G7 Development Banks Pledge $80 billion for African businesses

G7 Development Banks Pledge $80 billion for African businesses

African businesses are set to receive a massive boost from top G7 global development partners.

The G7 DFIs, the IFC, the private sector arm of the African Development Bank, EBRD and the European Investment Bank on Monday announced their commitments to investing $80 billion in the private sector over the next five years to support sustainable economic recovery and growth in Africa.

The Covid-19 pandemic has caused a severe global economic and health crisis, including dealing a deadly blow to African businesses.

The announcement is a welcome boost to support the long-term development objectives of African economies that have been negatively impacted by the crisis.

It is the first time the G7 DFIs have come together to make a collective partnership commitment to the African continent.

The IMF estimates that sub-Saharan Africa needs additional financing of around $425 billion between now and 2025 to help strengthen the pandemic response spending and reduce poverty in the region.

The UK Minister for Africa, James Duddridge, said: “The UK is proud to back this commitment by world leaders at the G7 Summit to invest more than $80 billion in Africa’s private sector over the next 5 years.

“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.”

Werner Hoyer, President of the European Investment Bank, said: “The EIB welcomes 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.”

Makhtar Diop, IFC’s Managing Director, said: “Ensuring an inclusive and sustainable recovery for people, businesses and economies across Africa in coordination with our development partners, is at the core of IFC’s development mandate today.

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.”

David Marchick, Chief Operating Officer of U.S. International Development Finance Corporation (DFC), said: “Under President Biden’s leadership, investing more in Africa is a top priority for DFC in fulfilling our development mandate.

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

Solomon Quaynor, African Development Bank VP, Private Sector, Infrastructure & Industrialization said: “We welcome this global partnership and the opportunity to provide the African voice, as Africa builds back better and boldly.

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The opportunity to create jobs particularly for youth and women, from a focus on industrializing 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.”

With the development, African businesses will access a much needed boost for post covid-19 recovery.