By Nawa Mutumweno – The Common Market for Eastern and Southern Africa (COMESA) is to raise $1 billion for infrastructure development in the region.
Through the Infrastructure Fund, COMESA envisages to resolve the infrastructure challenges besetting the region which are contributing to the increase in the cost of going business.
To achieve this, the regional economic community (REC) has signed contracts with financial and legal advisors to help raise the funds for the Infrastructure Fund which is domiciled in Mauritius.
The appointed advisors are Price Waterhouse Coopers who would be the lead financial advisors while SNR Denton would be the legal advisors with Deloitte taking the reporting accounts of the fundraising team.
“COMESA plans to raise a minimum $1 billion committed equity capital contribution, to be complementyed with a proportionate surbodinated debt offer depending on the off-take for the equity offer,” COMESA secretary general Sindiso Ngwenya elaborated.
The Fund was established with a view to address the pressing infrastructure challenges in the region that are impeding economic growth.
It was important that COMESA keeps its goals of eradicating extreme poverty in the region as it would be difficult to achieve that if the poor infrastructure situation is not addressed, Mr. Ngwenya added.
The purpose of the Infrastructure Fund was to raise capital for investment in trade-related projects in the region with the money to be raised being a mix of public and private investor funds.
“The fund will aim to enhance co-operation among member states to improve the efficiency and competiveness of their markets by upgrading the supply of domestic and regional infrastructure services.
“This will help in the diversification of production and distribution capacities with a view to promoting economic growth, wealth creation and poverty reduction,” he said.
The strategic objective of infrastructure development in the region is to improve the effective operation and to reduce to the cost of doing business and to enhance competitiveness in the regional market as well as in the international market. It is in this context that the developmet of physical infrastructurer is critical in facilitating trade, regional integration and economic development.
“However, within this context, all tthe major components under the infrastructure programming which include transport, information and communication technology (ICT), and energy will have to be addresssed. In order to achieve this, three main intervention areas have been identified for the development of infrastructure, which include: Policy and Regulatory Harmonisation; Development of Regional Physical Infrastructure; and Trade and Transport Facilitation, the COMESA ‘Annual Report 2010’ reads in part.
The vision of COMESA is to be a fully integrated, internationally competitive and prosperous economic community with high standards of living for its people and ready to merge into the African Union (AU).
The mission of COMESA is to achieve increased co-operation and integration in all field of development, particularly in trade, customs and monetary affairs; in transport, communications and information; in technology, industry and energy; in agriculture, environment and natural resources; and in gender matters under an environment of peace and security.
COMESA member staters are: Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eriteria, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.
It was initially established in 1981 as the Preferential Trade Area for Eastern and Southern Africa (PTA), within the framework of the then Organisation of African Unity’s Lagos Plan of Action and the Final Act of Lagos. The PTA was transformed into COMESA in 1994 to take advantage of a larger market size, to share the region’s common heritage and destiny and to allow greater social and economic co-operation, with the ultimate objective being the creation of an Economic Community.