ICA: Greater Commitment to Infrastructure Investment in Africa
11/03/2009
The world economic crisis is hitting investment in infrastructure in Africa, and $8 billion are still required to reach the requisite $20 billion per annum, so efforts to come up with additional capital, in the private sector in particular, have to be stepped up. Such were the conclusions reached by the Infrastructure Consortium for Africa (ICA), of which the Italian G8 Presidency hosted a meeting at the Farnesina yesterday and today. The ICA, a partnership between the G8 countries, the African Union and the African Development Bank, was launched in 2005 under the British duty presidency and sets out to help Africa make up lost ground in infrastructure terms.
Italian Foreign Affairs Under Secretary Vincenzo Scotti gave the opening address, confirming that development in Africa was one of the Italian G8 Presidency’s priorities and announcing that Italy would be proposing the introduction of financial risk-reduction mechanisms at the summit on La Maddalena with a view to boosting private-sector investment. Scotti went on to explain that stepping up infrastructure investment was a priority not only in terms of offsetting the impact of the crisis by helping create jobs and new development opportunities, but also with a view to giving the African continent a firmer foothold in the global economy over the longer term. Investment in new infrastructure could not be an end in itself, but had to meet a real need and form part of a broader strategy of promoting economic growth and sustainable development,
“We must not underrate the impact of the economic crisis on infrastructure investment in Africa,” ICA Coordinator Alex Rugamba said, pointing out that the foundations had to be laid to enable Africa to benefit from recovery once the world crisis was over. So every effort had to be made to attract greater funding, he added. African Development Bank Vice President Mandala Gantsho stressed the positive outcome of the meeting, citing the fact that the African Union’s previous summit had drawn up a “clear-cut strategy” for infrastructure development on the continent.
Under Secretary Scotti expressed the view that the solution to Africa’s infrastructure problem lay in making more selective use of public aid and turning more systematically to the market, public and private sector partnerships and private funding. To that end, the Italian Government had offered the African Development Bank a pilot risk assessment scheme to help answer the bankability problem (in other words, difficulty of access to credit) and facilitate capital mobilisation in the private sector. The initiative had been welcomed by the ICA and would be brought to the attention of the Group of Eight at its July meeting on La Maddalena.
