Leading global financial institutions say they are committed to investing US$80 billion in Africa over the next five years in support of Covid-19 response and growth.
These include G7 Development Finance Institutions, the International Finance Corporation, a member of the World Bank, the European Bank for Reconstruction and Development, the European Investment Bank as well as the African Development Bank.
In separate statements, the institutions said the Covid-19 pandemic has caused severe global economic and health crisis and the investments would support long-term development objectives of African economies negatively impacted by the crisis.
The International Monetary Fund (IMF) estimates that the sub-Saharan Africa needs additional financing of around US$425 billion between now and 2025 to help strengthen the pandemic response spending and reduce poverty in the region.
It is the first time the G7 DFIs have come together to make a collective partnership commitment to the African continent. The G7 or group of seven) is an organisation of the world’s seven largest so-called advanced economies.
They are Canada, France, Germany, Italy, Japan, the UK and the United States of America.
The UK Minister for Africa James Duddridge, said: “The UK is proud to back this commitment by world leaders at the G7 Summit to invest more than $80 billion in Africa’s private sector over the next five years.
This investment will create jobs, boost economic growth, help tackle climate change and fight poverty.
“It comes at a crucial time as the continent rebuilds its economies, severely impacted by Covid-19.”
Chief executive of CDC Group Nick O’Donohoe said “the patient, high quality capital that DFIs provide” is urgently needed if African economies were to start to rebuild quickly from the impact of the pandemic. He said CDC was committed to build long term investment partnerships in Africa that fuel sustainable private sector growth.
CDC, owned by the UK government loaned Zimbabwean private companies through Standard Chartered US$100 million in 2018, the first commercial loan in two decades.
President of the European Investment Bank Dr Werner Hoyer said the EIB welcomed G7 leadership to enhance support for high-impact investment across Africa during and after the pandemic.
“Last year the EU Bank’s engagement in Africa, as part of Team Europe, represented the largest ever support for climate action and investment in fragile states in 55 years of EIB operations on the continent.
“We stand ready to cooperate further with African and multilateral partners to tackle both Covid-19 pandemic and accelerate the green transition in Africa,” said Dr Hoyer.
IFC managing director Makhtar Diop, said ensuring an inclusive and sustainable recovery for people, businesses and economies across Africa in coordination with development partners was at the core of IFC’s development mandate.
“We know that the private sector will play a major role in financing Africa’s future by creating millions of jobs that are essential to ensuring sustained economic growth and poverty reduction. We therefore welcome this important partnership and are proud to provide financing and to work with partners to help create the right conditions to bring more private investment to Africa,” said Mr Diop.