-Ukrainian conflict.
AFC said it is committed to funding up to 50% of the new African Economic Resilience Facility and mobilizing the remainder through the company’s network of international partners and investors.

The facility will be disbursed through AFC loans to selected commercial banks, regional development banks and central banks in various African countries, providing them with much-needed hard currency liquidity to finance trade and other economic activities in their jurisdictions.

Speaking on the rationale for the launch, the Head of Treasury and Financial Institutions, Banji Fehintola said, “The COVID-19 pandemic has set back Africa’s economic growth trajectory and widened the trade finance gap. , while the Russian-Ukrainian conflict has added a new set of challenges negatively impacting growth prospects across the continent.

“We are determined to play a leading role in helping the continent’s recovery and resilience, not only through the work we do to close Africa’s infrastructure gap, but also through targeted interventions such as than this $2 billion economic resilience facility.