Lessons for Nigeria from the AFC by Ebuka Nwankwo

A lot of people remember Professor Charles Soludo for his banking consolidation, but as a civil engineer, and as someone who wants Nigeria to be like Dubai, I remember him as the pioneer chairman of the Africa Finance Corporation (AFC). In the midst of the rising inflation and hardship in the country, someone asked if anything good can come out of Nigeria. The answer to that question is simple – something good is happening in Nigeria and it is happening in Lagos.


This article is not about Soludo neither is it about the CBN governors after him that have supported the AFC, it is about how vision, patriotism and hard work could save Nigeria from its present troubles – these three virtues can be seen in AFC’s story. For Nigeria to prosper, I am sure a thing or two can be copied from the AFC.

After his banking consolidation, Soludo came up with another ambitious plan that surprised some of his critics – it even confused some critics. Part of the plan was to make Lekki the financial hub of Africa by 2020. The plan was to make Lekki what London is to Europe or what Singapore is to Asia. In this plan for Nigeria and Lekki, AFC was to be established in Lekki as a leading private sector investment bank, a development financier and a contributor to the development of Africa. AFC has lived up to expectation and its story should make any African proud. The first point Nigeria can take away here is patriotism. Here is an Igbo man who was a Central Bank governor, and had a vision for Lekki to be the financial hub of Africa. There were no ‘primordial’ sentiments that he could be empowering the Yoruba nation – the Oduduwa nation – he knew that Lekki being in Lagos has all it takes to be what Canary Wharf is to London.

AFC was launched in 2007 with an authorized share capital of $2 billion. In setting up the organization, a bill was sent to parliament seeking that 5 percent of Nigeria’s foreign reserve be made available to the AFC. Despite the opposition to this bill, the CBN still managed to raise money to invest in the AFC. The startup capital for the investment bank was thus from the private sector and from Nigeria’s apex financial institution, the CBN. There was elite consensus from Nigerian banks, who are shareholders, to support this venture. What is the takeaway here? Nigeria can reap from a good and honest investment – the CBN’s investment is yielding enormous dividend for Nigeria.

A small seed that was planted in Lagos now has thirteen members, who are shareholders. These members are: Nigeria, Guinea Bissau, Ghana, Sierra Leone, Gambia, Liberia, Guinea, Chad, Cape Verde, Gabon, Côte d’Ivoire, Rwanda and Uganda. And as at April, 2016, it had invested over $5 billion in 22 African countries. There are numerous lessons to learn here. One, when Africans see a good thing they key into it. Other African members of the AFC have keyed into this profitable venture and are benefiting. Two, Nigeria can still play the big brother role in Sub-Saharan Africa. For an organization, founded in Nigeria, to win the trust of other African investors’ shows that something is being done right in Nigeria.

In order to shield itself from currency somersaults and speculations, the AFC decided, from inception to carry out its business in dollars. Nigeria should note this, especially now we seem to be having a currency crisis – we are even thinking of embracing the Yuan. Had the AFC not shielded itself from currency problems, we will not be talking of this successful organization today.

If you are one of those who believe that only Africans can develop Africa, you are right – absolutely right. The AFC has supported companies and have invested massively in Africa’s electricity sector – its local knowledge of Africa is a big plus here. In 2013, the AFC was invited as a private sector partner in the $7 billion USAID-funded ‘Power Africa’ initiative announced by US President, Barack Obama. For an African-based organization to be involved in a global initiative to light up Africa is something Africans should be proud of.

Speaking of power, a lot of Nigerians are not impressed with the new owners of power assets in Nigeria. To be honest, nothing has changed. It looks like it is even worse. The truth is that Africa’s power problem requires massive investments. I have argued, in one of my articles, the facts on ground show that Nigeria will not have constant power supply in the next 20 years. The problem is cash.

For Africa to have power we need more investment banks,  like the AFC,  geared towards infrastructure. What Nigeria’s Infrastructure Bank (TIB) is doing locally, the AFC is doing locally and internationally. Investments from shareholders are being managed in a manner that would bring maximum benefit to Africans – in mining, oil and gas, power and civil infrastructure.

In 2015, the AFC posted impressive results – achieving 25 percent growth in its balance sheet and with prospects to keep investing in Africa. While Nigeria is being downgraded by rating agencies, this seed planted in Nigeria, AFC, enjoys impressive investment-grade ratings from rating agencies.

Since I am not a spokesman for the AFC (I don’t intend to be), the aim of this article is to assure Nigerians, in the midst of our present suffering that something good can come out of Nigeria. Or rather, that something good is happening in Nigeria. The ball is in the court of our policy makers to learn from this organization.

I am sure the President and CEO of AFC, Andrew Alli, will be willing and happy to tell state governments, and even the federal government, what they are doing right at the AFC.

ONE OTHER GOOD NEWS FOR NIGERIA

NJIDEKA AKUNYILI CROSBY: A MASTER IN THE MAKING
If Njideka Akunyili Crosby was a footballer, I’m sure America will not allow her play for Nigeria. Njideka’s masterpieces engage her audience in stimulating political and social dialogues. She blends her African culture with her adopted Western culture in passing her message to her audience.

She has exhibited her artworks in elite museums and galleries in America. If Nigeria is really serious about diversifying its economy and earning some forex, people like Mrs. Crosby should be engaged, even if it is on a part-time basis.
I know her mom, Professor Dora Akunyili, is smiling wherever she is.