ACP explores potential for major trade, investment bank
Brussels,6 September, 2012: The Secretariat of the African, Caribbean and Pacific Group of States has launched a far-reaching study to examine the feasibility of opening a trade and investment bank to service its 79, soon to be 80, member states.
Dubbed the ACP Bank for International Trade and Investment (BITI), the project aims to address gaps in existing financing methods which prevent valid projects from being realised.
The EU-funded study, running from June until December, will see a team of experts analyse financing gaps, conduct a market survey in ACP regions, and propose an implementation framework for the bank. That includes the structure, membership and location, sources of capital and operational activities and financial instruments.
“The global objective is to ensure that ACP countries can carry out key projects that can boost development, but cannot be financed by the existing channels, for whatever reasons. Research already shows there are significant gaps in trade financing and SME (small to medium business) financing, for instance – areas which are absolutely essential to ACP economies,” said Chef de Cabinet of the ACP Secretariat Dr Obadiah Mailafia, who is coordinating the BITI project.
It is foreseen that ACP countries will be the dominant shareholder in the institution, although investors may include European countries, international banking firms such as the EIB and ADB, and BRICs partners.
The original idea for such a bank stemmed from an ACP Council decision taken in 1980, which called for an exploration of the issue, but had lost steam. The initiative was recently revived at the ACP ambassadorial level and a Concept Note was prepared detailing the rationale, principles and context of setting up such an institution. The technical study and analysis will help to outline the conceptual framework, methodology and timelines for the project.
“There is no intention of creating a major bank just for the sake of it. There will be value added – it will cater to ACP countries, having thorough knowledge of our financing environments. It will address current gaps in financing mechanisms. Africa evidently has huge economic potential, and so do countries in the Caribbean and the Pacific. The BITI is therefore linked to the future of the ACP group as a whole,” said Dr Mailafia.
Field missions have been launched in the ACP’s six geographical areas, which will be followed by several rounds of analyses and validation exercises. The final report is due in December 2012.
(Photo: ACP Secretariat Chef De Cabinet Dr Obadiah Mailafia)
– ACP Press