Africa50 CEO Stresses Broad Role of DFIs in Promoting Economic Growth in Africa
On October 13, Africa50 CEO Alain Ebobisse joined David Bohigian, Executive VP of OPIC, Joachim Nagel, Member of the Executive Board of KfW, and Linda Broekhuizem, Chief Investment Officer at FMO, for a panel discussion on the evolving role of DFIs in the world’s changing economy. Co-hosted by CSIS and EDFI, the European association of DFIs, the event celebrated EDFI’s 25th anniversary. Other speakers included Dan Runde of CSIS, Nanno Kleiterp of EDFI, and Martin Wolf of the Financial Times.
Mr. Ebobisse responded to the questions on how DFIs have contributed to economic growth in Africa, and why African heads of state set up Africa50.
He emphasized that Africa50 is not a traditional DFI, but rather an investment fund focused exclusively on infrastructure, and that it is not owned by one country, but by 25 African shareholder countries, as well as the AfDB and two central banks. Harking back to his work in the World Bank Group, as well as with Africa50, he affirmed that DFIs have contributed greatly to economic growth in Africa, but that they have also enhanced other areas. For example: 1) they have increased access to finance and thus helped build viable financial markets; 2) they have engaged in policy debates and have helped improve the regulatory environment; 3) they have set standards for environmental, social and governance practice and helped ingrain the idea of impact investment and corporate social responsibility in the markets where they operate; and 4) they have helped provide access to basic public services such as water, sanitation, energy, transport and communication, particularly through public-private partnerships.
Describing Africa50, Mr. Ebobisse said that it was set up to fill the continuing funding gap for infrastructure in Africa. It is an African DFI, funded by Africans and for the benefit of Africans. While there are many DFIs and IFIs active in financing projects, the AfDB and African heads of state felt that an entity that focuses exclusively on infrastructure and that can bring together the public and private sectors would be effective.
He emphasized that Africa50 can act as a bridge between its public-sector shareholders and private investors to speed up infrastructure development. It provides equity or quasi equity to projects near or beyond financial close, but also builds up the pipeline of viable, bankable infrastructure projects. African heads of state are aware that this has been one of the hurdles holding back infrastructure investments and that a specialized entity such as Africa50 can contribute to overcoming it.
Category: Events