OPIC-SUPPORTED INVESTMENT FUNDS IN THE REGIONS - AFRICINVEST FUNDS II

UNCLAS ABUJA 000360 SIPDIS SIPDIS DEPT PASS TO OPIC-APATEL, 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 - AFRICINVEST FUNDS II REF: STATE 001477 ¶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 the much needed foreign capital. Capital for SME's remains limited in Nigeria, with interest rates often prohibitively high, despite very strong capitalization in the banking system. This fund could help put downward pressure on rates for SME's. ¶2. The Netherlands FMO has experience in equity investment and providing long-term loans in Nigeria and other countries in Africa which could be leveraged on by the AfricInvest Funds II. Nonetheless, determining which borrowers are low-risk could be challenging. However, Mission Nigeria believes that despite this issue, SME's are important for Nigeria's economic growth and will help to generate employment and develop nontraditional exports. ¶3. Embassy Abuja encourages OPIC to support the AfricInvest Funds II. PIASCIK