“Thank you, Madam Moderator, for giving me the floor.

Excellencies, all protocols observed,

I am honored to join this panel today and bring you BOAD's perspective, a few weeks after my appointment as Chairman.

I thank their Excellencies, the Honorable Ministers of Morocco and Mauritius for sharing their enlightening experience. It is also an honor to participate in this panel alongside Dr. Akhilesh Mishra from the Government of India and Mr. Sudatta Mandal from the Exim Bank of India, which is a shareholder of BOAD.

I also greet my peers and colleagues from EBID (ECOWAS Investment and Development Bank): Dr Mabouba Diagne, from Proparco in West Africa, Ms Fatoumata Sissoko-Sy from AfDB (African Development Bank ). And we especially thank Mr. Gerald Nsomba and Mr. Murahashi Yasuyuki for their contribution to this panel.

“Facing the problems is a start. But we have to solve them,” said His Excellency Antonio Guterres, Secretary General of the United Nations, today at the opening of the 75th United Nations General Assembly.

I found this quote very relevant to our topic today on innovative financing for Africa's growth in these difficult times.

WHAT ARE THE PROBLEMS WE FACE?

There are three of them: first, the global contraction of the economy, second, the financing gap, third, the inadequacy of traditional mechanisms and tools.

First, the declining economic context

The global economy is expected to contract by 4.9% in 2020 (while growth in 2019 increased by 2.9%) according to the IMF's June 2020 World Economic Outlook update.

Emerging and developing countries are particularly affected with negative growth of 3% in 2020 (while growth in 2019 was 3.1%) and with a decline of 3.2% in sub-Saharan Africa which “threatens to put the region at an impasse, reversing the development progress of recent years and slowing the region's growth prospects in the years to come".

With regard to the WAEMU region, projections for 2020 foresee a growth of 2.4% (compared to 6.1% in 2019) with lingering risks linked to the worsening of the pandemic crisis and the security crisis. in the Sahel region although inflation was kept within WAEMU standards of 3%.

Second, after the context, the financing gap

Meanwhile, the need for infrastructure in Africa has never been more urgent if we are to comply with the international SDG agenda and modernize our economies. In fact, if we were to assess the gap between the best and least endowed country, in terms of infrastructure, the gap would be around 90%.

Indeed, the AfDB estimates that there is a financing need of 93 to 170 billion USD per year for infrastructure in Africa, but today the financing gap represents annually up to around 100 billion USD.

It is interesting to note that an amount of 100,000 billion US dollars (thus 1000 times more) is the amount of assets managed by institutional investors (insurance companies, pension funds and sovereign wealth funds).

Therefore, a small portion of excess global savings, accompanied by low-return resources, would finance more than the productive and profitable infrastructure needed in Africa.

Third, after the context and the funding gap, the inadequacy of traditional funding mechanisms

In the troubled context I described earlier, traditional funding mechanisms are insufficient.

Development aid is very cyclical and therefore influenced by the negative global context. In addition, foreign direct investment contracted by a third, from 1.540 billion to 1.000 billion, due to both the COVID pandemic and the fall in commodity prices. Finally, WAEMU is already 43.8% indebted, which raises questions of sustainable indebtedness for financing development.

In summary, the three points cited – the context, the financing gap and the inadequacy of traditional mechanisms and tools – bring us back to Mr. Guterres' exhortation: “Facing the problems is a start, but we must solve them” and therefore for us: there is a need to design new financing mechanisms and tools to redirect these financial resources and close the infrastructure financing gap.

WHAT SOLUTIONS DOES BOAD PROVIDE?

First, Africa and more particularly WAEMU offers a land with great potential for long-term investments.

In this pandemic context, the expected annual growth in WAEMU has been constant around 6/7%, Côte d'Ivoire being considered one of the most dynamic and innovative economies in the world by the World Bank. . The potential for return on investment is immense in many high-growth sectors, both locally and at scale, thanks to the continent's rapid digitization and innovation-triggered growth.

In addition, WAEMU is structuring its regulatory frameworks to align them with international standards and requirements through the work of the Organization for the Harmonization of Business Law in Africa (OHADA), thus providing investors with flexible normative and judicial guarantees. and renovated.

Secondly, BOAD is already a solution thanks to its resilience and its anchoring in the West African region.

Located in Togo, in Lomé, BOAD is the development bank of the 8 member countries of UEMOA. It has a positive rating in 2020, both by Moody's (“Baa1” with stable outlook) and by Fitch (“BBB” with negative outlook).

In addition, thanks to its massive investments in public or private infrastructure (two thirds of the portfolio), BOAD has created lasting and impactful value for its eight beneficiary Member States since its creation in 1973 and offers attractive long-term investments for institutional investors.

Third, BOAD is at the forefront of innovation through its financing mechanisms for the private sector.

BOAD is investing, more than ever, in the private sector to stimulate the economy and fuel growth in its member states. To date, more than 150 projects with the private sector have been carried out. Since 2018, BOAD has initiated more than 4 investment funds dedicated to SMEs (CAURIS IV, AFIG II, ECP Africa IV, ADIWALE I).
And since 2019, as part of the Regional Initiative for Sustainable Energy (IRED), BOAD has taken stakes in two WAEMU funds: the Seed Fund (€18 million) and the Infrastructure Fund ( €40 million).

In addition, BOAD contributes to multiple transnational financing mechanisms to foster both integration in the WAEMU region and economic growth. It also serves to promote the regional financial market and the building of regional value chains as a first step to integrating West Africa into global value chains.

In fact, as a shareholder of the Regional Stock Exchange (9.1%) and the Regional Bank of Markets (4.8%), BOAD has also contributed to the creation of new financing tools and financial institutions. specialized:

– the GARI Fund and the Abdou DIOUF SICAV, two financial services investment funds;

– Cauris Investissement, the first sub-regional private equity fund management structure created in French-speaking West Africa;

– the West African Asset Management Company (SOAGA) in which BOAD holds 19.3% of the capital;

– CRRH – UEMOA) where BOAD holds 12.9% of the capital; and

– BOAD-Securitization 100% owned by BOAD.

BOAD has also taken a stake in the West African subsidiary of the African Guarantee Fund (AGF) based in Mauritius and is contributing 11.6% of its capital to help the banking system support SMEs.

In conclusion, BOAD, through its innovative partnerships and massive investments in infrastructure and the private sector, fosters a business environment with high investment potential in high-profit projects to contribute to export growth. companies, the creation of venture capital companies and the integration with capital-guarantee companies".