FROM THE PRESIDENT CONTENTS.

Transcription

1 2 013 Annual Report

2 FROM THE PRESIDENT CONTENTS This Annual Report for the ECOWAS Bank for Investment and Development looks at the a vi s of the Bank as well as the global economic environment under which the Bank operated in the year Global economic ac vity was marked by a decelera on of growth. Economic growth slowed to 3% in 2013, against 3.2% in At the subregional level, economic ac vity remained dynamic, but a li less robust than in the previous year. The strong growth in the subregion has come on the back of strong export growth in natural resource producing countries and a rebound of growth in Cote d Ivoire and Mali, two countries emerging from conflict. Regional growth stood at 6.4% in 2013, compared with 6.6% in The growing complexity observed at the global level, and the slight decline in regional output, call for more structured approaches to tackle the challenges posed by a slowing global economy. This would require among other things, a recalib on of regional economic policies away from dependence on the exporta on of primary commod to policies that espouse industrializ on. The industrializ on of the subregion s economies would require massive investments in infrastructure (i.e. roads, ports, telecommunica ons, etc), and I am hopeful that EBID can play a pivotal role in this endeavor. It should be noted that no meaningful dent would be made in efforts to diversify the economies of the subregion, without first addressing the issues of the infrastructural deficit that has so long limited the subregion s ini ves to move its economies away from dependence on primary commodi es export to modern, diversified and job cre ng economies. That is why the Bank s Strategic Plan ( ) has as one of its cardinal pillars, interv infrastructure development in the subregion. on in During the period under review, the Bank signed fi een loan agreements in the amount of US$ million for the financing of projects within ECOWAS Member States, tran ng into a 9.8% growth in net cumula ve commitments. Faced with an increasing growth in its commitments, the Bank intensified its resource mobiliz on in es, and strengthened its coopera on with partners, both within and outside the ECOWAS zone. With regard to the Bank s balance sheet, I am pleased to note that during the year under review, it expanded by 12.3% to UA million at end of December, from UA million at end of December Despite the consolid on of ac v es, the Bank registered a loss of UA 9.78 million as a result of provisions made on some private sector loans. Finally, we wish to extend our sincere apprecia on to all stakeholders of the Bank, especially the Board of Governors, Board of Directors, and other partners, for their con nued support to the Bank and we wish to call on them to con nue such support in po oning the Bank as the major regional actor in financing development projects. FROM THE PRESIDENT CONTENTS. EXCHANGE RATES.. ACRONYMS & ABBREVIATIONS LIST OF TABLES LIST OF CHARTS FACT SHEET CHAPTER I : PRESENTATION OF ECOWAS BANK FOR INVESTMENT AND DEVELOPMENT ESTABLISHMENT VISION MISSION AND OBJECTIVES THE STRUCTURE OF THE BANK S AS AT DECEMBER 31, DECISIONMAKING BODIES 1.6 HUMAN RESOURCES... CHAPTER II : INTERNATIONAL AND REGIONAL ECONOMIC ENVIRONMENT INTERNATIONAL ECONOMIC ENVIRONMENT THE ECONOMIC SITUATION OF THE ECOWAS REGION CHAPTER III : ACTIVITIES OF THE ECOWAS BANK FOR INVESTMENT AND DEVELOPMENT ACTIVITIES UNDERTAKEN BY THE DECISIONMAKING BODIES 3.2 ADMINISTRATIVE AND MODERNIZATION ACTIVITIES OF THE BANK 3.3 OPERATIONAL ACTIVITIES 3.4 COOPERATION AND RESOURCE MOBILIZATION ACTIVITIES CHAPTER IV : FINANCIAL POSITTION OF EBID AS AT 31 DECEMBER, BALANCE SHEET AS AT DECEMBER 31, INCOME STATEMENT AS AT DECEMBER 31, ANALYSIS OF FINANCIAL AND PRUDENTIAL RATIOS CHAPTER V : FINANCIAL OUTLOOK OF THE BANK KEY FOCUSES FOR THE YEAR CONCLUSION ANNEX The President Bashir M. IFO 2 ECOWAS Bank for Investment and Development (EBID) 3

3 EXCHANGE RATES ACRONYMS & ABBREVIATIONS PERIOD January 1 December 31 EXCHANGE RATE (4th quarter average) 1 Unit of Account (UA) = 1 IMF SDR 1 UA = US Dollars 1 UA = Pound Sterling 1 UA = Canadian Dollars 1 UA = Euro 1 UA = Francs CFA 1 UA = Naira 1 UA = Ghana Cedis 1 UA = Escudo 1 UA = Dalasi 1 UA = Guinea Francs 1 UA = Leone 1 UA = Liberian Dollars ADB African Development Bank AIB African Investment Bank AIF Agence Intergouvernementale de la Francophonie EIB European Investment Bank EBID ECOWAS Bank for Investment and Development WB World Bank ERIB ECOWAS Regional Investment Bank CEB ECOWAS Communauté Electrique du Bénin (Benin Electricity Community) Economic Community of West African States UNCTAD United Na ons Conference on Trade and Development DEG German Development Agency SDR Special Drawing Rights ECOMARINE West and Central African Shipping Company WAPP West African Power Pool ETI Ecobank Transna onal Incorporated EXIMBANK India ExportImport Bank of India EXIMBANK USA ExportImport Bank of the United States of America ABREF African Biofuels and Renewable Energies Fund GFCI Guarantee Fund for Cultural Industries IMF Interna onal Monetary Fund ERDF SFT ECOWAS Regional Development Fund Special Fund for Telecommunica ons NEPA Na onal Electric Power Authority (Nigeria) NEPAD New Partnership for Africa s Development NICT New Informa on and Communica Technologies OECD Organisa on for Economic Coopera on and Development MDGs Millenium Development Goals UN United Na ons GEO Global Economic Outlook UEMOA Union Economique Monetaire de l Afrique de l Ouest 4 5

4 LIST OF TABLES LIST OF CHARTS Table1: Structure of the Authorized Capital of EBID as at December 31, 2013(In UA Million) Table 2 : Staff Situa Of EBID As At December 31, 2013 Table 3 : Global GDP Growth Trends From 2010 to Table 4 : Growth Trends In SubSaharan Africa From 2010 to Table 5 : Infla on Trends Between 2012 to Table 6 : Average Commodi ty Price Trends Between 2012 And Table 7 : Major Regional Stock Market Trends Between 2012 And 2013 Table 8 : Average Currency Exchange Rate Trends In The SubRegion Against The Units of Account between 2012 and Table 9 : EBID Staff Strength As At December 31, Table 10 : Trends of Projects Appraised According To Sector Of Opera on (Public and Privat e) Between 2012 And Table 11: Trend of Approvals According To Type of Interven on Chart 1 : Breakdown of Subscribed Capital Of EBID Chart 2 : Global GDP Economic Growth Trends From 2010 To 2013 (%) Chart 3 : Real Growth Trends Of The Economies Of The SubRegion Between 2011 and 2013 Chart 4 : Inflation Trends (Annual Average) Between 2012 And 2013 Chart 5 : Current Account Balance Trends Of The Economies Of The SubRegion Between 2012 and 2013 Chart 6 : Approval Trends Between 2012 And 2013 Chart 7 : Trends In The Structure Of The Types Of Intervention Of EBID Between 2012 And 2013 Chart 8 : Net Total Commitment Trends Of EBID From 2004 to 2013 (Millions Of UA) Chart 9 : Trends In Distribution of Total Net Commitments Per Sector Of Operation between 2012 And 2013 (Millions of UA) Chart 10 : Distribution Of EBID S Net Total Commitments Per Country As At December 31, Between 2012 and Table 12: Financing Trends by Type of Interven on between 2012 and Table 13: Trends in Commitments between 2012 and 2013 by Type of Interven on Table 14: Sectoral Trends in Net Total Commitments of EBID between 2012 and Table 15 : Sectoral Distribu on of The Net Total Commitments As At December 31, Table 16 : Distribu and Trends In Net Total Commitments Per Country between 2012 and 2013 (In UA ) Table 17 : Loans Outstanding Per Country As At December 31, 2013 (In UA). Table 18: Balance Sheet As At December 31, 2013 (In Thousands Of UA). Table 19: Income Statement As At December 31, 2013 (In Thousands Of UA).... Table 20: Key Aggregates As At December 31, 2013 (In Millions of UA)... Table 21: Financial Ra As At December 31, Table 22 : Pruden l Ra s As At December 31,

5 FACT SHEET CHAPTER 1 Date of Establishment The Fund for Coopera on, Compensa May 28, It started opera ons in n and Development was established on Shareholders The 15 Member States of ECOWAS: Benin, Burkina Faso, Cape Verde, Côte d Ivoire, Gambia, Ghana, Guinea, GuineaBissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. Vision The vision of the Bank is to become the leading regional development and investment financing ins tu on in West Africa, and also serve as an effec ve tool for poverty redu on, wealth crea n and employment promo on so as to raise the living standards of the people of the region. Mission The Bank has been assigned the task of crea ng an enabling environment for the emergence of a strong, industrialized, and prosperous West Africa that is fully integrated at the internal level and within the world economic system so as to enable the Community to benefit from the opportun es and prospects offered by globaliza n. Transformation December, 1999: Transforma n of the ECOWAS Fund for Coopera n, Compensa n and Development into the, a holding company with two subsidiaries (ERDF and ERIB). July 2003: entry into force of the Protocol establishing EBID, the Holding and two subsidiaries (ERDF and ERIB). January, 2004: EBID becomes opera onal. June 2006: Decision of the Heads of State and Government to reorganize the EBID Group into a single en ty. January, 2007: EBID is reorganized into a single en ty with two windows (private sector and public sector). October 2011: Decision of the Board of Governors to raise the Bank s capital from UA 603 million 1 to UA 1 billion Capital as at Authorized Sta Subscribed Called up Paid : UA million : UA million. : UA million : UA million Strength 145 including 2 statutory appointees, 98 permanent staff and 45 contract staff. Approvals Projects approved in 2013: 21 projects at a total cost of UA million or US$ million. Total projects approved from : 223 projects for a total of UA 1.3 billion or US$ 1.9 billion Commitments New commitments in : 15 projects UA million or US$ million Loans as at 31/12/2013 : Total : UA million for 122 projects or US$ million UA million for 181 projects or US$ million PRESENTATION OF ECOWAS BANK FOR INVESTMENT AND DEVELOPMENT The, the financial arm of the Community, is an international development finance institution, which finances public and private sector projects. 1.1 Establishment EBID emerged in 1999 following the transformation of the former ECOWAS Fund, which was established in 1975 just as the Executive Secretariat (now ECOWAS Commission). EBID was initially organized on the lines of a holding company with two specialized subsidiaries namely: the ECOWAS Regional Development Fund which financed public sector projects; the ECOWAS Regional Investment Bank (ERIB) which focused on private sector projects. The Protocol which established the Bank came into force in July 2003 and the Bank commenced operations on 1st January, However, by Decision A/DEC.3/06/06 dated 16 June 2006, the Authority of Heads of State and Government of ECOWAS decided to reorganize the EBID Group into one entity with two windows, one of which is to fund the private sector whilst the other is assigned the task of financing the public sector projects. The Bank is headed by a President, who is assisted by two VicePresidents, responsible for Finance & Corporate Affairs and for Operations, respectively. Thus, the initial objectives, vision and mission of the Bank were maintained. The Bank has been operating under the new structure since January, Vision The vision of the Bank is to become the leading regional development and investment financing institution in West Africa, and also serve as an effective tool for poverty reduction, wealth creation and employment promotion so as to raise the living standards of the people of the region. Total balance sheet as at 31/12/2013 UA million (US$ million) 1.3 Mission and Objectives The Bank has been assigned the task of creating an enabling environment for the emergence of a strong, industrialized, prosperous West Africa that is fully integrated at the internal level and within the world economic system so as to enable the Community to benefit from the opportunities and prospects offered by globalization. 1 UA (Unit of Account) = 1 SDR (Special Drawing Right) 2 Financial Agreements signed in ) ECOWAS Bank for Investment and Development (EBID In accordance with Article 2 of its Protocol, the Bank seeks to: contribute to the realization of the objectives of the Community by supporting regional integration projects or any other development project under the private or public sector ; 9

6 contribute to the development of the subregion by financing the special programmes of the Community. 1.4 The Structure of the Bank s Capital as at December 31, 2013 The authorized capital 3 of EBID is UA million (Units of Accounts) 70% of which is held by Member States whilst the remaining 30% has been set aside for subscription by nonregional investors. As at December 31, 2013 only regional members have subscribed to the capital and is broken down as follows: Chart 1: Breakdown of subscribed capital of EBID As shown in the table below the callable capital stands at UA million,whereas the called up capital stands at UA million of which UA million has actually been paid as at the end of December, 2013, representing 41.3% of the called up capital or 16.2% of the authorized capital. Table 1: Structure of the authorized capital of EBID as at December 31, 2013 Item Amount (in millions of UA) Share (as % of Authorised Capital) Authorised Capital Subscribed Capital Calledup Capital Paidup Capital Capital Arrears Callable Capital Source: Finance and Accounting Department Source: Finance and Accounting Department 1.5 Decision Making Bodies EBID has a Board of Governors and a Board of Directors. Currently, only ECOWAS Member States are represented on the two Boards The Board of Governors In accordance with the Articles of Association of EBID, the Board of Governors is the highest decision making body. It has wide management, operational and administrative powers over the Bank s activities. Each shareholder is represented on the Board of Governors by a substantive Governor and an Alternate. The substantive Governors are the Ministers of Finance of Member States of the Community. The Board of Governors elects the Board of Directors, to which it delegates powers, excluding those specifically reserved for the Board of Governors. 3 This capital was raised at the Sixth Extraordinary Meeting of the Board of Governors held in Accra on October 10, 2011 to UA 1 billion The Board of Directors The Board of Directors of EBID comprises nine (9) members who are neither Governors nor Alternate Governors, and the President of EBID who is also the chairperson of the Board of Directors. The members of the Board of Directors are elected by the Board of Governors. The Directors are elected for term of two (2) years, renewable once. The list of the members of the Boards of Governors and Directors as at December 31, 2013 is presented in Annex

7 CHAPTER Human Resources As at December 31, 2013 the total staff strength of the Bank was recorded at 145, including 38 women or 26.2%. Table 2: Staff Situation of EBID as at December 31, 2013 Breakdown of Staff Categories Male Female Total Statutory Appointees Directors (D) Professional staff (P) General services staff (G) Support staff Contract staff Outsourced staff Source: Department of Administration INTERNATIONAL AND REGIONAL ECONOMIC ENVIRONMENT 2.1 International Economic Environment The slowdown observed since 2013 in the global economy continued in 2013, however at a slower pace, as a result of the gradual easing of uncertainties surrounding the prevailing economic and financial difficulties particularly in the developed countries. According to the International Monetary Fund (IMF), global economic growth is weak, the drivers of business are changing and the downside risks persist. The global economy was characterised by a rebalancing with improved growth prospects in developed countries and persistent weakness in major emerging countries. The economic activities of emerging countries are growing at a lesser pace than before. Notwithstanding, they still represent the bulk of global economic growth. Overall, global growth stood at 3.0% in 2013, compared to 3.2% in the previous year, as a result of the loss of intensity of the factors that were responsible for the weakness of global economic activity. Chart 2 : Global GDP economic growth trends from 2010 to 2013 (%) The Bank s organizational chart is presented in Annex 2. TOTAL Source: IMF, World Economic Outlook (WEO) January,

8 2.1.1 Situation of Advanced Economies The picking up of the developed economies was very much tied to the expansionist monetary policies which revived the services and construction sectors and to a lesser extent, the manufacturing sector. Thus, the economies of the advanced countries which were gradually becoming stronger were expected to grow by 1.3% in 2013, compared to 1.5% in The situation however, varied from one country to another. The persistent recession in Italy, Portugal, Spain and Greece held back growth in the Euro zone. The return to growth is clear in the United States, Japan and the United Kingdom with growth rates above 1%. In the United States, growth continued at a moderate rate as a result of the massive fiscal consolidation measures instituted. GDP rose at an annual rate of roughly 1.9% only in 2013 compared to 2.8% in 2012, under the negative effect of the fiscal cliff (cuts in expenditure and tax hikes). Government deficit thus dropped from 6.7% in 2012 to 4.1% in The American economy however, showed considerable resilience in the face of the fiscal shock thanks to the monetary policy pursued by the Fed (see segment on monetary policies). In the Euro zone, growth is recovering, but still feeble. The improvement of the Euro zone s financial environment continued in The economic situation also improved considerably as it emerged from recession in mid2013 and made progress towards a banking union. Public debt ratio, however, remained very high in several Euro zone countries and the banks are still fragile. The growth in the Euro zone GDP was expected to drop by an average of 0.4% in Table 3: Global GDP growth trends from 2010 to 2013 Country/ Zone Real Growth Rate (%) Global GDP GDP of Developed Countries United States Euro Zone Japan United Kingdom GDP of Emerging and Developing Countries Asia China India GDP of SouthSaharan Africa Source: IMF, World Economic Outlook (WEO) January, The IMF reckons that additional shortterm support would be required to strengthen growth within the zone. There is the need to again ease monetary policy, and particularly further reduce the policy rates, continue using forwardlooking guidelines to anchor interest rate expectations and other nonconventional monetary policy measures to reduce financial fragmentation and improve access to credit, especially by small and medium scale enterprises. Macroeconomic data in the United Kingdom recently showed healthy signs of improvement with a growth of roughly 1.7% in 2013, compared to 0.2% in This growth was sustained by different economic policy measures particularly infrastructure and real estate market support programmes and also an expansionist monetary policy and its induced wealth effects. In Japan, growth was expected to increase to 1.7% in 2013 against 1.4% in 2012, driven by the fiscal stimulus and easing of monetary policies with a view to supporting private consumption and investment Situation of the emerging and developing countries Emerging and developing countries continued to show robust growth, but lower than that observed during the expansion phase prior to the crisis. Economic activity was expected to grow by 4.7% in 2013 and 4.9% in Despite this decline, they still stimulated the global economy. In the case of developing countries, they were expected to post a 6.3% growth rate above this group s average driven by the Chinese economy. China, the world s second largest economy is growing by just over 7% per annum after recording rates above 10% in the 1990s and 2000s. Its growth was expected to slow down slightly at 7.7% in 2013, the same as in This downturn of the Chinese economy will adversely affect other countries, particularly commodityexporting emerging and developing countries. SubSaharan Africa continued to show robust and sustained growth in 2013 thanks to the resilience of domestic demand in most parts of the region. According to IMF estimates, GDP rose at an annual rate of roughly 1.9% in 2013, compared with 2.8% in 2012, as a result of negative impact of the fiscal cliff(into in expenditures and tax hikes). The major threats, for the future, are the possibility of a global economic downturn or a slowdown in growth in China or other major emerging markets which would adversely affect exports by reducing the commodity prices or by provoking a reduction in aid flows and FDI

9 Table 4 : Growth trends in sub Saharan Africa from 2010 to 2013 Country/ Zone Real Growth Rate (%) SubSaharan Africa Oilexporting countries Middleincome countries Including South Africa Including Nigeria Lowincome countries Fragile States Source : IMF, Global Economic Outlook January 2014 To ensure a sustainable and inclusive growth in the medium term, governments should deepen structural reforms, give priority to investment in infrastructure and focus on social spending. Macroeconomic policies should, in general, strive to curb inflation and create room for maneuver. Revenue mobilization, is in a general manner, an important objective for low income countries, where it could contribute to social and investment needs Inflation Trends According to the International Monetary Fund, inflationist pressures remained moderate in 2013, with some disparities however, depending on the different geographical zones. In the advanced countries, inflation was below the expected level, roughly an average of 1.5%. In the Euro Zone however, the slowdown in activity and the downward pressure on salaries in the peripheral countries were expected to keep inflation at roughly 1.5% in the medium term. In developing countries, prices increased slightly by about 5%. In SubSaharan Africa, inflation declined on the whole in several countries, as a result of the drop in the prices of food products and prudent monetary policies. It settled at 6.9 % in 2013 against 9 % in Table 5: Inflation trends between 2012 and 2013 Global Inflation Country/ Zone Real Growth Rate (%) Advanced countries United States Euro Zone Japan United Kingdom Developing countries China India Sub Saharan Africa Source: IMF, Global Economic Outlook January Commodities market trends Commodity prices, though still above the historic trend, were very unstable throughout the year and are expected to fall in the next few years. In 2013, they took a sharp downward trend particularly with food commodities, owing to the slowdown in growth observed in emerging and developing countries. For the main commodity items of the subregion, the prices varied as follows between 2012 and 2013: cotton (+1.3%), coffee (9.1%), sugar ( 17.3%), cocoa (+2.6%), uranium (21.3%), aluminum (8.7%) and gold (15.4 %). Regarding the crude oil market, after falling to its lowest in 2011 in the aftermath of the crisis, oil prices recovered, and hovered around US$100 per barrel before picking up under the effect of the geopolitical risks which intensified during the year. In 2013, the average cost of spot was US$ 104.1/barrel against US$ 105.0/barrel in 2012, or a 0.9% drop

10 Table 6 : Average commodity price trends between 2012 and 2013 Country/ Zone Average price of Commodities Variation (%) 2013/ 2012 Cotton (Cts/lb) Coffee (Cts/lb) Cocoa $/MT Rice ($/MT) Maize ($/MT) Sugar (Cts/lb) Uranium ($/lb) Aluminium $/MT Gold ($/oz) , Crude oil $/barrel ( Spot crude) Source: IMF Table 3. Actual Market Prices for NonFuel and Fuel Commodities, The Economic Situation of the ECOWAS Region At the regional level, economic growth was consolidated in 2012 against the backdrop of an international environment characterized by general slowdown of global economic activity. The regional growth level stood at 6.4% in 2013 as against 6.6% in 2012, thereby confirming the resumption of dynamism within the West African economy. Insert 1: Selected Macroeconomic Indicators of ECOWAS countries Country Real GDP growth rate (%) Annual average i nflation (%) Current balance (% of GDP ) Per capita GDP (US dollar) Benin Burkina Faso Cape Verde t Côte d'ivoire The Gambi a Ghana Guinea Guinea Bissau Liberia Mali Niger Nigeria Senegal Sierra Leone Togo ECOWAS Source : IMF, World Economic Outlook january 2014/ The ECOWAS Commission At the macroeconomic level, the region is made up of varied and diverse countries. For instance, Cape Verde, the least populated country has the highest GDP per capita (USD ) which is close to 9 times that of Niger (USD 440.0) and more than twice that of Nigeria (USD ), the most populated country with half the population of the zone. Between 2012 and 2013, the macroeconomic framework was marked by a consolidation of economic growth (+6.4%), relative price tension and a slight increase in per capita GDP

11 This dynamism in the regional economy can be traced to the rapid pickup in growth in countries as a result of increase in exports of natural resources, such as those of iron ore in Sierra Leone, uranium and oil in Niger, as well as other factors such as the economic rebound in Côte d'ivoire and Mali, following the restoration of peace. Chart 4 : Inflation trends (annual average) between 2012 and 2013 According to estimates of the International Monetary Fund, all the countries of the subregion were expected to record increases in real GDP between 2012 and Of the fifteen States, nine recorded growth rates of at least 5% in They are: Benin (5.0%), Togo (5.5%), Niger (6.3%), Nigeria (6.2%), The Gambia (6.4%), Burkina Faso (6.5%), Ghana (5.4%), Côte d Ivoire (8.1%), and Sierra Leone (13.3%). Chart 3: Real growth trends of the economies of the subregion between 2011 and 2013 Source : IMF, World Economic Outlook October 2013January 2014/ The ECOWAS Commission IMF World Economic Outlook(WEO), October 2013 Source: IMF, World Economic Outlook October 2013January 2014/ ECOWAS Commission Owing to the combined effects of the stability of foodstuffs and oil prices, inflation dropped drastically in 2013 in most countries of the subregion. With the exception of Guinea (+12.7%), Ghana (11%) and Sierra Leone (+10.3%), which recorded double digit inflation rates, inflationary pressure remained moderate in most of the countries of the subregion during the period under review, varying between 0.1% in Mali and 12.7% in Guinea

12 Current account balance remained negative in most of the countries, with the exception of Nigeria whose trade was boosted by the favorable trend in oil prices. Chart 5: Current account balance trends of the economies of the subregion between 2012 and 2013 Table 8 : Average exchange Rates of the Currencies of the Subregion vis a vis the Unit of Account between 2012 and 2013 Currency Var (%) UA / USD 1, , UA /EUR 1, , UA /FCFA 796, , UA / NAIRA 233, , UA / CEDIS 2, , UA /ESCUDO 144, , UA / DALASI 46, , UA /F GUI 10513, , Source: IMF, World Economic Outlook October 2013January 2014/ ECOWAS Commission Overall, the performance of major stock markets of the subregion strengthened relative to its level in UA /LEONE 6644, , UA / LIBER $ 114, , Table 7 : Major regional stock market trends between 2012 and 2013 Stock Exchanges Index Dec Dec Var. (%) Nigeria Stock Exchange (NSE) NIG ALSI % Ghana Stock Exchange (GSE) GSE CSI % BRVM Composite Index % Source: /Places boursières régionales The performance of the currencies of the subregion against the Units of Account was mixed. With the exception of the CEDI, the NAIRA and the DALASI, the other currencies appreciated against the Units of Account

13 CHAPTER 3 ACTIVITIES OF THE ECOWAS BANK FOR INVESTMENT AND DEVELOPMENT 3.1 Activities Undertaken By the DecisionMaking Bodies The Board of Governors During the period under review, the Board of Governors of the Bank held its 11th ordinary session in Bissau, Republic of Guinea Bissau on July 4, At this ordinary session, Governors adopted resolutions relating to the governance of the Bank, approved the accounts of Bank for the year ended December 31, 2012, and approved the 2012 Activity Report of EBID, among others. The Board equally took note of the progress report on EBID as at May , the status of execution of the line of credit extended to EBID by the Indian Government and the conclusions of deliberations of the 38th, 39th and 40th meetings of the Board of Directors, held respectively on October 30, December 20 and March 27, The main resolutions adopted are summarized in Annex The Board of Directors Between January 1 and December , the Board of Directors of EB ID held four ordinary sessions (40th, 41st, 42nd and 43rd sessions) on March 27, July 28, October 30 and December 20, 2013, respectively, in Lomé in Togo. During these sessions, the Directors approved the financing of twentyfour (24) projects. They also considered and adopted several resolutions relating among others, to the financial statements for the year ended December 31, 2012, the 2012 Activity Report, the 2013 budget of the Bank and the adoption of the new organogram for the Bank. The main resolutions adopted are summarized in Annex Administrative and Modernization Activities of the Bank Human Resource Management In line with the Bank s human resource management policy, it continued to strengthen its corps of professionals in During the year under review, ten (10) professional staff members were recruited. Also, as part of the implementation of the new organogram, several appointments and staff redeployment were carried out. Table 9 : EBID Staff Strength as at December 31, 2013 The table below shows Staff m Socioprofessional category President ovements fro m 2012 to Male Female Total 0 Proportion % VicePresident 1 1 Management staff Professional staff (D & P) Support staff (G & M) Total permanent staff Outsourced staff Contract staff Total contract staff Total Source: Administration Department Furthermore, the Bank, in line with its operational capacity building policy, initiated individual as well as tailormade group training programmes for the benefit of staff during the period under review, enabling some Bank staff members to participate in several training seminars related mainly to the following themes: Fundamentals of Assets/Liability Management; Resultsbased management and policy monitoring and evaluation; development programmes and projects; The Essentials of IFRS Standards; Improving Income Generation in DFIs: System, Strategy and Options. Regarding group training, it focused on performance contract, resultsbased development management and resultsbased development monitoring and evaluation Status of implementation of the Rehabilitation of the Headquarters Building In connection with the rehabilitation activities of the Bank s Headquarters, the Board of Directors during its meeting held on December , approved a total budget of UA

14 4.7 million, or FCFA 3.7 billion. The works to be carried out have been organized into four (4) phases, namely: Phase 1: general studies and design of works to be carried out and preparation of the invitation to tender documents; Phase 2: publication of invitation to tender, receiving, opening and award of contracts; Phase 3: execution of works, supervision of execution; Phase 4: reception of works and handing over of documentation indispensable for the operation and the technical management of the building. As at end of December 2013, the first two stages of the rehabilitation work of the headquarters which was approved by the Board of Directors in December 2010 reached an implementation rate of 34.3%, corresponding to payments of FCFA 1.13 billion out of a total amount of FCFA 3.23 billion contract awarded Modernisation of the Information System With a view to equipping EBID with an efficient, reliable, secured and upgradable information system in accordance with accepted international norms, the decisionmaking organs approved Management s initiative to implement an innovative master plan. The implementation of the master plan started in 2010 and made it possible, inter alia, to : migrate to a new information network ; deploy new IT hardware; totally replace the financial management application platform of the Bank ; and configure the work stations in accordance with the requisite existing security standards. In this perspective, a Director of Department was appointed in 2013, to ensure a better coordination of this major project. The Bank s IT system modernisation programme continued in 2013 with the implementation of the following activities: formulation of a new master plan with funding from the French Development Agency (FDA) as part of the EBID capacity building programme; organisation of an audit exercise on the IT security management of EBID with a view to upgrading it and obtaining the certification of the Bank s IT system; drafting of an IT security code and a code of ethics for the utilisation of the Bank s IT resources; the redeployment of new computers to staff; the relaunch of the SunSystem application replacement project Strengthening governance At the instance of the standing committees of the Board, notably, the Audit Committee and the Risks and Credit Committee, several actions were carried out as part of measures to strengthen good governance of the Bank, through the deployment of tools for the management of risk and control of the entire operational and financial activities of the institution. This mainly concerns the continuation of the audit missions launched in 2012 and undertaking new missions, initiated during the period under review and with focus on equity participation, the Bank s headquarters agreement, mission expenses, management of contracts, IT, billing and loan recovery, budget and postappraisal of two projects. The main activities carried out at the Risks Analysis Department involved the continuation of the implementation of the AFD grant for the Bank s capacity building in risks management, updating antimoney laundering, antiterrorism financing procedures and drafting of an environmental and social updating plan. Over the same period, the Department, among others, drafted a report on the quality of the Bank s portfolio as at 31 December 2012, supervised projects in collaboration with the Operations Department, launched the Bank s selfevaluation process and gave reasoned opinion projects submitted to the meetings of the Board of Directors. Finally, strengthening the staff of this department positively impacted on the Assets/Liabilities Management activities with the organisation of three ALM Committee meetings Enhancing the Image and Visibility of the Institution In order to enhance the visibility of the institution, Management strengthened the Communication Unit by upgrading it into a Communication and Marketing Division, thereby giving it more prerogatives and missions. In this perspective, the new Division drafted an Action Plan for , pending the formulation of a real communication policy. The implementation of this plan is expected to begin in Similarly, for the accomplishment of its mission, the division prepared a term of reference for the recruitment of a communication agency and an audiovisual production outfit for the production of a documentary on EBID. 3.3 Operational Activities Over the period spanning January 1 to December 31, 2013, the Bank s operational activities mainly consisted of appraisal of projects, approval of loans, signing of financing agreements and supervision of projects. Compared to the situation in 2012, the activities have increased relatively, in most segments Project Appraisals Twentyseven (27) projects were approved in 2013, of these 7 were from the public sector whilst 20 were private sector projects in the amount of UA million or US$ million, representing an increase of 5% over the level in

15 Table 10: Trends of projects appraised according to sector of operation (public and private) between 2012 and Variation (%) 2013/2012 Num. Amount Num. Amount Num. Amount PUBLIC PRIVATE TOTAL Source: Research and Strategic Planning Department As shown in the graph below, between 2012 and 2013, projects approved increased by more than UA 59 million, or 63.2%. This development was as a result of an increase in private sector projects, which more than doubled from UA 54.7 million in 2012, to UA million in Chart 6: Approval trends between 2012 and 2013 A disaggregation of loans by sector indicates that public sector loans amounted to UA 31.2 million (US$ 47.3 million) corresponding to 21.7%, whilst the private sector projects amounted to UA million, or US$ million, representing 78.3% of ongoing commitments. Between 2012 and 2013, public sector projects appraised dropped both in terms of number and amount whilst those of the private sector increased noticeably Project Supervision To minimize and eliminate the risks inherent in the implementation of projects, the Bank intensified the supervision of active projects in its portfolio. As such, twentyfive (25) projects were supervised in 2013 against twentyone (21) in the previous year Loan Approvals During the period under review, the Bank s Board of Directors approved the financing of twentyone (21) projects for a total amount of UA million or roughly USD million. Table 11: Trend of approvals according to type of intervention between 2012 and Variation (%) Num. Amount Num. Amount Num. Amount PUBLIC LOAN PRIVATE LOAN GUARANTEE PARTICIPATION Total Source: Research and Strategic Planning Department Source: Research and Strategic Planning Department The approval of these new financing facilities brings to UA 1.15 billion, the total amount approved by the Board of Directors for 177 projects within the economies of the Community Member States, between January 1, 2004 (date of actual commencement of EBID s operational activities) and December 31, Signing of Loan Agreements In 2013, fifteen (15) loan agreements were signed for projects in Benin, Ghana, Guinea, Burkina Faso, Cape Verde, Côte d Ivoire, Liberia, Mali, Nigeria and Sierra Leone,in the amount of UA million (US$ million)

16 Table 12: Financing trends by type of intervention between 2012 and Variation (%) No. Amount No. Amount No. Amount out that, the decline in guarantees, some of which had expired, have been removed from the institution s active portfolio. Chart 7 : Trends in the structure of the types of intervention of EBID between 2012 and 2013 PUBLIC LOAN PRIVATE LOAN GUARANTEE PARTICIPATION Total Research and Strategic Planning Department When compared with 2012 where these stood at UA 84.8 million, new commitments rose by 40%, owing mainly to the strong growth in the volume of private sector financing (+80.9%), whose effects were mitigated by those of the public sector (22.8%) due to inadequate resources Commitments of EBID as at December 31, 2013 Notwithstanding the removal of several projects from the Bank s active portfolio, the net cumulative commitments of the Bank in favour of Community Member States increased by 9.8% in 2013,to UA (US$ ( ) as against UA (US$ ) as at 31 December 2012, for 122 active projects. Source: Research and Strategic Planning Department On the whole, as can be seen in the chart below, in ten years of activity, the Bank has raised the level of its net cumulative commitments from UA 121 million in 2004 to UA 764 million as at the end of December Chart 8: Trend of approvals according to type of intervention between 2012 and 2013 Table 13: Trends in commitments between 2012 and 2013 by type of intervention Type of interventions Variation (%) LOAN PARTICIPATION GUARANTEE TOTAL Source: Research and Strategic Planning Department The structure of the types of intervention remained the same over the period under review. Direct loans or lines of credit made up over 90% of loans granted by EBID. It should however be pointed Source: Research and Strategic Planning Department 30 31

17 Breakdown of Commitments According to type of financing As indicated in the table below, only the industry and infrastructure sectors received funding in 2013, highlighting the challenges the Bank continues to encounter in mobilising concessional resources to attend to the numerous needs of the rural development and social sectors, which remain major challenges for the subregion. Table 14: Sectoral trends in net total commitments of EBID between 2012 and 2013 TYPE OF INTERVENTION Loans Sectors Variation (%) No. Amount No. Amount No. Amount Infrastructure Rural Development Industry Services Social Table 15 : Sectoral distribution of the net total commitments as at December 31, 2013 Area of intervention No Amount in UA Amount in US$ % of commitment Public Sector % Private Sector % Total % Source: Research and Strategic Planning Department In comparison with their level as at December , the Bank s net funding to the public and private sectors in 2013, increased by 5.6% and 16.5%, respectively. Chart 9: Trends in distribution of total net commitments per sector of operation between 2012 and 2013 (millions of UA) Equity participation Guarantees Services Infrastructure Industry Services Source: Research and Strategic Planning Department At the end of December 2013, the Bank s net total commitments for financing of 64 public sector projects amounted to UA or 59.8%, while support for the development and promotion of private sector had 58 projects in its active portfolio, for a total amount of UA , or 40.2% of the outstanding net total commitments. Source: Research and Strategic Planning Department According to country: Although all the Community Member States had benefitted from the Bank s assistance, the distribution of the net total commitments presented in the table below shows that the bulk of the Bank s assistance had gone to the following countries: Côte d Ivoire (14.1%), Benin (13.7%), Togo (10.5%), Ghana (9.4%) and Senegal (8.6%)

18 Chart 10 : Distribution of EBID s net total commitments per country as at December 31, 2013 (in %) Table 16: Distribution and trends in net total commitments per country between 2012 and 2013(in UA) Country Commitments as at end of Dec.2012 UA Commitments as at end of Dec.2013 UA Variation (%) Dec / Dec.2013 Percentage of Total BENIN BURKINA FASO CAPE VERDE CÔTE D'IVOIRE THE GAMBIA Source: Research and Strategic Planning Department However, as shown in the table below, the following countries have begun to experience increased growth in the Bank s interventions: Liberia (+158.9%), Sierra Leone (+75.8%), Ghana (+50.3%) and Nigeria (+38.4%). GHANA GUINEA GUINEEBISSAU LIBERIA MALI NIGER NIGERIA SENEGAL SIERRA LEONE TOGO TOTAL Source: Research and Strategic Planning Department Disbursements Loan disbursements amounted to UA in 2013, bringing total disbursements to UA compared with UA in 2012, indicating an increase of 21.2%. Thus, the rate of distribution of active loans stood at 54.7% against 50 % in the previous year. The disbursement rate of active loans stood at 54.7% as at December 31, 2013, against 50% in the previous year. On the basis of repayments made, total loans outstanding amounted to UA (US$ ) as at December 31, The situation by countries is as follows: 34 35

19 Table 17 : Loans outstanding per country as at December 31, 2013 (in UA) Outstanding loan Country No Commitment Disbursement Not disbursed Principal ue Repayment of Principal Amount Part (%) BENIN BURKINA FASO CAPE VERDE CÔTE D'IVOIRE THE GAMBIA GHANA GUINEA GUINEA BISSAU LIBERIA MALI NIGER NIGERIA SENEGAL SIERRA LEONE TOGO LOANS Other Operational Activities The other operational activities of the Bank concerned the Special Fund for Telecommunications (SFT), the Cultural Industries Guarantee Fund (CIGF) and the Environment and Sustainable Development Unit (ESDU) Special Fund for Telecommunication (SFT) EBID manages the Special Fund for Telecommunications whose mission is to finance telecommunications infrastructure in Member States As at December 31, 2013, the total balance sheet situation of the Fund stood at UA as against UA in 2012, indicating an increase of 7.1%. Regarding the operating statement, it showed a profit of UA against a loss of UA in 2011, together with the exchange rate gains made over the period. The detailed balance sheet and operating statement of the SFT are presented in Annex Cultural Industries Guarantee Fund (CIGF) Established on the initiative of the Organization of French Speaking Countries [Organisation Internationale de la Francophonie (OIF)] and EBID, the Cultural Industries Guarantee Fund is a mechanism that guarantees financing operations in favour of cultural industries of West African States that belong to OIF and ECOWAS. The Fund is administered by the Management Committee on which each of the two partners is represented by three members. During the period under review, the activities of the Fund concerned guarantee operations and monitoring of activities. In this regard, the Fund provided guarantee for two projects in Togo and Burkina Faso. These operations brought to 20 the total number of the Fund s interventions for an amount of FCFA million over a gross potential of FCFA 2.47 billion. As at the end of December 2013, the net utilisation rate of the CIGF (net guarantee / net potential stood) at 25%. The total amount of arrears stood at FCFA million. In spite of some progress made, the CIGF is still unknown to potential beneficiaries, as a result of the lack of promotional activities to enhance the Fund s visibility. This situation stems from the lack of adequate financial resources of the Fund which also limits its intervention capacity, considering the huge potentials of the cultural industry sector in West Africa Environmental & Sustainable Development Unit (ESDU) Major activities during 2013 focused, among other things, on the finalization of procedures and working documents of the Unit and their adoption by the Board of Directors. Furthermore, the Unit embarked on several activities aimed at improving the visibility of the Bank with a view to positioning it as a major stakeholder in project implementation in ECOWAS, more particularly in terms of climate change, renewable energy, etc. In this regard, the Unit undertook a number of activities to mobilize resources to finance regional projects in various sectors such as: renewable energy, water and sanitation, waste management, clean development mechanisms, etc through the Green Climate Fund, and Global Environmental Facility. Lastly, the Unit tackled environmental issues in projects financed by the Bank through its involvement in the preparation of the appraisal process and project supervision. 3.4 Cooperation and Resource Mobilization Activities The implementation of cooperation, partnership and financial resource mobilization activities is a key component of the strategic development of EBID. The Bank is pursuing the twinobjectives of improving its public profile within the Community, among the circle of development partners and endeavoring to mobilize the needed resources to increase its project financing activities for its profitability and sustainability. In view of the growing volume of its commitments, the Bank, in 2013, deployed its cooperation, partnership and resource mobilization efforts both within and without ECOWAS