Experts expect AIIB to ease Africa's funding challenges

NAIROBI - African economic experts have said they expect the Asian Infrastructure Investment Bank (AIIB) to ease funding challenges in the African continent.

The founding members of the China-proposed bank met earlier last week in Beijing to witness the signing of an agreement, a key step that paves the way for the operations of the institution.

Speaking during a two-day forum on Investing in Africa which was concluded on Wednesday in the Ethiopian capital Addis Ababa, Ethiopia's State Minister of Finance and Economic Development Ahmed Shide said AIIB was a significant step towards establishing another development institution that can fund infrastructure and other development activities.

"We welcome it; we are closely following the evolution and the establishment of this new institution," he said, adding that "Ethiopia remains open to working with the proposed bank on financing of various infrastructure projects in future."

Speaking to Xinhua, Charles Onunaiju, a Nigerian economic analyst, termed the bank as a "watershed in global finance."

"It is historical; it is a bold step in the direction of breaking the monopoly of certain forces in respect of international finance. It will also create liquidity for developing countries to access, especially for infrastructure projects," Onunaiju said.

He said although AIIB's operation will be within Asia, especially in financing heavy infrastructure, it is going to provide reasonable and meaningful financial access to developing countries.

It will become a destination of point for all developing countries, he affirmed.

Elsewhere, South Africa's Minister in the Presidency responsible for Planning, Monitoring and Evaluation, Jeff Radebe said his country's participation in AIIB will strengthen its growing business relationships with the Asian region and will also demonstrate solidarity with the region's development aspirations.

Pierre Heistein, the convener of University of Cape Town's Applied Economics for Smart Decision Making said South Africa's short-term hopes will be that AIIB is able to kick-start growth on the Asian continent and once again spur a growing demand for commodities.

While welcoming the proposed bank, the outgoing president of the African Development Bank Donald Kaberuka expressed hope that AIIB will take a "broader view of funding infrastructure projects in Africa" and would expand its mandate to other parts of the world.

Speaking during the Addis Ababa forum, Newaye Gebreab, Economic Advisor to Ethiopia's Prime Minister, said that any new additional funding that can get created globally and is accessible to African countries is most welcome.

"We hope that AIIB will in due course also be able to fund projects from Africa. I believe there will be a lot of requests for funding from the continent," Gebreab said.

He said AIIB was a better alternative, especially after the West ignored calls made by developing countries since 1970s for restructuring of the World Bank and the International Monetary Fund.

"The AIIB that I know, surely, has a broader mandate. It is more transparent, more open, more participatory and has a greater scope of accomplishing the task of financing infrastructural demands in developing countries," Onunaiju added.

Dr Edith Togba, an Economics lecturer at the Alassane Ouattara University in Cote d'Ivoire's town of Bouake, has said the AIIB will open greater opportunities for Africa.

"The initiative is good and it ought to be appreciated. A substantial amount of money is welcome in a continent like Africa where growth needs to be supported and job creation sectors need to be revived," the lecturer said.