Kenya will contribute $100 million to the AfDB and two other African multilateral lenders

As a sign of confidence in attempts to address the continent’s issues, Kenya will boost its $100 million stake in three significant African financial organizations, including the African Development Bank (AfDB).

During the opening ceremony of the African Development Bank’s annual meetings in Nairobi on Wednesday, President William Ruto announced that the additional capital infusion will also benefit the African Export-Import (Afrexim) Bank, headquartered in Cairo, and the Trade and Development Bank (TDB), situated in Bujumbura.

According to Dr. Ruto, the new investments are a sign of trust in the institutions’ ability to assist raise further funding from both inside and outside the continent.

“Countries on this continent, we have to start realizing that, as its proprietors, we must trust in our institutions before anyone else would.He stated, “We have to invest in these institutions in order for others to invest in them, and we have to believe in ourselves in order for others to believe in us.”

He claimed that although the Kenyan government has previously increased its investments in Afrexim Bank, it did not specify how much of the $100 million went to the financing company for continental commerce.

Owned by financial institutions from both inside and outside of Africa, as well as a number of private investors, Afrexim Bank provides loans to African governments and companies for initiatives related to trade.

Its profit for the previous year increased by 66% to $756.1 million, and it distributed a $264 million dividend to shareholders—an additional 66% increase above the amount distributed in 2022.

Kenya will own a larger stake in the leading development financier AfDB, which only lends to African nations, with the infusion of additional funds.

Last year, AfDB’s net income before distribution reached $545 million, the highest level in the bank’s history, while its earnings from loans and investments in treasury securities increased by 123% to $1.73 billion.

Dr. Ruto stated, “I think it’s a very worthwhile investment and I want to encourage public and private entities to invest equally. I was motivated by the profits I saw and the dividends that will be paid.”

The AfDB is owned by African member states to the tune of 60%; the remaining 40% is owned, among others, by the United States, Japan, and India. With roughly 10% of the shares, Nigeria is the largest stakeholder.

The Common Market for Eastern and Southern Africa (Comesa) member nations, including Kenya, own TDB, which will also gain from the extra funding from Kenya.

Kenya is contributing an additional $20 million to the AfDB concessional window, which is mostly used to lend to economically vulnerable nations on the continent, in addition to the recently announced $100 million commitment.

This is “an indication of Kenya’s confidence in the concessional window of the African Development Bank,” according to Dr. Ruto.

“It is an indication that in order to raise $25 billion, we must show our dedication to and confidence in the investment we are making in this organization,” Dr. Ruto continued.