African Finance Corporation Summit 2014: the infrastructure divide
The Africa Finance Corporation (AFC) held its inaugural Investment Summit in Lagos, Nigeria on the 25th March 2014. The theme of the summit was ‘Bridging the Infrastructure Investment Divide,’ the summit attracted more than 500 business leaders from across the continent, and featured several significant actors in the infrastructure development sector.
The threat posed to continent-wide sustained high levels of economic growth, posed by critical infrastructure shortfalls was central to the summit agenda. According to Jim O’Neill, a speaker at the summit, Africa’s infrastructural divide is “both a defining challenge and a standout investment opportunity.” O’Neill is an internationally renowned economist and former Chairman of Goldman Sachs Asset Management, who is credited with coining the BRICS and MINT acronyms.
He further stressed that “Africa’s future depends on the policy makers doing the right thing.” The World Bank estimates Africa’s infrastructure deficit at US$38 billion of investment per year, with a further US$37 billion per year required in operations and maintenance. This represents approximately 12 percent of Africa’s current continent-wide GDP.
Bridging the Infrastructure Investment divide
Overcoming that infrastructure shortfall requires significant local, regional, and international investment. A specific example raised was that of Nigeria itself. O’Neill has previously suggested that Nigeria could become one of the next global economic powerhouses, but has noted that that ambition is seriously threatened by insufficient infrastructure development.
Professor Tamuno Preye Jones, a representative of Nigeria’s President Goodluck Jonathan, emphasized the ongoing efforts by the Nigerian government to overhaul the country’s power sector, as an example of that country’s commitment to achieving infrastructural development in order to sustain economic growth rates. The Summit brought together African politicians, business leaders and academics for a series of panel discussions.
Speakers listed included the aforementioned Jim O’Neill, as well as:
- Dr. Ngozi Okonjo-Iweala, Coordinating Minister of Finance and Economy, Nigeria;
- Prof. Chinedu Nebo, Minister of Power, Nigeria;
- Hon. Patrick Achi, Minister of Economic Infrastructure, Cote d’Ivoire;
- Hon. Cristina Duarte, Minister of Finance, Cape Verde;
- Mr Jim Yong Cai, Executive Vice President and CEO, International Finance Corporation;
- Mr Tony Elumelu, Chairman Heirs Holdings;
- Ms. Diana Layfield, CEO Africa, Standard Chartered Bank
- Dr. Nkosana Moyo, Mandela Institute for Development Studies;
- Ms. Funke Opeke, CEO, Main One;
- Ashish Thakkar, CEO, Mara Group.
Africa’s infrastructural divide – and deficit
The Summit was described as a must-attend event for audiences interested in Africa’s infrastructure challenges – and was specifically geared toward the discussion of means and methods available to alleviating the African infrastructure shortfall. The general consensus was that the various governments of African countries need to take the lead in terms of investment and providing the political impetus.
However, accessing and facilitation of international capital was also a serious matter of discussion. Key sessions at the Summit included ‘Building the New Africa “action plan for the next decade” – with panels dedicated to examining aspects of power, transport, and natural resources sectors.
The Chairman of Africa Finance Corporation, Bayo Ogunlesi noted prior to the summit that it was “a key opportunity to for a broad range of stakeholders, from national governments to the indigenous and international private sector and donor partners, to contribute to the development of constructive solutions to the deficit in infrastructure investment in Africa which continues to hold back economic growth on the continent.”
Sustainable economic growth
In this regard, Ogunlesi emphasised the AFC’s commitment to the role of catalyst for infrastructure development in Africa, “by focusing on investments in the sectors that are critical to economic growth on the continent and attracting new investment partners and country members.”
Commenting on the Summit, O’Neill expressed delight at being a party to a gathering of the most important figures in the region, in terms of addressing the infrastructure shortfall. O’Neill highlighted the role played by the AFC in brokering discussion amongst key figures relating to infrastructure development and investment. The AFC is also directly involved with financing and advising several significant infrastructure projects across the continent.
The Africa Finance Corporation is an African-led multilateral development financial institution which seeks to improve African economies by actively developing and financing infrastructure. Established in 2007, the AFC is a private sector-led investment bank and development finance institution. It was created to help mobilize and channel required capital towards driving Africa’s economic development.
Infrastructure development and investment
In order to assist African economies achieve their full developmental potentials, the AFC has so far committed over US$1.91 billion in investments, and is looking to invest an additional $10 billion in capital over the next few years. It is worth noting that AFC’s operational guidelines call for it to address Africa’s development needs in a profitable way, by creating benefits for both societies in the region, and investors.
The 2014 AFC Investment Summit was a significant success in terms of bringing together some of the most influential and significant people, in terms of infrastructure development in Africa – something the AFC will seek to build on in future iterations.
Benefits of these investments are key to Africa’s development and should have positive impact on the common African man/woman. What are your expectations? Please leave us your comments as we’ll like to read from you.
For more information:
- Oluwatoyin Olatunji, ‘Africa’s business leaders discuss the continent’s infrastructural challenges at the African Finance Corporation Summit 2014’, Celebrating Progress Africa, 27 March 2014. Available at: http://www.cp-africa.com/2014/03/27/africas-business-leaders-discuss-continents-infrastructural-challenges-african-finance-corporation-summit-2014/
- ‘Africa Finance Corporation(AFC)Hosts Inaugural Summit to Address the Scale of Africas Infrastructure Requirements and Investment Deficit’, MENAFN Press, 11 March 2014. Available at: https://www.menafn.com/1093784539/Africa-Finance-Corporation–AFC–Hosts-Inaugural-Summit-to-Address-the-Scale-of-Africas-Infrastructure-Requirements-and-Investment-Deficit