Mr. President;
Excellencies;
Ladies and Gentlemen:
I am honored and pleased to attend the Ordinary Session of the 152nd Meeting of the OPEC Conference in my capacity as the Director-General of OFID. Indeed I thank you Mr. President, as well as H.E. Mr. El-Badri for the kind invitation.
First of all, allow me to extend to you, Mr. President, my heartfelt congratulations on your election to the Presidency of the OPEC Conference of Ministers. I am certain that this august body will have the privilege of benefitting from Your Excellency’s wisdom and vast experience.
Secondly, I hope that I will be able to welcome Angola’s Minister of Finance to OFID’s Ministerial Council Meeting convening in Caracas on 16 June 2009, to congratulate him on Angola’s membership with our institution. This would be along the lines of my side discussions with Angola’s former Ministers of Petroleum and Finance whom I met at the Summit of Heads of State and Governments of OPEC Member Countries in Riyadh in mid- November 2007.
Further, I would also like to congratulate H.E. Mr. Rilwanu Lukman on his recent appointment as the new Minister of Petroleum Resources of the Federal Republic of Nigeria. I have had the pleasure to work with H.E. Dr. Lukman during his time as OPEC Secretary General, and I am certain that he will be of great service to his country and the organisation.
On a similar note, allow me briefly to also express my sincere congratulations to OPEC, and in particular to the Federal Republic of Nigeria, for Mr. Kanayo F. Nwanze’s assumption of the position of President of the International Fund for Agricultural Development (IFAD). Indeed, with Mr. Nwanze’s election, it is a pleasure to see such a high-profile position being entrusted again to an OPEC Member Country, the first three having been Saudi Arabia, Algeria, and Kuwait. OPEC Member Countries, as you know, played a major role in the establishment of IFAD, and still continue to enjoy a highly fruitful cooperation with the organisation through OFID. Indeed, IFAD is one of our main strategic partners, and the importance of the work of both organisations is captured, as you all know, in the declarations which resulted from the Summits of Heads of State and Government of OPEC Member Countries in Caracas and in Riyadh, as these two institutions are highlighted as the aid channels of the OPEC member countries, along with their individual programmes.
Mr. President;
Excellencies;
Ladies and Gentlemen:
As I reported to this distinguished Conference on 5 March 2008, the second theme of the Riyadh Declaration, namely “Energy for Sustainable Development”, highlights the importance of energy for the eradication of poverty. As this falls into the heart of our mandate at OFID, we have translated this theme into a “plan of action”, the first item of which was implemented through our Workshop on Energy Poverty in Africa. We believe that the Workshops design and execution have dovetailed with the spirit of the Riyadh Declaration.
I am pleased to report that this Workshop, which took place in Abuja on 9 and 10 June 2008, under the high patronage of H.E. the President of the Federal Republic of Nigeria, was a distinct success, with a large number of attendees from government, industry and international organizations. OFID itself prepared a background paper entitled Energy in Africa and provided the resources for the authorship and presentation of eight papers which focused on the power sector, energy access and sector reform.
During OFID’s Ministerial Council Meeting in Isfahan on 18 June 2008, I summarized the outcome of the Workshop.
The participants agreed that poor access to energy blocked social and economic development and that the continent required more usable and sustainable modern energy. They suggested ways and means to increase the accessibility, availability and affordability of energy. It was concluded that without world intervention, through innovative approaches, Africa, notably Sub-Saharan Africa, could not succeed in its quest to develop energy resources nor achieve its eight Millennium Development Goals on time.
As a reconfirmation of the Riyadh Summit’s stand to support impoverished countries in the energy sector, I would like to recall the Jeddah Energy Meeting, convened on 22 June 2008 in which the Custodian of the Two Holy Mosques, King Abdullah bin Abdulaziz Al Saud made an appeal for the launching of an “Energy for the Poor” initiative to assist developing countries in meeting the cost of energy. The major role within this package is held by the World Bank, whom the King called on to organize and host a Donors’ Meeting for Energy with donor countries and development finance institutions as participants.
In response, a preparatory technical meeting chaired by the World Bank took place in Paris in November 2008. To achieve headway on the tasks ahead, OFID, World Bank, the national development agencies of OPEC Member Countries and the Arab Bank for Economic Development in Africa (BADEA) have been closely collaborating at a less formal level in the identification of energy projects in the low income countries.
As OFID readjusts its mandate to re-emphasize energy, it is seeking energy projects which, upon completion, would allow society to reap immediate benefits and respond most relevantly to the needs of the population to be addressed.
Mr. President;
Excellencies;
Ladies and Gentlemen:
As you all know, the world is currently going through an unprecedented financial and economic crisis, and it is as usual the poorest who are hit the hardest. At OFID, we have always been proud of our ability to adjust our operations and financing windows to the current global challenges and demands we face. And this crisis is no different. Like all developing financial institutions, we are faced with two major challenges: on one hand, we have to respond to a much bigger demand in developing countries, as they are suffering from a slowdown in economic development and a credit crunch which is affecting their access to capital. On the other hand, we are experiencing a meltdown of our limited resources as a result of the market crisis.
However, thanks to our prudent investment and risk management policies, OFID has been able to limit its losses in 2008. Not only that, but our gains in the preceding three years have been more than enough to cover the losses incurred in 2008 due to the current global financial situation. Nevertheless, the challenges remain as to how the increasing demand coming from the developing countries should be dealt with. One approach which Multilateral Financial Institutions (MFIs) have agreed on, is the provision of finance to vulnerable banking systems, the protection of trade finance, and the provision of funding to poorer sections of the population through microfinance banks.
Different institutions are now addressing similar objectives, and are proposing a collaborative approach to OFID. In this respect, I have received a letter from Mr. Robert Zoellick, President of the World Bank, requesting that OFID should join forces with the World Bank and the International Finance Corporation (IFC). We believe that by utilising the experience and resources of these institutions, in particular that of the World Bank, OFID can most effectively execute its strategy to provide urgent support in some of these areas. We are therefore considering participation in the following initiatives:
- A Bank Recapitalisation Fund managed by IFC: in this initiative, OFID would target investments into Africa, Latin America, and MENA under three separate sub-funds.
- A Microfinance Fund: this fund in which OFID may participate would make loans to Microfinance Banks globally.
Mr. President;
Excellencies;
Ladies and Gentlemen;
The World Bank is projecting that the current financial crisis will trap an extra 53 million people under the US$ 2 per day reference. Further, developing countries face a shortfall of US$ 270 – 700 billion this year, as private sector creditors avoid emerging markets, and only one quarter of the most vulnerable countries have the resources to prevent a rise in poverty. These are only a few indicators to illustrate why OFID, despite the financial crisis and the strain on its resources, is committed to its activities and seeking new financing means to help the poorest countries through these difficult times.
Thank you for your attention.