The African Development Bank (AfDB) is tackling the problem head on, by removing barriers that have stemmed the flow of investment finance into the continent. Africa Investment Forum which took place on November 7 2018 Akinwumi A. Desina writes, is the most important step in this process.
By bringing him together multilateral financial institutions, pension funds, sovereign wealth funds and private investors the AfDB aims to create a mechanism to reduce market, political and financial risks, and in the process improve the ease of doing business. As part of this effort the investment forum will prioritize public - private partnerships and private- sector deals. The message we aim to deliver a simple: Africa is ready for business.
African economies offer tremendous opportunities especially in energy infrastructure such as roads, railways and ports and agriculture, minerals, oil and gas. But Africa must turn this potential into streams of wealth for greater prosperity on the continent.
Africa has also become the world’s second-most attractive investment destination. According to the United Nations Conference on Trade and Development, inward foreign direct investment Is expected to increase by an amount of 20% this year to USD 50 billion from USD 42 billion in 2017.
Finally Africa’s pension funds, insurance funds and sovereign wealth funds collectively valued at more than $1 trillion dollars. If Africa could leverage this wealth to attract just one % of our global assets under management estimated to total more than USD 131 Trillion, the continent’s needs for USD 130 170 billion in annual infrastructure investments could be met. As matters currently stand, Africa faces an annual financing gap of USD 68-108 billion.
Africa has a huge population to place consumer demand a rising middle-class a dynamic youth population and rapidly reforming governments but I’m keen to accept these investments. The African investment Fund would provide what has been missing so far: a safe stable marketplace to accelerate deals.
Source: Akinwumi A. Desina. The Reporter (7 November 2018). Investor’s bright future in Africa. The Reporter p.26,31.