President Uhuru Kenyatta announced Kenya would double its current shareholding investment in Africa50 to US$100 Million

Infrastructure Key in Driving Africa’s Growth Agenda

By Irene Gaitirira
Published August 14, 2018

Dr Akinwumi Adesina, President of African Development Bank and winner of World Food Prize 2017.Developing bankable infrastructure projects is not only key in driving Africa’s growth agenda but also provides unprecedented opportunities for private sector participation.

Saying public funding is limited, President Uhuru Kenyatta of Kenya invites to help African governments in closing what he refers to as ‘the infrastructure gap on the African continent’.

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Kenyatta spoke during African Development Bank (AfDB)’s Africa50 General Shareholders Meeting held in Nairobi, President Kenyatta said support for bankable projects in energy, transport, ICT, water and sanitation provide unprecedented opportunities for private sector participation.

President Uhuru Kenyatta announced Kenya would double its current shareholding investment in Africa50 to US$100 MillionAfDB estimates that infrastructure funding requirements on the continent stand at close to US$170 Billion annually, leaving a financing gap of US$68 Billion – US$108 Billion.

Private sector infrastructure financing in Africa, AfDB says, remains low, averaging US$6 Billion per year. In 2016, however, the figure dipped to US$2.6 Billion.

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“The private sector must step up and help us close the infrastructure gap on the African continent,” Kenyatta said, announcing that Kenya would double its current shareholding investment in Africa50 to US$100 Million. “We must have the confidence to trust and invest in our own infrastructure. Let us grow our partnership and make Africa50 a success.”

Alibaba founder and chairman Jack Ma talks to young entrepreneurs and students at the University of Nairobi in the Kenyan capital on July 20, 2017.While stressing the importance of tackling factors that inhibit private sector infrastructure investments, including high costs of financing, weak regulations, lack of cost reflective tariffs, low profitability, and weak regulatory frameworks for public-private partnerships, Akinwumi Adesina, President of AfDB and Chairman of Africa50, said Africa must act with speed and urgency in the provision of bankable infrastructure as “Our people expect nothing less.”

“We must work smart to attract greater levels of investment financing for infrastructure development in Africa,” Dr Adesina said. “Globally, there is approximately a US$120 trillion pool of savings and private equity. Africa must creatively attract some of this into the continent.”

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Consequently, he said, AfDB has launched the Africa Investment Forum (AIF) set to take place in South Africa in November 2018. The transaction-based forum is expected to be a gathering of global pension funds, sovereign wealth funds and institutional investors, and key private sector players.

Tripartite Free Trade Area (TFTA) could see a larger market comprising 26 countries with a combined population of nearly 625 million people and an estimated total Gross Domestic Product (GDP) of approximately US$1.0 Trillion established.Adesina commended President Kenyatta for the country’s bold commitment to and investments in infrastructure development over the last 5 years. Infrastructure accounts for 77% of the Bank’s Kenya portfolio.

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He urged countries that have not yet become shareholders of Africa50 to do so. Africa50 currently has a shareholding base of 25 African states.

Three years after its founding, Africa50 is said to have mobilised more than US$850 Million in infrastructure investments and expects to raise up to US$3 Billion through its private sector window. It is reported to have made major investments in a number of shareholder countries, including Egypt, Nigeria, Senegal and Kenya, among others.

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