G7 devt. finance institutions, others to invest $80bn into African businesses

G7 Development Finance Institutions (DFIs)have announced their commitment to invest $ 80 billion in Africa’s private sector over the next five years to support sustainable economic recovery and growth on the continent.

A statement released on Monday by the African Development Bank (AfDB)said that the G7 DFIs had announced with the International Finance Corporation (IFC), the private sector arm of the AfDB, the European Bank for Reconstruction and Development (EBRD), and the European Investment Bank.

This is the first time that G7 DFIs have come together to collectively engage in a partnership with the African continent, the statement said.

Each DFI has its own investment criteria that are aligned with a needs assessment, to achieve development impact across a range of sectors.

DFIs play an important role in helping to create markets, mitigate risk and pave the way for other investors to enter new markets.

The G7 DFI group includes CDC, Proparco (France), the Japan International Cooperation Agency (JICA) and the Japan Bank for International Cooperation, DFC (United States), FinDev Canada, DEG (Germany) and CDP (Italy) .

UK Africa Minister James Duddridge said the UK was proud to support this commitment from world leaders at the G7 summit.

“This investment will create jobs, stimulate economic growth, help fight climate change and fight poverty. This comes at a crucial time as the continent rebuilds its economies, severely affected by COVID-19, ”Duddridge said.

Further, Nick O’Donohoe, group chief executive of Centers for Disease Control and Prevention (CDC), said the patient capital and high-quality DFIs provided were urgently needed if African economies were to rebuild. quickly after 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 United Nations Sustainable Development Goals,” said O’Donohoe.

Werner Hoyer, President of the European Investment Bank (EIB), said the EIB praised the leadership of the G7 to step up support for high impact investments in Africa during and after the pandemic.

“Last year, the EU Bank’s engagement in Africa, through Team Europe, represented the greatest ever support for climate action and investments in fragile states in 55 years of EIB operations on the continent.

“We are ready to cooperate more with African and multilateral partners to fight both COVID-19 and accelerate the green transition in Africa,” Hoyer said.

In addition, Makhtar Diop, Managing Director of IFC, said ensuring an inclusive and sustainable recovery for people, businesses and economies across Africa, in coordination with IFC’s development partners, is at stake. the core of the company’s development mandate.

“We know that the private sector will play a major role in financing Africa’s future by creating millions of jobs essential to ensure sustained economic growth and poverty reduction.

“We, therefore, welcome this important partnership and are proud to provide funding and work with partners to help create the right conditions to attract more private investment to Africa,” said Diop.

Likewise, David Marchick, chief operating officer of the American Corporation for the Financing of International Development (DFC) said investing more in Africa, under President Biden’s leadership, was a top priority for the DFC in accomplishing its development mandate.

“DFC are proud to double their commitment to Africa, alongside our G7 and multilateral partners.

“We will continue to prioritize investments in vaccine manufacturing, COVID-19 response, climate change mitigation and adaptation and gender equity on the African continent,” Marchick said.

Dario Scannapieco, CEO of Cassa Depositi e Prestiti (CDP), said that closer collaboration between DFIs and multilateral partners is a key factor in fostering sustainable economic recovery and growth in Africa.

“CDP looks forward to contributing to this strategic partnership, supporting the African continent in the development of its entrepreneurial and financial private sector, in order to unleash its vast untapped potential,” said Scannapieco.

Further, Solomon Quaynor, AfDB Vice President of Private Sector, Infrastructure and Industrialization, said the bank welcomed the global partnership and the opportunity to make Africa’s voice heard. , while Africa is rebuilding itself better and boldly.

“The possibility of creating jobs, especially for young people and women, with a focus on the industrialization of Africa supported by the African Continental Free Trade Area, will be our priority.

“Given the gap between IMF estimates and the commitments of this partnership, we will seek to attract African development partners.

“As well as African economies from sovereign wealth funds, pensions and insurance pools, estimated at the US $ 1.8 trillion in assets under management,” Quaynor said.

In addition, Heike Harmgart, EBRD Managing Director for the Southern and Eastern Mediterranean, said harnessing the potential of the private sector is critical to supporting prosperity in Africa and meeting its development needs.

“In the North African countries where we work, Egypt, Morocco and Tunisia, we have invested more than 11.5 billion euros in just nine years.

“It will focus on stimulating the private sector, developing green and sustainable infrastructure and promoting the participation of young people and women in the economy.

“We will continue our efforts to expand large-scale private sector investment opportunities in the region, in close cooperation with other development actors,” said Harmgart.

However, Monika Beck, board member of DEG, a German development finance institution, noted that many African partner countries of the institution had been affected by the pandemic.

“We quickly developed new services to support private sector SMEs and help protect jobs and livelihoods.

“In Africa, DEG has always been specifically committed to creating opportunities for the young and growing population. Therefore, DEG welcomes and is proud to be part of the G7 DFI Africa initiative, ”said Beck. (NAA)