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African Development Bank

Tag Archives | African Development Bank

New $2 Billion Fund, China and the African Development Bank

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Asahi.com
Asahi.com

Asahi.com

According to the Financial Times, the Chinese and the African Development Bank will soon announce a contribution of $2 billion to an Africa-wide investment vehicle, “Africa Growing Together Fund.” Unlike most Chinese finance on the continent, this would be open to all companies to compete.

If it’s true (and it is still to be confirmed), this is a huge change and a very welcome one. While the multilateral banks are not immune from corruption and embezzlement challenges, they do have stakeholders that try to hold them accountable in a transparent process. That has not been the case with the Chinese policy banks. I suspect that Chinese firms will still win the majority of contracts but what an excellent tactic by a maturing Chinese leadership to make them compete internationally for their wins.

This kind of competition is how companies become excellent, not by having deals handed to them, or by winning through collusion or non-competitive means. I can’t wait to learn more. A hat tip to John Briscoe.

Rwanda’s Development Drive

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Rwandan President Paul Kagame during the World Economic Forum in Davos, Switzerland, January 23, 2013.  Photo: Moritz Hager

For many Rwanda is synonymous with genocide. However, since the inter-ethnic conflict has ended, President Paul Kagame’s government is focused on revolutionizing Rwanda’s public image and converting the nation into the economic powerhouse of East Africa.

Rwandan President Paul Kagame during the World Economic Forum in Davos, Switzerland, January 23, 2013. Photo: Moritz Hager

After coming into office in 2000, Kagame outlined his primary economic objectives: privatize state-owned industries, reduce financial regulation for businesses and transform Rwanda from an agricultural economy to a knowledge-based economy. What is helping to achieve these objectives is the government’s wide-ranging advisory support from institutions such as the Singapore Economic Development Board, the Clinton Foundation and the African Development Bank.

In terms of infrastructure development, Rwanda ranks 96th out of the 144 countries surveyed in the Global Competitive Index. This is due to major transport deficits which impede national and regional connectivity and contribute to the high costs of doing business. In response, the government has instituted the National Transport Sector Policy which provides the implementation framework for transport development. Among the envisaged projects is an ambitious transnational railway line which will link the Rwandan capital, Kigali, with the Kenyan port city of Mombasa. Since the Rwandan section costs an estimated $1.5 billion the railway line will rebate its cost by creating a cheaper and more efficient trade route for Rwanda to export its agricultural products and mineral wealth to international markets. More importantly, the railway line is expected to reduce the cost of importing machinery and construction material - both of which are imperative in the development of Rwanda’s infrastructure.

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