Rebuilding African economies post pandemic [Interview]

Michael Oduor Africanews journalist   -  
Copyright © africanews
Africanews

The cost of Covid-19 can be counted, not only in the millions of deaths across the world, but also the financial losses incurred because of the disruptions and restrictions imposed to prevent the spread of the virus.

Projects were halted, investors frustrated and projections of growth revised as the world literally shut down to deal with the threat of infection and death.

Africanews talked to the president and Group MD of the Eastern and Southern African Trade and Development Bank  (TDB), Mr. Admassu Tadesse who has championed pan-African financing of major infrastructure projects.

The Covid-19 pandemic affected TDB’s role in powering ambitious projects across the continent.

Some major deals were halted, delayed, or canceled as a result of pandemic-related losses. New strategies were needed.

“We, of course, have a particular mandate to support trade. As you know, the lockdowns and the closures of borders have of course affected trade. Growth has been muted. We've not seen the same level of demand coming through for our trade finance services as we have in the past,” Mr. Tadesse told Africanews.

“We do have a fair amount of infrastructure financing and project finance as well. We have attracted into various countries and even those that we did not have a specific presence in then. We are also going digital as far as we could,” he explained.

The disparity in the allocation of the stimulus packages was another major setback that has dragged down many African economies.

“I think the stimulus packages in different parts of the world have really helped keep the overall economic order, you know, fairly favorable to a rebound. But of course, we know that our part of Africa has not had anywhere close to the kind of stimulus packages that the G7 countries have enjoyed. Trillions of dollars being spoken about in so many months and not just one package, but multiple packages,” Mr. Tadesse revealed.

“So in the end, our sovereigns in the continent and the African space have been very constrained with borrowing, of course, not being able to mount the type of stimulus packages that most other economies with capacity have been able to do. In this regard, there's been very good support, but not enough.”

In regards to impact investing and how it has become more important at project finance and allocations of funds, Tadesse revealed how other subsidiary companies like insurance farms help boost finance to these major league stakeholders.

“We have a good number of pension funds, insurance companies, reinsurance companies investing in our capital, allowing us now to, of course, intermediate and leverage that with debt and provide the financing, the development financing and the trade financing,” he said.

The impact investment got a big boost, both by the pandemic and the green agenda which has had a boost from the changes.

This occurred in the United States and even the European Union has continued to push very hard with, of course, China and India also following through as major countries and economies in the world.

TDB has been a major sponsor and supporter of the Pension Funds and Alternative Investments Africa , conference since its inception.

The conference has over the years managed to bring the stakeholders together and ensure that there are smart conversations happening and there's more connectivity with stakeholders.

There has been confidence-building and a lot of information sharing.

Mr. Tadesse attested to the fact that TDB has been participating regularly over the years and found the conference to be a very useful platform, with very good participation and attendance.

The Pension Fund Africa has always contributed to intense debates and high-level networking with the aim of promoting alternative investments and diversifications.

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