Africa-Press – Tanzania. THE National Assembly has ratified the Agreement for the Establishment of the Africa Finance Corporation (AFC), paving the way for Tanzania to access long-term investment financing aimed at boosting infrastructure, industrial growth and economic development.
Presenting the agreement in the National Assembly yesterday, Finance Minister Dr Mwigulu Nchemba said Tanzania’s ratification would enable the country’s private sector and local financial institutions to benefit from AFC funding.
The financing will support lending and refinancing across multiple sectors of the economy.
Dr Mwigulu noted that joining the AFC will enhance national income, spur employment creation and improve the circulation of both local and foreign currency in the economy.
“Institutions accessing these funds will be able to employ more people, thus creating jobs and boosting income,” he said.
He added that the AFC offers expert advisory services in planning, financing and implementing development projects and programmes.
He underscored that the corporation’s high credit rating — A3 by Moody’s — would help attract investment to Tanzania.
Quoting Article 3 of the Agreement, Dr Mwigulu proposed a reservation ensuring that AFC loans be directed specifically toward long-term and developmental projects such as infrastructure, strategic investments and industrial development.
“This is to protect local institutions that currently offer short and medium-term loans,” he said.
The AFC was established to accelerate economic growth and industrial development across Africa.
As of March, this year, a total of 44 African countries had joined the Corporation, 28 as regular members and 16 as shareholder members.
Dr Mwigulu told the august House that as of December 2024, the AFC had total assets worth 14.4 billion US dollars and equity worth 3.9 billion US dollars, invested in projects across Africa, particularly in infrastructure, energy, transportation, communications and industry.
Since its inception, the AFC has financed projects worth 14.79 billion US dollars in 34 member countries.
The AFC, established on May 28, 2007, has its headquarters in Lagos, Nigeria. It is jointly owned by both public and private sectors.
The Central Bank of Nigeria holds 59 per cent of the shares on behalf of the public sector, while 41 per cent is owned by the private sector.
Among the private shareholders are the African Development Bank (AfDB) and the Africa Reinsurance Corporation (Africa Re), jointly holding 2 per cent.
The finance minister noted that since 2021, the AFC, through the Ministry of Foreign Affairs and East African Cooperation, had invited Tanzania to join.
“Some investors in Tanzania were unable to access AFC loans because the country was not a member,” he said.
Dr Mwigulu clarified that upon joining as a regular member, the government would not be required to guarantee loans issued by the AFC to the private sector.
However, guarantees may be provided for loans issued to government institutions or public-private partnership (PPP) projects, in line with existing laws.
Presenting the Parliamentary Standing Committee on Budget’s report, committee member Bahati Ndingo urged caution regarding some clauses in the agreement related to immunities and exemptions.
She advised that Articles 7 to 15, which pertain to privileges, immunities and tax exemptions for the AFC and its employees, should be accompanied by appropriate reservations to avoid conflict with national laws.
“The government should draw lessons from countries such as Liberia, Ethiopia and Somalia, which ratified the agreement with similar reservations,” she said.
The committee also urged the government to carefully assess the scale and type of organisations it partners with under such agreements to ensure that preferential treatments align with the country’s legal framework.
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