AFRICA – The private sector arm of the African Development Bank (AfDB), has committed to investing US$80 billion together with the G7 DFIs, the IFC, EBRD and the European Investment Bank, in the private sector over the next five years to support sustainable economic recovery and growth in Africa.
This investment will create jobs, boost economic growth, help tackle climate change and fight poverty.
“The UK is proud to back this commitment by world leaders at the G7 Summit to invest more than US$80 billion in Africa’s private sector over the next 5 years,” the UK Minister for Africa, James Duddridge, said.
“This investment will create jobs, boost economic growth, help tackle climate change and fight poverty. It comes at a crucial time as the continent rebuilds its economies, severely impacted by Covid-19.”
The IMF estimates that sub-Saharan Africa needs additional financing of around US$425 billion between now and 2025 to help strengthen the pandemic response spending and reduce poverty in the region.
“The patient, high quality capital that DFIs provide is urgently needed if African economies are to start to rebuild quickly from the impact of the pandemic. CDC is committed to building long term investment partnerships in Africa that fuel sustainable private sector growth in support of the UN’s Sustainable Development Goals,” Nick O’Donohoe, the CEO of CDC Group, said.
The announcement is a welcome boost to support the long-term development objectives of African economies that have been negatively impacted by the Covid-19 pandemic.
“The EIB welcomes G7 leadership to enhance support for high-impact investment across Africa during and after the pandemic. Last year the EU Bank’s engagement in Africa, as part of Team Europe, represented the largest ever support for climate action and investment in fragile states in 55 years of EIB operations on the continent,” Werner Hoyer, President of the European Investment Bank, said.
Makhtar Diop, IFC’s Managing Director, said that ensuring an inclusive and sustainable recovery for people, businesses and economies across Africa in coordination with their development partners, is at the core of IFC’s development mandate today.
“We therefore welcome this important partnership and are proud to provide financing and to work with partners to help create the right conditions to bring more private investment to Africa,” he added.
David Marchick, Chief Operating Officer of U.S. International Development Finance Corporation (DFC), said: “Under President Biden’s leadership, investing more in Africa is a top priority for DFC in fulfilling our development mandate. DFC is proud to be doubling down on our commitment to Africa alongside our G7 and multilateral partners and will continue to prioritize investments in vaccine manufacturing, COVID-19 response, climate mitigation and adaptation, and gender equity on the African continent.”
Each DFI has its own investment criteria which are aligned to an assessment of need to achieve development impact across a range of sectors. DFIs play an important role in helping to build markets, mitigate risk and pave the way for other investors to enter new markets.
The G7 DFI group consists of CDC, Proparco (France), JICA and JBIC (Japan), DFC (US), FinDev Canada (Canada), DEG (Germany) and CDP (Italy).