Equity’s Eastern and Central Africa Recovery and Resilience Plan is envisaged to provide financing of up to 2% of the combined GDP of the six economies, in which the Group operates, to the private sector in the form of blended financing of short-term overdrafts, medium-term loans and credit facilities which require long-term project and development financing.

While launching the Recovery and Resilience Plan Dr. James Mwangi, Equity Group Managing Director and CEO said, “A total of Kshs 678 billion (USD 6 billion) will be available to 5 million MSMEs and 25 million individual borrowers for the next 5 years. The plan conceives that the 5 million businesses largely comprising MSMEs will create 50 million jobs, 25 million jobs directly and an equal number of jobs indirectly as the ecosystems of business become more cohesive, connected, and ultimately synergize and grow.”

“The recovery plan will have special focus on youth and women, supporting them to be the primary drivers of creating and expanding opportunities in the real economy. Under the Young Africa Works Initiative in partnership and collaboration with the Mastercard Foundation, the plan will build capacity in young people through financial literacy, entrepreneurship training and digital literacy. To ensure that no one will be left behind, lending to young people will be complemented with credit guarantee facilities to mitigate default through our credit risk pricing model that has opened inclusive credit access to all. Risk based credit pricing has enabled us to adopt a transparent, all-inclusive interest rate, at the current average central bank rate that ranges from 13% to 18.5% for the lowest risk and the highest risk categories respectively,” added Dr. Mwangi.
The Regional Development Plan through recovery and resilience initiatives focuses on five thematic areas:
• Primary sectors of Food and Agriculture, and extractive sectors
• Manufacturing and Logistics
• Trade and Investments
• Micro small and medium enterprises
• Social impact and Environmental investments

Under the primary sectors, principally Food and Agriculture, the focus will be on unlocking productivity gains and value addition ecosystems to achieve food security for the region while increasing value creation in the primary sectors, which are the highest employers, highest foreign exchange earners and the highest contributors of export goods. The plan targets agricultural transformation by enhancing value chain coordination, capacity building of smallholder farmers-anchoring them better to formal value chains, financing mechanisation and credible inputs. A significant plank of the plan is agro processing which adds and enhances the value of agricultural exports, while processing food for easy access by an urbanising population and production of building materials to support construction and housing development.

The recovery and resilience plan seeks to leverage on productive capacities and comparative advantages to transform the region into a manufacturing hub that converts agricultural raw material into finished products for export and national use. The plan covers value addition for all primary products including retaining value in mineral processing to export semi-finished and finished products. The plan targets financing of in-country manufacturing and regional supply chains to replace broken global supply chains following COVID-19 disruptions. This will build regional resilience against global supply chain shocks while contributing to economic recovery and growth of the region, creating employment opportunities for young people and markets for local producers.

“We learned and developed a lot of knowledge while setting up PPE production and manufacturing in Kenya during the early days of the COVID-19 pandemic. In order to replace the broken global PPE supply chains, Equity Group Foundation donated Kshs 1.1 billion (USD 11 million) jointly with its partners to protect doctors and medical staff of 116 national referral, county, and faith-based hospitals for the last two years. Through the initiative to establish and strengthen local production and manufacturing, Kenya has become self-sufficient in PPE and a leading African exporter of PPE. Our current plans include supporting the manufacturing and production of COVID-19 drugs, anti-infectives and vaccines in the region,” said Dr. Mwangi.

Focus on trade and investments will enable expansion of markets for the primary sectors of Food and Agriculture and the manufactured products, along with the realisation of investments to support growth of the two sectors. The East African Community, following the inclusion of DRC (Democratic Republic of the Congo), will provide an expanded regional market with similar characteristics and requirements. The African Continental Free Trade Area Agreement (AfCFTA) presents, with it opportunities that the Plan seeks to fully utilize by signing an implementation and collaboration partnership with the AfCFTA Secretariat to position Equity Group as an implementation partner. The plan also seeks to fully utilise existing Trade and Investment Agreements such as the European Union Trade Agreement, the United States of America’s AGOA (African Growth and Opportunity Act) framework, and the capacities of the Commonwealth community. -Pilot testing of these initiatives was undertaken with the December 2021 Kenya DRC Trade Mission between the Governments of the DRC and the Government of Kenya with support of Equity Group. The mission which has generated a sizeable deal pipe provided us invaluable lessons on how to mobilise, organise and support the private sector in stimulating cross-border trade and investment for purposes of scaling,” said Dr. Mwangi.

Micro, Small and Medium Enterprises (MSMEs) are the largest vehicles for indigenous capital and entrepreneurship and will contribute significantly to local capital formation and employment. Mass market and MSME financing is a key strength of Equity Group with 72% of its loan and credit portfolio held in this segment. The Group has rolled out a plan to lend and advance loans to 5 million MSMEs and 25 million individuals to stimulate participation of the local community and population, with a bias to young people and women.
To enhance the success rate among MSMEs and young people, the plan involves credit risk sharing mechanisms and capacity building through financial literacy and entrepreneurship training.

“The Group has pilot tested lending to young people under the Young Africa Works in partnership with Mastercard Foundation with a resounding success rate of 436,000 MSMEs trained and funded to the tune of Kshs 136 billion, and 1.2 million jobs created by the enterprises as they expand and grow on access of financing,” said Dr. Mwangi. “The objective of the plan is to formalise the informal sector of MSMEs by linking them with formal manufacturing and primary food and agriculture sectors and by populating their value chains and ecosystems to achieve growth and resilience while accelerating recovery of the MSME sector,” added Dr. Mwangi.

The Regional Recovery and Resilience Plan seeks to enhance the social contract with society while targeting sustainability on the basis of resilience by including environmental and climate change considerations. The plan strives to achieve a social economic transformation of the region in a socially ethical and environmentally sustainable manner. Being a purpose driven plan, inclusion is at the centre of consideration to ensure nobody is left behind and the plan is fully anchored on sustainability.

“We seek to use our AAA+ rated finance brand to ensure the plan enhances its social contract with society by seeking partnership and collaboration with local communities to ensure their participation and involvement. The plan incorporates strong principles and practices to assure all stakeholders of transparency and openness, under ESG (Environmental Social Governance) considerations,” said Dr. Mwangi.

Equity Group recognises that it cannot single-handedly deliver the development of Africa. Cognisant of this fact, the Group has chosen to champion the socio-economic transformation of Africa jointly with like-minded partners and to seek their collaboration and partnership to synergise the combined capabilities and competencies of public-private partnerships, which will help mobilise the requisite strength to execute the Plan. The Group has socialised and negotiated partnership with the United Nations Resident Coordinators in the 6 countries in which it operates for collaboration and participation of all the UN Agencies operating in the region under the auspices and delivery of the Sustainable Development Goals (SDGs) collaboration framework.

The Plan has won the support and participation of IFC, AfDB, European Development Banks (Team Europe), the Commonwealth Secretariat, the African Continental Free Trade Area Agreement Secretariat and the European Union, as well as support from the national governments of the six countries the Group operates in. “We are grateful for the enthusiasm shown towards collaborating and partnering to jointly execute on the social and economic recovery and resilience of Eastern and Central Africa, particularly in mobilising USD 6 Billion in financing for the fund,” said Dr. Mwangi.

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The Governor was speaking at the official opening of the final leg of the Kenya-DRC Trade Mission held in Mbuji-Mayi town, some 1,600 kilometers northwest of the capital Kinshasa, where the first meeting took place on 29 November.

“It is an honour to welcome you to the Great Kasai region. We express our gratitude for your delegation’s arrival. This is a historic moment. The Trade Mission shows that Kasai has potential and has given our people hope that together we can explore avenues for business development. EquityBCDC’s decision to choose Mbuji-Mayi as the final stop for the Trade Mission is a clear indication that the Bank is a great catalyst of development in the Great Kasai region,” she said.

The visit to Mbuji-Mayi by the delegates from Kenya and DRC was a culmination of a bilateral agreement signed by President H.E. Uhuru Kenyatta of Kenya and his counterpart President H.E. Felix Tshisekedi of the DRC in April 2021 to create closer ties between the two countries, particularly along the issues of trade, manufacturing, and agriculture. The MOU was signed during a State visit of the Kenya President to the DRC, where he also commissioned the opening of the EquityBCDC tower in Kinshasa.

Governor Musuamba shared a comprehensive profile of the province in Central DRC that has the longest section of the mighty Congo River, illustrating the opportunities for investment that exist in infrastructure development, agriculture, mining, tourism, energy, internet connectivity, water utilities and other sectors.

“With a population of 55 million people whose average age is 20 years old, employment can be created by stimulating production through consumption. We have a tropical climate that is conducive to farming. Most of our land is arable. Among crops that can be grown here are cassava, corn, soya, peanuts, sweet potatoes, and fruits like pineapples, papaya, and avocados. With the adequate arable land and two rainy seasons, farming potential in Great Kasai can enable DRC to achieve food self-sufficiency,” she said.

Beyond agriculture is the mining of diamonds, iron, gold, cobalt, and other minerals, which provides a lucrative investment opportunity. “Serious exploitation can be explored for processing diamonds and other minerals at an industrial level. We also have massive deposits of construction materials like sand and granite, which exists in many areas,” said the Governor adding that the demand for suitable housing remains insatiable.   

However, said the Governor, these opportunities come with challenges. She cited transport and reliable energy as needs and urged investors from both the DRC and Kenyan entrepreneurs to work with EquityBCDC (the DRC subsidiary of Equity Group Holdings) that has already established itself as the largest financial institution in the province, despite the challenges.  

“To invest, be ready to tackle challenges. There is the challenge of electricity or more particularly lack of it and poor roads that inhibit transport to and out of this province. These challenges are not insurmountable given the benefits that are certain upon investment,” said H.E Dieudonne Piemme, Governor Kasai Province.

“By partnering together, we can solve challenges that affect the African continent including hunger, health issues and poverty by allowing businesses to be the driving force for continental change. This is the first time that businessmen and women of our two great nations have come together to purposefully explore business opportunities,” said Equity Group Chief Commercial Officer, Polycarp Igathe, as he implored delegates to take advantage of the physical attendance of the meeting by the Kenyan delegates to connect.

To reciprocate the visit of Kenyan entrepreneurs to the DRC, Equity is looking forward to hosting DRC business leaders on a similar mission to the Kenyan cities of Nairobi, Mombasa, Nakuru, and Kisumu in early 2022 to seek cross border opportunities for investment for the benefit of developing the two countries.

Kenya’s Ambassador to the DRC, Ambassador George Masafu said, “The mission by the Kenya Government to the DRC, in partnership with Equity Group, was not in vain and indeed, the meeting in Mbuji-Mayi was a turning point for Kenya and the DRC. The trade mission was a labor of love that seeks to fulfill the objective of President Kenyatta’s bilateral agreement signed in April, putting words into action for our two great nations.”  He added, “A political goodwill was built when President Uhuru Kenyatta and President Felix Tshisekedi shook hands in April this year. The political goodwill by our two presidents is fueling interest and growth for business opportunities in the DRC and by working together, we set pace for other African countries to partner with DRC,” said Amb. Masafu.

EquityBCDC Managing Director, Celestin Mukeba said, “This Trade Mission was organized with the sole purpose of unlocking trade, tourism and investment opportunities in DRC and this is already bearing fruit. Equity’s vision and mission is to transform lives and livelihoods, and to give dignity through wealth creation. It is in this vein of expanding wealth that Equity has brought more than 300 Kenyans to DRC in four cities for networking and matchmaking.”

Celestin urged the investors to tap into the USD5 billion availed to companies and small and medium-sized enterprises by Equity, as part of efforts to integrate the region through trade and investments. “We want the DRC to be the first to utilize the liquidity that Equity has to resolve mammoth challenges in energy, food security, and mining,” said Mukeba. He added, “Remember development cannot happen unless people synergize with the government, especially for infrastructure. For the private sector, it is important to tap into the opportunities.”

The Kenya-DRC Trade Mission 2021, a partnership between the Government of Kenya, the Government of the DRC, and Equity Group Holdings saw cumulatively over 300 Kenyan investors and business people visit DRC and a delegation of over 7,000 attend the conferences and business networking sessions across the four cities

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Dubbed the ‘Clean Cooking Project’, the initiative aims at supporting learning institutions to install modern technologies for cooking that are environmentally safe such as steam-based cooking, biofuels, sustainable biomass and Liquid Petroleum Gas (LPG). Equity will provide financing for the equipment and other installation costs based on an institution’s needs.

Speaking during the launch of the initiative at Alliance High School, Equity Group Managing Director and CEO, Dr. James Mwangi said, “Wood-fuel is not a sustainable model for our planet as it has led to adverse environmental degradation and depletion of our much-needed forest cover. Lack of appropriate financing and innovative technologies has been the biggest barrier to clean energy transition. To close this gap, we have decided to partner with learning institutions to facilitate them access and install more environmentally friendly cooking and lighting facilities”.

According to the Clean Cooking Alliance of Kenya (CCAK) study on ‘Use of Biomass Cookstoves and Fuels in institutions in Kenya report of 2018’, 97% of primary and secondary schools use firewood derived from forests as cooking fuel. This counters the Kenya government efforts of attaining the constitutional requirement of 10 percent forest cover.

“We decided to create a more integrated programme to ensure trees would grow to maturity and not be used as an energy source. For us to migrate from wood-based fuel solutions in our institutions, we require a concerted effort from the management of the various institutions, energy technology providers, end-users and government agencies. We encourage institutions and organizations to take this route and lead the way so that we can protect our environment. Equity will walk with you on this journey,” added Dr. Mwangi.

CCAK estimates that 1 million metric tonnes of wood-fuel is used by primary and secondary schools every year with a value of KES 10 billion. The increased over-reliance on wood and charcoal as the primary sources of fuel by institutions requires urgent attention for Kenya to reduce greenhouse gas emissions by 30% by the year 2030 under the Intended Nationally Determined Contribution (INDC).

Education Cabinet Secretary Prof. George Magoha, who presided over the launch, said, “Alliance High School has traditionally used wood for cooking, harvested from trees in its compound. With the installation of clean cooking infrastructure, the school can now reap the benefits of cleaner and environmentally friendly cooking solutions. This is a project that is transformative and in line with the Government’s agenda. When you look at the negative effects of climate change you will understand its importance. My call today is for all schools in Kenya to quickly follow suit and embrace clean energy solutions. This will contribute in reversing environmental degradation, save costs and improve health outcomes. If all schools switched to cleaner alternatives, we will not only preserve our trees but will also significantly reduce our carbon footprint.”

By transitioning to cleaner fuels like LPG, institutions can realize up to 40% savings in their cooking and lighting budget with better health and environmental outcomes, improved kitchen hygiene and motivation of workers.

“I am very grateful to Alliance High School, Equity and its technical partners for making it possible to have Alliance transition from a heavy consumer of wood fuel to modern and cleaner cooking technology that preserves the environment. The school’s kitchen will be used as a model for all institutions that want to adopt this technology,” added Prof. Magoha.

Equity is fully committed to working with all learning institutions in Kenya for them to realize the multiple benefits of modern and clean energy.

Last year, Equity committed to planting 35 million trees to contribute and rally the country towards the achievement of 10% forest cover. Out of the 35 million trees, Equity intends to plant 20 million in learning institutions. So far, Equity has planted 3.2 million trees, 2 million of which has been planted in 2,133 schools across the country. This is in support of the government initiative to achieve the 10% forest cover. Kenya Forest Service (KFS) and the Ministry of Environment & Forestry are supporting Equity through technical assistance on seedlings requirements for different geo-ecological zones, adoption of forest blocks that require rehabilitation and other logistical support.

Equity through the Foundation is promoting and driving conservation and smart use of natural resources by expanding forest cover, improving water security and promoting the use of renewable energy and energy-efficient technologies. So far 780,000 households and businesses have been supported to access clean energy products including solar panels for lighting and heating in homes, schools and hotels.

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