Kenya’s President, William Ruto, has announced a significant investment of $100 million in the African Development Bank (AFDB), the African Export-Import (Afrexim) Bank, and the Trade and Development Bank (TDB). This move aims to demonstrate Kenya’s confidence in these institutions and encourage other countries to follow suit.
The motivation behind this investment lies in the impressive financial performance of these institutions. The AFDB’s earnings from loans and investments in treasury securities skyrocketed by 123% to $1.73 billion last year, while Afrexim Bank’s profits surged by 66% to $756.1 million. President Ruto believes that investing in these institutions will attract more financing from within and beyond Africa, promoting economic growth and development.
While the exact allocation of the $100 million investment remains undisclosed, it is known that Kenya has already made additional investments in Afrexim Bank. This investment will enhance Kenya’s shareholding in AFDB, which exclusively finances African countries. Additionally, Kenya is committing an extra $20 million to the AFDB’s concessional window, which primarily lends to fragile countries on the continent.
The ownership structure of these institutions is diverse, with African member states holding 60% of the AFDB shares, and the remaining 40% owned by countries like the United States, Japan, and India. Nigeria is the largest shareholder, with approximately 10% of the shares. Afrexim Bank is owned by African governments, financial institutions within and outside the continent, and several private investors. TDB, on the other hand, is owned by the member countries of the Common Market for Eastern and Southern Africa (Comesa), including Kenya.
This investment is expected to have a significant impact on the continent. It will increase the AFDB’s lending capacity to finance high-priority and transformational development projects across Africa. Additionally, it will support the African Export-Import (Afrexim) Bank and the Trade and Development Bank (TDB) in their efforts to promote trade and economic development in Africa. This move demonstrates Kenya’s commitment to supporting African financial institutions and promoting economic growth and development in the continent.
