President Ellen Johnson Sirleaf has called on the Economic Community of West African States (ECOWAS) Bank for Investment and Development (EBID) and its shareholders to consider opening up the capital portfolio of the Bank to non-regional members and other institutional investors. According to President Sirleaf, the admission of non-ECOWAS members into EBID will enable the Bank to contribute to the economic and social development of member states through low interest loans.
Speaking at the opening ceremony of the 12th Ordinary Meeting of the Board of Governors of EBID in Monrovia on Monday, June 16, the Liberian leader observed that with a larger membership, EBID will be endowed with greater expertise and the credibility of its status will allow it to have access to the markets of non-ECOWAS member states.
Meanwhile, Liberia has assumed the Board Chairmanship of EBID with Mr. Amara M. Konneh, Minister for Finance and Development Planning (MFDP) directly taking over as Chairman of the Board of the sub-regional bank. President Sirleaf welcomed the decision of the Bank to give the rotational Board Chairmanship to Liberia as she recalled EBID’s first two executives Mr. Robert Tubman and the late Romeo Horton, who played key roles in establishing the ECOWAS Trust Fund, now EBID.
About 70 percent of EBID’s capital is exclusively for ECOWAS countries, with 30 percent opened for non-ECOWAS countries to participate. But President Sirleaf believes that the 30 percent is a form of restriction that has the inclination to pull the Bank back from growing. She recalled how the admission in 1982 of non-African states into the African Development Bank (AfDB) has greatly enhanced the Bank’s capital base.
“Many of us were there at the time and we know that although there were objections, those objections were overcome and the AfDB was able to open up its capital,” the President declared.
She explained that as a result of opening up the AfDB’s capital in 1982, the Bank now enjoys ‘AAA’ ratings from all of the main international credit rating agencies. She called on executives of EBID, shareholders, and member states to counter any fear they might have that they will lose control over the Bank if they opened its capital to non-ECOWAS countries.
President Sirleaf also used the ceremony to enjoin EBID’s executives and finance ministers of member countries to harness their collective knowhow and leverage the Bank’s resources in addressing projects and programs aimed at reducing poverty as strongly enshrined in the Bank’s mission and vision statements.
The President praised EBID for supporting regional development, but reminded member states that they all have a lot to do to make the Bank the principal driver of private sector growth and an effective instrument for poverty alleviation, wealth creation, and job creation for the people of the sub-region.
In its strategic plan for 2010-2014, EBID envisaged to inject about US$300 million per annum, or about US$1.5 billion into the economy of the sub-region for financing of projects both in the public and private sectors.
But in the face of member states defaulting on their loan payment, which undermines new loan approval and disbursement by the Bank, it is now time for EBID to analyze very keenly, some of the issues underpinning its bad results as the works to derive a more realistic, but aggressive strategic direction going forward.
With Liberia in charge as chair of the Board, many people believe that EBID will now begin a new course of attracting other investors.
Speaking with reporters minutes after taking over as Chairman of EBID, Liberia’s Finance Minister Amara Konneh pledged his commitment to taking the Bank to a new level and to position it to play its rightful role of financing development projects in the ECOWAS sub-region.
Mr. Konneh, who was joined by the president of EBID Mr. Bashir M. IFO, assured the public that the Bank’s new strategic plan will address most of the issues brought forward by people who have interest in the Bank.
He disclosed that the Liberian government has already begun to fully regularize its status with EBID after long years of inactiveness at the Bank as a result of the civil war. Konneh: “Liberia became detached from EBID because of the years of conflict, but now that we are back, we will be striving to see how the Bank can help finance some of our infrastructure projects.”
Mr. Konneh also spoke of the how significant a task the sub-region has to perform together.
“This year marks a crucial period of reflection for the Bank as we review progress over the last four years, consistent with our strategic plan from 2010 to 2014. Looking at our agenda, we have set for ourselves a clearly ambitious target and I am very confident we will derive the required outcomes to move the Bank forward,” he said. Konneh noted that though the Bank has been challenged over the last few years, particularly in addressing capitalization and resource requirements, it has still seen remarkable progress as it continues to sustain the foundation for growth and expansion.
“We have come to review some of the issues, not with all the answers, but with a unity of purpose that would ensure that we make the hard choices and take the tough decisions, both policy and operational in helping shape the future of this institution,” Konneh stated.
In his intervention, the president of EBID Bashir M. IFO thanked the Liberian government for the warm reception and observed that prudent macroeconomic management coupled with increasing social stability, has allowed the country to launch the ambitious strategy, the Agenda for Transformation (AfT) to make Liberia a middle income economy by 2030, amidst challenges.
He disclosed that in 2013, the total assets of EBID increase by 12.3 percent from unit of account 359.5 million at December, 2012 to unit of account 403.6 million at end, 2013.
Mr. IFO declared that the Board of Governors approved 21 projects in the amount of unit of account 153.7 million or about US$232.9 million. He disclosed that on a year basis, new approvals increased by 17 percent.
According to the EBID boss, new commitments amounted to unit of account 118.7 million (US$180 million) for 15 projects in 2013.
According to him, payments in respect of capital were received from Burkina Faso, Ghana, Benin, Guinea, Liberia, Nigeria, Nigeria, and Sierra Leone in the amount of unit of account 20.2 million.
The EBID is the financial arm of ECOWAS established by the fifteen member States of ECOWAS which include: Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo. Its headquarters is in Lomé, Togo.