3 questions to

Yves Boudot spent 27 years of his career in about ten African countries. He was appointed Director of AFD’s Sub-Saharan Africa Department a few weeks ago.

Is it right to say that Africa is the priority continent for AFD?

Africa is the main priority for France’s cooperation policy.* AFD is in charge of implementing this vision. This priority given to financing development in Sub-Saharan Africa aims to provide solutions to the major issues and challenges posed by the emergence of the continent. This priority is also the result of the very history of France’s official development assistance and of our Institution. It is in Sub-Saharan Africa that AFD’s operational, financial and emotional roots are implanted. This is what makes AFD stand out in the landscape of donors and also constitutes its main area of expertise and its core value. Sub-Saharan Africa concentrates nearly 40% of AFD’s total activity and 60% of the State budgetary effort.

How should we view the situation in Africa today?

We should try to avoid the tendency we have to generalize as soon as we talk about this continent. For far too long now, generalities about the situation in Africa and its future have made us vacillate unequivocally between a pessimistic or fatalistic vision and a blind optimism. Sub-Saharan Africa is diverse and complex with widely varying situations. However, one thing that is sure today is that Sub-Saharan Africa is at the forefront of the global issues and challenges both today and for the coming decades. This is perhaps how the situation actually stands in Africa today. The unprecedented population dynamics, the strong and resilient economic growth in recent years, the natural resources potential that we are constantly talking about, but which has so far been developed very little, and the continued progress towards peace and democracy have definitely made us change the way we look at the continent. South Africa is a striking example. Who could have foreseen, back in 1990 when Nelson Mandela came out of prison, that twenty years later this country would be the economic power that it is on the way to becoming?

What are the main challenges that Sub-Saharan African countries need to face?

There are major challenges. Africa will need to feed almost a billion more people by 2050. Its population growth rate is estimated at some 15 million more people a year. Its agriculture will need to feed cities that will continue to grow at a fast pace and also to provide rural areas with a livelihood. By 2050, two billion Africans will need access to water, energy, education or health, whereas today’s production and distribution capacities cannot meet demand. Finally, economic growth in Africa, which is well above the current growth of our economies, will first and foremost need to be synonymous with large-scale job creation for the continent’s youth and with tax resources for States. The emergence of a formal private sector is one of the major challenges for Sub-Saharan Africa.

What are AFD’s main strategic directions in Sub-Saharan Africa?

Once again, they depend on the economic and social situation of the countries we support. They consequently first depend on the demand and needs of the beneficiaries of our financing, but also on States’ capacity to borrow in order to finance their investments. AFD’s activity in Sub-Saharan Africa is today guided by three main areas defined by the French Government: financing major infrastructure, developing more productive agriculture and supporting more inclusive growth. The first therefore involves supporting the development of major infrastructure and providing communities in cities and rural areas with access to essential services. They concern access to energy, transport, water, irrigation, education and health. A recent World Bank study highlighted the lack of this infrastructure, the high cost of access to it and the substantial additional amounts required to remedy the current situation over the next ten years. Energy and transport are objectively speaking the two main priorities. These two sectors require heavy investments. They must be implemented by coordinating the efforts of donors, private partners and States. For example, there is considerable hydropower potential and projects, which are necessarily regional, are implemented over the long term. We must now focus our efforts on this sector. Since the end of the 1970s, rail transport has been abandoned for roads and yet on the main trade corridors and to transport raw materials from the mining industry it is the means of transport that best meets needs. The second priority area for the coming years is to develop subsistence farming and agri-food industries. The sector accounts for 13% of GDP in Sub-Saharan Africa and concerns almost 70% of the working population. It helps create value, stabilize communities in rural areas and combat desertification. Africa’s agriculture needs to be more productive in order to guarantee food security for cities and rural areas and create export surplus. These challenges are core to the way movements take place between Africa’s growing cities and rural areas. Finally, everyone is aware that for nearly ten years now, the continent’s economic growth rates have been well above those of our own economies. This steady growth is largely driven by the upward trend for commodity prices, notably mining and oil products. It is, moreover, often unequal from one country to another. It is essential to promote the development of more inclusive growth led by a formal private sector in high employment generating sectors. AFD is consequently pursuing its efforts to promote the development of a banking and financial system oriented towards the development of this private sector.

Do we have geographical priorities?

In terms of the distribution of the French State’s budgetary effort, the 14 priority countries for French cooperation** are a strong focus for AFD’s activity. However, AFD now works in all Sub-Saharan African countries where it adapts its action and tailors its tools to the needs expressed and to our ability to meet them. The real priority would be to come up with a different geographical approach to Sub-Saharan Africa. We must first look at things from a regional perspective, particularly for major infrastructure projects, while pursuing national actions in other sectors. The scale of the challenges that we have just mentioned and the critical size of the economic blocs are such that a regional approach is inevitably essential. This is true when it comes to financing major energy or transport infrastructure projects, but also for the development of coherent and integrated economic areas that create dynamism and emulation, in synergy with the regional Unions that are gradually emerging.

* This priority is set out in the French Ministry of Foreign and European Affairs’ Framework Document for Cooperation for 2011.

** The 14 priority countries in Sub-Saharan Africa: Benin, Burkina Faso, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Ghana, Guinea Conakry, Madagascar, Mali, Mauritania, Niger, Senegal and Togo.

This year’s World Water Day focuses on urban issues. What can you tell us about AFD’s action in this sector?

AFD’s Water and Sanitation strategy focuses on four priorities. Two of these are based on urban populations. These choices have been made in a context of fast-paced demographic growth, rising insecurity and the lack of facilities. This lack is particularly marked in the field of wastewater and excreta collection and treatment.

The first area involves providing sustainable access to water for all. Access to basic services constitutes a major health, social and land issue in this area. The lack of it constitutes a factor of economic and social exclusion for certain categories of disadvantaged populations. AFD’s financing helps to scale up both access to water for all, as well as water connections for public facilities, such as schools, health centers or markets .

The second priority is to speed up the process to develop sanitation in urban areas and guarantee a healthier urban environment. There are two major issues: public health, due to housing densification and the lack of supply, and an environmental issue, particularly the groundwater pollution caused by wastewater, excreta and sludge.

Action must be taken at several levels: by reinforcing infrastructure, but also by supporting hygiene promotion programs. Mobilizing “social marketing” techniques gives extremely good results.

Which actors does AFD mainly work with in this sector? 

Our main partners in developing countries are States, public or private companies or regional authorities, particularly in the French Overseas Communities.

Whenever possible, AFD cofinances projects with other bilateral (national) or multilateral donors (World Bank, EIB, ADB, etc.). It also builds technical and financial partnerships with decentralized cooperation (French local authorities), whose operations are highly complementary to those of AFD. We have also signed agreements with numerous NGOs in the sector.

What tools does it use?

AFD implements its strategy for the water and sanitation sector at three levels:

• by participating in financing infrastructure, of course, via a range of financial tools comprising sovereign loans (allocated to a State or a public entity that benefits from a State guarantee) and non-sovereign loans customized to finance drinking water facilities when sectoral policies have made sufficient headway. We can also use the system of guarantees, dedicated credit lines, etc. and, of course, grants mainly earmarked for the most vulnerable and the sanitation sector where in developing countries it is difficult to finance the investment via tariffs;
• by contributing to capacity building , which is necessary to support investment programs in order to ensure they are sustainable;
• by contributing to sectoral research in partnership with experts and researchers from both the North and South .  

Which emblematic projects can you tell us about?  

The drinking water and sanitation project in the outlying neighborhoods of Ouagadougou is of specific interest because it has been implemented by the City Hall of Ouagadougou and the National Office for Water and Sanitation (ONEA). It follows on from two major water supply projects for the capital via the ZIGA dam and for collective sanitation for the city center and industrial wastewater. 

The 6^th World Water Forum will be held in France in 2012. What does this involve for AFD?

The World Water Forum is the main event on water in the world. It is held in a different country every three years. This week-long event is the highpoint of a global decentralized preparatory process which lasts over 2 years.

It will be held in Marseille from 12 to 17 March 2012. This candidature highlighted the will to establish a participative approach open to all water sector stakeholders, in the spirit of the “Grenelle” process for the environment, as well as to come up with concrete solutions.

AFD is a member of the Board of Directors of the Forum’s International Committee. It holds the Vice Presidency of the “Regional Process”, which aims to mobilize the participation of all stakeholders in the 4 major regions of the world (Africa, the Americas, Asia-Pacific and Europe).

AFD also provides input for research on topics selected for this event, particularly the topic of “financing access to water for all”.

This year’s World Water Day focuses on urban issues. What can you tell us about AFD’s action in this sector?

AFD’s Water and Sanitation strategy focuses on four priorities. Two of these are based on urban populations. These choices have been made in a context of fast-paced demographic growth, rising insecurity and the lack of facilities. This lack is particularly marked in the field of wastewater and excreta collection and treatment.

The first area involves providing sustainable access to water for all. Access to basic services constitutes a major health, social and land issue in this area. The lack of it constitutes a factor of economic and social exclusion for certain categories of disadvantaged populations. AFD’s financing helps to scale up both access to water for all, as well as water connections for public facilities, such as schools, health centers or markets .

The second priority is to speed up the process to develop sanitation in urban areas and guarantee a healthier urban environment. There are two major issues: public health, due to housing densification and the lack of supply, and an environmental issue, particularly the groundwater pollution caused by wastewater, excreta and sludge.

Action must be taken at several levels: by reinforcing infrastructure, but also by supporting hygiene promotion programs. Mobilizing “social marketing” techniques gives extremely good results.

Which actors does AFD mainly work with in this sector? 

Our main partners in developing countries are States, public or private companies or regional authorities, particularly in the French Overseas Communities.

Whenever possible, AFD cofinances projects with other bilateral (national) or multilateral donors (World Bank, EIB, ADB, etc.). It also builds technical and financial partnerships with decentralized cooperation (French local authorities), whose operations are highly complementary to those of AFD. We have also signed agreements with numerous NGOs in the sector.

What tools does it use?

AFD implements its strategy for the water and sanitation sector at three levels:

• by participating in financing infrastructure, of course, via a range of financial tools comprising sovereign loans (allocated to a State or a public entity that benefits from a State guarantee) and non-sovereign loans customized to finance drinking water facilities when sectoral policies have made sufficient headway. We can also use the system of guarantees, dedicated credit lines, etc. and, of course, grants mainly earmarked for the most vulnerable and the sanitation sector where in developing countries it is difficult to finance the investment via tariffs;
• by contributing to capacity building , which is necessary to support investment programs in order to ensure they are sustainable;
• by contributing to sectoral research in partnership with experts and researchers from both the North and South .  

Which emblematic projects can you tell us about?  

The drinking water and sanitation project in the outlying neighborhoods of Ouagadougou is of specific interest because it has been implemented by the City Hall of Ouagadougou and the National Office for Water and Sanitation (ONEA). It follows on from two major water supply projects for the capital via the ZIGA dam and for collective sanitation for the city center and industrial wastewater. 

The 6^th World Water Forum will be held in France in 2012. What does this involve for AFD?

The World Water Forum is the main event on water in the world. It is held in a different country every three years. This week-long event is the highpoint of a global decentralized preparatory process which lasts over 2 years.

It will be held in Marseille from 12 to 17 March 2012. This candidature highlighted the will to establish a participative approach open to all water sector stakeholders, in the spirit of the “Grenelle” process for the environment, as well as to come up with concrete solutions.

AFD is a member of the Board of Directors of the Forum’s International Committee. It holds the Vice Presidency of the “Regional Process”, which aims to mobilize the participation of all stakeholders in the 4 major regions of the world (Africa, the Americas, Asia-Pacific and Europe).

AFD also provides input for research on topics selected for this event, particularly the topic of “financing access to water for all”.

The women, a vulnerable and key population for the development?

It is the commonplace to remind that the women constitute the most vulnerable population. Multiple studies show that in the situations of food insecurity, the women are the first ones to suffer from it. The rate of eviction of the girls of the whole educational system is very upper to that of the boys. The working time of the women is often widely upper to that of the men; the double day is a wide-spread phenomenon. The women entrepreneurs have much more difficulty reaching the credit that their male counterparts. Quasi-universal phenomenon, the women are very under-represented and in position of weakness in the authorities or encircle leaders. Other less known and more militant studies show that the budgets neglect or often forget the needs of the women.

It is so unanimously recognized as an increase of the income of the women benefits at once the increase of the well-being of their whole family. The increase of the duration of the schooling of the girls allows their future children to be better been looked after and better educated.

As soon as the women have an economic surplus, they reinvest a part in the health and the education.

What can we say about the consideration of gender issues in the action of the AFD today?

For the follow-up of these projects, the AFD was equipped with "sexo-specific" indicators in the field of the health, with the education and with the microfinance. Besides this institutionalized follow-up, the teams projects in charge of the microfinance and of the water and the purification consider that the implication of the women is a priority for the success of the financed projects.

For example, each knows that the women are actresses indispensable to a good management of borders-fountains and other devices of distribution.

Aside from our partnerships with NGO and of the health mother-child, the AFD finances very exceptionally projects where the promotion or the protection of the woman is the heart of the problem; on the other hand, the prevention or the decrease of the discriminations are concerns for every project

What obstacles meet the initiators of a consideration of gender issues in the projects?

The difficulty, the complexity or the obligation of speed of a negotiation can drive all the stakeholders to evade the gender issues. This problem comes to be added to all the parameters of a project and can seem more complex to handle that the other financial, technical or ethical conditions. Especially that, generally, all the negotiators has a control limited by these questions.

One should not deny sometimes the existence of an indifference, a conscious or an unconscious, counterparts of the AFD to take into account the gender issues.

However, this type of obstacle also meets for the consideration of the other factors: the environment, the handicap, the autochtonous populations, the working conditions and the other discriminations.

On the other hand, in our partnership with NGO, the carried attention on this question

Can you speak to us about exemplary projects?

For the sectors of the microfinance and the water and the purification, the examples are plethorae. In other domains, we can quote the rehabilitation of the rural tracks in Kenya. From the conception of the project, the employment of the women in the works of rehabilitation of tracks was a requirement common to all the actors. The entrepreneurs in charge of various sections were able to reach adapted trainings. The rate of feminine employment had to constitute a part of progress reports.

Other example, accompaniment of the nature reserve of Limpopo, in Mozambique, shows clearly the importance of the women for the success of a project. The women are important users of the natural environment where they collect numerous wild resources and are very involved in the agricultural works. Their participation and their understanding in the measures of conservations are essential

Is there a certification of projects by an independent certifying body?

Today, the only real known certification internationally and non-specialized containing dimensions genre is the standard SA8000. It is very directly inspired by international treaties and the agreements of the International Labour Organisation. This standard allows to obtain a certificate at the conclusion of very structured independent audits. There are the other more sector-based certifications in the textile industry and the industrial plantations. The standard performances of the IFC (International Finance Corporation), the Safeguard of the World Bank and the other policies of the multi-and bilateral Development financial institutions (DFI) do not give places to certifications. At last, voluntary commitments taking into account the gender issues as the new standard ISO 26000 exist, such as the principles of Ecuador, the Global Compact signed by the AFD...

The consideration of the gender issues and of the fight against discrimination constitutes an inevitable part of any policy of social and environmental responsibility worthy of the name.


What are the perspectives of extension of these practices for the other projects financed by the AFD?

The teams projects would need elements of speech and plea to convince their counterpart of the importance of these questions for the general improvement of the living conditions.

The situation remains difficult today. Crime is rife, the political situation still remains unclear and a cholera epidemic must be eradicated. Living conditions remain extremely precarious. The population of Haiti has shown exceptional courage and determination. The reconstruction is taking place with the help of everyone, little by little, but it is happening…

What are the local agency’s main operations?

AFD has been supporting projects in Haiti for years. The Haitian authorities have asked us to continue them. We have nine projects totalling €75m in several sectors: firstly agriculture with an irrigation project for subsistence production which benefits 2,000 families and is a real success. We are also working in the sectors of health, education, microfinance, infrastructure, environment, urban development. Two major reconstruction projects were launched in the immediate aftermath of the earthquake using funds delegated to AFD by the French Foreign Ministry: the reconstruction of the main university hospital (500 beds) with a cost estimated at $50m and the restructuring of two popular Port-au-Prince neighborhoods with some 80,000 inhabitants for an amount totalling €20m. AFD also allocated €20m of initial budget support in 2010. We also have a sizeable portfolio of projects to support NGOs with 16 ongoing programs.

How is international aid coordinated during this reconstruction phase?

I would like to put right some of the extremely negative misleading information that has been widely disseminated and make a distinction between emergency aid and the reconstruction of Haiti. There has been a massive and extremely diversified amount of emergency humanitarian aid. The weakness of the central State amplified the impression of disorder and interference which can still be seen today, but the worst was often avoided thanks to this demonstration of solidarity.
At the same time, on a different time scale, international aid for the complete reconstruction of Haiti has been launched with an extremely ambitious agenda. The amounts of financing that have actually been pledged are extremely high. Of course, with a State and administrations that are weak and badly affected by the earthquake, it is not easy to actually implement projects and it is neither surprising nor shocking to see that one year on from the disaster we are still at the study or preparation phase. Despite all the difficulties that have been met and the political vacuum we have seen since the elections in December, I can testify to the fact that international aid is being coordinated in the field in all the sectors on which Haiti’s development depends. Our “guiding principle” continues to be that the decisions and responsibility must be in the hands of Haitians and this makes the activity much more difficult. However, if we continue our efforts, there is real hope that with time and a great deal of perseverance, Haiti will be pulled out of its chronic underdevelopment. 

You already know PROPARCO. You left it in 2008 to head AFD's Mediterranean Department. Why have you come back?

Well, firstly because I was asked to, and when I look at my career, my attachment to AFD's private sector investment arm, and the increasingly important role it plays in the implementation of France's public policy for development financing, I see it as a great honor and accepted with pleasure. Luc Rigouzzo, my predecessor, was appointed Director of Cabinet of the Minister of Cooperation, Mr. de Raincourt. Mr. Zerah, Chief Executive Officer of AFD, subsequently put forward my nomination to PROPARCO's Board of Directors, which approved it on 1 December 2010.

And also because PROPARCO has been very important in my career. I started out in African State-owned and private companies right after I graduated from the HEC Paris international business school. These initial experiences made me want to work for development and, without realizing it at the time, I fully shared the intuition that led to the creation of PROPARCO: financing sustainable development is not just about budget transfers from State to State. Building a formal private sector is one of the main keys to economic and social development wherever we are in the world. I joined Caisse Française de Développement in 1988 with this conviction, then I joined PROPARCO for the first time in 1999. I was Investment Director, then went on to become Deputy CEO. I worked for three CEOs: Gilles Peltier, Claude Périou and Luc Rigouzzo.

Finally, because PROPARCO has been experiencing extremely strong growth in its business in recent years, the tools I helped to set up prior to my departure have been enhanced and developed, and PROPARCO's teams are today recognized for their commitment and professional expertise.

You've experienced the recent changes to PROPARCO, how would you describe it today?

PROPARCO is a development finance institution (DFI) set up by AFD in 1977 on the conviction that the private sector should be one of the main players in the development of South economies, particularly because:

-       it is the first factor for growth and job creation and generates fiscal contributions that allow States to play their role as investors in the general interest and redistributors of wealth;

-       it is in the front line in terms of environmental and social concerns and governance;

-       and it can become an intermediary for public policy by directly providing certain basic services, particularly in the social sectors.

Thirty years on, with its developmental impacts and results constantly improving, PROPARCO is living proof that it is possible to finance operations that are economically viable, socially equitable, environmentally sustainable and financially profitable. This success shows just how right that initial conviction was. It is especially interesting because PROPARCO's model for economic development and strategy is unique and ambitious. It is based on:

-       a governance structure that sets it apart from its European partners. Its capital and Board of Directors are indeed open to public and private partners from both North and South countries;

-       an approach to time and risk that leads it to focus exclusively on long-term financing in geographical areas or for private players that are considered as being too risky by commercial banks;

-       finally, a portfolio of projects selected for their social, environmental and economic impacts.

PROPARCO's strategy is today based on three cornerstones:

-       to promote economic growth and job creation in the poorest countries;

-       to provide basic services for populations via the private sector (electricity, water, housing, infrastructure, microfinance, health, education...);

-       to disseminate high environmental and social standards, particularly in terms of energy efficiency in emerging countries. 

PROPARCO offers private entrepreneurs in South countries three main types of financial tool: loans, direct and indirect equity investments, and investment tools in local currencies.

PROPARCO focuses almost 60% of its investments in Africa, but today also operates in all countries on the OECD's Development Assistance Committee list.

What challenges will PROPARCO be facing over the next two years?

PROPARCO will be continuing to develop its activity in line with the efforts that have been made over the past five years. This is the first challenge facing all PROPARCO's teams.

PROPARCO will, moreover, once again see growth in 2010, and in 2011.

Sub-Saharan Africa will remain its top priority in all its business sectors. The extremely ambitious target of €500m of investments in Africa – higher than the commitment made by the French President in Cape Town in 2008 – will be achieved in 2010. This target will be maintained in 2011, with a focus on French-speaking Africa.

PROPARCO is the European bilateral DFI with the highest level of commitments in the Mediterranean and will continue to be so. PROPARCO’s strategy is to be a key player within a network of Mediterranean financial institutions, with the aim of scaling up regional integration and exchanges with Africa.

It will continue to extend its activities to other geographical areas. For example, with the opening of an office in Mexico. We will be focusing on our high level of expertise in the sectors of climate change, water and sanitation, agro-industries, health, education and tourism.

PROPARCO will be increasing its amount of direct financing, particularly equity investments. It will be scaling up its activity in the infrastructure sector and consolidating its activity to support banks and microfinance institutions.

Finally, PROPARCO will give priority to financing businesses that are working to develop the agricultural sector and agro-industries, particularly in Africa.

All these efforts, initiated by my predecessors and implemented by talented teams, will be made while ensuring that there are closer ties and a closer operational synergy between PROPARCO and its parent company, Agence Française de Développement.