Tunis — In a bid to improve the African business environment, the Board of Directors of the African Development Bank (AfDB) Group on Wednesday in Tunis, endorsed a grant of US$ 15 million, from its surplus account in support of the Investment Climate Facility (ICF).
The ICF is a new Public-Private Initiative through which donors, international and domestic corporations and NGOs, will collaborate with African governments and regional organizations, to improve the investment climate at the national, regional, and continental levels.
The Facility was incorporated in Dar es Salaam, Tanzania, in April and will work with other players in the field of investment climate enhancement by proactively identifying opportunities to develop programs that address important constraints on business on the continent.
To achieve this, the ICF will focus on building the environment for investment encouraging, developing and working with coalitions for investment climate reform, and supporting business-government dialogue; getting the investment climate right, supporting governments in creating a legal, regulatory and administrative environment that encourages businesses at all levels to invest, grow and create jobs; and encouraging business to respond, improving Africa's image as an investment destination through coordinated effort to publicize improvements in the investment climate.
The Facility will support the design and implementation of programs in eight areas that have been agreed on as priority constraints to the enabling environment. These are property rights, taxation and customs; infrastructure facilitation, competition, business registration and red tape, financial markets, labor markets, corruption and crime.
ICF activities fall under six broad areas - legislative review and reforms; capacity building of key institutions such as land registry offices, company registries and commercial courts; promotion of public-private sector dialogue; implementation of recommendations of the NEPAD APRM (African Peer Review Mechanism) process; research as well as economic and sector work in the priority areas; and media work aiming at improving Africa's image as a place to do business.
The governing structure consists of two primary organs: the Board of Trustees (BOT) and its sub-committees; and the Management. A third organ supporting the Board and Management Executive is the Technical Advisory Committee (TAC).
The ICF's business plan calls for processing about 12 new projects each year. The size of projects will vary from less than US$ 500,000, which can be approved by the CEO, to over US$ 1 million, which requires the approval of the BOT. The ICF will target projects that fill specific gaps in the programs offered by other development partners and will generally seek larger projects to gain economies of scale.
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The initial phase of the ICF's operations will be driven by three strategic themes: Intra-African trade - improving Africa's import and export environment as well as improving and simplifying administration in order to facilitate cross-border trade; Facilitating business development and expansion, focusing on constraints on ICT and infrastructure development, business registration and licensing, and property rights; and, Facilitating financial and investment environment, developing capital markets, increasing access to finance for enterprises, improving the regulatory environment for second and third tier institutions and facilitating improved digital infrastructure.
At the invitation of the Facility, the Bank will play two key roles as its primary regional partner, core financial contributor and resource administrator.
The ICF's projected funding needs stand at US$ 550 million during its life-span (7 years) with an initial target funding level of US$ 120 million for the first three years of operation. The US$ 15 million grant will be approved by the Board of Governors of the Bank Group.
