THE African Finance Corporation (AFC) said it is accelerating efforts to mobilise the continent’s own money for investments, and tapping investors in the Middle East and Asia, as developing nations grapple with seismic shifts in geopolitics and funding flows.
Samaila Zubairu, chief executive of the AFC , a development finance institution owned by Nigeria’s central bank and other African financial institutions, said in an interview the lender is ready to weather a world in which the United States and Europe cut financial aid and turn increasingly inward.
“The only thing we want is to get domestic capital more available for investment within the continent,” Zubairu said.
“We would accelerate our initiatives to mobilize domestic capital from African pension funds, African institutional investors, to invest domestically,” he said, adding that in the long term, some $15-$20 billion could come from domestic pension funds.
U.S. President Donald Trump’s America First agenda, and cuts in U.S. aid money, could drain billions from projects in Africa. European countries are also slashing aid funding, with Britain redirecting much of it to boost defence spending.
Zubairu said the AFC, which deploys $2.5-$3 billion each year, would scale up fund allocation “prudently” by choosing projects other backers could pile into.
It launched the pilot project InfraCredit to support pension fund investments in much-needed infrastructure projects, with
oil-rich Nigeria’s sovereign wealth fund providing guarantees on local currency debt.
The project has mobilised some 230 billion naira ($152 million), including investments from 21 pension funds, which previously invested almost exclusively in government debt.
Zubairu said he expects to launch similar programmes as early as this year in Botswana, Angola and Kenya.
“This is the kind of programme that we think needs to be replicated at scale,” he said. “If we do programmes like this, then you see a lot more billions available for investment.”
Pension funds had also placed money in the Infrastructure Climate Resilience Fund, boosting a $52 million commitment from the European Investment Bank, he said.
Investors from the Gulf and Europe are also looking to place money in other AFC projects, such as ARISE Integrated Industrial Platforms which designs and finances industrial projects.
(Reuters)
