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Conference on Islamic microfinance in Jeddah, co-organized with Islamic Development Bank, on 30 April and 1 June
AFD and the Islamic Development Bank have co-organized an international conference on Islamic microfinance in Jeddah (Saudi Arabia) with CGAP (microfinance network led by the World Bank). This conference gathered major players in Islamic microfinance and provided the opportunity to review the practices and products of this financing method which is experiencing rapid development.
A rapidly developing method to finance the economy
The work of the conference reviewed the practices, products and volumes of this financing method, which is experiencing rapid development with a billion dollar turnover and an annual growth rate of 30%. It also highlighted the results of a study jointly led by CGAP and AFD.
This conference was organized in the context of the partnership agreement signed last January between AFD and the Islamic Development Bank (IsDB).
The exchanges were rich and lively and brought to light the strengths and weaknesses of these tools, which are increasingly requested in a number of countries where AFD operates. They also more clearly identified the needs of beneficiaries, financial institutions and central banks, which play an essential role in terms of the regulatory framework and regulation.
A whole host of innovative experiences in the field
Several observations were made: the existence of a strong demand for this type of financial product, particularly from the poorest; the proliferation of innovative experiences in the field, which are often poorly identified; the need to launch benchmarking exercises in order to build technical, financial and institutional references.
A knowledge platform on the Internet
It was agreed that the various donors and institutions concerned, including IsDB and AFD, will support this process by promoting the implementation of information and exchange tools, such as a knowledge platform backed up by a dedicated website, and by holding an annual conference. An invitation was launched for the next one to be held at AFD’s headquarters in Paris.
Bilateral talks were held between AFD’s Chief Executive Officer, Dov Zerah, and the President of IsDB, Mr. Ali, on the sidelines of this conference, and meetings between the respective operational departments defined practical ways of implementing the agreement, notably the possibility of staff exchanges and the first cofinancing operations in the Mediterranean.
Publication of study “Reducing the Cost of Migrant Remittances and Optimizing their Impact on Development”
This study was led by a team of experts, under the supervision of Savings without Borders, in Morocco, Tunisia and Senegal, as well as in the Comoros. It proposes practical solutions to reduce the costs of migrant remittances and increase their impact on development.
The proposals made by the study aim to reduce the average cost of migrant remittances and to optimize their impact on the development of African countries. They specifically focus on improving linked bank accounts (dual bank accounts for migrants in their country of residence and in their home country with activities coordinated between the banks of both countries), the development of innovative financial products, support for electronic payment technologies and the adaptation of regulatory and legislative frameworks.
What are the lessons learned from the study?
Due to their importance for the recipient communities, the flows of money from migrants tend to remain stable and are less sensitive to changes in the economic climate.
How to optimize remittances and their impact on development
- Reducing the cost of migrant remittances will increase their contribution to development.
- An understanding of the local context is the key to reducing the cost of remittances and informal flows.
- It would appear that the cost of remittances in the Maghreb region and franc zone has stabilized at a level that remains too high.
- While the profile of actors is becoming more diverse, there is still a need to develop the range of services in order to be more competitive.
- An overhaul of regulatory frameworks, with the aim of promoting diversification in the range of services and financial products, would help increase competition and reduce the cost of remittances.
- Four types of financial and technological services and products can contribute to reducing the cost of remittances.
- Actors, services, tools, new technologies…: there are ultimately five areas to be explored in order to expand and strengthen the range of banking and non-banking products and encourage both a reduction in the cost of remittances and co-development.
Developing an African broadband telecoms network in 29 countries
During the signing, Ibrahim Mayaki, Chief Executive Officer of the NEPAD Planning and Coordinating Agency (NPCA) and former Prime Minister of Niger, and Yves Boudot, Director of AFD’s Sub-Saharan Africa Department, had the opportunity to discuss – in addition to ICT development in Africa – the headway made by the Programme for Infrastructure Development in Africa (PIDA), an initiative led by the African Union Commission, NEPAD and African Development Bank.
AFD’s long-standing support to NEPAD’s New Information Technologies initiatives
Since 2003, AFD has been supporting NEPAD’s activities in the telecoms sector (e-Africa Program) via an earmarked grant and the joint AFD-DBSA Project Preparation and Study Fund. These funds have cofinanced preparatory services for NEPAD’s ICT operations and have provided a residential technical assistant (on assignment since July 2009) to support the project for the UMOJANET (“umoja” means “union” in Swahili) broadband transmission virtual network.
This new financing has been delegated from the European Infrastructure Fund (EU-ITF) and follows on from an €850,000 AFD grant (allocated in 2006) to support NEPAD’s initiative to develop a continent-wide broadband transmission virtual network.
Umojanet is extending Uhurunet
The grant that has been allocated will finance the study program that results from the technical assistant’s research to finish off the design of the concept and of the UMOJANET network. The aim is to extend it to the 29 countries in North, West and Central Africa. This will complete both coverage on the continent and the UHURUNET project for Southern Africa.
This project aims to offer African operators a pan-African network of fiber-optic transmission channels. The resulting interconnection offer is required to meet criteria for comprehensiveness, guaranteed quality, open access, non-discrimination and lowest possible cost. The bid invitations will be published in February 2012.
AFD’s approach in supporting NEPAD’s activities is based on its research on promoting regional integration via the construction of major communication networks as a complement to the private sector. This strategy is in line with those adopted by other donors (World Bank, ADB, EIB, KfW, DBSA…). It previously prompted AFD to provide USD9.5m of cofinancing alongside other donors in 2007 for the Eastern African EASSy submarine cable project.
The signing of this additional financing for the implementation of the UMOJANET project should allow NPCA to present an effective implementation plan for a fiber-optic broadband network in West, Central and North Africa over the next 12 months. This will complete both coverage on the continent and the UHURUNET project for Southern Africa.
100 Million Euros to support Tunisia’s economy
France is contributing 100 Million Euros to the Republic of Tunisia via the AFD. This financial support was announced by Alain Juppé, the French Minister of State for Foreign and European Affairs, during his visit to Tunis on 5 and 6 January 2012. The contribution is made under the Deauville Partnership launched during the French Presidency of the G8.
With Tunisia’s 2012 Budget to be examined by the National Assembly in just a few days, this contribution will add nearly 200 million Dinars to Tunisia’s Treasury and strengthen the Bank of Tunisia’s foreign currency reserves by 100 Million Euros.
This financial contribution is supported by active technical cooperation in several areas of key importance to Tunisia’s transition process. The AFD, with several other financing agencies (including the European Union, the World Bank and the African Development Bank), will thus be providing support for major reforms designed to modernise the capacities of the Ministry for Employment and to reform the regulatory framework for micro-finance and capital investment.
The aim is to strengthen employment by developing training for young people and fostering enterprise creation.
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From 2011 to 2013, French support to the transition process and economic recovery in Tunisia will amount to 425 Million Euros. |
In 2011, the AFD signed financing agreements for the Tunisian State amounting to more than 200 Million Euros and will be signing further agreements this year for nearly 100 Million Euros.
These agreements will support new projects designed to ensure a better equilibrium between regions and sections of society, particularly as regards drinking water supplies. Existing projects are to be adapted to these new priorities.
Finally, the AFD has proposed to accelerate the implementation schedule for existing projects, so that further financial contributions to Tunisia can be secured in important areas such as vocational training up to the level of qualified engineers, financing for businesses, micro-finance, major infrastructure and improved living conditions for Tunisia’s population.
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