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African Development Bank joins other Development Finance Institutions to deepen private investment in fragile states
Representatives of 27 Development Finance Institutions (DFIs) met at the University of Oxford on 11-13 February for a follow-up forum to strengthen private investment inflows into fragile or conflict-affected economies.
The Commission for State Fragility, Growth and Development, a partnership of the World Bank Group’s International Finance Corporation, CDC, the United Kingdom’s DFI and International Growth Centre of the London School of Economics organized the meeting. Participating institutions agreed to cooperate in rolling out pilot interventions in a number of fragile states.
Africa’s premier DFI African Development Bank co-organized the forum, and agreed to lead a pilot intervention in Madagascar going forward. The Bank will also participate in joint implementation of pilot programs in Ethiopia, Democratic Republic of Congo and Sierra Leone. Former Bank president Donald Kaberuka co-chairs the Commission with David Cameron, a former prime minister of the U.K.
One impetus for the meeting is the need to accelerate the implementation of the Sustainable Development Goals of the UN 2030 Agenda for Sustainable Development, which projections indicating that roughly half of the world’s extreme poor will live in fragile states by 2030 (Source: World Bank). The trend underscores the critical importance of fully engaging the private sector in developing solutions that will help improve human lives. DFIs are well-placed to contribute to job creation and economic transformation in fragile environments as well as for youth and women.
Participants at the 2020 meeting discussed developments in pilot programs, launched last year at the inaugural forum, in a number of countries. Other topics included managing the higher risk associated with operating in fragile environments, including the use of de-risking tools; and mechanisms to maximize the impact of donor-supported investment facilitation.
Participating institutions agreed the following:
- Responsible investments in fragile environments are global public goods. Therefore, DFIs are prepared to incur higher operating costs, risks, and capacity demands.
- There is considerable variation among fragile environments and, as a result, different investment approaches are required to address local operating realities.
- We achieve more together. We will strengthen the country pilot programs, by:
- Identifying barriers to private investment at country level and working together with governments and other stakeholders to remove them;
- Fully and fairly collaborating on activities upstream of investments to build the pipeline of project opportunities;
- c. Regularly sharing lessons learned.
- Enhancing collective dialogue with development agencies and shareholders to improve complementarity, manage financial and non-financial risks, and work together on reforms to strengthen the business environment. The DFIs will invite development agencies to participate in the next forum. CDC Group, IFC and the African Development Bank, in partnership with Oxford University and the International Growth Centre, will convene the next forum in 2021 to share learning and assess progress.
Former President of Liberia Ellen Johnson Sirleaf and Mo Ibrahim, Founder and Chair of the Mo Ibrahim Foundation, helped set the stage for the discussions. The governments of the United Kingdom and the Netherlands, as well as investors and businesses operating in fragile economies, also took part.
Olufemi Terry |Communication and External Relations Department | African Development Bank