By Semafor Africa
Photos: Wikimedia Commons
African policymakers and bankers are exploring ways to unlock trillions of dollars tied up in the continent’s institutional funds to build infrastructure.
The topic was a recurring talking point during this week’s Africa CEO Forum in Abidjan, amid growing uncertainty around international investment caused by erratic US trade policies.
In areas such as infrastructure, Africa is estimated to have a $100 billion-a-year funding gap. Analysts say one way to bridge that shortfall would be to unlock a larger portion of African institutional investments — such as pension funds — which have been concentrated in more conservative assets such as fixed income and treasury bills.
“There is about $4 trillion in Africa, mostly in banks, pension funds and foreign reserves,” Samaila Zubairu, CEO of the Africa Finance Corporation, a Lagos-based multilateral lender, told Semafor, citing research by his institution. “The issue is, how we get it to flow into projects.” He said AFC, which specializes in infrastructure development, is in talks with authorities in Angola, Botswana, and Kenya to replicate InfraCredit, a Nigerian credit institution that supports pension fund investments by providing guarantees on local currency debt.
