Mr. Brad Koen;
Distinguished Guests;
Ladies and Gentlemen:
Let me start by commending and thanking all the officials of the Standard Bank and OFID for the conceptualization and formulation of the two agreements we are signing today. Let me also express our appreciation and gratitude to those who prepared this ceremony. It took us some time to drive these agreements to this stage, but this time allowed us to get to know each other, and this is essential for the implementation of these agreements and for the Partnership we want to build.
The OPEC Fund for International Development (OFID) has now 33 years of operating experience as a Development Finance Institution. As of today, OFID has conducted over one thousand four hundred operations in 122 countries with total commitments of over US$ 11 billion. OFID’s operations are demand driven be they by governments or private concerns. OFID runs several windows, each dedicated to a specific category of Partners. As a development institution we offer long term funding for government- run economic and social infrastructure. We also fund the Private entrepreneurs in all business sectors.
In supporting the Private sector, we do not attempt to compete with existing institutions. To the contrary, we work with them to complement their activities and add value to their products and services. It is in this spirit that we have recently launched a Trade Finance Facility, not only to help alleviate the credit crunch generated by the ongoing crisis but also to address established needs not addressed by the free market for different reasons. This, from our perspective, is the rationale for the Partnership we are gradually building with Standard Bank.
Ladies and Gentlemen,
OFID and Standard Bank are launching two initiatives, a global Trade Finance Risk Sharing and a more focused Smallholder Scheme at a time when the crisis continues to depress growth and reverse hard won gains especially in Africa. The recession of 2008 and 2009 is deep enough, to leave us still guessing, whether the world economy is recovering or on the verge of a double dip. Naturally, the fall in demand in mature economies led to a slump in global trade and in commodity prices. On the financial side, de-leveraging and reduction of exposures, resulted in the decline of financial flows to developing countries, obstructing trade flows and essential investments.
And yet, the last decade was for the world and the developing countries, a decade of trade dynamism and robust growth, authorizing hope of progress towards the attainment of the Millennium Development Goals. Through the two schemes, we have signed today, OFID and Standard Bank are re-establishing confidence and encouraging financing of trade and investments in Africa a continent that had shown that it can be more than a continent of no-hope.
As an institution driven by the overarching objective of poverty alleviation, OFID commits more than 50% of its resources to Africa, contributing to its development especially that of its economic and social infrastructure. We focus on the Poor, but our focus is not just to alleviate some suffering of the moment; rather, our objective is to empower the Poor and to provide opportunities for the Poor to become a driver of development, and a source of wealth.
For us, Poverty is synonymous with lack of opportunity. With Standard Bank, we will give the Small Land Holders and to their service providers, the funding they lack, to develop their production and strengthen their marketing capacities. More generally we will share the risk incurred by the Primary Banks in their dealings with the small and medium scale enterprises.
We appreciate the pivotal role of AGRA in the smallholder scheme, and we are glad to be able to complement its institutional support, to the smallholders, which is most important to sustaining rural development. Indeed, rural development is essential to poverty alleviation as rural populations are the most deprived and the most exposed to the factors generating or entrenching poverty.
These factors are indeed numerous. In OFID we have decided to help governments and the private sector provide affordable energy to the Poor. The lack of appropriate energy is recognized now, more than ever, as one of the most important constraints to poverty alleviation and the attainment of the Millennium Development Goals. We would welcome the cooperation of Standard Bank in this initiative, and are prepared to explore ideas the bank may have, in that respect.
Ladies and Gentlemen,
I wish to conclude on a note of challenge. In both schemes we are looking at ways of helping countries deal with the crisis and the perceptions of aggravated risks it has engendered. We need to be prudent naturally but we also need to recognize that the small and the poor can be creditworthy. Let us learn lessons from the implementation of the schemes we have just agreed, and hopefully find in them ground for intensification and expansion.
I would like to once again thank you Mr. Koen and your colleagues for the excellent cooperation on these transactions. We have learned a great deal from your most competent officials. I am also grateful to Standard Bank for hosting today’s signing ceremony and apologise that this event could not take place in your Headquarters. I hope that, in the future, we will be able to hold the next signing ceremony either in South Africa or one of the beneficiary countries. Finally, I am most appreciative of these arrangements, and for the courtesy and attention you have given to the OFID delegation.
To conclude, let me congratulate Standard Bank on the impressive financial results for 2009. Considering the depth of the crisis and the resulting complications, this is a major achievement.
Thank you.