The Bank of Tanzania, the country's central bank, has made an equity investment in Africa Finance Corporation, becoming a sovereign shareholder in the pan-African infrastructure lender. The announcement, made in Dar es Salaam on Wednesday, adds the Bank of Tanzania to the shareholder base of an institution with 48 member countries.
SOVEREIGN CONFIDENCE GROWS
AFC described the investment as a reflection of "growing sovereign confidence" in its mandate to channel capital toward critical infrastructure and industrial development. The corporation, which was established in 2007, has invested more than $18.5 billion across 36 African countries since inception, financing projects spanning energy, transport, logistics, telecommunications, and heavy industry. The investment follows S&P Global Ratings' assignment of an A credit rating with a positive outlook to AFC.
AFC said the investment supports its shareholder diversification strategy by strengthening the participation of African sovereign institutions and central banks. AFC said it intends to expand its support in Tanzania through sovereign financing and partnerships with local institutions, including financing lines for the national budget and trade.
TANZANIA'S RATIONALE
Bank of Tanzania Governor Emmanuel Tutuba said: "Our investment reflects confidence in AFC's model and aligns with Tanzania's priorities to strengthen economic resilience, support private sector growth, and advance sustainable development through strategic partnerships."
More broadly, African economies are grappling with infrastructure financing needs that the African Development Bank has estimated at between $130 billion and $170 billion annually, leaving a gap of $68 billion to $108 billion.
AFC'S EXPANDING FOOTPRINT
AFC President and Chief Executive Samaila Zubairu said: "We are honoured by this decision and value it as a strong vote of confidence in AFC's mandate and track record."