Africa’s Regional Bodies Commit to Filling Infrastructure Financing Gap
In a meeting held on 19 July 2013 in Tunis, Tunisia heads of key African economic and development institutions committed to working towards filling Africa’s infrastructure financing gap. African Union Commission (AUC) Chairperson, Nkosazana Dlamini- Zuma, United Nations Economic Commission for Africa (ECA) Executive Secretary, Carlos Lopes, and African Development Bank (AfDB) Group President, Donald Kaberuka, along with heads of other regional economic communities attended the meeting. The one-day gathering discussed mainly innovative ways of financing infrastructure for Africa’s development.
Setting the stage in his opening remarks, President Kaberuka underscored the critical role of infrastructure in Africa’s development. “The one thing which can really slow down the recent performance in its tracks is infrastructure. No country in the world has been able to maintain 7% GPD growth and above (sustainably) unless the infrastructure bottleneck is overcome,” he said.
“We are today, all sources combined, hardly able to put together 45 billion dollars a year, leaving an annual gap of similar volume. We are all doing different things in our respective regions with new initiatives and funds being created, but let us face it: there is limited additionally and no critical mass,” Kaberuka added.
Taking a pragmatic approach, AfDB President said that Africa’s regional economic entities, as well as development institutions should go beyond reflection on scenarios for financing infrastructure. They should outline how it will be financed. “That is the idea of the Africa 50 vehicle. I first mentioned this idea at the SADCC Summit in Maputo,” he said.
For Kaberuka, the Bank is ready to accompany African countries’ development efforts with this new vehicle. “It will be a vehicle which can build on the AfDB track record and financial strength as investor, financial engineer, attract local and international pools of savings, utilize smart aid and leverage that to up our funding of infrastructure. It will be a strongly rated instrument able to issue a bond of significance – a bond attractive to investors.”
Kaberuka concluded his intervention by underlying the AfDB’s commitment: “The African Development Bank, given its experience and mandate, will play a lead role but this is our collective instrument.”
The Tunis meeting was an opportunity to further strengthen partnerships among regional institutions and pave the road for a sustainable development for the next 50 years.
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