AfDB to the rescue of African countries in their fight against the coronavirus
The headquarters of the African Development Bank in Abidjan. Reuters
Text by: RFI Follow
With a view to combating the coronavirus, the African Development Bank (AfDB), which wanted to mobilize a record amount of $ 3 billion, obtained promises of subscription of more than $ 4.6 billion through a bond loan social entitled "fight the Covid-19".
The Pan African Bank speaks of a " remarkable reference loan ". Instead of going into debt directly with other banks, which are themselves in a difficult situation, the AfDB preferred to resort to the capital market, where the costs are more advantageous.
The loan has a maturity of 3 years, that is to say that it is the maximum time that the Pan-African financial institution will have to repay its debt, at a rate of 0.75%. A very low rate, a sign that investors trust the African Development Bank, highly rated by specialized agencies, with a triple-A. While it was $ 3 billion, the social bond issue was also a great success, with subscriptions exceeding $ 4.6 billion.
According to the Pan African Bank, this issue is the largest social bond ever issued on the dollar capital markets. One of the explanations for this record is also the very high volatility of the financial markets in recent weeks.
How will these resources reach different African countries, what will be the criteria for a country to benefit from them? The AfDB Board of Directors must discuss this very quickly ... Details will be known next week.
Thanks to this fundraising, we will be able to finance part of the programs and projects that the AfDB will set up in consultation with its shareholders to support African countries in their fight against Covid-19. It is for us to mitigate the social and economic effects of this pandemic on the continent.
Hassatou Diop N'Selé, AfDB Veryorian
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