2023-10-26 22:06:00
How to mobilize private capital towards Africa? Too few are, particularly in the fight once morest climate change. According to IMF calculations, with the objective of carbon neutrality in 2050, the effort made by the private sector in development economies must double. Concerning infrastructure, there is a shortage of 108 billion dollars each year according to the African Development Bank. On the continent, the private sector is sometimes too cautious to invest.
The private sector must be at the heart of development financing. Everyone seems to agree on this point. Except it doesn’t live up to expectations. Between pandemic, wars, and coups d’état, too much uncertainty or even too much political instability can explain these shortcomings, according to Maktar Diop, president of the International Finance Corporation (IFC), the World Bank’s organization for the private sector .
« This is one of the rare times in African history where you can cross Africa from the west coast to the east coast only passing through countries that are ruled by military regimes. », he notes.
For 2023, Maktar Diop boasts of a 30% increase in IFC’s commitments with companies. Its objective: to make investments less risky by improving guarantee instruments and relying on local banks.
« How to help banks? First to have this connection with the demand. Sometimes they don’t have the appetite for risk, they don’t have the expertise to study this, so we are in the process of putting [en place] “risk sharing” instruments and we signed one of these initiatives with Moroccan banks », he adds.
Call on public development banks
The reform of the global financial architecture initiated this year should make it possible to free up investments. To keep the building going, institutions such as the European Investment Bank (EIB) finance, among other things, electrification projects in Madagascar.
« One way to finance more projects is to use public development banks like the EIB to bring in more private investment. », underlines its vice-president Ambroise Fayolle. “ If with one euro of public money, you manage to have 10 euros of investments, while you might finance two euros of public investment, you have in total done for the cause of the environment in Africa. »
The other project pointed out by private investors is the slowness of the files, as explained by Orso Vesperini, deputy general manager of the French group NGE, specializing in infrastructure works.
« All the investments that are voted for and granted to Africa are not used for the sake of time needed to process the files. “, tell Orso Vesperini. “ We actually have water tower files – I won’t tell you where – on which we have already been working for three years, where we had favorable agreements, but which ultimately did not see the light of day. »
A time for examining cases that is incompatible with the needs of Africa, according to him.
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