On January 13, 2017, Africa50 CEO Alain Ebobisse was the opening panelist for the plenary panel “Financing in Africa: New Solutions,” at the Africa-France Summit in Mali. He was joined on the panel by Philippe Labonne, CEO of Bolloré Ports, Binta Toure Ndoye, CEO of Oragroup, Antoine Emmanuelli, Managing Director of CDC Capital, Emeke E. Iwereriebor, Executive Director of United Bank for Africa, and Régis Charpentier, CEO of WinWin Africa.
Mr. Ebobisse explained Africa50’s priorities and how this new investment vehicle can attract private capital for infrastructure development in Africa and build up the pipeline of bankable projects. The other panelists brought the perspectives of their companies and sectors to the discussion on how to fill the financing gap in Africa and better balance investment demand and with financial resources.
Panel Context and Introduction
In spite of the exceptional growth in development financing over the last few years, Africa still has problems mobilizing the resources necessary for its growth and transformation. Financing needs are estimated between $600 billion and $1,200 billion by various international organizations. These needs are in all domains—infrastructure ($90 billion), corporate finance ($100 billion), finance for access to energy ($50 billion) etc.
Given insufficient public resources and foreign development assistance, and with low prices for African products and services, sustainable development in Africa is contingent on new financing solutions. These must include finance from inside Africa, as well as private sector finance from outside Africa. The impediments are many, and demand for finance and supply are out of balance. Many institutional investors remain risk averse, although often the risk is overrated and mostly linked to political instability. Moreover, financing is often restricted to silos. African economic actors, such as enterprises and financial institutions, have little access to financial markets, contributing to the weak linkage of these to African economies.
Therefore, financial innovation is all the more important, working through new instruments, new funds, or new economic models capable of creating more bankable projects. New financing mechanisms, such as the Africa50 fund started by the African Development Bank, must complement external sources and new sources from emerging markets to realize the ambitious project of developing Africa.