‘Africa can use own resources to bridge infrastructure gap’

Business Reporter

AFRICA can leverage on capital markets, pension funds and sovereign wealth funds to bridge the infrastructure gap, African Development Bank president Akinwumi Adesina said. Sharing a panel with the heads of nine Multilateral Development Banks last Saturday in Washington, he said while MDBs could provide funding for infrastructure, there was huge scope for the continent to use own resources to bridge financing gap.“If we don’t fix Africa’s infrastructure financing gap — which we put at some $60-70 billion a year — we will continue to take two percentage points off Africa’s annual growth rates,” he said.

“In Africa, we will leverage the continent’s pension funds, its sovereign wealth funds and its private equity funds, which we estimate at some $520 billion. I am convinced that the future of Africa lies inside Africa — using African resources, and utilising African markets.”

The forum–held under the theme “Spending more, spending better” — was introduced by World Bank president Jim Kim and UN Secretary-General Ban Ki-moon.

Mr Adesina said the main challenge that the continent was facing was electricity shortages.

“With 650 million Africans without electricity, we have to light up and power Africa.”

He said the bank would invest $12 billion into energy sector during the next five years with potential unlocking an additional $40-50 billion in funding from the private sector.

“We at the AfDB are working alongside our member governments to strengthen the capacity to examine and prepare infrastructure projects.

“Further, we believe that accountability and transparency in public infrastructure projects is key. Choosing the right contractors — in the right way — and giving local communities a say in the infrastructure projects that serve them,” said Mr Adesina.

Speaking at the same event, Jim Kim said: “There is no way we will meet the Sustainable Development Goals and the goals set by COP21 unless we create multiple layers of (infrastructure) financing.

“We as MDBs were created as leveraging mechanisms, going to the capital markets backed by our AAA ratings. The best investment a finance minister can make is with the MDBs. My message is invest early and often in the MDBs to deliver infrastructure.”