Tuesday, October 7, 2008

Africa's COMESA bank to raise $1bln for oil bills

The financing arm of the Common Market for Eastern and Southern Africa (COMESA) said on Tuesday it planned to raise some $1 billion to help member countries offset rising oil import bills.

High global oil and commodity prices have hit most of COMESA's 20 African nations hard with added knock-on effects to the cost of production.

"We're looking at raising up to $1 billion. With that amount of money, we can do a lot of oil procurement," said Michael Gondwe, president of the Eastern and Southern African Trade and Development Bank.

"We're looking at possible buying through economies of scale," he told reporters at the bank's annual meeting in the Ugandan capital.

Oil has fallen sharply from a record high of $147.27 reached in July to $97.47 a barrel for U.S. crude by 1015 GMT and $95.40 for London Brent crude.

The bank, which was part of the precursor to COMESA, usually lends to corporates and parastatals, but will involve governments for the oil deals, it said.

The bank said it planned to use international money markets to raise capital for oil procurements. It has lent over $3.5 billion since the bank was founded in 1985.

"The big oil bills are certainly going to impact (COMESA countries') growth," Gondwe said.