Sanwo-Olu Seeks Foreign Investments Domiciled in Local Currency to Lessen FX Risk

* Adesina calls for greater collaboration, co-financing to spur continent’s devt

Ugo Aliogo in Marrakech

Lagos State Governor, Mr Babajide Sanwo-Olu, yesterday, revealed that the State was looking at adopting a strategy where investments coming into it would be domiciled in local currency to de-risk forex.
Also, the President, African Development Bank Group (AfDB) Dr. Akinwumi Adesina, has reiterated that the multilateral institution and it partners were implementing a $20 billion Desert-to-Power initiative to develop 10 Gigawatts of solar power across Nigeria and 10 countries in the Sahel region, including the Sahel regional transmission lines.

They both spoke during a plenary session at the 2023 Africa Investment Forum (AIF) Market Days organised by the AfDB with the theme: ‘Regional Corridors: Quest to Integrate Africa.
Sanwo-Olu said: “Such strategy will deepen our own local currency and also help us de-risk foreign currency interest rates and other issues.
“So, indeed, it is a lot of money. So, if you want me to put some numbers to it, it could be a billion dollars in local currency or trillion naira. That is the kind of thing that we are going to pick on.”

Speaking on the need to sweat out public assets more in order to generate revenue and cash, the governor explained that the State government was discussing with the Federal Ministry of Finance Incorporated (MOFI), adding that there are a lot of assets in Lagos, which they want to determine the real owners and what percentage everybody owns. This, he said would help free up dead assets locked down in some sectors.

He expressed confidence that the State government was working on the timelines.
Speaking on the Lagos State’s completion of the red line railway by the end of 2023 and its partnership with Ogun State on the project, the governor revealed that the red line rail project was going to get to Ogun state.

He remarked that when they designed the project, there was no partnership with Ogun State, saying, presently, there is a partnership with Ogun State government on the project and, they “have given them access to land.”
Continuing, he said: “We will start testing by December. We will do a lot of testing before full commercial services and transportation of passengers can commence.

“My administration is committed to leveraging opportunities created by the ongoing Africa Investment Forum (AIF) and interface with investors from across the world to create projects that impact lives of the citizens.
“I came to this forum for exchange of ideas with the global business community, to identify areas of mutual economic relationship to enable my government come up with policies that could easily ramp up projects in transportation, food processing and film industry among others to help change the lives of the people.

“With the benefit of having about 23 years of consistency and unbroken public policy environment, I have no doubt that the issue of political risk that many people are often concerned about won’t indeed be an issue in the state.
 “How can you be talking of political risk when you know that Lagos has been together over the last 23 years. I was expecting you to ask of currency risk and not political risk. There is no political risk. All our focus is on infrastructure projects that impact the lives our people,” the governor added.

Speaking further, Adesina, said over the past seven years, the bank has provided over $44 billion for the development of infrastructure.
He said the AfDB had also devoted $2.5 billion towards the development of regional infrastructure.
He noted that the financial institution was financing the development of regional electricity corridors, to assure reliable and competitively priced electricity, adding that the Bank’s support for regional integration focuses on catalyzing public and private investment in transport and electricity connections.
He remarked that as of 2022, the bank had financed 25 transport corridors, constructed over 18,000 kilometers of roads, 27 border posts and 16 bridges, for a total amount of $13.5 billion.

Adesina expressed delight that the bank and Africa Finance Corporation (AFC) have joined the United States, the European Union, together with the governments of Angola, Zambia and the Democratic Republic of Congo to develop the strategic Lobito Corridor, which he said the strategic corridor would connect Angola, Zambia, and Democratic Republic of Congo, opening linkages to the mines and connecting them to the port in Angola.

According to him, “The AfDB will commit $500 million to this $1.6 billion investment opportunity. The Lobito corridor also brings together the power of two global initiatives, the U.S-led Partnership for Global Infrastructure and the European Union’s Global Gateway.
“To fully optimise the benefits of the development of regional corridors across Africa, we should focus on five priority areas.
“First, dedicate pooled financing facilities to support the preparation and development of corridor projects. Second, special industrial zones should be developed around the corridors to optimize on the existing infrastructure in these corridors.

“Third, we need to put in place a systematic approach and platform to identify and syndicate around the development of strategic regional corridors. To achieve this, the Africa Investment Forum will dedicate a special board room annually for regional corridors. This will foster greater collaboration, co-financing and faster development of strategic corridors.”