By Duncan Miriri
DAR ES SALAAM (Reuters) – The African Development Bank’s regional refinancing facility for hard-pressed African nations with maturing international bonds will be activated soon, the AfDB’s president said on Wednesday, after heads of state grant their approval in two weeks.
The creation of the facility, known as The African Financial Stability Mechanism, has been finalised by the bank and received approval from finance ministers, and it is now just awaiting final approval from heads of state at an African Union summit in mid-February, Akinwumi Adesina said.
“That is a facility that will allow Africa to refinance its debt on the global capital markets,” he told Reuters in an interview in Tanzania’s commercial capital.
“IMF doesn’t do refinancing. Multilateral development banks don’t do refinancing so this particular facility will help Africa to deal with the situation we are in.”
African countries face high refinancing risks, he said, with repayments of $20 billion coming up every year over the next three years.
The facility will lend money at “concessional” rates, Adesina said, adding that beneficiaries will be expected to carry out defined macroeconomic and fiscal reforms.
(Reporting by Duncan Miriri, editing by Karin Strohecker)
