Helping Africa face
some of its challenges
The LSF was designed by the United Nations Economic Commission for Africa, in collaboration with Afreximbank, in response to several major challenges facing African countries, in particular the ongoing coronavirus pandemic, the historical high cost of borrowing for African Sovereigns and the urgent necessity to address climate change and its consequences.
It was the culmination of a long engagement process with the international community at large:
- IMF MD, Board of the IMF, IMF teams, WBG
- G7. G20 & COP successive teams
- Elysée Summit on the financing of African economies, COP 26, ECA Conferences
- US Treasury, Ministère du Trésor, Finance and Foreign Ministries of Germany, Italy, Spain and UK
- Finance Ministries of Mexico, Argentina, Brazil, Pakistan, Egypt, South-Africa and Indonesia
The LSF has been endorsed by 26 African countries at the outset of the CoM2022 conference organized by the ECA.
Position within the world’s financial
Developed countries have long enjoyed the existence of large repo markets for their government bonds, facilitating the creation of stable and additional funding sources.
The LSF’s objective is thus to address the gap in market participation for financing Africa’s international sovereign debt, indirectly helping to promote a more stable repo market on the African continent.
Supporting Africa’s sustainable development
The LSF has a special focus on green and SDG linked investments, thus promoting sustainability-linked investments in Africa. This will be achieved by advancing financing on more favourable terms (i.e., at better rates and for longer maturities) for SDG-aligned investments and investments that contribute to the objectives of the Paris Agreement in African economies.
The LSF operates an Asset and Liability Management policy with a funding plan for credit and repo lines of various terms matching its transactions, established with a diversified pool of financial institutions representative of the multiple LSF stakeholders, globally as well as in Africa. It includes central banks, MDBs and IFI, private and commercial banks. The optimal funding capacity is expected at USD 30 Bn over the medium term. To that effect, the LSF is actively engaging with the IMF and G20 on the on-lending of their unused-SDRs.
About The Liquidity and Sustainability Facility
The LSF was designed with the support of the United Nations Economic Commission for Africa and Afreximbank with the dual objective of supporting the liquidity of African Sovereigns Eurobonds and incentivizing SDG-related investments such as SDG and green bonds on the African continent.