FAGACE has increased its intervention capacity by raising its capital to 152 million euros and welcoming new members.
With the adoption of the strategic plan, FAGACE is now in a position to grant direct loans and is working on the creation of a bank.
The capital of the Fonds Africain de Garantie et de Coopération Economique, FAGACE, was increased from 30 to 100 billion CFA francs (152 million euros) at the end of the third general meeting of shareholders held in Douala on March 17, chaired by the Cameroonian Minister of Finance, Mr Essimi Menye, current chairman of the meeting. The meeting also ratified the accession of two new members, Mauritania and Golden Holding. The two new members each subscribed to the capital in the amount of 762,000 euros, plus an issue premium of 152,000 euros. Golden Holding, the first institution to join FAGACE, is an offshore company domiciled in the United States, with capital of $3 million, specializing in securities management and asset administration.
Financial resources
The assembly also adopted a text on the extraterritoriality of the Fund. Its diplomatic immunity previously applied only to its member countries. This new provision enables the Fund to negotiate its extension to all countries where it operates. It significantly increases its access to financial resources on the international market.
FAGACE has also drawn up a ten-year strategic plan to consolidate its core business, while at the same time diversifying. It became clear to the shareholders that, in order to increase its capacity to provide guarantees, the Fund could no longer limit itself to the capital resources already subscribed by the member states. Other income-generating activities are needed to increase the Fund’s guarantee capacity. Previous reforms had already enabled it to offer a full range of guarantees. With the adoption of the strategic plan, FAGACE is now in a position to grant direct credit and to start work on setting up a bank. Eventually, FAGACE will become a financial holding company.
Downstream
The Annual General Meeting approved four new projects. Three projects were guaranteed for a total of 1.35 million euros. These are the extension of distribution capacity for Petrolex SA, an increase in production capacity for Eaux Minérales du Mont Etindé, Semme Mineral Water, and the creation of a beauty care center at the New Beach Hôtel. These approvals have enabled the promoters to mobilize financial resources in the order of 2.4 million euros from Cameroonian banks, notably SGBC and BICEC. These new approvals bring the Fund’s total intervention in Cameroon to 10 million euros for seven projects. They testify to the dynamism of Cameroon’s private sector, as the country has only been a member of FAGACE since April 10, 2006. Burkina-Faso has benefited from a one-point interest rate subsidy, i.e. 200,000 euros on a ten-year loan of 2 million euros granted by EBID, the ECOWAS development bank, for the integrated livestock development project in the Liptako-Gourma region.
Observers
The Douala meeting, which was the last of its kind since the General Meeting has now been transformed into a Board of Governors, like other similar institutions, was attended by observers from Gabon and South Africa’s Loita Partners Capital Limited. This presence may herald their imminent membership. Mauritania and Golden Holding were admitted as observers at the previous General Meeting. They subsequently joined the Fund. Current FAGACE members are Benin, Burkina Faso, Cameroon, Central African Republic, Côte d’Ivoire, Guinea-Bissau, Mali, Mauritania, Niger, Rwanda, Senegal, Togo and Golden Holding.
Member countries : Benin Burkina-Faso Cameroon Central African Congo Brazzaville Côte d’Ivoire Guinea-Bissau Mali Mauritania Niger Rwanda Senegal Chad Togo
