Remarks made by CEO of the African Union Development Agency-NEPAD, Ms Nardos Bekele Thomas during the session on Mobilizing Capital for Smart Infrastructure and Deeper Integration. 

Date: 25th May 2023

Venue: Sharm El Sheikh International Conference Center, Egypt

 

My Dear Brother, President Adesina of the African Development Bank (AfDB),

Distinguished Colleagues,

Excellencies, Ladies and Gentlemen,

Good morning

I extend my gratitude to the AfDB for initiating this valuable platform that brings together Regional Economic Communities (RECs) and African Union Institutions to address Africa's development challenges and seek solutions. The bank's pivotal role as the continent's leading development financing institution is commendable.

Let me begin by emphasizing the distinctive nature of the Dakar Financing Summit for Infrastructure, highlighting its key aspects:

PIDA, the Programme for Infrastructure Development in Africa, embodies Africa's vision for physical integration and connectivity across its five regions. It serves as the backbone for intra-African trade, fosters a conducive environment for robust private sector development, and aims to create shared prosperity for all.

PIDA's primary objective is to address the pressing needs of the African population. It aims to provide affordable and reliable access to electricity for the 640 million Africans who currently lack it, clean drinking water for the 418 million people in need, and significantly reduce logistical costs while enhancing efficiency in industries.

To realize this vision, an investment of US$161 billion is required. While this amount may seem substantial given the global financing challenges, we perceive it as a significant investment opportunity for the private sector in Africa and around the world.

Outcomes of the 2nd Dakar Financing Summit

The Summit was designed with a clear purpose - to create a platform for substantive discussions. By focusing on project-based conversations involving key public, private, and development finance institutions stakeholders, the Summit aimed to foster concrete actions and tangible outcomes.

Among the Summit’s outcomes:

1. 1. The Dakar Financing Summit witnessed an impressive turnout, with over 1,000 participants, including hundreds of CEOs, 25 African Ministers, and Heads of State and Government. This diverse and high-profile participation underscored the summit's significance as a premier gathering for infrastructure development in Africa.
   2. A total of 22 projects from the PIDA Priority Action Plan 2 (PAP 2), with a combined value of $65 billion, were successfully packaged and presented to stakeholders, including investors, multilateral development banks, and private sector entities.
   3. Ten of these projects garnered substantial interest, highlighting their potential for generating returns and positively impacting Africa's infrastructure development.

Recommendations aiming to support the collaboration between the Private and Public Sectors

1. We need to raise US$8 billion in project preparation funding
2. The Summit emphasized the crucial role of ensuring the bankability of projects and, therefore, called upon investors, technical and financial partners, and the private sector to actively support AU Member States in mobilizing the necessary resources.
3. We urged African governments, development finance institutions, and international partners to strengthen their support and financial commitments towards infrastructure project preparation, particularly through the AUDA-NEPAD Infrastructure Project Preparation Facility (IPPF) and the PIDA Service Delivery Mechanism (SDM). We can effectively boost project preparation activities by enhancing financial resources and consolidating services through these established mechanisms.
4. This will significantly improve the bankability of infrastructure projects throughout the continent, expedite their implementation, and ultimately drive sustainable development and economic growth.

 

2. We call on Member States to fortify risk mitigation systems in close coordination with the AUDA-NEPAD and the RECs

Close coordination among Member States, AUDA-NEPAD, and RECs is essential to fortify risk mitigation systems. This will create an environment that instils confidence in investors and facilitate the smooth implementation of infrastructure projects.

Robust risk assessment and allocation mechanisms are crucial to foster favourable conditions for collaboration, streamlining regulatory processes, enhancing transparency, and promoting fair and predictable investment conditions.

 

3. It is imperative to diversify funding sources, even within the framework of Public-Private Partnerships (PPPs)

Exploring a broader range of financing options is essential to support infrastructure projects across Africa. Diversifying funding sources reduces dependence on a single channel and taps into a wider pool of resources, enhancing the sustainability and resilience of infrastructure investments.

Prioritizing diversification in funding sources and supporting initiatives like the Alliance for Green Infrastructure in Africa (AGIA) will mobilize the necessary resources for infrastructure projects, aligning with Africa's commitment to environmentally responsible and climate-friendly development.

This will contribute to the continent's long-term sustainability and promote a greener, more inclusive future for all Africans.

 

4. We must forge closer collaboration among stakeholders and enhance synergies of action

Increased collaboration among stakeholders is vital to maximize the impact of infrastructure investments across Africa. Strengthening the collaboration between the AfDB, AUDA-NEPAD and other key players through platforms like the African Investment Forum unlocks new avenues of investment, drives economic growth, and fosters sustainable development.

Platforms like the African Investment Forum facilitate dialogue, showcase investment opportunities, forge strategic partnerships, exchange knowledge, and leverage networks to mobilize investment for PIDA projects.

 

Conclusion

In conclusion, I want to emphasize the urgent call to Africa's technical and financial partners, development finance institutions, guarantee funds, and the banking and financial sectors to establish close collaboration with regional and continental institutions. This collaboration is crucial to achieving synergy and coherence among the various infrastructure financing mechanisms at both national and regional levels.

By streamlining and aligning our efforts, we can optimize the impact of infrastructure investments, avoid duplication of efforts, and capitalize on the expertise and resources available across different institutions.

Through these concerted efforts, we can unlock the full potential of Africa's infrastructure development, driving economic growth, job creation, and improved livelihoods for the continent's people.

Our collective efforts can and will position Africa on a trajectory of accelerated infrastructure development, paving the way for sustainable economic growth, improved connectivity, and enhanced quality of life for its people.

I thank you.