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IFC, African and European Partners Launch Alliance to Support Private Sector Growth in Africa

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To support a stronger private sector, entrepreneurship and the growth of small and medium-sized businesses across Africa, African, European, multilateral and bilateral partners today launched the Alliance for Entrepreneurship in Africa (AforE).

The Alliance will combine and focus the technical and financial strengths of its members to improve Africa’s business environment and support the growth and success of small and medium-sized enterprises (SMEs), women in business and young entrepreneurs. In addition to its core members, the Alliance aims to bring together multilateral and bilateral development banks, bilateral donors and African national development banks.

The Alliance was first announced at the Summit on Financing of African Economies in Paris in May 2021.

Alliance core members include the African Development Bank (AfDB); the European Bank for Reconstruction and Development (EBRD); the European Investment Bank (EIB); the European Development Finance Institutions (EDFI); the French Treasury; the International Finance Corporation (IFC) and Proparco, the private sector financing arm of Agence Française de Développement Group (AFD Group).

The launch of the Alliance comes as African economies recover and rebuild from the effects of the COVID-19 pandemic, with small businesses seen as important drivers of job creation, innovation and the delivery of essential goods and services.

The creation of the Alliance reflects the strong commitment of African, European, multilateral and bilateral institutions, in coordination with the African Union, European Commission and others, to bolster Africa’s private sector amid ongoing African and global economic challenges.

Alliance members today signed the working arrangement for the Alliance. IFC will serve as the Alliance Secretariat helping to coordinate the activities and operationalize the initiative in partnership with the French Treasury.

“Small businesses and entrepreneurs in Africa are drivers of inclusive growth, economic stability and resilience. Supporting their growth will be critical to creating jobs and helping Africa recover from the COVID-19 crisis. And the Alliance for Entrepreneurship in Africa stands ready to do that. IFC is proud to be part of this initiative, which deepens the partnership between international partners to give small businesses the support they need and deserve,” said Makhtar Diop, IFC’s Managing Director.

Solomon Quaynor, the African Development Bank’s Vice President for the Private Sector, Infrastructure and Industrialization, said: “Micro, small, and medium-sized enterprises are vital to Africa’s prosperity. They represent 90% of all businesses and generate more than half of all jobs. Supporting existing businesses and the ecosystem for entrepreneurs to create innovative new ones lies at the heart of our private sector development strategy. The African Development Bank is committed to the Alliance for Entrepreneurship in Africa. We want to ensure that African entrepreneurs have the means to thrive and can play an important part in solving Africa’s development challenges.”

Odile Renaud Basso, EBRD President, said: “The EBRD is committed to supporting financially and technically small businesses in the North African countries where it invests, Egypt, Morocco, Tunisia and soon Algeria. We offer an extensive suite of financial tools and advisory programme that we put at the service of small and medium enterprises and by joining forces with partners in Alliance we can archive a better impact on the economic growth of these countries.”

“Ensuring that African entrepreneurs and companies can access finance is crucial to accelerate growth and create jobs. Over the last two years EIB has been very active to support financial institutions that help SMEs particularly hit by the COVID-19 pandemic. We are pleased to be a core member of the Alliance for Entrepreneurship in Africa. This initiative combines the financial and technical strengths and local insight of African and international partners and together we can ensure a better future for African business,” said Ambroise Fayolle, European Investment Bank Vice President.

“The European DFIs welcome the opportunity to join hands with international and African partners to boost entrepreneurial growth in Africa. EDFI member institutions have been able to increase financing for SMEs across Africa, demonstrating our commitment to this important priority. The deeper collaboration through this new alliance can help mobilise even more investment in the inclusive development of Africa’s private sector,” said Søren Peter Andreasen, CEO at EDFI.

“Proparco is proud to count among the founding members of the Alliance for Entrepreneurship in Africa. Proparco has long been committed to supporting African entrepreneurs and will build on the expertise acquired through the French initiative Choose Africa to contribute to this new global Alliance,” said Gregory Clemente, CEO of Proparco.

“Last May, the international community gathered in Paris at the Summit on the Financing of African Economies to devise jointly actions that will help boost a strong and inclusive recovery in Africa, grounded in a dynamic private sector. Today, we are proud to deliver with the official launch of the Alliance for entrepreneurship in Africa, gathering prominent development partners to support private sector development in Africa, as the main driver for growth and job creation. We will remain committed in the implementation phase to deliver on the ground, mobilize additional financing, promote tangible and high value added projects developed by the Alliance core members, with the objective to effectively make a difference for African SMEs through innovative financial products,” said Mr. Emmanuel Moulin, Director General of the Treasury.

Through a private-sector focused cooperation platform, the Alliance will support the roll-out of new initiatives to expand financing options for Africa’s SMEs, which cite a lack of access to finance as a major constraint to growth. According to the World Bank, SMEs account for up to 90 percent of all businesses in sub-Saharan Africa and represent 38 percent of the region’s GDP. Prior to COVID-19, IFC estimated the funding gap faced by SMEs in the region at $331 billion.

In addition to financing projects, the Alliance will support reforms aimed at strengthening the business and investment climate across Africa and facilitate the growth of private sector initiatives in more sustainable green and digital sectors.

Banking and non-banking financial institutions, other public and private sector organizations (such as foundations, philanthropic organizations, venture capital firms), and business and innovation training providers (including incubators, accelerators, universities), may also join the Alliance.

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Boeing to Deliver 50 737 MAX Planes to British Airways

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International Airlines Group (IAG), the owner of British Airways, on Thursday said it has agreed to purchase 50 Boeing 737 MAX planes. The transaction estimated at $6.25 billion includes a substantial discount and is expected to be delivered between 2023 and 2027, according to a statement issued by the company.

In the statement seen by Investors King, Luis Gallego, the Chief Executive of IAG, said “The addition of new Boeing 737s is an important part of IAG’s short-haul fleet renewal.”  

“The deal falls short of a blockbuster non-binding commitment for 200 737 MAX jets placed under former chief executive Willie Walsh at the Paris Airshow 2019 that was a welcome lifeline to Boeing when the model was grounded after two fatal crashes.

“But the firm 737 MAX 10 order from a top-tier customer is an important signal to the market at a time when Boeing faces an increasingly high-stakes battle to win certification of the largest MAX variant before a new safety standard on cockpit alerts takes effect at year-end.”

Boeing’s financial health rests on the resumption of deliveries of 787 Dreamliners and clearing MAX inventories, company executives and analysts have said.

Former IAG’s Chief Financial Officer, Steve Gunning revealed to analysts in November that the airline group would need some additional short-haul aircraft towards 2024 or 2025 and hinted that any order would include the 737 MAX.

IAG, owner of Ireland’s Aer Lingus and Spain’s Iberia and Vueling in addition to British Airways, also has a further 100 purchase options as part of the deal, which is subject to shareholder approval.

IAG is one of the world’s largest airline groups, with a fleet of 531 aircraft. Before the impact of the COVID-19 pandemic it operated to 279 destinations and carried around 118 million passengers each year.

It is a Spanish registered company with shares traded on the London Stock Exchange and Spanish Stock Exchanges.

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CISLAC Campaigns For Tobacco Tax Hike

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The Federal Ministry of Health, Civil Society Legislative Advocacy Centre (CISLAC) has called for a campaign to raise tobacco tax. The aim of this advocacy is to generate income for the health sector and save the lives of Nigerians.

Executive Director, CISLAC, Mr Auwal Rafsanjani said the measure would provide Nigeria with a win-win situation by lowering tobacco product affordability while generating income for development funds. He said that the detrimental effects of tobacco usage had prompted countries such as Nigeria to enact tobacco control measures to reduce tobacco consumption and cost.

“Excise taxes are the most effective tax measure for promoting health because they change the price of a harmful product relative to other goods and can be easily increased over time. Consumption is reduced best with taxes based on specific taxes on unhealthy products such as sticks and packs of cigarettes.

“Closely linked to the issue of tobacco taxation as a control tool, is the issue of safeguarding population health. It is not news, however, that the state of health care delivery in Nigeria remained very abysmal while the world intensified efforts to attain the Sustainable Development Goals,” he said.

Recall that Investors King had earlier reported the World Bank’s call to the Federal Government of Nigeria, urging the government to impose special taxes on alcohol, cigarettes and beverages that are highly sweetened in order to improve primary healthcare conditions in the country.

Investors King gathered that, Shubham Chaudhuri, the Country Director for Nigeria in the World Bank Group, said that an improvement in healthcare in Nigeria will come by taxing the things that are “killing us.” He said that the economic rationale for the action is quite strong if lives are to be saved and a healthier Nigeria achieved.

According to Rafsanjani, African nations convened in April 2001 to address health-care finance issues, which are one of the primary determinants of Universal Health Coverage (UHC), and decided to set aside 15% of their budget for health.

“As the country defaults on budgeting effectively for health, countries of the world are adopting innovative approach to mobilise resources for health financing which is adopting tobacco taxes as an alternative strategy”, he noted.

The study, according to Rafsanjani, was commissioned to investigate the potential of tobacco taxation as a form of income for Nigerian health financing.

He explained that the study’s goal was to give scientific information to help policymakers formulate better policies as Nigeria battled to close the gap in health funding.

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Merger and Acquisition

Access Holdings Plc to Acquire Majority Stake in First Guarantee Pension Limited

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Access Holdings Plc has agreed with First Guarantee Pension Limited to acquire a majority stake in the company in its drive to transform from a narrow banking business into a financial service company.

The leading financial institution stated in a press release obtained by Investors King on Thursday.

According to Access Bank, the transaction is in line with its strategy to evolve into a full-blown financial services company and gain relevant market share across Africa, global monetary centres and beyond banking verticals.

Speaking on the firm’s push to change the banking landscape, Dr. Herbert Wigwe, Group Chief Executive Officer, Access Corporation said “This transaction is a natural evolution for us. Over the last 20 years, we set our sights on and delivered ambitious plans to transform the African financial services landscape focusing on banking and have created the African leading Bank and largest bank by customer base.

“This large customer base both on the wholesale and retail segments makes the pension business a natural fit for the Corporation given its objective of ecosystem optimisation. We will leverage our well-established culture of strong corporate governance, risk management, cutting-edge technology, and digital capabilities to deliver high standards of professionalism in the management of pension assets to the benefit of our stakeholders.”

The firm added that the National Pension Commission and the Central Bank of Nigeria have given their no objection to the transaction.

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