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Soludo defends $462m investment in AFC

Posted by By JAMES OJO, Abuja on 2008/05/02 | Views: 556 |

Soludo defends $462m investment in AFC

The agreement to invest a whopping $462million in the Nigerian–promoted African Finance Corporation (AFC) was signed 24 hours before former President Olusegun Obasanjo handed over to President Umaru Yar’Adua.

The agreement to invest a whopping $462million in the Nigerian–promoted African Finance Corporation (AFC) was signed 24 hours before former President Olusegun Obasanjo handed over to President Umaru Yar’Adua.

Central Bank of Nigeria (CBN) Governor, Professor Chukwuma Soludo who revealed this yesterday to the House of Representatives Committee on Banking and Currency said that signing the agreement or not would not have stopped the corporation from coming into being.

The Federal Government had raised a panel to investigate CBN role in the investment, if due process was followed and the safety of the nation’s commitments in the corporation.
Soludo, who defended the investment, said that every provision that must be followed in the agreement was done, adding that it was after it that the former president gave approval that the agreement could be signed.

According to him, the Board of the CBN within its powers approved investing in AFC in accordance with the Act that established the apex bank.
“It was the former president that gave approval and directed every other person to do their duties. The process started in January 2006, but I remember that on March 23, 2007, I wrote a memo to the then President, Chief Obasanjo that we need to sign agreement with people who want to be part of the corporation.

“Two months later, he approved and said that five of us, including the Secretary to the Government of the Federation (SGF), Minister of Justice, Minister of Finance and Minister of Foreign Affairs should implement the agreement immediately.

“On May 28, 2007, Chief Bayo Ojo, the Minister of Justice came over to the CBN headquarters to sign the agreement on behalf of Nigeria and the CBN Board of Directors approved the investment,” he told the committee.
Soludo said that though the idea of African Finance Corporation was a Nigerian initiative, other countries have started to show keen interest by signing the agreement, including nations like Canada and China waiting to be part of the investment.

Before the end of the year, he said that over 25 countries would have become members, as the idea of AFC was to serve as investment reservoir for critical sectors of members’ economy.

Nigeria trade investment in AFC, he explained was not more than the agreement reached in 1993 with Africa Exim Bank, adding that it was similar to other investment through the Exim bank.
Even though AFC has just taken off, Soludo said that governments and companies are already approaching it for syndicated loans to meet the 2020 development goal.

From the AFC, the CBN governor said that special projects such as in power sector, the Kogi Coal Fire power plant, the Port Harcourt Ring road, the Fourth Lagos Mainland Bridge are to be financed.
On the source of the fund used in the investment, Professor Soludo said that the investment was in the audited account of the CBN from the sun of $16 million in a dormant account in England that was converted into Naira for that purpose.

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