The minister was deliberating in a presser at the Petroleum Building at Brusubi, which was promptly convened to shed light on the Senegambia Bridge deal with Africa50, which has been heavily criticised and viewed by many as a bad move by the government.
Facing journalists, Minister Keita said: “We would say the discussion has really been very animated, and it came at the backdrop of an interview I granted while in Togo attending the shareholders’ meeting of Africa50, on the sidelines of which we signed two agreements. An interview was conducted by the CNBC Network. I was not even expecting to be that wide, because they just called me in a corner and I did the interview there.
“But the signature was a public ceremony, and we signed two agreements. One was the Joint Development Agreement. … They are asset recycling, and asset recycling is a financial instrument or financial terminology or arrangement that you go into for revenue-producing assets which provide predictable and reliable cash flow. Instead of waiting for long years to be receiving the cash flow in dribs, you take the monetised value, a significant amount of it upfront, from investors.”
“In layman's terms, it means you have the right cash flow, but instead of waiting for a scheduled future, you have investors who would be prepared to pay you today, and they will be patient to be collecting these streams of cash in the future.”
Minister Keita emphasised that the transaction they are embarking on is not a sale, mortgage or privatisation transaction but simply “a monetisation of the rights, because an asset has two characteristics: you have outright ownership and you have the rights accrued to that ownership.”
So we are separating that, and we are only selling forward the rights to the cash flows, which are in the form of tolls emanating from the bridge.
He furthered that in plain terms, it simply means transferring into cash the future cash flow.
“For example, we are now collecting revenue from the bridge every day but when we monetise, it is that right of collecting the revenue that you are giving to Africa50, which is an international organisation, and they will be the one to collect,” he explained.
Mr Keita also stated that it is a joint venture, adding: “It is not an asset recycling where we say, ‘you have right to these assets,’ and then we are hand soft until when the asset comes back to us. We are shareholders with Africa50.
He stated that the arrangement has it that Africa50 gets 87% shareholding, while the Government of The Gambia, represented by the Government of The Gambia in the board and in the governance structure, will get 12.5% shares.
“Those shares we have not paid for. Those shares are accrued to us because of the rights we have given them, in addition to the money that they are going to pay upfront. Normally when we do these types of transactions at arm’s length, you will have to pay for your entitlements to those shares. But these are [pro] bono shares they have accrued to us. That is the nature of the transaction.”
On the second agreement, he said: “The second agreement we signed is Heads of Terms. Heads of Terms in layman's terminology is like an MoU, an MoU in the sense that we are saying, ‘when we go into conceiving the concession proper, these are the broad outlines that the concession agreement will cover.’ The concession agreement will cover operation, maintenance, environmental, social and governance issues, fiduciary issues and the welfare of the infrastructure.
“There will be a better toll system that will be developed in order to ensure there will be transparency of revenue collection and reporting. Government being at the centre, at the table, will not be unaware of what is going on, because we will be on the board, but the management and operation will be delegated to Africa50, who is the private sector specialised in this.”
