Africa Finance Corporation and Other Probes – By Yushau A. Shuaib

In this season of probes on various sectors of the Nigeria’s economy, there are insinuations that the enquiries are witch-hunting exercises to nail some personalities of the previous administration. More worrisome are the emerging tribal sentiments being expressed on some of the investigations.

While every individual has the right to personal opinion, parochial allegations and attempt to politicize the process may derail the wisdom of correcting the wrongs of the past so as to address the myriads of problems bedeviling our nation. For instance the ‘power probe’ is justifiable in tracing huge monetary allocation to the energy sector without tangible projects on the ground. That of the oil sector is to determine the actual receipts from our major source of revenue whose operations were shrouded in secrecy. The searchlight on the privatisation policy would unravel the appropriateness of disposals of our collective patrimonies. Likewise the FCT Probe could be timely considering the litany of petitions from people who alleged victimization, maltreatment and pauperization against the former administration of federal capital city. The exercises also offer the accused persons and agencies to clear on the charges.

These probes could not have been targeted at any ethnicity or region… nor a battle of supremacy between the North and the South as every section of Nigeria has its individuals and groups as beneficiaries as well as victims of the past actions. Probing the probes may make the picture clearer.

So far the most contentious probe is that on the Africa Finance Corporation (AFC) which has generated a lot of debates, divisions and diversionary reactions. The controversy is so intense that the Central Bank of Nigeria (CBN), the major promoter of the corporation, had to place disclaimers to dissociate itself and debunk tribal jingoists who were spreading rumours of persecution of one of the major players.

A probe as a query is not an indictment until a proper examination is undertaken to determine otherwise. If anything, going by a document credited to the Secretary to the Government of the Federation (SGF), Ambassador Baba Gana Kingibe, the genesis of the government’s enquiry is to perfect the process of the investment by the CBN in the new multilateral financial institution of which Nigeria is a major stakeholder. According to the document, the SGF clearly stated that: “Following a request for the conferment of legal status on the African Finance Corporation pursuant to Section 11(2) of the Diplomatic Immunities and Privileges Act (Cap D9) Laws of the Federation of Nigeria 2004, it became necessary to carry out a due diligence on the corporation before considering the request.”

Sadly names of Minister of Finance, Dr. Shamsudeen Usman and Chief Economic Adviser to the President, Mr. Tanimu Yakubu Kurfi were parroted in hushed tones as brains behind the probe. Unfortunately for such faultfinders, the two public officers are sincere technocrats and intellectuals of high repute. Going by their antecedents, they do not operate on the basis of sectional sentiment or attach themselves to myopic alliances. In fact Dr. Shamsudeen Usman, while he was Deputy Governor of Central Bank of Nigeria, joined other highly qualified Nigerians in the Technical Committee that provided the guidelines for the establishment of AFC. Other members in that committee are individuals that had worked at higher levels in different multilateral institutions. They included Chris Edordu, pioneer President of Afreximbank in Cairo; Dr. Oba Fajana, former economist with the World Bank in Washington and Dr. Seyyid Abdullahi, former Director General of OPEC Fund in Vienna who some years ago was denied the Chairmanship of African Development Bank (ADB) in one of the glaring continental conspiracy against Nigeria. Therefore Dr. Usman could not have stooped so low to betray the project he and other eminent Nigerians had conceived and supported.

While some Nigerians may have reservations on some past CBN’s courses of action, for instance the suspended redenomination of Naira and aborted Dollarized Allocation respectively, the bank’s investment in the Africa Finance Corporation is no doubt a good idea that could catapult Nigeria to realise its dream on Vision 2020.

Though the use of the word PROBE over the investment in AFC could send a bad signal to its shareholders and prospective investors from within and outside the country, the available fact so far has shown that no fund was alleged to be missing or misappropriated. Likewise the investment is not a ‘white elephant’ or fictitious project. The fund can be traced and recovered if need be.

History of global financial and multilateral institutions started with initiatives of other countries who later become nations to reckon with in international politics considering their shrewd judgments. AFC is aimed at achieving the philosophy of FSS 2020 and also Vision 20 2020 being promoted by present administration of President Umaru Musa Yar’Adua.

Launched in April 2007, the Africa Finance Corporation (AFC) is Nigeria’s initiative and promoted through the Central Bank of Nigeria (CBN) with the support of some major banks in the country. The corporation is a private sector-owned entity operating as a regional investment bank to fund key economic sectors that are vital for Africa’s development goals through financial products – loans, guarantees, risk management products, equity participation and venture capital, technical assistance and advisory services at large scale.

In defending the project, Prof. Charles Soludo stated that the $462 million invested by the CBN to set up the AFC was sourced from Federal Government bonds and not from any account of a foreign bank. He added that the process for setting up AFC started in January 2006 and the final agreement was signed about 17 months later. He stated that the CBN Act allows the bank to go into any investment for the economic development of the country if approved by the Federal Government. He cited similar investment of the bank in Nigerian Deposits Insurance Corporation (NDIC), Securities and Exchange Commission (SEC) amongst others.

According to him, the money invested in AFC is safe, secured and yielding interest. And that with time CBN would reduce its share to about 10 per cent. He added that besides some African countries that had subscribed to the concept, some Canadians had offered to invest about $100 million but the management of the corporation had asked them to wait because of the on-going valuation of the investment, emphasizing that the investment was critical to the achievement of the 2020 goals.
With many countries and international bodies showing interest in investing in the corporation, from available information, AFC is already carrying out some big projects in the power sector and construction industry that would generate revenue to the corporation.

The Africa Finance Corporation is not a Father Christmas institution where fund will be doled out freely; every penny invested is accounted and easily recouped with profit and interest based on the structure of its operation.

In the area of branding, AFC could serve as a veritable instrument to reinforce the position of Nigeria as economic power in the continent and positively project her image to the international community. South Africa as a country has provided similar bodies… in fact in entertainment industry alone, it demonstrates her superiority in the continent through Annual Kora Awards and the Channel O Awards as highest bodies that recognize musical artistes in Africa and enhance the image of South Africa as more nations and acclaimed artistes participate in the competition.

If only we realize the politics in African regional financial institutions where Nigeria, with its high stakes and few other nations, are maltreated over the years, the idea of AFC should have even come long time ago to enable the country provide a leadership role in the economic development of the continent.

Since the only allegation about the investment so far is on procedural error in the process of authorization for the release of funds on the project, the best that could be suggested is to correct any suspected lapses so as to support the new multilateral initiative.

The debate over this lofty idea of AFC should neither be myopically narrowed to ethnic sentiments nor killed on the basis of egocentricity. It may be necessary too to advise all public institutions and their principals to avoid ego trips. Instead they should observe due process and respect constituted authorities in their dealings and work harmoniously in tandem with the direction of the present administration.

This article was originally published in Economic Confidential May, Leadership May 7, Financial Standard May 7&8, Daily Independent May 8, The Punch May 8, Vanguard May 9, New Nigerian May 9, Nigerian Tribune May 11 and Daily Trust May 12, 2008