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Nigeria, other African nations awaiting $80bn business support from G7

By News Desk

Private business owners across sectors within Nigeria and that of their counterparts in other African nations have been identified as beneficiaries of 80 billion dollars business support fund being expected to be facilitated by G7 Development Finance Institutions (DFIs).

As learnt, the injection of this fund over the next five years in the continent’s private sector, was to boost economies across Africa and ensure a strong rebound from coronavirus economic meltdown to support sustainable recovery and growth in Africa.

Aside from boosting the economies, the fund was also aimed at expanding private sectors capacity in areas of job creation such that would allow unemployed youths across the continents are gainfully employed and contributing meaningfully to Africa’s collective GDP.

Confirming the development on Monday through a statement, the African Development Bank (AfDB), said that the G7 DFIs made the announcement along with the International Finance Corporation (IFC), the private sector arm of the AfDB, the European Bank for Reconstruction and Development (EBRD), and the European Investment Bank.

According to AfDB, it is the first time the G7 DFIs have come together to make a collective partnership commitment to the African continent and each DFI has its own investment criteria which are aligned to an assessment of need, to achieve development impact across a range of sectors.

Explaining further, the AfDB noted that DFIs play an important role in helping to build markets, mitigate risks and pave the way for other investors to enter new markets, adding that the G7 DFI group consists of CDC, Proparco (France), Japan International Cooperation Agency (JICA) and Japan Bank for International Cooperation, DFC (US), FinDev Canada, DEG (Germany) and CDP (Italy).

On his part, The UK Minister for Africa, James Duddridge, said that the UK was proud to back the commitment by world leaders at the G7 Summit.

“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,” Duddridge said.

Also, the Chief Executive Officer, Centres for Disease Control and Prevention (CDC) Group, Nick O’Donohoe, said that the patient, high-quality capital DFIs provided was urgently needed if African economies were to rebuild quickly from the impact of the pandemic.

“CDC is committed to building long term investment partnerships in Africa that fuel sustainable private sector growth in support of the UN’s Sustainable Development Goals,” O’Donohoe said.

In his reaction, President of the European Investment Bank (EIB), Werner Hoyer, said that 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 and accelerate the green transition in Africa,” Hoyer said.

Also, IFC’s Managing Director, Makhtar Diop, said that ensuring an inclusive and sustainable recovery for people, businesses and economies across Africa, in coordination with IFC’s development partners, was at the core of the corporation’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,” Diop said.

Similarly, Chief Operating Officer of U.S. International Development Finance Corporation (DFC), David Marchick, said that investing more in Africa, under President Biden’s leadership, was a top priority for DFC in fulfilling its development mandate.

“DFC is proud to be doubling down on our commitment to Africa, alongside our G7 and multilateral partners. We will continue to prioritise investments in vaccine manufacturing, COVID-19 response, climate mitigation and adaptation, and gender equity on the African continent,” Marchick said.

Chief Executive Officer, Cassa Depositi e Prestiti (CDP), Dario Scannapieco, said that closer collaboration among DFIs and multilateral partners was an essential factor in fostering sustainable economic recovery and growth in Africa.

“CDP looks forward to contributing to this strategic partnership, supporting the African continent in developing its entrepreneurial and financial private sector, to unlock its vast, untapped potential,” Scannapieco said.

Also, Vice President, Private Sector, Infrastructure and Industrialisation (AfDB), Solomon Quaynor, said that the bank welcomed the global partnership and the opportunity to provide the African voice, as Africa builds back better and boldly.

“The opportunity to create jobs, particularly for youth and women, from a focus on industrialising Africa underpinned by the African Continental Free Trade Area, will be our priority. Given the gap between the IMF estimates and what this partnership is committing to, we will seek to crowd-in African development partners. As well as African savings from SWFs, pensions, and insurance pools, estimated to have US$1.8 trillion AUM,” Quaynor said.

Furthermore, EBRD Managing Director, Southern and Eastern Mediterranean, Heike Harmgart, said that harnessing the potential of the private sector was essential in supporting prosperity in Africa and meeting its development needs.

“In the North African countries where we work, Egypt, Morocco and Tunisia, we have invested over 11.5 billion euros in only nine years. It will be focused on boosting the private sector, developing green sustainable infrastructure and promoting youth and women participation in the economy. We will pursue our efforts to expand private sector investment opportunities at scale in the region, in close cooperation with other development actors,” Harmgart said.

However, member of the DEG-Management Board, a German development finance institution, Monika Beck, noted that many of the institution’s African partner countries had been affected by the pandemic.

“We quickly developed new services to support private sector SMEs and to help protect jobs and livelihoods. In Africa, DEG has always been specifically committed to creating prospects for the young, growing population. Therefore DEG welcome and is proud to be part of the G7 DFI Africa initiative,” Beck said.

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