Egypt is one step closer to becoming a member of the Africa Finance Corporation (AFC) after the cabinet approved plans to join the multilateral lender in its weekly meeting last Thursday.
The Finance Ministry will represent Egypt at the corporation’s headquarters in Lagos.
The AFC offers investment and other support to its 31 African member states in various sectors, most importantly energy, natural resources, transport, heavy industries, and communications. The lender has channeled more than USD 10 bn into projects in 35 countries since its founding, and while it hasn’t been that active in Egypt, that now looks set to change.
Earlier this year AFC president and CEO Samaila Zubairu told local press that once Egypt’s membership is ratified, we can expect big-ticket investment that could see us receive over USD 1 bn — way beyond the AFC’s previous sub-USD 100 mn inflows to the country. It has already identified USD 400-500 mn worth of Egyptian projects in the private renewables, transport, logistics and natural gas sectors, and USD 250 mn to support public sector transport and logistics projects. Crucially, AFC capital can mobilize a project to secure up to 6x more in private funding, part of the AFC’s strategy of “derisking” projects to facilitate private sector involvement.
Next steps: The House of Representatives will hold a final vote on the decision when it comes back from summer recess. If passed, it will be shipped to President Abdel Fattah El Sisi for ratification. The House is due back in session no later than the first Thursday in October.
