African Association of Development Finance Institutions (AADFI), are currently pushing for diverse ways of improving their financial strength in order to close infrastructure gaps, as well as boosting intra-African Trade.
Following a meeting on Wednesday in Abuja, hosted by Nigeria’s Bank of Industry (BoI), Dumisani Msibi, the Southern African representative, said development finance institutions in Africa are looking at funding patterns beyond what various governments offer to address infrastructure concerns, which is key in driving intra-African trade.
”What becomes immediate and clear is that our regional Development Finance Institutions (DFIs), have taken it upon themselves to facilitate Trade by ensuring that we first had proper infrastructure, which is key in driving intra-African Trade,” Dumisani said.
Speaking further on how African DFIs could co-finance a project that has socio-economic benefit, he said, “If there is a railway line that cuts across countries, AAFI we make a presentation on how these different countries are going to collaborate to make it feasible for trade to take place, while also providing solutions.”
On localisation of investment of pension assets by DFIs, he noted that it was part of ongoing discussions that touch also on investing on pension assets without necessarily taking it outside national economic boundaries.
It is estimated that about $48bn is required per annum as an addition to what is currently estimated as having been spent ($45bn) on infrastructure in Africa. It is also estimated that Africa needs $315-$400bn of agricultural investments over the next 10 years, equivalent to roughly $40bn per year, requiring innovative financing to close the funding gap.
In his remarks, Olukayode Pitan, the Managing Director of BoI said the Bank would take advantage of several credit lines being offered by several African countries to improve its assets,while improving its support for Small and Medium Scale Industries.
“The BoI will leverage on opportunities from this kind of meeting,and I make bold to say that I have had colleagues who had approached me to say,bank of industry,it is time to explore the advantage of this line of credits,” Pitan said.
Some of the benefits to member countries of AADFI include: Benefits from AADFI assistance for lines of credit from development partners;participate in the association’s meetings, symposiums, workshops,and related activities.
Joseph Amaihere, the Secretary General of AADFI said DFIs have catalytic responsibility to mobilise and direct resources to growth sectors and development projects,helping to reduce infrastructure and energy gaps, financial MSMEs and industrialisation,which are pivotal to development.
