African Development Bank Senior Vice-President Bajabulile Swazi Tshabalala, has held talks with a high-level delegation from JPMorgan Chase, the largest US bank, on potential partnership between the two institutions.
The delegation from JPMorgan Chase, led by Masha Gloukhovski, Global Head of the Public Sector, included Olivier Eweck, Head of the Public Sector for Sub-Saharan Africa, Gabriel Syed, Vice President for emerging markets, and Sjoerd Leenart, Global Head of Corporate Banking. The team conveyed JPMorgan's interest in collaborating with the African Development Bank Group, particularly on trade and the private sector, and project funding operations. The meeting took place on March 22.
"We are also very interested in providing long-term financing, as far as possible in local currencies, provided we have a guarantee from the Bank," said Eweck. The US Bank currently works with the Bank Group on capital market transactions. It is considering leveraging the Bank's guarantee instruments to increase funding to eligible African countries, particularly low-income states.
Ms. Tshabalala spoke about efforts to partner with other development institutions to mobilise resources to help combat climate change in Africa amid regional and global challenges. She highlighted the impacts of the African Development Bank window, which offers financing and support to middle-income countries, and the African Development Fund, which provides concessional funding to low-income countries and transitional countries.
The Senior Vice President said the Bank Group had just approved a new ten-year strategy, which aims to accelerate inclusive and climate-resilient growth, and plans to strengthen partnerships with multilateral development banks in line with the global quest for them to become "better, bigger and more efficient."
She welcomed JPMorgan Chase's desire to invest more in Africa, stating that the Bank Group was ready to strengthen its partnership while being mindful that some of the activities under the collaboration do not create "systemic risks" for either institution. "One of the Bank's major objectives was to mobilize private-sector funding for development in Africa," she stressed.
Max Magor Ndiaye, the Bank Group's Director of Syndication, Co-financing and Client Solutions, said JP Morgan and others could support the Bank's commitment to low-income nations eligible under the African Development Fund criteria and those facing challenges, including transition countries.
Ms Tshabalala questioned the refusal of certain investment banks to share the risks even when governments comply with the rules. As a result, she said, governments often suffer significant consequences of external shocks such as the Covid-19 pandemic.
"JPMorgan has its own approach, and we are here for the long term. While our work has an impact in periods of prosperity, it is particularly important in more difficult times," said Eweck. "We are committed for the long term."
Gloukhovski stressed: "We are a profit-making institution. So, it's a challenge for us. And we need better coverage. So, it's important to adopt a holistic approach."
Ahmed Rashad Attout, Bank Group acting director for financial sector development department, lauded JPMorgan Chase's interest in doing more in Africa. "The future is genuinely positive for Africa, and I think that you are making a very good strategic decision to be in Africa at this time because the future belongs to it. The demand for capital market solutions is increasing," said Attout, who has worked with JP Morgan on some Bank operations in the capital market.
Emphasising that ADF country donors would not continue to provide money for concessional financing forever, Valerie Dabady, division manager for the resource mobilisation department , commented that the African Development Fund - which achieved a record replenishment of its funds of $8.9 billion in 2022- was authorized to raise additional funding on the capital market, which means that it must be credit rated, she explained.
She highlighted the Bank Group's expertise as Africa's premier development finance institution. "And if you are looking to establish a base in Africa, we are the skilled partner you need," she assured, adding that JPMorgan Chase could work with the Bank through its many trust funds.
Members of the Bank team invited JPMorgan Chase to participate in the upcoming Africa Investment Forum Market Days scheduled for December 2024 in Rabat, Morocco. The Africa Investment Forum, an investment platform established by the Bank Group and seven other partners, advances projects to bankability, raises capital, and accelerates deals to financial closure.
