OPIC-SUPPORTED INVESTMENT FUNDS IN THE REGIONS: AFRICA

UNCLAS ABUJA 000359 SIPDIS SIPDIS DEPT PASS TO OPIC-KGANDHI, USTR-AGAMA DEPT PASS TO EXIM-JRICHTER, TDA-EEBONG TREASURY FOR PETERS AND HALL DOE FOR CGAY AND GPERSON E.O. 12958: N/A TAGS: EINV ECON NI SUBJECT: OPIC-SUPPORTED INVESTMENT FUNDS IN THE REGIONS: AFRICA DEBT FUND REF: STATE 001478 ¶1. The required capital to operate businesses and implement development programs that will create jobs and improve the livelihoods of the citizens is in short supply in Africa. Some African countries, Nigeria inclusive, are implementing economic reforms in order to achieve higher growth rates and attract much needed foreign capital. While Nigerian banks are flush due to recent over-subscribed capitalizations, the cost of capital is disproportionately high. If this OPIC fund could come in and provide a vehicle to absorb some low risk corporate paper, that could perhaps strengthen Nigeria's desire to develop capital markets and put some downward pressure on interest rates. Also, public financing at the sub-national level (states and municipalities) could benefit if the fund would get into those areas. ¶2. The Standard Bank Group has worldwide financial services experience, and in the Nigeria context provides cutting edge financial products to its customers. The Standard Bank Group recently acquired IBTC-Chartered Bank of Nigeria, the foremost investment bank in Nigeria. ¶3. Embassy Abuja encourages OPIC's support of the USD 300 million Africa Debt Fund, providing all the right groundwork is done. SANDERS