Annual Report

Transcription

1 ANNUAL REPORT

2 FROM THE PRESIDENT I am very pleased to submit the Annual Report of the ECOWAS Bank for Investment and Development (EBID) for Despite the difficult global economic landscape, lack of concessional resources, etc., the Bank s balance sheet expanded by 25% to settle at US$ million, resulting into a profit of US$ 1.72 million in This was largely due to improved oversight, strengthened governance and a robust risk management framework. In spite of the fall in commodity prices and the outbreak of the Ebola Virus disease the in Guinea, which became an international public health emergency, claiming lives of thousands in the sub-region, the economies of the sub-region remained robust, posting a growth rate of 6.7%, more than double the global rate of (?) against 5.7% in While the sub region s performance is encouraging, the infrastructural challenges faced by key sectors in these economies cannot be overlooked. Infrastructural development is a sine qua non for the acceleration of economic growth and development. Therefore EBID will continue to contribute to the economic development of the region by remaining a major player in financing projects aimed at fostering the emergence of an economically strong, industrialized and prosperous West Africa. In 2014, the Bank s Board of Directors approved the financing of ten (10) projects for a total amounts of USD million. Sixteen (16) loan agreements in the amount of USD million spread between the public and private sector were signed in favor of Member States increasing the net cumulative commitment of the Bank by percent over the previous year. The last twelve months culminated into the final year of the implementation of the Strategic Plan of the Bank. Overall objectives were not fully achieved mainly due to the dearth of concessional resource which affected public sector financing. However, during the course of the implementation of the Strategic Plan, the Bank s volume of net cumulative commitment increased by 6.3 times, from US$ million in 2009 to US$ 1.34 billion in Additionally, the Bank s balance sheet grew by 114% from US$316.1 million (?) in 2009 to US$ million and loans to Member States jumped from US$62.4 million to US$418.7 million, an increase of 329% Although resource mobilization efforts were intensified within and outside the ECOWAS region to match the increase in the growth of commitments, the availability of resources continues to be a major challenge of the Bank. As shareholder support is fundamental to the continued viability of a development bank such as EBID, it is important that Member States pay up the arrears of the first and second tranches of the called-up capital. In the same vein, access to a portion of the Community Levy will also be essential. These will in no small measure keep the Bank adequately resourced and enable it to subsidize the interest rate charged on public sector loans. 1

3 Finally, I would like to thank all shareholders and our partners for their continued support as well as staff for their unflinching commitment in ensuring a strategic positioning of our Bank in order to contribute to the promotion of sustainable development in West African Sub region. 2

4 Table of Contents FROM THE PRESIDENT... 1 TABLE OF CONTENTS... 3 EXCHANGE RATES... 4 ACRONYMS & ABBREVIATIONS... 5 LIST OF TABLES... 6 LIST OF FIGURES... 7 FACT SHEET... 8 CHAPTER I : INTERNATIONAL AND REGIONAL... 9 ECONOMIC ENVIRONMENT INTERNATIONAL ECONOMIC ENVIRONMENT ECONOMIC ENVIRONMENT OF THE ECOWAS SUB-REGION CHAPTER II : ACTIVITIES OF THE ECOWAS BANK FOR INVESTMENT AND DEVELOPMENT ACTIVITIES UNDERTAKEN BY THE DECISION-MAKING BODIES ADMINISTRATIVE AND MODERNIZATION ACTIVITIES OF THE BANK OPERATIONAL ACTIVITIES COOPERATION AND RESOURCE MOBILIZATION ACTIVITIES CHAPTER III: FINANCIAL POSITION OF EBID AS AT 31 ST DECEMBER BALANCE SHEET AS AT 31 ST DECEMBER INCOME STATEMENT AS AT 31 ST DECEMBER, ANALYSIS OF FINANCIAL RATIOS CHAPTER IV: OUTLOOK OF THE BANK KEY FOCUSES FOR THE YEAR A N N E X E S

5 EXCHANGE RATES PERIOD 1 st January 31 st December Unit of Account (UA) EXCHANGE RATES (4 TH Quarter average) = 1 IMF SDR UA 1 = US Dollars UA 1 = Pound Sterling UA 1 = Canadian Dollars UA 1 = Euro UA 1 = Francs CFA UA 1 = Naira UA 1 = Ghana Cedis UA 1 = Escudo UA 1 = Dalasi UA 1 = Guinean Francs UA 1 = Leone UA 1 = Liberian Dollars 4

6 ACRONYMS & ABBREVIATIONS ABREF AfDB BEC (CEB) CIF CTI-PFAN EBID ECOMARINE ECOWAS ECREEE ERDF ERIB ETI EXIMBANK-INDIA EXIMBANK-USA GCF GDA GEF GEO GFCI IMF MDGs NEPA NICT NPAD OECD RIICE SDR SEFA SFT UEMOA UN UNCTAD UNFCCC USAID WADB WAFCEF WAPP WB African Biofuels and Renewable Energies Fund African Development Bank Benin Electricity Community (Communauté Electrique du Bénin) Climate Investment Fund Initiative for Climate Technologies Consultative Network ECOWAS Bank for Investment and Development West and Central African Shipping Company Economic Community of West African States Centre for Renewable Energy and Energy Efficiency of ECOWAS ECOWAS Regional Development Fund ECOWAS Regional Investment Bank Ecobank Transnational Incorporated Export-Import Bank of India Export-Import Bank of the United States of America Green Climate Fund German Development Agency Fund for Global Environment Facility Global Economic Outlook Guarantee Fund for Cultural Industries International Monetary Fund Millenium Development Goals National Electric Power Authority (Nigeria) New Information and Communication Technologies New Partnership for Africa s Development Organization for Economic Cooperation and Development Regional Initiative for Investment in Clean Energy Special Drawing Rights Sustainable Energy Fund for Africa Special Fund for Telecommunications West African Monetary Union United Nations United Nations Conference on Trade and Development United Nations Framework Convention on Climate Change US Agency for International Development West African Development Bank (BOAD) Forum of Financing Clean Energy in West Africa West African Power Pool World Bank 5

7 LIST OF TABLES TABLE 1 : GLOBAL GDP GROWTH TRENDS FROM 2011 TO TABLE 2 : INFLATION TRENDS BETWEEN 2013 AND TABLE 3 : AVERAGE COMMODITY PRICE TRENDS BETWEEN 2013 AND TABLE 4 : MAJOR REGIONAL STOCK MARKET TRENDS BETWEEN 2013 AND TABLE 5 : AVERAGE CURRENCY EXCHANGE RATE TRENDS IN THE SUB-REGION AGAINST THE UNITS OF ACCOUNT BETWEEN 2013 AND TABLE 6: STAFF STRENGTH OF EBID BETWEEN 2013 AND TABLE 7 : TRENDS OF PROJECTS APPRAISED ACCORDING TO SECTOR OF OPERATION BETWEEN 2013 AND TABLE 8: TREND OF APPROVALS ACCORDING TO TYPE OF INTERVENTION BETWEEN 2013 AND TABLE 9: FINANCING TRENDS ACCORDING TO TYPE OF INTERVENTION BETWEEN 2013 AND TABLE 10: TRENDS IN COMMITMENTS BETWEEN 2013 AND 2014 ACCORDING TO TYPE OF INTERVENTION...24 TABLE 11: SECTORAL TRENDS IN NET TOTAL COMMITMENTS OF EBID BETWEEN 2013 AND TABLE 12 : SECTORAL BREAKDOWN OF THE NET TOTAL COMMITMENTS AS AT 31 ST DECEMBER TABLE 13 : BREAKDOWN AND TRENDS IN NET TOTAL COMMITMENTS PER COUNTRY BETWEEN 2013 AND 2014 (IN UA) 28 TABLE 14 : TREND OF OUTSATNDING LOANS BY COUNTRY AS AT 31ST DECEMBER 2014 (IN UA)...29 TABLE 15 : BALANCE SHEET AS AT 31 ST DECEMBER, 2014 (IN THOUSANDS OF UA )...33 TABLE 16: INCOME STATEMENT AS AT 31 ST DECEMBER, 2014 (IN THOUSANDS OF UA)...34 TABLE 17: SOME FINANCIAL RATIOS BETWEEN 2013 AND

8 LIST OF FIGURES FIGURE 1 : GLOBAL GDP ECONOMIC GROWTH TRENDS FROM 2011 TO 2014 (%)... 9 FIGURE 2 : REAL GROWTH TRENDS OF THE ECONOMIES OF THE SUB-REGION BETWEEN 2013 AND FIGURE 3 : INFLATION TRENDS (ANNUAL AVERAGE) BETWEEN 2013 AND FIGURE 4 : CURRENT ACCOUNT BALANCE TRENDS OF THE ECONOMIES OF THE SUB-REGION BETWEEN 2013 AND FIGURE 5 : APPROVAL TRENDS BETWEEN 2013 AND FIGURE 6 : TRENDS IN THE STRUCTURE OF THE TYPES OF INTERVENTION OF EBID BETWEEN 2013 AND FIGURE 7 : NET TOTAL COMMITMENT TRENDS OF EBID FROM 2004 TO 2014 (MILLIONS OF UA)...25 FIGURE 8 : TRENDS IN DISTRIBUTION OF TOTAL NET COMMITMENTS PER SECTOR OF OPERATION BETWEEN 2013 AND 2014 ( IN MILLIONS OF UA)...27 FIGURE 9 : BREAKDOWN OF EBID S NET TOTAL COMMITMENTS PER COUNTRY AS AT 31 ST DECEMBER 2014 (%)

9 FACT SHEET Annual Report 2014 Date of establishment Shareholders Vision Mission Transformation The Fund for Cooperation, Compensation and Development was established on 28 th May, It started operations in The 15 Member States of ECOWAS: Benin, Burkina Faso, Cabo Verde, Côte d Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo. 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. 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. December, 1999 : Transformation of the ECOWAS Fund for Cooperation, Compensation and Development into the ECOWAS Bank for Investment and Development (EBID), 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 operational. June 2006: Decision of the Heads of State and Government to re-organize the EBID Group into a single entity. Capital as at 31/12/2014 Authorised : UA million January, 2007: EBID is re-organized into a single entity 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 to UA 1 1 billion. October 2014: Signing of an equity participation agreement with a Non-Regional Arcode Europe Suscribed Called up Paid : UA million : UA million : UA million Staff complement as at 31/12/2014 Approvals 142 including 3 Statutory Appointees, 94 permanent staff and 45 contract staff. Projects approved in 2014 : 10 projects at a total cost of UA 84.6 million or US$ million. Total projects approved from : 234 projects for a total of UA 1.37 billion or US$ 2.1 billion Commitments New commitments in : 16 projects UA million Or US$ million Total balance sheet as at 31/12/2014 s as at 31/12/2014 Total UA million (US$ million) : UA million for 141 projects or US$ million : UA 1.1 billion for 197 projects or US$ 1.7 billion 1 UA (Unit of Account) = 1 SDR (Special Drawing Right) of the International Monetary Fund (IMF) 2 Financial Agrement signed in

10 CHAPTER I : INTERNATIONAL AND REGIONAL ECONOMIC ENVIRONMENT 1.1. INTERNATIONAL ECONOMIC ENVIRONMENT The global economic environment continued to be dominated by strong downside risks to growth, including reduced commodity prices, elevated geo-political tensions, and heightened threats to global financial markets in the emerging and frontier markets in the wake of the end of loose monetary policy in the United States, the so-called Quantitative Easing at the end of October Lower oil prices also intensified the risks and vulnerabilities faced by oil producing countries in the aftermath of falling oil prices. Global economic growth remained unchanged at 3.3% in 2014 compared to In advanced economies, growth was lower than expected in the Euro Area and Japan. However, in the United States, apart from a temporary contraction at the beginning of 2014, growth was above potential and reached its fastest pace since In emerging markets and developing economies growth slowed to 4.4% in 2014 from 4.7% in 2013, reflecting cyclical factors, tight domestic policies and geo-political tensions in China and Russia. Growth in Sub-Saharan Africa remained unchanged at the level in 2013 at 5.1%. The region experienced mixed growth, with the pace of expansion being slower in some of the larger economies as a result of subdued global demand, low commodity prices, weak Foreign Direct Investment flows and infrastructure bottlenecks. Figure 1 : Global GDP economic growth trends from 2011 to 2014 (%) 7,0 6,0 5,0 4,0 3,0 2,0 1, ,0 Global GDP GDP of developed countries GDP of emerging and developing countries GDP of Sub-Saharan Africa Source: IMF, World Economic Outlook (WEO) - October

11 1.1.1 Advanced economies Growth in the advanced economies was projected at 1.8 % in 2014 compared with 1.4 % in The United States economy grew at an estimated 2.2 % in 2014, unchanged from the level recorded in 2013, driven by strong private consumption, exportation growth and contraction in importation. In the United Kingdom, the economy grew by 3.5 % as against 1.7 % in However, the performance of the Euro Area was at variance with the trend in other key advanced economies. Fundamental fiscal problems, rising unemployment, and weak lending in the second half of 2014 constrained growth. In the Euro Area, growth remained sluggish, to settle at 0.8% in 2014, from 0.5% in The Japanese economy technically fell into a recession in the third quarter of 2014; growth slowed to 0.1% in 2014, from 1.6% in Table 1 : Global GDP growth trends from 2011 to 2014 Country/ Zone Real growth rate (%) Global GDP Developed countries United States Euro zone Japan United Kingdom Emerging and developing countries Asia China India Sub-Saharan Africa Source : IMF, World Economic Outlook October Emerging and developing countries The emerging markets and developing economies remained constrained by limited macroeconomic space. In 2014, the impact of lower oil and commodity prices on their terms of trade and real incomes constrained growth. Growth slowed to 4.4 % in 2014, from 4.7% in the previous year, with China facing its lowest growth of 7.4 % since 1990 due to the cooling of its property market. In Sub-Saharan Africa, growth was revised downwards to 5.1 % in 2014 from the earlier projection of 5.4 %, reflecting the ongoing sluggish global growth and declining commodity prices. In addition, political crisis, infrastructural challenges, and the Ebola outbreak in Guinea, Liberia and Sierra Leone moderated the earlier robust outlook. 10

12 1.1.3 Inflation trends Inflationary pressures remained largely contained in In advanced economies, inflation stayed below central bank targets, indicating continued economic slack. Inflation in advanced economies was recorded at 1.4 % in 2014 as against 1.6 % in In emerging and developing economies, inflation was broadly stable, settling at 3.4 % in 2014, from 4.4 % in With regard to price developments in Sub-Saharan Africa, inflation was essentially contained in single-digit at 6.7 % in 2014, from 6.6 % in 2013, reflecting a minimum rise of 0.1 percentage point. Table 2 : Inflation trends between 2013 and 2014 Country/ Zone Inflation Rate 3 (%) Global Inflation Advanced countries United States Euro Zone Japan United Kingdom Emerging and Developing countries China India Sub-Saharan Africa Source : IMF, Global Economic Outlook October Commodity market trends Commodity prices plummeted by 12.0 % in December, mirroring the sharp decline in oil prices. Non-fuel prices declined by 2.2% largely as a result of the appreciation of the dollar against other major currencies. In 2014, commodity prices fell by almost 30 % with energy prices dropping by 39.0 % and non-fuel prices falling by 9.9 %. With regard to the main commodity items of the sub-region, price developments showed mixed results in the twelve months ending December 2014: cotton (-9.0%), coffee (+5.0%), sugar (-3.4%), cocoa (+25.6%), uranium (-13.2%), aluminium (+1.1%) and gold (-17.4%). Relative to the crude oil market, prices dived by 21.3 % in December, averaging a little over US$ 60/barrel, reflecting weak demand, large gains in non-opec supply, among others. 3 annual average 11

13 Table 3 : Average commodity price trends between 2013 and 2014 Annual Report 2014 Average price of commodities Commodities Variation (%) /2013 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 Non-Fuel and Fuel Commodities, ECONOMIC ENVIRONMENT OF THE ECOWAS SUB-REGION The ECOWAS region during the year under review showed resilience against the wider impact of Ebola and the fall in commodity prices, with the economic impact of Ebola being confined mainly to the three most affected countries: Liberia, Sierra Leone and Guinea. The impact of volatility in commodity prices was mixed in the region. The decline of oil prices by almost 50% in the second half of 2014 put pressure on growth prospects on the Nigerian economy and led to a devaluation of the Naira. However, the fall in oil prices had positive impacts on many oil importing countries, by reducing pressure on their balance of payments and reducing the cost of energy, thereby leading to increased productivity. During the last three months of 2014, there was an increased divergence of growth between UEMOA and non-uemoa countries, with the former posting strong growth, of about 7% according to BCEAO. The fall in oil prices constrained productivity in Nigeria and Ghana. In Nigeria, the Naira plummeted in value at an all-time low in the fourth quarter, sealing up pressure for foreign exchange.the Ghanaian economy suffered immensely from regular power cuts, high inflation and a depreciation of the Cedi as a result of a worsening macroeconomic environment. According to the International Monetary Fund (IMF), the ECOWAS region recorded an estimated growth rate of 6.7% in 2014 as against 5.7% in

14 Figure 2 : Real growth trends of the economies of the sub-region between 2013 and 2014 Source: IMF, World Economic Outlook October 2014 Benin Economic growth remained solid in Benin in 2014, largely on the back of increased agricultural productivity and services, as well as the strength of the construction sector. Economic growth was estimated at 5.5% in 2014, against 5.6% in The construction sector experienced a rise in activity in 2014 as a result of increased investment in the transportation and tourism sectors. Inflationary pressure eased in 2014 due to the combination of higher food supply and the decline in international oil prices since June The rate of inflation was recorded at 1.7% in 2014 in contrast to 2.8% in Burkina Faso In spite of the political crisis in late 2014, growth in Burkina Faso remained robust, with a real GDP of 6.7% recorded, against 6.6% in The slowdown in growth was a result of a combination of lower prices of gold and cotton and an unfavorable rainfall pattern. The overall budget deficit reached 3.8% of GDP in 2014, as against 3% in 2013, driven by declines in revenues. Inflationary pressure remained subdued in The rate of inflation was reported at 1.5%, as against 2.8% in Measures introduced during the year under review, including subsidized prices for grain in deficit areas and price control of consumer products, helped to contain inflation. 13

15 Figure 3 : Inflation trends (annual average) between 2013 and 2014 Source: IMF, World Economic Outlook October 2014 Cape Verde Economic recovery remains a problem in Cape Verde due to sluggish global economic and domestic economic difficulties. Growth in the economy slumped in the last two years from 4% in 2011 to 0.5% in In 2014, real GDP growth increase to 1.0% on the back of the construction sector. The rate of inflation, which has maintained a downward trend since April 2013 due to lower commodities prices, further decelerated to settle at 0.8% in 2014, compared with 3.3% in Côte d Ivoire Economic recovery in Côte d Ivoire through major public works projects, produced an estimated growth of 8.5% in 2014, from 8.7% in The Government has vigorously embarked upon measures to implement social reforms and improve the business climate. Inflationary pressure remained largely contained from 2.9% in 2013 and subsided to 0.6% in The Gambia In The Gambia, real GDP was estimated at 7.4%, although strong downside risks remain relative to the projection on account of the impact of Ebola on tourism, and delayed rainfall. The recent Ebola epidemic in West Africa has adversely affected tourism and related sectors, with hotels cancellation rates reaching 60% for the 2014/2015 winter season*. Rice production was estimated to have contracted by 57% in The Gambia in

16 Ghana Economic growth in Ghana slowed in 2014 to settle at 4.5% against 7.1% in The Ghanaian economy continued to experience an inflationary spike, despite regained stability in the purchasing power of its domestic currency, the Cedi. The average rate of inflation ended the year at 15.7% driven in part by non-food prices. Guinea The Guinean economy grew at an estimated 2.5% in 2014, from 2.3% in On account of the Ebola Virus Disease (EVD), the Guinean economy is expected to forego at least US$ 500 million in GDP in Inflationary pressure was expected to subside in 2014 to settle at 10.1%, from 12.7% in Guinea-Bissau In Guinea-Bissau, the economy grew at an estimated 2.6% in 2014, driven mainly by the resumption of official aid to the country, and a successful cashew nuts export campaign. While growth benefited from the afore-mentioned, it was somewhat reduced by a disappointing non-cashew agricultural campaign, which saw a decline in rice production of 36%. Liberia Real GDP growth substantially reduced in Liberia in 2014 on account of the negative impact of the Ebola Virus Disease. Economic growth in 2014 was estimated at 2.5%, from a robust 8.7% in The slowdown in the economy reduced fiscal space, with stagnant tax revenues compared to previous years, although additional budget support from donors led to strong total revenues through December Inflation in Liberia peaked at 13.5% in September before subsiding to 7.9% in November, although imported rice prices pass throughout the country remained at 19% higher. Mali The Malian economy grew at an estimated 5.9% in 2014, up from 1.7% in the previous year. The improvement in real GDP growth was on account of improved performance in the tertiary and agricultural sectors. Niger Niger s economic growth accelerated to 6.3% in 2014, from 4.1% in 2013, largely on the back of an improved agricultural output. 15

17 Box 1: Some macro-economic indicators of ECOWAS countries Country Real GDP growth rate (%) Annual average inflation (%) Current balance (% of GDP) Per capita GDP (US dollar) Benin Burkina Faso Cape Verde Côte d'ivoire The Gambia Ghana Guinea Guinea-Bissau Liberia Mali Niger Nigeria Senegal Sierra Leone Togo ECOWAS Source: IMF, World Economic Outlook October 2014/ the ECOWAS Commission At macroeconomic level, the region is made up of varied and diverse countries. For example, Cape Verde, the least populated country has the highest GDP per capita (USD ) which is close to 9 times that of Niger (USD 484.4). Growth remained robust despite falling commodity prices and the impact of the Ebola Virus Disease which was restricted mostly to three countries: Guinea, Sierra Leone and Liberia. Nigeria The Nigerian economy continued to post impressive growth in 2014, despite the macroeconomic challenges due to falling oil prices. In 2014, the Nigerian economy grew at an estimated 7.0%, from 5.4% in Inflationary pressure largely remained within the Central Bank s target of 6-9%, to settle at 8.3% in The impact of the adverse oil price shock has led to a sharp decline in the country s fiscal buffers. However, the overall impact on the non-oil sector remained relatively muted, as it is expected to drive growth in the medium term. 16

18 Senegal In recent years, the Senegalese economy has experienced solid economic growth. Activity intensified in Economic growth for 2014 is estimated at 4.5%, from 3.5% in 2013; with inflation substantially moderating from 1.2% in 2013 to -0.5% in Sierra Leone Sierra Leone made considerable progress economically before the Ebola Virus Disease Outbreak in 2014, with double digit growth in 2012 and 2013 of 15.2% and 20.1% respectively with favorable macroeconomic conditions. According to estimates from the International Monetary Fund (IMF), real GDP growth contracted significantly in 2014, to settle at 8.0%, from an impressive level of 20.1% in Inflation averaged 8.8% during the year, due to the impact of the public health crisis. Togo The Togolese economy grew at estimated 5.6% in 2014, up from 5.1% in Growth was largely driven by public and private investments in infrastructure. Current account balance remained negative in most of the countries with the exception of Nigeria and Guinea Bissau. Figure 4 : Current account balance trends of the economies of the sub-region between 2013 and 2014 Source: IMF, World Economic Outlook October

19 Unlike in 2013 where the major regional stock exchanges strengthened relative to the previous year; in 2014 the Nigerian All Share Index fell precipitously, from a strengthening of 47.2 % in 2013 relative to 2012, to a fall of 16.1 % vis-à-vis The fall in the Nigerian All Share Index can be attributed to falling oil prices which characterized the second half of 2014 and the devaluation of the Naira. Although the BRVM and the GSE CI strengthened, their strengthening was less in intensity compared to the level in the previous year. Table 4 : Major regional stock market trends between 2013 and 2014 Stock Exchanges Index Dec. Dec Var. (%) Nigeria Stock Exchange (NSE) NIG ALSI % Ghana Stock Exchange (GSE) GSE CI % BRVM Composite Index % Source: During the year under review, all the currencies of the sub-region depreciated against the Units of Account, with the CEDI recording the worst depreciation at 55.3%. Table 5 : Average currency exchange rate trends in the sub-region against the Units of Account between 2013 and 2014 Currency Var (%) UA / USD UA /EUR UA /FCFA UA / NAIRA UA / CEDI UA /ESCUDO UA/ DALASI UA / GUI F UA /LEONE UA / LIBER $ Source: EBID / Audit Department & IMF 18

20 CHAPTER II : ACTIVITIES OF THE ECOWAS BANK FOR INVESTMENT AND DEVELOPMENT 2.1 ACTIVITIES UNDERTAKEN BY THE DECISION-MAKING BODIES Board of Governors During the period, the Board of Governors of the Bank held its 12 th Ordinary Session in Monrovia, Liberia on 16 th June, At this session, the Governors adopted the 2013 Activity Report and approved EBID s account for the year ended The Board also considered and approved: the Guidelines for allocation of EBID shares to Non-Regional partners ; the request for authorisation for equity participation of Arcode Europe in the capital of EBID; the request for the renewal of tenure of the External Auditors of EBID; appointment of Directors The main resolutions adopted are summarised in Annex Board of Directors Between 1 st January and 31 st December 2014, the Board of Directors of EBID held two Ordinary Sessions (44 th, and 45 th ) at the Bank s Head Office in Lome on 25 th April and 2 nd June and two home consultations (46 th and 47 th ) from 19 th to 24 th October and 18 th December, respectively. During the sessions, the Directors approved the financing of ten (10) projects, in six (6) of the fifteen (15) Member States namely: Benin, Côte-d Ivoire, Ghana, Guinea, Niger and Senegal. They also considered and adopted other resolutions relating among others, to the financial statements for the year ended 31 st December 2013, the 2013 Activity Report, the 2014 budget of the Bank and the Interim Action Plan for 2015, pending the development of the Bank s Strategic Plan. The main resolutions adopted are summarised in Annex 4. 19

21 2.2 ADMINISTRATIVE AND MODERNIZATION ACTIVITIES OF THE BANK Human Resource Management Annual Report 2014 Regarding the human resource management policy, major activities carried out in 2014 mainly focused on reinforcement and training of the Bank s staff. In this regard, interviews were organised for positions that were not filled at the end of the 2012 recruitment exercise and for the Bank s Young Graduate Professionals Programme. Similarly, tests were organised for the recruitment of support staff to do away with the system of outsourcing staff. Also, three (3) professional staff members proceded on retirement. Staff redeployments between 2013 and 2014 are shown in the table below: Table 6: Staff Strength of EBID between 2013 and 2014 Socio-professional category Staff Strength 31/12/2013 Recruitments Departures 31/12/2014 President Vice-President Management staff Professional staff (D & P) Support staff (G & M) Total permanent staff Outsourced staff Contract staff Total contract staff Total Source: Administration and General Services Departement Futhermore, the Bank, in line with its operational capacity building policy, initiated individual as well as tailor-made group training programmes for the benefit of staff during the period under review. This enabled some staff to participate in several training seminars related mainly to the following themes: Legal and Commercial Aspects of the Success of PPP ; Management of Social Service ; Good Archives Management in a Digital Era; Documentary Credit Practice ; Anti-Money Laundering Practice; Strategies for recovering non-performing loans ; Hign-level management; and Credit-investment evaluation. 20

22 Regarding group training, it focused on office automation Status of implementation of the rehabilitation of the head office building In connection with the rehabilitation of the headquarters building, the Board of Directors at its session held on 21 st December 2010, approved a budget in a total amount of UA 4.7 million or CFA F 3.7 billion. However, given the increase in the volume of work due to the considerable time that elapsed between the conduct of the studies and the actual implementation of the project, and secondly on account of the technical improvements needed to be brought to the project because of environmental concerns and the need to optimize the functionality of the building, an additional FCFA 500 million was approved by the Board of Directors at its 43 rd Session on 20 th December 2013, bringing the total budget to CFA 4.21 billion. As a reminder, the four phases of the performance of works are as follows: - 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 31st December 2014, the first two stages had been completed and works (phase 3) which commenced in March 2013 have reached a % implementation rate Modernisation of the Information System In order to provide EBID with an efficient, reliable, secure and upgradable information system in accordance with accepted international norms, the following progress was made during the reporting period: The finalization of the IT Master Plan of the Bank, in collaboration with the French Development Agency (AFD) and Credit Agricole from the grant agreement signed between the Bank and AFD on 18 th March 2013 amounting to 500,000. The IT Master Plan was adopted by the Board of Directors at its 44 th Session held on 25 th April The development of an implementation plan thereto, and the engagement of its implementation through the creation of the IT Committee and the ICT Security Committee; The holding of the first meeting of the ICT Committee at which steps were taken to organize a seminar aimed at owning the IT Master Plan; the commencement of the process of hiring a consulting firm to support the implementation of the IT Master Plan and strengthen the SUNSYSTEM; 21

23 The migration of the entire computer system of the Bank to Private CLOUD WINDOWS SERVER 2012 R2 (for servers) and WINDOWS 8.1 (for workstations); and Training of staff of the Bank in the use of the above-mentioned products 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. In this regard, as part of its programme of activities for 2014, the Department of Internal Audit and Evaluation of Operations finalised several missions relating to: audit of the budget, audit of the vehicle fleet and audit of procurement procedures. It also undertook two other missions mainly on recruitment and professional training, expense accounts, finalisation of audit reports and drafting of action plans based on recommendations of the Audit Committee. Finally, the Department undertook a fact-finding mission to the African Development Bank on retrospective evaluation. The main activities carried out by the Risks Analysis Department (RAD) related to the 4 th self-evaluation of the Bank according to AADFI standards and the rating of the Bank by Moody s. The RAD also completed the AFD Technical Assistance Project to EBID through the production of a technical and financial implementation report forwarded to the partner. 2.3 OPERATIONAL ACTIVITIES Over the period from 1 st January to 31 st December 2014, 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 2013, activities have declined relatively, for want of adequate resources for financing the numerous requests received from Member States Project appraisals In 2014, thirteen (13) projects were appraised. Of this, five (5) were public sector projects while eight (8) were private sector projects amounting to UA 95.3 million or US$ million, being a drop of 38.5% from one year to the other. Table 7 : Trends of projects appraised according to sector of operation between 2013 and 2014 SECTOR Variation (%) 2014/2013 No Amount (UA) No Amount (UA) No Amount PUBLIC PRIVATE TOTAL Source: Research and Strategic Planning Department 22

24 The total for public sector projects stood at UA 16.1 million (US$ 24.5 million) corresponding to 14.4% of the total amount of resources to be provided by the Bank Project supervision To minimize and eliminate risks inherent in project implementation, the Bank intensified the supervision of active projects in its portfolio. As such, thirty -five (35) projects were supervised in 2014 against twenty-five (25) the previous year approvals During the period, the Bank s Board of Directors approved the financing of ten (10) projects for a total amount of UA 84.6 million or about USD million. Table 8: Trend of approvals according to type of intervention between 2013 and Variation (%) No Amount (UA) No Amount (UA) No Amount PUBLIC LOAN PRIVATE LOAN GUARANTEE PARTICIPATION TOTAL Source: Research and Strategic Planning Department As shown in the figure below, between 2013 and 2014, projects approved declined by almost UA 69.2 million, or 45.0%. This development was as a result of two sectors of operation that recorded a drop of 71.9% for the public sector and 34.5% for the private sector, respectively. Figure 5 : Approval trends between 2013 and ,0 160,0 140,0 120,0 100,0 80,0 60,0 40,0 20,0 0, PUBLIC PRIVATE TOTAL Source: Research and Strategic Planning Department The approval of these new financing facilities brings the total amount approved by the Board of Directors to UA 1.37 billion ($US 2.1 billion) in respect of 234 projects. 23

25 2.3.4 Signing of loan agreements Contrary to the approvals, signing of new loan agreements recorded a slight dip, to the tune of UA111.6 million in 2014 for sixteen (16) loan agreements signed in respect of Benin, Ghana, Guinea, Burkina Faso, the Gambia, Côte d Ivoire, Mali, Niger, Senegal and Sierra Leone. Table 9: Financing trends according to type of intervention between 2013 and Variation (%) No Amount (UA) No Amount (UA) No Amount PUBLIC LOAN PRIVATE LOAN GUARANTEE PARTICIPATION TOTAL Source: Research and Strategic Planning Department Compared with 2013 where these stood at UA million, the new commitments have shown a 6.2% decline in 2014, in spite of the significant drop observed in the private sector, offset by the sharp rise in the volume of financing in favour of the public sector (+92.5%) Commitments of EBID as at 31st December, 2014 Notwithstanding the removal of several projects from the Bank s active portfolio, as at the end of December 2014 net cumulative commitments of the Bank in favour of Member States, recorded an increase of 14.41% in 2014, which was UA (US$ ) as against UA (US$ ) as at 31 st December 2013, for 141 active projects. Table 10: Trends in commitments between 2013 and 2014 according to type of intervention Type of intervention Amount (UA) Amount (UA) Variation (%) LOAN PARTICIPATION GUARANTEE TOTAL Source: Research and Strategic Planning Department The structure of the types of intervention remained the same from one year to the other. Direct loans or lines of credit made up over 95% of loans granted by EBID. It should however be noted that the decline in guarantees, some of which had expired, have been removed from the institution s active portfolio. 24

26 Figure 6 : Trends in the structure of the types of intervention of EBID between 2013 and 2014 Source: Research and Strategic Planning Department On the whole, as can be seen in the figure below, in eleven years of activity, the Bank has raised the level of its net cumulative commitments from UA 121 million in 2004 to UA 883 million as at the end of December Figure 7 : Net total commitment trends of EBID from 2004 to 2014 (Millions of UA) Source: Research and Strategic Planning Department 25

27 Breakdown of commitments According to type of financing: The social sector was not a beneficiary of funding in 2014 as shown in the table below. This is as a result of challenges the Bank encountered in mobilising concessional resources to meet the numerous needs of that sector which nevertheless remains a major challenge for the subregion. Table 11: Sectoral trends in net total commitments 4 of EBID between 2013 and 2014 TYPE OF INTERVENTION s Equity participation Guarantees Sectors Infrastructure Rural Development Industry Services Social Total s Services Total Participation Infrastructure Industry Services Total Guarantees Variation (%) No Amount (UA) No Amount (UA) No Amount Commitments Source: Research and Strategic Planning Department The net total commitments of EBID as at 31 st December 2014 for financing of (76) public sector projects amounted to UA or 58.5% of outstanding net total commitments. For development support and private sector promotion financing, the Bank has 65 projects in its active portfolio, for a total amount of UA , or 41.5% of the outstanding net total commitments. Table 12 : Sectoral breakdown of the net total commitments as at 31 st December 2014 Area of intervention No Amount (UA) Amount (US$) % of commitment Public Sector Private Sector Total Source: Research and Strategic Planning Department 4 Net total commitments = Commitments on active projects 26

28 The Bank s net loans to the public and private sectors, increased by 11.9% and 18.1% respectively in comparison with their levels as at 31 st December Figure 8 : Trends in distribution of total net commitments per sector of operation between 2013 and 2014 ( in millions of UA) 1 000,0 900,0 800,0 700,0 600,0 500,0 400,0 300,0 200,0 100, PUBLIC PRIVATE TOTAL Source: Research and Strategic Planning Department According to country: Although all Member States benefit from the Bank s assistance, the breakdown of the net total commitments presented in the figure below shows that bulk of the Bank s assistance goes to the following countries: Côte d Ivoire (13.3%), Benin (12.6%), Togo (11.4%), Ghana (9.6%) and Senegal (8.5%). Figure 9 : Breakdown of EBID s net total commitments per country as at 31 st December 2014 (%) 14% 12% % 8% % 4% 2% 0% BENIN BURKINA FASO CABO VERDE CÔTE D'IVOIRE The GAMBIA GHANA GUINEA GUINEA- BISSAU LIBERIA MALI NIGER NIGERIA SENEGAL SIERRA LEONE TOGO Source: Research and Strategic Planning Department 27

29 However, as shown in the table below, the Bank s interventions in 2014, focused more on countries such as Guinea(+64.0%), the Gambia (+32.9%) Togo (+24.3%), Niger (+21.7%). Table 13 : Breakdown and trends in net total commitments per country between 2013 and 2014 (in UA) Commitments as at Commitments as at Variation Country Dec / Dec.2014 end of Dec.2013 end of Dec (%) (%) (UA) (UA) BENIN BURKINA FASO CABO VERDE CÔTE D'IVOIRE THE GAMBIA GHANA GUINEA GUINEA-BISSAU LIBERIA MALI NIGER NIGERIA SENEGAL SIERRA LEONE TOGO TOTAL Source: Research and Strategic Planning Department Disbursements disbursements amounted to UA in 2014, bringing total disbursements to UA as against a level of UA in 2013, thereby recording a 29.5% jump. Thus, the disbursement rate in respect of active loans showed 60.8% as at 31 st December 2014 against 54.7% the previous year. On the basis of repayments made, total loans outstanding amounted to UA (US$ ) as at 31 st December, The situation per country is presented in Table

30 Table 14 : Trend of outsatnding loans by country as at 31st December 2014 (in UA) Annual Report 2014 Country No Commitment Disbursement Not disbursed Princpal due Repayment of Principal. Outstanding loan Total Amount Part (%) BENIN BURKINA FASO CABO VERDE CÔTE D'IVOIRE THE GAMBIA GHANA GUINEA GUINEA BISSAU LIBERIA MALI NIGER NIGERIA SENEGAL SIERRA LEONE TOGO TOTAL Source : Research and Strategic Planning Department Other Operational Activities The other operational activities of the Bank involved the Special Fund for Telecommunications (FST), the Cultural Industries Guarantee Fund (FGIC) and the Environment and Sustainable Unit (UEDD) Special Fund for Telecommunication (FST) EBID manages the FST for the financing of telecommunications infrastructure in Member States. As at 31 st December 2014, the total assets of the Fund stood at UA 20,328,808 against UA 21,882,127 in 2013, representing a loss of 7.1 %. Regarding the income statement, it showed a loss of UA 1,553, 318 in 2014 against a profit of UA in The details of the balance sheet and income statement are presented in Annex Cultural Industries Guarantee Fund (FGIC) Created at the inititative of the International Organization of French Speaking Countries (OIF), and EBID, the FGIC is a mechanism that ensures cultural funding operations undertaken by West African States, Members of the OIF and ECOWAS. The Fund is administered by a Management Committee, in which both partners are represented with three members each. 29

31 During the period under review, the activities of the Fund focused on operations of credit guarantee and monitoring. Thus, two projects in Togo and Burkina Faso amounting to FCFA 92 million benefitted from the Fund. These operations bring to 20 the number of Fund interventions for a total of FCFA billion against a gross potential of FCFA 2.43 billion. As at the end of December 2014, the net rate of utilization of the FGIC rose to 25 %, with the cumulative amount springing to FCFA 158,560,000. In addition, eight (8) projects in Benin, Burkina Faso, Senegal and Togo were supervised during the review period. In spite of these interventions, the FGIC s potential largely remains unknown to beneficiaries in the sub-region due to the lack of promotion and visibility of the Fund. These are mainly as a result of the lack of financial resources for the Fund which also limits its ability to fund operations in the light of the enormous potential of the cultural industry in West Africa Environment and Sustainable Development Unit The Environment and Sustainable Development Unit made significant progress during the year under review as follows: Participation in four (4) appraisal missions in the framework of determining the social and environmental impacts of each of the appraised projects ; Participation in two (2) supervision missions in Sierra Leone ; Review of the Business Plan and the report on the social impacts of sixteen (16) projects under appraisal by EBID; Continued negotiations with partners such as the Green Climate Fund (GCF), the United Nations Framework Convention on Climate Change (UNFCCC), the Climate Investment Fund (CIF) and the Fund for Global Environment Facility (GEF) to obtain the accreditation needed for the Bank to be the implementing agency of the latter within the ECOWAS zone. This status will enable it to expand its access to international funding for climate change and the environment; Supporting the Business Plan Competition organized within of the framework of the Forum on Financing Clean Energy in West Africa (WACFCEF), the Initiative for Climate Technologies- Consultative Network. The contest was promoted by the Centre for Renewable Energy and Energy Efficiency of ECOWAS (ECREEE), and the Regional Initiative for Investment in Clean Energy of the US Agency for International Development, in collaboration with the African Development Bank (AfDB) through its Sustainable Energy Fund for Africa (SEFA), the West African Development Bank (BOAD), EBID and the African Society of Biofuels and Renewable Energy (SABER). 30