Members of the private sector in real estate in Gambia market would not be scratching their heads too hard again for finance to fund their national or regional investments and development projects when the African Finance Corporation (AFC) is up and running.

The AFC, which will commence operation in April 2007 with its headquarters in Nigeria, will be a private sector-led profit-oriented African investment bank. Its establishment is being facilitated by the Central Bank of Nigeria.

Explaining the rationale for setting up the AFC to a cross section of the business community in The Gambia at a forum held on Thursday at the Kairaba Beach Hotel, the Nigeria Central Bank Governor, Prof. Chukwuma Charles Soludo, said: “The rationale for setting up the AFC is the need to harness the opportunities created by the massive funding gap for the key economic sectors of growth in Africa and the development of needed infrastructure by creating a regional focused investment bank which will help mobilise and distribute required capital towards driving the continent’s economic development.”

The focus of AFC, he said, would include funding private sector led projects and the development of infrastructure across Africa.

“AFC would offer a full range of financial products including loans, guarantees, risk management products, equity participation in private-sector led projects and venture capital,” he said. “AFC would also offer investment banking services such as corporate finance, mergers and acquisitions, capital markets activities, equity research, asset management, and project and structured finance. In addition, AFC would also provide technical assistance and advisory services in support of private sector development in Africa.”

The AFC is just in time to ameliorate the swathe of problems members of the private sector in Africa face in sourcing funds to improve their businesses and concerns across the continent.

“The Government of The Gambia and the Central Bank welcome the establishment of the Africa Finance Corporation which is meant to bridge the massive funding gap and to scale up funding of infrastructure projects in particular,” Hon. Famara L. Jatta, Governor of the Central Bank of The Gambia, said, adding: “The establishment of the AFC is coming at a time of optimism about growth prospects and development in Africa.”

Stating the need for the establishment of the AFC, Hon. Jatta said Africa is the only continent to have grown poorer in the past 25 years. “Africa’s share of world trade has halved in a generation and it received less than 1.0 percent of foreign direct investment in 2005,” he noted, saying that Africa also lagged behind other regions in terms of economic growth and competitiveness.

AFC has an authorized share capital of two billion ordinary shares of US$1.00 each out of which one billion ordinary shares is expected to be paid up at the commencement of business.

According to Prof. Charles Soludo, the AFC has an authorised share capital of two billion United States Dollars (US$2,000,000,000), all belonging to a single class of shares and ranking equally for all purpose.  “Broad ownership of AFC is expected predominantly from private sector institutions across African countries. Consequently, minimum of 51% ownership is expected by the private sector from member countries.”

Prof. Soludo added that as an offshoot to keep the AFC afoot, the Central Bank of Nigeria (CBN) “stands ready” to provide up to US$1 billion share capital for the Corporation. When this amount is met by shares from the private sector, the CBN would simply back out and leave the whole empire in the hands of the private sector. It would always step in to keep the Corporation running in the event of a shortfall in the bank’s share capital, he added.

The Forum, moderated by Mr Nana Grey-Johnson, was graced by the Nigerian High Commissioner to The Gambia, H.E. Mariam Mohamed, the President of the Bankers’ Association, Mr Mamour Jagne, and other high profile business tycoons and representatives in the country.