International financiers ramped up efforts to stave off economic recession in Africa with the establishment of a $15 billion fund to support small and medium-sized enterprises that have been the main drivers of growth in the continent over the past decade.

The fund, an initiative of the African Development Bank (AfDB), the French Development Agency (AFD), and Development Bank of Southern Africa, will support intra-Africa trade, boost lending to agribusiness, and finance key infrastructure that supports businesses across the continent.   
 
Other contributors to the fund are the European Investment Bank, the German Financial Cooperation, the Islamic Trade Finance Cooperation, and the World Bank.   
 
Dr Donald Kaberuka, the AfDB president, said Africa was looking for a private sector-driven response independent of the public sector.  

He said the scope and magnitude of the global economic crisis demands that Africa seeks innovative ways to support its vibrant private sector, especially at the micro-level.  

“This is the first time that Africa is facing a crisis whose origin is external. Such a crisis calls for a different response,” he said.   

Under the plan, AfDB will use an emergency liquidity facility worth $1.5 billion to support countries that have been hit hardest by the global financial crisis and need immediate cash injection.   

An additional $500 million trade finance line of credit will be available to agribusinesses and microfinance institutions.   

Financing agreement

Under the financing agreement reached at a conference in Dakar, AFD will contribute $3.1 billion to finance SMEs and infrastructure projects throughout the continent.  

AFD plans to raise $1 billion through the African Agriculture Fund to boost agricultural productivity by supporting private companies and cooperative co-societies.  

The Development Bank of Southern Africa’s $4 billion contribution will be spent on infrastructure development and finance training to the tune of $50 million.

Dr Kaberuka said the European Investment Bank will support infrastructure and energy projects through the Africa Infrastructure Trust Fund — an initiative of the European Commission.

Source:http://www.waltainfo.com/walnew/index.php?option=com_content&task=view&id=10385&Itemid=47