Ladies and gentlemen,

In 2006 GARI Fund marked its eleventh financial year since the effective commencement of its activities in September 1995.

In 2006 the Fund carried out its activities in a stiff competitive environment and within an economic context characterized by sharp increase in the price of crude oil and poor rainfall patterns in some countries in West Africa.

Whereas economic growth was estimated at 5.4% in Africa and 5.1% at the global level, West Africa managed a growth rate of only 3.8% due in part to the fragile socio-political situation in some countries, on the one hand, the poor performance of the agricultural sector and the external shocks fuelled by high crude oil prices that effected the economies of the countries of the region.

The combination of these factors did not however derail the goal of GARI to position itself as the standard bearer of institutions that provide support to the private sector in West Africa.

The Fund embarked on two major activities in 2006 namely, the enhancement of its internal organization and corporate governance and the preparation of a marketing strategy. The two projects the first of which is being partly funded by DEG, the German Development Agency, whilst the second which is benefiting from PRO€INVEST⁽²⁾ assistance, aim at injecting a fresh dose of dynamism into the activities of GARI and to improve on its services.

With respect to operations, premium was once again put on quality projects. Thus, guarantees totalling FCFA 9.9 billion were provided for 18 projects of the total, FCFA 4.9 billion was provided as guarantee for loan operations (15 projects), whilst FCFA 5 billion (3 projects) covered resources mobilization activities. The guarantees approved covered financing facilities amounting to FCFA 30.56 billion channelled into investments worth FCFA 61 billion.

The guarantees approved as at 31 December 2006 brings the total amount approved since the commencement of activities to FCFA 76 billion, thereby making it possible to raise for the private sector loans amounting to FCFA 234 billion for investment in all sectors of activity totalling FCFA 587 billion.

At the financial level GARI Fund injected more sanity into its portfolio and enhanced reserves to mitigate general banking risks. These efforts led to the constituting of substantial provisions which formed part of efforts to raise the quality of the Fund’s portfolio. The provisions that were constituted resulted in a loss of FCFA 368 million as against the net profit of FCFA 172 million recorded in 2005.

The loss did not however, undermine the solid financial situation of GARI whose own capital and net resources⁽³⁾ amounted to FCFA 23 billion and FCFA 17 billion respectively as at 31 December 2006.

To maintain the intervention capacity and the credibility of the institution, the Board of Directors whilst keeping in check all sort of risks engendered by the activities of GARI, continued to set great store by rigour and prudential rules which have always guided its decisions and orientations. The multiplier co-efficient of the Fund is thus maintained at 5 and all the standard and internal prudential ratios have been complied with.

In the area of cooperation with partner institutions, GARI teamed up with EXIMGUARANTY of Ghana to organize a forum in Accra which brought together lending institutions. The Governor of the Central Bank of Ghana also participated in the forum which discussed, among others, the financing of investments in Ghana, and the assistance that GARI Fund could provide. Furthermore, the Bank participated actively in various meetings with guarantee institutions in West Africa with a view to establishing the Professional Association of Guarantee Institutions of Africa (APIGA).

With respect to prospects, GARI aims at building on the capital of confidence and improve on its performance by developing its expertise and building synergies with partner institutions. The gradual extension of operations to countries that are not yet covered by its interventions ranks among the priorities of the Fund just as the regular adapting of the policies and procedures inspired by best practices.

Finally, I would like to express my sincere gratitude to the Board of Directors for their sustained efforts to make GARI Fund an effective tool and preferred instrument for the promotion of private investments in West Africa. I would like to express my deep appreciation to our partners for their support, and also invite lending agencies and international financial institutions operating in our region to take further ownership of this tool so that together we would be able to address the problem of economic development of our countries.

SANOGOH Bintou
Chair of the Board of Directors

(2) European Union Programme for the promotion of investment in ACP countries, the implementation of which has been entrusted to the Centre for the Development of enterprises.

(3) These are own resources of the Fund less compromised commitments, provision for risks and the net worth of intangible fixed assets.