Abidjan (Côte d’Ivoire), 27 February 2020: Norway is one of the major ALSF donors. Since 2010, year of the creation of the ALSF to 2018, Norway has supported the Facility for an amount of US$ 6,05 millions. Interview of Mr. Paal Bjornestad, Executive Director representing Denmark, Finland, India, Norway and Sweden at the AfDB.
ALSF: Why did Norway country decide to fund the ALSF?
Mr. BJORNESTAD:Norway is a rich country. We are one of the richest countries in the world if you measure us by the GDP per capita. One reason for that is that we are rich in natural resources: we have fisheries, we have forestry, we have hydropower, and also oil and gas. So we have benefited a lot from our natural resources, particularly from oil and gas.
But when we found oil and gas in Norway on the Norwegian continental shelf in the beginning of the 1970’s, we were already a developed country, so we had a lot of legal capacity, so we could negotiate with foreign companies to ensure that the benefits of the oil and gas were benefiting the government and the people of Norway.
Poorer States, particularly fragile States they don’t have legal capacity and they don’t have the legal frameworks. Many of them are also very, very rich in natural resources but the people of those countries, the peoples of those countries, and the governments do not necessarily benefit because they don’t have the legal framework, they don’t have the capacity to negotiate contracts that ensure that the benefits reach ordinary people. So the ALSF is doing a very important job in order to ensure that the benefits actually are going to the African people that own those resources by helping in negotiations and also assisting in making legal frameworks better.
ALSF: The ALSF works in the framework of the Arican Union 2063 Agenda, the “High 5” of AfDB and the SDGs.
Mr. BJORNESTAD: Yes, the ALSF is linking its activities strongly to the Sustainable Development Goals (SDG). As you know the SDG is something that all the world leaders have agreed on, that all the countries will strive to achieve them. So it is good that all international efforts are linked up to the Sustainable Development Goals. And I think the Facility is doing that in a very good manner.
Perhaps also the ALSF should look more into risks from climate change, that that’s sort of taken into account in contracts and legal framework that might have great medium- to long-term impacts on the countries the ALSF is assisting.
ALSF: What are the main strengths of the ALSF?
Mr. BJORNESTAD: ALSF has a very strong legal team. I know the ALSF was awarded “Best Legal Department of the Year” at the 2018 African Legal Awards held in South Africa. That is, of course, comforting for donors but also for those receiving support from the ALSF.
ALSF: ALSF is an agent for development and a partner for building up a fairer climate business.
Mr. BJORNESTAD: African countries are now more in more – also because development assistance is declining – looking at attracting private sector investments both from outside the continent but also from inside the continent. And of course, if you have good and transparent legal frameworks, that is reducing the risk of investing in Africa and it will be easier to attract foreign investors. So in that prospect also, the Facility is playing a crucial role.
More and more countries are looking into the Public-Private-Partnerships to finance and manage infrastructures. Africa has a huge need of infrastructure, more infrastructure constructions,and at the same time, they have increased their debt significantly.
So they are looking at new avenues to finance this need for infrastructure, and PPPs are one option. But they are difficult to structure, it is difficult to have the right type of contract, and you need good legal expertise, and that is something that the ALSF is providing.
ALSF: How do you see the Facility’ future after 2022, last year of it’s mandate as stipulated in the ALSF Treaty?
Mr. BJORNESTAD: There is certainly a great need also for ALSF assistance after 2022. African countries need to develop. Many of them have very low internal resources from taxes. So they have relied to a great extent on development assistance. But development assistance is going down, It has gone down the last couple of years and that trend probably will continue.
So in order to build roads, to build schools and health facilities, to develop the country, many African countries have then been enforced to rely on debt. So many countries have increased quite significantly their debt over the last decade. That can cause some problems down the road as the future generations will have to repay this debt. If they, instead, could get the income from the natural resources by having a good legal and transparent framework, by having good contracts that the ALSF is assisting them with, they would have to rely less on the debt and that would be a much better situation.
The ALSF is not only assisting the governments but also building capacities among lawyers in African countries. So, down the line, the ALSF probably will not have a monopoly any more. There will also be stronger capacity in African countries. Of course, in the long term, the aim should be to dismantle the Facility if the countries have sufficient capacity themselves to negotiate good contracts themselves. And of course, in the long term, our aim is that Africa should go from many middle-income countries, but also many LDCs (least developed countries), to middle-income status for all the countries and high-income status long term, and then they should have the capacity, of course, themselves. So, this should be a long-term aim, certainly.
ALSF: Would you plead for a financial contribution to the ALSF by the African countries themselves?
Mr. BJORNESTAD:I am sure that the African countries will see the benefits from engaging the ALSF and they will then be more willing to pay for its services down the line. But of course we also know that many of these countries are very poor, lack capacity, and are fragile States.
We want to provide development assistance to these countries : Norway has its aim of providing 1% of its GNI (Gross National Income) in development assistance. We think that supporting the Facility’s activities is a good way to use not all but some of that 1%.
But of course, I agree that down the line, we should expect and aim that also African countries are to a great extent are contributing, because that will build ownership and build sustainability.
So we need to have a clear plan for that. And I know that is on the ALSF’s list of tasks : resource mobilization and the focus should definitely be on African countries to ensure that they also contribute to the facility that they are the beneficiaries of.
Interview by Eve Ehoura
À propos de l’ALSF
Created by the African Development Bank in 2010, the ALSF supports governments in negotiating complex commercial transactions, providing legal and technical assistance in public-private partnership projects across the oil and gas, mining and energy sectors, and covering sovereign debt issues and creditor litigation.
Eve Ehoura, Communication Officer: email@example.com