African Community Fund

Asset Valuation & Reserve Management Directive

Directive No.: ACF-DIR-006 | Effective Date: 04/05/2026 | Version: 1.0

PREAMBLE

WHEREAS the African Community Fund (the "Fund") operates as an international institution with full juridical personality under Article 2.1 of its Charter;

WHEREAS Article 3.1 establishes the Fund's primary objective to create a stable, durable store of value widely accepted and trusted internationally;

WHEREAS Article 3.3 guides the Fund by the principle of making natural resources equitable to members, inspired by cooperative principles of mutuality, long-term value creation, and responsible stewardship;

WHEREAS Article 7.3 requires that payments in Gold be valued at the prevailing international market price at the time of receipt, verified by an independent assayer approved by the Fund;

WHEREAS Article 11.3 mandates that share redemption upon voluntary withdrawal be calculated at Net Asset Value (NAV) per share, reflecting underlying asset value without speculative premium or discount;

WHEREAS Article 14.2(d) entrusts the Executive Committee with managing the Fund's liquidity and asset allocation;

WHEREAS Article 23.2 requires annual external audit of the Fund's accounts by auditors of recognized international standing;

WHEREAS Article 13.5 authorizes the Chair to adopt directives consistent with the Charter to implement the Fund's mission;

NOW THEREFORE, the Chair hereby issues this Asset Valuation & Reserve Management Directive to establish standardized methodologies, allocation frameworks, and oversight mechanisms for the valuation and stewardship of Fund assets.

ARTICLE 1: PURPOSE AND SCOPE

1.1 Purpose: This Directive establishes a transparent, rigorous, and internationally aligned framework for the valuation of Fund assets, the calculation of Net Asset Value (NAV), and the strategic management of reserve composition to preserve purchasing power, ensure liquidity, and support the Fund's cooperative mission.

1.2 Scope: Applies to all assets held by the Fund, including but not limited to:

  • (a) Physical precious metals (gold, silver);
  • (b) Fiat currencies and convertible monetary instruments;
  • (c) Approved Program-aligned receivables and member loans;
  • (d) Highly liquid cash equivalents and short-term instruments;
  • (e) Any other assets authorized by the Executive Committee.

1.3 Governance Oversight: The Executive Committee retains ultimate authority over reserve policy, allocation thresholds, valuer appointments, and valuation methodology adjustments.

ARTICLE 2: VALUATION METHODOLOGY

2.1 Precious Metals (Gold & Silver):

  • (a) Valued at the prevailing international market benchmark price (e.g., LBMA Gold Price, COMEX Silver Fix, or equivalent recognized exchange) at the valuation timestamp.
  • (b) Adjusted for purity, weight, and assay certification. Premiums for fabrication, transport, or insurance shall not inflate reserve valuation.
  • (c) Verified quarterly by independent, internationally accredited assayers per Article 7.3.

2.2 Fiat Currencies & Convertible Instruments:

  • (a) Valued using mid-market exchange rates from recognized financial data providers (e.g., Bloomberg, Reuters, or central bank reference rates) at 16:00 UTC on the valuation date.
  • (b) Cross-currency conversions shall use the most liquid and transparent trading pair available.

2.3 Program Receivables & Member Loans:

  • (a) Valued at amortized cost, adjusted for expected credit losses (ECL) using a risk-weighted provisioning model aligned with IFRS 9 principles.
  • (b) Non-performing exposures (>90 days past due or restructured) shall be provisioned at 100% until collateral realization or workout resolution.

2.4 Net Asset Value (NAV) Calculation:

  • (a) NAV per Share = (Total Fund Assets − Total Fund Liabilities) ÷ Total Outstanding Shares.
  • (b) Calculated monthly for internal monitoring, quarterly for reporting, and ad-hoc for redemption events per Article 11.3.
  • (c) Strictly reflects underlying asset value. No speculative premiums, discounts, or goodwill adjustments shall be applied.

ARTICLE 3: RESERVE ALLOCATION POLICY

3.1 Target Allocation Framework:

  • (a) Precious Metals Reserve: Minimum 60% of total assets. Serves as the foundational store of value and macroeconomic buffer.
  • (b) Liquidity Buffer: Minimum 15% in cash and highly liquid instruments. Ensures capacity for operational expenses, capital calls, and tiered redemption obligations (Article 11.4).
  • (c) Program & Development Allocation: Up to 25% in approved member loans, cooperative receivables, and mission-aligned strategic holdings.

3.2 Rebalancing Triggers:

  • (a) Quarterly review by the Executive Committee.
  • (b) Automatic rebalancing initiated if precious metals fall below 55%, liquidity drops below 12%, or after a >10% NAV deviation within a 30-day period.
  • (c) Rebalancing actions shall prioritize asset preservation, liquidity restoration, and mission alignment.

3.3 Prohibited Holdings: The Fund shall not hold leveraged instruments, speculative derivatives, concentrated equity positions, or assets inconsistent with cooperative stewardship and long-term value creation (Article 3.3).

ARTICLE 4: INDEPENDENT ASSAYER & VALUER PROTOCOLS

4.1 Appointment Standards: Assayers and independent valuers shall be internationally accredited, free of conflicts of interest, and appointed by the Executive Committee following a competitive procurement process.

4.2 Verification Frequency:

  • (a) Physical precious metals: Full assay and weight verification quarterly.
  • (b) Complete portfolio re-valuation: Annually, aligned with the external audit cycle (Article 23.2).
  • (c) Ad-hoc verification: Triggered by redemption events, force majeure, or Executive Committee directive.

4.3 Chain of Custody & Security: All physical assets shall be stored in approved, insured vaults with dual-control access, tamper-evident seals, and continuous environmental monitoring. Movement of assets requires Executive Committee authorization and independent escort.

4.4 Valuation Disputes: In the event of disagreement regarding asset valuation, the Executive Committee shall appoint a mutually agreed neutral expert. Their determination shall be final and binding, with costs shared equally.

ARTICLE 5: LIQUIDITY MANAGEMENT & RISK CONTROLS

5.1 Stress Testing: Biannual liquidity simulations shall model:

  • (a) Aggregate withdrawal requests exceeding 10% of liquid assets (Article 11.6);
  • (b) Sharp precious metal price corrections (>15% in 30 days);
  • (c) Currency volatility and settlement delays.

5.2 Counterparty & Custodian Limits: No single custodian, bank, or counterparty shall hold >30% of the Fund's precious metals or liquid reserves. Diversification across jurisdictions and legal structures is mandatory.

5.3 Strategic Hedging: Limited use of forwards or options is permitted solely to protect NAV stability and hedge currency/metal price risk. Hedging positions shall not exceed 10% of the exposed asset value and shall never be used for speculative gain.

5.4 Contingency Authority: During declared Force Majeure or systemic market disruption, the Executive Committee may temporarily adjust allocation thresholds to preserve liquidity and asset integrity, subject to immediate written notification to the Voting Meeting.

ARTICLE 6: REPORTING, AUDIT & TRANSPARENCY

6.1 Internal Reporting: The Chief Financial Officer shall provide the Executive Committee with a monthly dashboard covering NAV, reserve composition, liquidity coverage ratio, credit provisioning, and valuation variances.

6.2 External Audit: Annual financial statements shall be audited per Article 23.2. The audit shall include physical count verification, methodology validation, reserve policy compliance, and independence assessment of appointed valuers.

6.3 Open Data Publication: Aggregate, non-sensitive reserve data shall be published quarterly via the Fund's Open Data portal, including:

  • (a) Reserve composition by asset class;
  • (b) NAV trend indicators;
  • (c) Audit summary highlights;
  • (d) Liquidity coverage metrics.

6.4 Member Access: All Members receive the audited annual report and semi-annual reserve statements. Class A Members receive detailed briefings prior to Voting Meetings; Class B Members receive summaries aligned with Non-Voting Meeting protocols.

ARTICLE 7: GOVERNANCE, COMPLIANCE & OVERSIGHT

7.1 Executive Committee Authority: Holds final approval over reserve policy, allocation limits, valuer appointments, and stress test methodologies.

7.2 Operational Implementation: The Chief Financial Officer (or designated equivalent) is responsible for daily valuation execution, custody coordination, and compliance reporting.

7.3 Audit Committee Review: The Audit Committee shall review valuation judgments, provisioning models, and reserve allocation adherence semiannually, reporting findings directly to the Voting Meeting and Chair per Article 15.6.

7.4 Waivers & Exceptions: Temporary deviations from allocation thresholds require documented Executive Committee approval, clear rationale, and a maximum 60-day sunset period unless formally renewed.

ARTICLE 8: AMENDMENTS, REVIEW & ENTRY INTO FORCE

8.1 Review Cycle: This Directive shall be reviewed biennially by the Executive Committee to incorporate market developments, audit findings, and operational feedback.

8.2 Amendments: The Chair may amend this Directive upon recommendation of the Executive Committee, provided all changes remain consistent with the Charter.

8.3 Entry into Force: This Directive enters into force upon signature by the Chair and publication on the Fund's official website.

8.4 Languages: In accordance with Article 28.1, this Directive is authentic in English, French, Portuguese, and Arabic. In case of discrepancy, the English text shall prevail for technical and financial specifications.

SCHEDULE A: VALUATION BENCHMARKS & DATA SOURCES

Asset Class Primary Benchmark Secondary/Validation Source Update Frequency
Gold LBMA Gold Price (USD/oz) COMEX, XAU/USD Spot Daily (15:00 UTC)
Silver LBMA Silver Price (USD/oz) COMEX, XAG/USD Spot Daily (15:00 UTC)
Fiat Currencies Bloomberg FX Mid-Rate Central Bank Reference Rates Intraday (16:00 UTC)
Cash Equivalents Par Value + Accrued Interest Custodian Statements Daily
Program Loans Amortized Cost − ECL Independent Credit Review Quarterly

SCHEDULE B: RESERVE ALLOCATION THRESHOLDS & TRIGGERS

Metric Target Range Warning Threshold Action Trigger
Precious Metals 60% − 70% < 58% Rebalance within 30 days
Liquidity Buffer 15% − 25% < 12% Immediate liquidity review & asset reallocation
Program/Loan Portfolio 15% − 25% > 28% Cap new approvals, prioritize collections
Single Custodian Exposure ≤ 30% > 25% Diversify holdings within 60 days
NAV Deviation (30-day) ≤ ± 5% > ± 8% Executive Committee intervention & stress test

SCHEDULE C: COMPLIANCE & OPERATIONAL CONTACTS

Function Contact Purpose
Independent Assayer Coordination [email protected] Scheduling, chain-of-custody, verification reports
Liquidity & Risk Management [email protected] Stress testing, hedging oversight, counterparty limits
Audit & Valuation Review [email protected] Methodology validation, external audit liaison
Open Data & Transparency [email protected] Publication of aggregate reserve metrics and NAV trends

Adopted by the Chair of the African Community Fund on 04/05/2026.
Shared Value, Shared Prosperity.

Digital Signature md5-SYcQLcXJFeRtKNIeaxVcTw==
Verify digital signature
©2026 African Community Fund
africancommunityfund.com