AFD began its operations in Ghana in 1985, opening its first representation in an English speaking country. Since 1986, AFD has concentrated its operations on major economic infrastructure development projects in the country, mainly in the telecommunications, transport and energy sectors. Photo © Paul Williams
On 26th April 2013, a financing agreement of 400,000 Euros was signed between the microfinance institution, Advans Ghana (respectively represented by its Managing Director, Mr Cedric Henot) and AFD (represented by its Resident Manager, Mr Bruno Leclerc), in the presence of Claude Falgon, Chairman of Advans Co. Ltd.
This grant of technical assistance aims at promoting the development of the Very Small Businesses Unit within the financial institution, Advans Ghana. An amount of 300 000 Euros is earmarked for strengthening the capacity of credit analysts, for improving their control functions and for the implementation of a business strategy and tools to better segment this sector. The balance of 100 000 Euros will be devoted to the organisation of training sessions for their clients - very small businesses (with a minimum target of 250 clients).
The Chairman of Advans stressed on the long and close relationship that has existed between Advans and AFD Group. The Resident Manager of AFD Accra also underscored the major role of very small businesses in the development of the economy of Ghana and recalled that the purpose of this grant is to facilitate access to credit.
In view of the great benefits to institutions and people who are exposed to the use of computers and as part of its corporate social responsibility, the AFD has donated some fairly used ICT (Information and Communications Technology) equipments to Oshiyie M/A Basic School in the Greater Accra Region and to the NGO OrphanAid Ghana.
The objectives of these donations are:
- For the Oshiyie M/A Basic School, to help the school in providing tuition to its pupils in ICT, with the view of bringing them abreast with current happenings in the world;
- For the NGO OrphanAid, to help the orphanage in the management of its programmes in order to promote the welfare of the disadvantaged children in the orphanage.
Since we are in an era of information technology, shortage or lack of computers in any school or organisation slows down the development and the capacity of the pupils, students and workers from these institutions. It is for that matter that AFD decided to assist these two institutions.
Weak governmental financial resources coupled with a generally defective urban management constitute an impediment to the decentralisation process in Africa. Aware of the challenges and needs in this area, the AFD, through its training centre (CEFEB), organised a workshop in Accra, from 27 to 29 November 2012, on the management of municipal resources which brought together 38 finance officials from African local governments.
Provision of services to meet the new urban needs
How to optimise the existing municipal resources and access new ones? In many African countries where most cities are experiencing chronic budget deficits and government revenues are generally not sufficient to develop and deliver appropriate services to a rapidly growing urban population, the question deserves to be more than ever asked.
The 3-day workshop held in Accra, on the initiative of the Centre for Financial, Economic and Banking Studies – CEFEB (the training centre of the AFD), in partnership with the Municipal Institute of Learning (MILE) of the municipality of Durban, and the Public Private Infrastructure Institute Facility (PPIAF), attempted to provide useful insights into this issue.
38 finance managers from South Africa, Gambia, Ghana, Kenya, Nigeria, Uganda, Swaziland and Tanzania benefited from various presentations and testimonies which highlighted the hitches and obstacles of the decentralisation process, and explored solutions to an accomplished, effective and sustainable decentralisation.
Good governance, accountability and citizen awareness: essential provisions to mitigate the challenges of urban growth
Beyond the contextual diversity in terms of financial resources and the level of decentralisation, the challenges which these municipal officials face daily are often the same: to have services paid for, put in place a virtuous circle of good governance and accountability, manage political pressures, educate and sensitise the people.
During the workshop, the presentations, among others, of the Finance Director and of the Water and Sanitation Director from the city of Durban, helped for instance to address the practical aspects of these issues. The context of Ghana, the host of the event, was used in many presentations to highlight the achievements and challenges of the decentralisation process.
The operational dimension sparked lively debates, South-South cooperation ideas were drawn and both participants and organisers have concluded that it was an experience worth repeating.
On 30th November 2012, Hon. Dr Kwabena Duffour, the Minister of Finance and Economic Planning, Bruno Leclerc, Resident Manager of the French Development Agency (AFD) and H. E. Mr Frederic Clavier, Ambassador of France, signed a credit facility agreement related to a loan to the Government of Ghana for an amount of €50 million (120 million of Ghana Cedi), for the retrofit of the Kpong hydroelectric dam operated by the Volta River Authority (VRA). This financing is on-lent by the Government to VRA.
The Kpong dam represents 12% of the country’s electricity production. The financing will mainly help to secure, for the next 30 years, 152 MW of power from the Kpong dam by retrofitting its mechanical installations, mainly by changing the turbines. A component of the financing will also support VRA to launch technical as well as environmental and social feasibility studies for the future Pwalugu multipurpose project (power generation, irrigation, flood mitigation, water supply and fisheries), close to Bolgatanga. This project aims to be a key driver for the development of North Ghana in the future.
Apart from hydroelectricity components, the AFD financing will also cover the installation of 30 000 prepaid meters to customers of NEDCo (in charge of the distribution of electricity in the North of Ghana). Finally the project will aim at reinforcing VRA’s financial sustainability by improving the business financial model and the investment planning tools of the company.
AFD Group's commitment in the energy sector reached more than €240 M in 2011 and 2012, including i) this financing, ii) a direct financing to GRIDCo for the 330 KV line between Kumasi and Bolgatanga and the interconnection between Ghana and Burkina Faso and iii) a direct loan to TICO for the 3rd turbine of the Takoradi II plant.
On October 18, 2012, the Resident Mission of Agence Française de Développement (AFD) in Accra organised a press conference on the occasion of the publication of the activity report of the AFD Group for the year 2011 to throw more light on the activities of AFD worldwide as well as its activities in Ghana and thus evaluate the impact of AFD's financing on the nation in line with the development agenda of the Ghana government.
The total of financing committed by AFD in 2011 worldwide amounts to almost € 7 billion (16.8 billion Ghana cedis), that represents two-thirds of French bilateral aid. Sub-Saharan Africa continues to be AFD's n° 1 priority, with more than €2.7 billion in funding commitments.
In Ghana, AFD committed €240 M in 2011, including two loans (€70 M) to the Government for the retrofit of the Kpong dam and a new contribution to the District Development Facility, a direct loan of €141 M to Gridco for the interconnexion between Ghana and Burkina Faso and a new 330 KV line between Kumasi and Bolgatanga, three PROPARCO credit lines to local banks, several guarantees for loans to SMEs, and a grant to a microfinance institution (FIDES) that intends to develop activities in the north of Ghana.
In 2012, the estimate of total commitments could amount to more than €150 M. A €40 M loan to the Government has already been committed for sanitation and rural water supply in four regions, as well as AFD Group's participation in funding the third turbine of Takoradi 2 power plant.
AFD’s activities are aligned with the Government's strategy as defined in the 2010-2013 Ghana Shared Growth and Development Agenda (GSGDA) and in the Compact 2012-2022 signed in June 2012 by the Minister of Finance and Economic Planning and Development Partners. They are part of the French cooperation strategy in Ghana. Three sectors of concentration have been jointly decided by Ghana and France: i) agriculture, ii) urban development and support to local governments and iii) energy. France through AFD also participates in the Multi-Donor Budget Support with nine other Development Partners.
Innovation is also a key driver of AFD activities. For example, in the agricultural sector, AFD finances outgrowers schemes in the rubber and oil palm sectors (and hopefully soon in the cocoa sector) based on tripartite agreements between a bank, an outgrower and a technical operator.