Transparency in governance, environment, now tied to AfDB funding.

As continent-wide festivities to mark the 60th anniversary of the creation of the African Development Bank, AfDB, continue to ebb, officials have gone back to business; with the holding of the first forum to intimate governments on the need to highlight good governance, social protection of populations and environmental protection as corner stones that will henceforth guide allocation of funds to member states.



This was the subject of the inaugural forum of the Africa Environment, Social and Governance Disclosure, ESG, that held at the AfDB headquarters, on Wednesday, 23 October. It held under the theme: “Building a Sustainable Finance Ecosystem for Africa: A Collaborative Approach for ESG Disclosure”.

The AfDB Group Vice President, Solomon Quaynor, warned that the importance of ESG disclosure for attracting finance for sustainable development in Africa cannot be overstated. 

Stressing that it is no longer an optional add-on; but an absolute necessity if Africa is to thrive and not just survive in the 21st century.

He also announced that they are organising the two-day event jointly with the Multilateral Cooperation Center for Development Finance, MCDF, and the Making Finance Work for Africa, MFW4A.

They are hoping to catalyze collaboration and knowledge sharing on ESG issues. This is to pave the way for the establishment of a centralised Africa ESG Information Disclosure Hub and embedding ESG principles into the continent's development strategies.

Before the AfDB chieftain clarified that MFW4A is a platform for African governments, the private sector, and development partners to coordinate financial sector development across the continent.

Quaynor who is in charge of the Private Sector, Infrastructure & Industrialization, used the forum to emphasize the urgency of adopting robust ESG practices as a strategy to accelerate development. 

“Achieving sustainable development requires substantial financial investments which will not come without trust, transparency, and accountability,” he said. 

Quaynor also highlighted that Africa faces low awareness of ESG’s importance, inadequate infrastructure for data collection, and inconsistent policy engagement. 

He alerted that fragmented ESG disclosure standards could lead to Africa being excluded from global capital markets that increasingly prioritise sustainability.

“By facilitating better data availability and promoting best practices, we can enhance stakeholder engagement and foster greater trust between investors and businesses. This is essential for building a sustainable finance ecosystem that benefits everyone,” Quaynor noted.

Officials toasting during 60th anniversary of AfDB in Cameroon

 

 

The Head of Project Team at MCDF, Frederic Wiltmann, elaborated on its work to support sustainable investment. 

“We now have several capacity-building programmes focused on facilitating trade financing, connectivity infrastructure development, and environmental and social safeguards,” Wiltmann said. 

He added that: “One of the pillars involves establishing this Disclosure Hub initiative, and today’s forum serves as a launch for this capacity-building programme, of which we hope the Disclosure Hub will be one of the major outputs”.

He said the opening sessions featured discussions on the development of an African ESG taxonomy and an overview of the global landscape of ESG disclosure. 

For Lebogang Senne, Technical Director of the Pan African Federation of Accountants, the establishment of a Centre of Excellence to accelerate the Africa-wide adoption and implementation of the IFRS Sustainability Disclosure Standards of the International Sustainability Standards Board, ISSB will surely boost ESG awareness in Africa.

The second day session featured engaging discussions on the challenges and opportunities in ESG reporting in Africa with insights from industry leaders. 

Other sessions focused on investor expectations for ESG reporting, including a panel discussion featuring representatives from various financial institutions.

Participants from Yaounde were told that Cameroon has drawn down 46% of its total funding from the AfDB. This tallied with the announcement of the Minister of the Economy, Planning and Regional Development, Alamine Ousmane Mey, on October 17 in Yaounde, during a ceremony to mark the 60th anniversary of the AfDB.

"Currently, our cooperation with the AfDB involves a portfolio of 26 projects totaling 2.5 billion United States Dollars, USD; which is approximately 1.5 trillion FCFA, with a disbursement rate of 46%," the MINEPAT boss stated. 

He further revealed that AfDB funding primarily supports infrastructure, transport, energy, and agriculture projects, which make up 58.6%, 21.2%, and 10.8% of the total funding, respectively.

As Africa's leading multilateral financing institution, the AfDB continues to play a crucial role in providing financial resources for over 6,500 development projects across the continent, officials said.

 

 

 

This story was first published in The Guardian Post Edition No:3273 of Monday October 28, 2024

 

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