By Irene Gaitirira
Published May 13, 2018
Financing Africa’s development needs will require an estimated US$600 – US$700 billion per annum in 2050 when Africa’s population hits the 2 billion mark and overtakes those of China and India combined. African Development Bank’s African Economic Outlook 2018 reports that about about US$130 – US$170 billion of this will be needed annually.
To address these challenges, the African Development Bank has launched the Africa Investment Forum to mobilise private equity funds, sovereign wealth funds and the private sector to facilitate infrastructure projects with the capacity to transform the continent.
South Africa’s Gauteng Province, Africa’s seventh largest economy, has endorsed the Forum as a game changer for financing Africa’s infrastructure development at the launch of the African Investment Forum in Johannesburg.
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While Africa is the next investment frontier, there is an urgent need to bridge the gap between available capital and bankable projects, said African Development Bank President Akinwumi Adesina, noting the Africa Investment Forum will help make Africa a place where its young people want to live and thrive in.
“The overall Investment gap for Africa to achieve overall economic development is actually much higher and stands at US$200 billion to US$1.2 trillion a year. Impediments to bankable projects must be resolved to create win-wins for governments, development finance institutions and other relevant stakeholders. Africa must invest in its own development if it wants others to do so,” he said.
“This is the essential reason for the new approach of the Africa Investment Forum, a multi-stakeholder, multi-disciplinary platform that will incentivize collaboration for the economic and social development of Africa. This will primarily be about transactions and investment deals for Africa’s economic development and not a talk shop.”
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Adesina noted that financing Africa’s development is and has always been a collective and cooperative task, requiring broad-based partnerships with the private sector.
“We know that the money is there. By 2020, there will be close to US$$111 trillion assets under management globally that are invested around the world often at very low interest rates. Within Africa, the assets under management of domestic institutional investors will rise to US$1.8 trillion by 2020, tripling from US$634 billion in 2014. Most of this money isn’t invested in Africa. But Africa should invest in its own development if it wants others to do so.”
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Key industry leaders have endorsed the Forum as a unique opportunity for the private sector to invest in transformative projects across key sectors of strategic interest in Africa.
