CONCLUSIONS

1
CONCLUSIONS
2
Common Point 1

• FfD is a domain that deserves a specific
  attention today
• No institutional approach functional approach
  (de B)
• Yet, institutions matters (see below)
• A holistic view of FfD, including position within
  financial sector must be taken
• No one-size-fits-all approach
• Must take into account that DFIs in Zone Franc
  are submitted to commercial-bank regulations
  (provisioning, usury rate, etc. (Comores, BNDA)

3
Common Point 2

• FfDs raison-dêtre is to bring finance to
  specific clients/projects
• Market failures and vulnerable economic actors
• Local level
• Local groups (BNDA)
• Municipalities (DBSA)
• SMEs (ADB)
• Renewable Energies
• State failures
• Infrastructures (DBSA, BOAD, CDG)

4
Common Point 3

• FfD is composed of a combination of variety of
  (i) specific financial instruments, (ii) specific
  non-financial instruments.
• Not just long-term finance
• Specific Financial Instruments
• Grants,
• Loans
• Leasing (DFCU, BOAD)
• Guarantees (BOAD)
• Equity participation (DBSA, Tunisia, BOAD, CDG)
• Underwriting (DBSA, BOAD, CDG)
• Arranging (DBSA, BOAD, CDG)
• Specific non-financial instruments
• Advorisy Services Development entails more
  than financing (DBSA),
• Technical Assistance (DBSA, BOAD, DFCU)
• Capacity Building (DBSA)
• External Technical Services (BNDA)

5
Common Point 4

• Resources are needed to build FfD financial
  instruments.
• Liquidity in banking systems is very important in
  Africa not used for FfD (de B)
• Two opposite situations
• DFIs are banks
• Relatively easy access to resources through
  deposits from clients and governments (BNDA, BGD)
• Use of resources difficult because banking
  regulations (BNDA)
• DFIs are not banks
• Resources are more difficult to mobilize (BOAD,
  DFCU, DBSA)
• Use of mobilized resources left to DFIs because
  of lack of external regulations
• Concessional resources are needed
• Yes (BOAD, CDG)
• Not necessarily (DFCU)

6
Common Point 5

• The organization supplying FfD (DFIs) must be a
  complex organization.
• It must be a Knowledge Organization
• DBSA We are an advanced knowledge-based
  organization
• BOAD études sur le coton, PME, HIV, etc.
• It must be an organization capable of playing
  multiple functions
• Financiers
• Partner (DBSA, BOAD, CDG)
• Adviser (DBSA, DFCU)
• It must be an organization knowing how to be a
  catalyst/facilitator (DBSA, BOAD, CDG)
• When DFIs are banks, they must
• Abide banking regulations (BNDA, BGD, Comores)
• What can we do when regulators do not understand
  the constraints of FfD (BDEAC, BNDA)
• Should not we revisit banking regulations to give
  more margin of action to FfD activities ?
• How can the two domains (commercial and
  developmental) be coordonated ?
• By combining them in a single organization (BNDA,
  BGD)
• By separating the two domains (DFCU)
• By creating separate entities for each
  developmental activity (BGD).

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Common Point 6

• DFIs can be profitable.
• BOAD Nous navons pas vocation à faire des
  profits, mais dans la diversification et dans la
  conduite des actions nous générons des profits.
• DFCU, BNDA
• DBSA  making profit shields DFIs government
  interference.

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Common Point 7 (1/2)

• As organizations, DFIs must have a specific
  governance.
• Problem
• Capital of the DFIs will be predominately public
• Mission de service public (BNDA, BGD, DBSA, CDG,
  BOAD)
• Political pressure to promote regional
  integration (DBSA, BOAD)
• Market failures (private sector not interested)
• State failures (national budget cannot finance)
• Risks
• Interference from government (BOAD, Comores, ADB,
  Egypt)
• Civil servants managing FfD (Tunisia)
• Crowding out private sector (IBRD)

9
Common Point 7 (2/2)

• Proposed solutions
• DFIs must diversify its shareholders to bring
  counterweight to government (BOAD, BGD)
• DFIs must pay attention to the composition of
  their Board
• Board Members should be trained and made aware
  that they have a responsibility (DFCU)
• External personalities/independent persons will
  bring weight to Board (BGD)
• DFIs that are not banks should impose on
  themselves stringent rules
• Criteria of internal rules of some DFIs are more
  severe than banking regulations (SADCC)
• Pressure from outside actors is useful
• Les marchés nous jugent (BOAD)
• Ratings are crucial (SADCC, BOAD)
• Being profitable is best protection from
  government see above (DBSA).

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Draft action proposals
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1. Make an inventory of DFI success stories
   lessons learnt
2. Organise sub-regional consultations
3. Organise exchange of DFI best practices and
   standards
4. Liaise with other fora on corporate governance
   (IBRD, OECD)
5. Organise a working group on regulations to work
   on DFI specificities