Why Kenya is investing $100m in African Development Bank, two other key financial institutions
Kenya has pledged to invest $100 million in key African financial institutions, including the African Development Bank (AfDB) and the African Export-Import (Afrexim) Bank.
This was announced by President William Ruto during the 59th Annual Meetings of the AfDB Group, reflecting a deep-seated confidence in the potential of African-led solutions to the continent's challenges.
According to Ruto, the investment is a vote of confidence in the institutions that have been at the forefront of driving economic growth and addressing developmental issues across Africa. His commitment to these institutions is further grounded in a belief that for others to invest in Africa, African nations must lead by example.
“Nations in this continent, we must begin to understand that if others are to believe in our institutions, we must believe in them first, as the owners...We must believe in ourselves for others to believe in us, and we must invest in these institutions for others to invest in them,” he said on Wednesday, May 29 in Nairobi.
Ruto mentioned that additional capital would be allocated to the Bujumbura-based Trade and Development Bank (TDB).
The decision to invest in these financial institutions, according to Ruto was influenced by the banks' strong financial performance and the anticipated dividends. He encouraged both public and private sectors to consider similar investments.
“I was motivated by the profits I saw and the dividends that will be paid, and I think it’s a very worthwhile investment and I want to encourage public and private entities to equally invest,” Dr Ruto said.
The Afrexim Bank and the AfDB have been instrumental in funding trade-related projects and infrastructure development, respectively.
Afrexim Bank, which provides loans to African businesses and governments for trade-related projects, is owned by African governments, financial institutions both within and outside the continent, and various private investors.
It has seen a significant increase in profits, reporting a 66 percent rise to $756.1 million last year and paying out a dividend of $264 million.
Similarly, AfDB's earnings from loans and investments rose by 123 percent to $1.73 billion, with a net income before distribution reaching a historic high of $545 million.
