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Complied by Cass Gilroy-Business Editor

CBN and 25 banks to raise $1 billion for African Finance Corporation

The Central Bank of Nigeria (CBN) in partnership with the 25 other banks throughout the country are set to raise $1 billion for the proposed African Finance Corporation through private placement. And while the CBN is to invest $500 million of its own money (about 49% in the corporation) other Nigerian banks are to invest about $250,000 each.

The additional funds are expected from other private sector investors across the continent. The African Finance Corporation will shortly begin its first round of capitalisation through private placement. In its capitalisation drive, a number of road shows will be held in Accra and Banjul. The private placement offer of one billion ordinary shares at $1 per share opened last week and will run for six weeks, ending on February 4, 2007.

The Deputy Governor of the Financial Sector Surveillance for CBN, Mr Tunde Lemo, said at a meeting with stockbrokers and asset management companies in lagos, that 98 per cent of the offer proceeds of $979.2 million would be used for working capital while the balance would be used as head office set up expenses and pre-operational expenses.

He said the AFC would fast-track industrial development in Africa through the provision of loans and other financial services to promote industrialisation, trade, housing, micro finance, infrastructure development, energy and extractive industry sectors.

The initial authorised capital of the corporation, he said, would be $2 billion but would commence business with a paid up capital of $1 billion through private placement.


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