- African Investment Bank
The African Investment Bank (AIB) is one of three financial institutions of the
African Union (AU) along with theAfrican Monetary Fund and theAfrican Central Bank . It will be headquartered inTripoli, Libya and is scheduled to begin operations in April 2007. [M. Mkwezalamba CAMEF II 2006]Background
The Lome Summit (
2000 ) adopted the Constitutive Act of the African Union, which specifies the objectives, principles, and organs of the AU. Twenty-seven African countries signed the act, which provided for establishing a wide variety of institutions, including thePan-African Parliament ;Court of Justice ; African Central Bank; African Monetary Fund; and African Investment Bank. ["Menas Libya Politics & Security" 2006] In2005 , the AU held a meeting of independent experts inAddis Ababa, Ethiopia , to consider concept papers and draft Protocols prepared by theAfrican Union Commission (AUC) regarding the three institutions. The AU also determined seats for thefinancial institutions, the African Central Bank (Nigeria ), the African Investment Bank (Libya), and the African Monetary Fund (Central Africa ). [M. Mkwezalamba CAMEF II 2006]Mandate and Principles Governing Operations
On
November 21 ,2006 , the AUC held a meeting inYaounde, Cameroon , to outline the implementation of the three African Financial Institutions as per Article 19 of the Constitutive Act. [M. Mkwezalamba CAMEF II 2006] The AIB's mandate was invisioned to aid in fostering economic growth and acceleratingeconomic integration inAfrica in line with the AU's Strategic Plan. [Agreement Establishing the AIB] Article 17 of the "Agreement" further established that AIB's method of banking operations will be conducted in accordance with the following governing principles: [Article 17, "Agreement"]#Operations are principally for
financing specific projects, including national, sub-regional or regional development schemes for members. May include financing to national development institutions in Africa serving the mandate;
#In selecting projects, evaluate it's potential contribution to the mandate, rather than project type;
#AIB will not finance any undertaking in a member's territory if that member objects;
#In considering loan or guarantee applications, consider the borrower's ability to obtain financing or facilities elsewhere;
#In making or guaranteeing loans, consider if the borrower & itsguarantor can meet obligations; and that theinterest rate , other charges & the repayment schedule is appropriate;
#Proceeds can only be used for procurement in member states of goods produced by members, except if theBoard of Directors permits non-member procurement, or non-member produced goods, in special circumstances (i.e., non-member provides significant financing to AIB);
#In the case of a direct loan, the borrower can draw funds only for project expenditures as incurred;
#Take measures to ensure that loan proceeds are used only for the purposes which the loan was granted;
#Avoid a disproportionate amount of resources benefiting any member;
#Seek reasonable diversification inequity capital investment; AIB will not assume management of any entity or enterprise in which it has an investment, except where necessary;
#Apply sound banking principles, particularly to investments in equity capital;
#In guaranteeing loans made by other investors, AIB shall receive suitablerisk compensation.Membership
According to Article 4, AIB membership is open to all AU members. Eligible countries who do not become members when operations begin may be subsequently admitted, under terms and conditions established by the
Board of Governors (BOG), following the affirmative vote of at least four-fifths of the Governors, representing not less than three-fourths of the member's total voting power. [Article 4, "Agreement"]Capital
AIB's initial authorized
capital stock has yet to be determined. It will be divided into a number shares with a specificpar value , which shall be available to members for subscription in accordance with the provisions in the "Agreement". The authorizedcapital stock shall be divided into paid-in shares and callable shares. The BOG will occasionally determine the proportion of authorized capital in paid-in shares and callable shares. The BOG may increase the authorized capital stock, under terms and conditions deemed advisable. The BOG's decision to increase the authorized capital will be adopted by a vote of at least four-fifths of the Governors, representing not less than three-fourths of the members total voting power. [Article 5, "Agreement"]Notes
References
* [http://www.africa-union.org/Economic%20Affairs/Meeting%20Financial%20Institutions/AGREEMENT%20ESTABLISHING%20THE%20AFRICAN%20INVESTMENT%20BANK.pdf Agreement Establishing the AIB]
* [http://www.africa-union.org/root/AU/Conferences/Past/2006/November/EA/Yaounde/CAMEF%20II/Speech/STATEMENT%20OF%20COMMISSIONER%20ON%20EXPERTS%20MEETING%20cAM.doc M. Mkwezalamba, CAMEF II] 2006
* [http://www.uneca.org/cfm/2007/speech_maxwell_070402.htm M. Mkwezalamba, CAMEF] 2007
* [http://cns.miis.edu/pubs/inven/pdfs/oau.pdf Inventory of International Nonproliferation Organizations and Regimes: AU Profile] "Center for Nonproliferation Studies" 9-27-2006
* [http://www.menas.co.uk/pubsamples/Libya%20Politics%20%20and%20%20Security%20-%2013.12.06.pdf Menas Libya Politics & Security] 12-13-06
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