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African Development Bank calls for boost to private sector investments as well as fiscal and debt sustainability at T20 Summit in Tokyo
Sound policies to improve investor interest and address fiscal sustainability concerns in Africa were key points made by Director General of the Bank’s Southern African Bureau, Kapil Kapoor during the Think20 (T20) conference held in Tokyo Japan on 26-27 May. The T20 Summit convened top policy experts to detail innovative T20 Japan policy solutions for consideration during the G20 Leaders’ summit in Osaka on 28-29 June.
As Lead Co-Chair of the Cooperation with Africa Task Force, Kapoor presented policy briefs covering fiscal and debt sustainability and the G2O Compact with Africa.
Heightened fiscal vulnerabilities in Africa are weakening fiscal revenues and growth, particularly for commodity-exporting African countries.
In his policy brief on “Fiscal and Debt Sustainability,” Kapoor highlighted that to entrench fiscal sustainability, countries need to strengthen domestic resource mobilization and improve public investment management. Increasing tax revenue collections, savings mobilization and efficiency of public spending were also recommended as critical factors. The brief called on the G20 to support several initiatives including data harmonisation, tax compliance and the development of effective debt resolution frameworks.
In the policy brief on the “G20 Compact with Africa (CWA)” which covers macroeconomic, business and financing frameworks, Kapoor stressed the need to improve conditions for mobilizing private sector investments to promote sustainable development in African countries. To drive more investment, Kapoor called on the G20, partner countries and international organisations to coordinate more closely, increase technical assistance and provide support for early-stage project preparation. He also encouraged member countries of the CWA to commit to implementing key reforms that will create a better environment to attract private investment. This includes setting up reliable regulations and institutions, establishing investor protection and providing political risk insurance amongst others.
During a session on "Fiscal and debt sustainability and domestic resource mobilization in Africa", Kapoor acknowledged the global decline in development assistance and confirmed the Bank’s commitment to driving development through many channels including investment. In another high-level panel session, he highlighted the success of the Bank’s maiden Africa Investment Forum held in Johannesburg last November which secured investment interest in 40 deals across the continent worth over $38 billion in just two days. Ahead of the upcoming forum in November, he invited Masahiko Kiya, Ambassador for TICAD at the Ministry of Foreign Affairs of Japan, to encourage Japanese private companies to attend and take advantage of the diverse investment opportunities on the continent.
In a video message, Prime Minister of Japan Mr. Shinzo Abe underscored the value of the meeting and concluded, “The T20 is an important engagement group of the G20. I am delighted to hear that T20 members have discussed various solutions for realizing a sustainable, inclusive and resilient society. I also expect you [the T20] will present new perspectives and a clear path towards resolving the challenges that the world faces”.
T20 Japan is an official engagement group of Japan’s 2019 G20 presidency chaired by the Asian Development Bank Institute (ADBI), in coordination with the Japan Institute of International Affairs and Institute for International Monetary Affairs
On the event sidelines, the African Development Bank Group hosted an event focused on Africa’s economic outlook and debt sustainability. It was attended by over 80 participants from the private sector, think tanks, academia, and government representatives.