December 19, 2009 -- African finance ministers embarked on detailed discussions over the allocation of shares for the African Investment Bank (AIB) an d the voting rights -- these being the few operational details still delaying the take off of the Tripoli-based funding body for the African Union (AU).

AU Commissioner for Economic Affairs, Maxwell Mkwezalamba, said the creation of the Investment Bank for Africa had met several crucial criteria and that the few remaining details would be hammered out during an emergency conference of the African finance ministers, underway here Thursday.

  The ministers held a series of meetings - first in Addis Ababa, the Ethiopian capital, in January, and in Cairo, Egypt, and the third session is the current meeting which opened Thursday to examine the remaining details still slowing the setting up of the Investment Bank.    

The ministers are expected to conclude work on a series of new guidelines on how the 53 African countries would subscribe for shares in the newly-created Investment Bank, headquartered in Tripoli.

'I am pleased to note that the Commission, in compliance with decisions of the last extra-ordinary conference, has undertaken further consultations on the two items and prepared annexes to the statute of the AIB,'

Mkwezalamba told the ministers during the opening session of the meeting.

  African state capitals have been supplied in advance with the draft suggestions on how shares for the US$ 25 billion needed to create the Investment Bank would be allocated.   

African countries are expected to put in place an initial capital of US$ 4 billion to kick-start operations of the bank, which is expected to offer another source of funding for Africa's infrastructure development.

  African experts feel the lack of good roads, rail network and poorly-built airports in the continent are making the process of continental unity a big nightmare.   They further noted the existence of the African Development Bank (AfDB), which they also said offered them an opportunity to get long-term capital for investment, but claimed that the African bloc had no real voice to determine the priorities of the AfDB.   

Mkwezalamba told the ministers that although the AUC circulated the draft suggestions on how the shareholding of the Investment Bank should be spread out, it did not receive adequate reactions.

'It must be mentioned that not all the member states were able to provide thei rinputs...this was despite adequate time, having been set aside for this and reminders having been sent to them,' he said.

It has been proposed that the voting rights in the Investment Bank be guided by the practice applied at major international institutions.

The proposal is to equally grant 10 per cent of the total votes to each country.

  This will make 566 votes as basis votes and additional one vote in proportion of shares held by each country as proportional vote for each installment of US$ 10,000 of the capital.   If the ministers approve this proposal, then South Africa would wield power, followed by Nigeria, Egypt and Algeria, some of Africa's wealthiest states.   

South Africa, with the largest economy in terms of the Gross National Product (GNP), will be allocated at least US$ 4.4 billion, as part of its shares in the new bank.

Nigeria will receive the second highest number of shares worth US$ 2.7 billion.

The other major shareholders will be Egypt, with some US$ 2.1 billion worth of shares to be released to them once the bank begins operations.

Algeria, Africa's third largest economy, is slated to receive US$ 2 billion in shares subscription.

Libya, the country designated to host the new bank, will subscribe US$ 998 million worth of shares, allocated on the strength of its economy.

The other notable shareholders will be Sudan, with US$ 873 million, Angola, US$ 733 million, Tunisia US$ 530 million and Kenya US$ 469 million.

  Africa's smallest economy, Sao Tome and Principe, will contribute US$ 2 million, while cash-strapped Zimbabwe is expected to subscribe for US$ 33 million, much less than war-torn Somalia's US$ 39 million. Senegal will contribute US$ 180 million. (Afriquejet)