The African Development Bank (AfDB) has invested a cash amount of US$28.2 million into real estate development bank Shelter Afrique to increase its reserves, following a US$8.2 million injection to strengthen its balance sheet in late 2016.
Shelter Afrique is a continental collaboration between the AfDB, 44 African governments, and the Africa Reinsurance Company, from which James Mugerwa managing director resigned on 2 February after the firm was exposed for accounting and financial irregularities by professional services firm Deloitte.
“These new resources show that the African Development Bank is fully committed to the growth and development of Shelter Afrique, which plays a vital and unique role in the development of affordable housing across Africa,” said Gabriel Negatu, director general at AfDB’s East Africa Regional Development and Business Delivery Office.
Following the publication of the Deloitte report, shareholders unanimously agreed to pay up their share capital commitments of approximately US$116 million in order to avoid temporary suspension from membership. The official deadline for all such payment lands at the end of 2017.
Shelter Afrique also promised to improve its governance structure and financial management. The appointment of Femi Adewole, former business development director, as acting managing director, is the first outward sign of a strategic overhaul to the bank’s management.
“The African Development Bank takes issues of governance seriously. With the strong measures taken by Shelter Afrique to improve its governance and the support of its shareholders, the company can move to the next stage of its development,” said Negatu.
Adewole greeted the news of the AfDB’s assistance as crucial in the organisation’s commitment to developing affordable housing across Africa. He added that he received further letters of intent from other major shareholders.