Distinguished representatives of our Partner Banks
Ladies and Gentlemen of the Press
Distinguished Ladies and Gentlemen
Today is a great day for us –a day we are celebrating the values of friendship, hard work and pursuit of excellence; a day all of us gathered here must be proud of; and a day I must confess is a vindication of our operational philosophy that lays emphasis on partnerships. I am therefore highly elated by the opportunity to address you as we celebrate the fruits of our collective hard work that has culminated in the loan agreement we are signing today.
As you are all aware, distinguished Ladies and Gentlemen , this deal came to market at a time of great uncertainty in the global financial markets as a result of the sub-prime mortgage crisis that had its origins in the US but which quickly spread to major money centers creating an unprecedented liquidity crunch and virtual disappearance of inter- bank money market activities. The decision to go to market under such conditions was therefore an agonizing one for us. We were faced with what that famous writer, Mr. Fredrick Forsyth, described as the Devil’s Alternative; not proceeding meant that we risked missing our operational targets in terms of net income and asset growth which could damage our credit in the future. Proceeding presented us with a risk of a possible failure of the syndicated loan issuance which is itself damaging to our reputation as well as our ability to meet our operational targets. Faced with these unpalatable alternatives we sought counsel from our partner banks who provided valuable advice that made us take the decision to proceed. Not only did they provide advice, they also quickly put together a bridging facility that enabled us meet our funding needs while we prepared for market entry under the difficult environment. In the end, distinguished Ladies and Gentlemen, it was the confidence earned through many years of partnership with the group of Mandated Lead Arrangers that made it possible for us to take the plunge. We believe that we earned the confidence of those banks by rising above mediocrity, maintaining excellence in our operations , and our demonstrated loyalty to those who support us. Our great story and the hard work of our friends—the MLAs— no doubt contributed to the resounding success of this syndication despite market uncertainties. As you are all aware, the Facility was almost twice oversubscribed and attracted about 30 banks who we welcome enthusiastically as our new friends.
Distinguished Ladies and Gentlemen, we need many friends to help us in the work we are doing to take Africa out of poverty. There has never been a better time than now to identify with Africa. The continent is experiencing a tremendous revival. Economic growth in the past five years had been above five percentage points; inflation is in single digits; foreign exchange reserves cover more than five months of imports; total trade figure doubled between 2000 and 2007; the number of armed conflicts has fallen significantly; and fiscal discipline has resulted in the continent achieving an average fiscal surplus of 3 % of GDP in recent years. These are remarkable achievements when viewed from where the continent was only a few years ago. Prospects are even brighter considering the determination of Africa’s new leaders to embrace best practices in economic management as well as the very favorable external environment. And there is a new crop of entrepreneurs that are determined to seize the moment. A few days ago, before coming to London for this event, I visited Rwanda and Zambia. In Rwanda, a country that only in 1994 went through a most harrowing of experiences in the form of a disastrous fratricidal , I found a leadership desperate to use the bitter lessons of the past to build a greater tomorrow; I found a crop of young entrepreneurs anxious to take advantage of the tremendous opportunities offered by prudent economic policies to rise to the best of their abilities and therefore deal a mortal blow to the xenophobia fired by economic deprivation and which fed the disaster of the past. In Zambia, I was marveled by the speed at which progress can be made under conditions of economic and political stability. During my visit I signed two loan agreements; one in support of Zambian Mining Service companies, and the other in support of Zambian SMEs in non- traditional export activities. I was humbled by the relief I saw in the eyes of some of the beneficiaries of these facilities. I was emotionally moved when one of the beneficiaries chosen to make a statement at the signing ceremony choked in appreciation. Such events remind me of how far our little efforts can go to make a difference to Africa’s future. And none of these would have been possible without the support we receive from you. You must therefore be also fulfilled that apart from the business aspects of our relationships, you are also making a difference in our world.
Distinguished Ladies and Gentlemen
It is important that I also inform you that the work you are doing , through Afreximbank, to support Africa’s development enables you to benefit from the best of two worlds—– your participation in making our world better and a peace of mind regarding the safety of your investment. With regard to the latter, Ladies and Gentlemen, I am pleased to inform you that our Bank is stronger then ever. We have exceeded all important targets set under our 2008 budget which itself was derived from our Third Strategic Plan covering the period 2007 to 2011. Total assets are in the region of USD 1 billion , three years ahead of our forecast; net income is more than 20 % ahead of 2007; and shareholders’ funds are rising as a result of new equity investments from existing and new shareholders. Our Tier One capital ratio remains extremely healthy at more then 40 %. These results are as a result of your support for which we remain eternally grateful.
We intend to continue to earn your confidence by not only being innovative in pursuit of our mandate but also ensuring that we remain a sound and profitable financial institution worthy of our name and place in Africa. Our goal is to work relentlessly to ensure that never again will Africa be seen as a problem rather than a partner; never again will Africa sit on its arms as opportunities pass it by; never again will Africa be the world’s basket case; and never again will we remain a continent of potentials that are not tapped for the benefit of mankind. We have begun the journey towards realization of these goals but it is a difficult one. But no matter how difficult it is, the journey is one we are determined to join like-minded organizations to create a beaten path for others to continue. Our goals may sound lofty and audacious. But with you as our friends and the excellence that is at the foundation of our work, we feel confident to make them the ultimate objective of our endeavor in Afreximbank. The proceeds of this syndicated loan will be deployed towards the attainment of this goal. We will therefore continue to focus on activities with the highest growth potential as well as those that will enable Africa benefit from the opportunities that abound today, especially in the tourism, telecom , mining services and commodities sectors.
Distinguished Ladies and Gentlemen, I must now formally thank all those who contributed to the success of this syndicated loan issuance. I must first thank the group of MLAs for a work well done under a most challenging environment. To participating banks some of whom are taking our risk for the first time, we express our deep thanks for identifying with us in this period of great uncertainty. I am sure you will soon learn that ours is a bank that respects its obligations and which values partnerships. We will therefore work to ensure that some of you benefit through other ancillary business from us. The law firm of Denton Wilde and Sapte have become gurus in documenting our deals and we must thank them for the speed and diligence which made it possible for us to be signing this deal today. We are also grateful to the Ladies and Gentlemen of the Press here with us for finding this event worthy of their coverage. We hope they will as usual give it the positive mention it deserves.
It is now my pleasure to wish us all a successful signing ceremony and best wishes as we travel to our various destinations after the event.
J-L EKRA
PRESIDENT, AFREXIMBANK
LONDON, JUNE 13. 2008