Business
Ethiopia provides Africa with a blueprint to finance massive infrastruture projects without donor support
The ADB has also jumped on the private equity bandwagon, launching a pan-African facility to support the development of women fund managers. Geraldine Fraser-Moleketi, the bank’s special envoy on gender, told Africa Renewal that the idea is about looking at “innovative policies because current models are not inclusive”. Africa’s approximately one billion population and a combined consumer spending power that will rise to more than US$1.3 trillion by 2020, according to McKinsey, a global management consulting firm, makes the continent a tantalizing prospect for private equity funders.
Pension funds pool money from workers to be paid upon retirement and are particularly useful for long-term investments. During tough financial times, pension funds can be handy to augment infrastructure expenditure, financial experts believe. Africa’s pension funds currently hold US$380 billion in assets, thanks to a decade of economic growth. Very few countries, including South Africa, have pension systems that are broad-based, relatively transparent and protect beneficiary rights.
Growing investments
Despite Africa’s socio-economic challenges, Lopes remains optimistic. “I am also a realist,” he says, identifying three megatrends in Africa’s favor.
– “The first is the demographic one. It is true the rest of the world is ageing and Africa is getting younger.
– The second is the hard commodities in Africa once you take out oil and gas. The third is Africa’s reservoir of productivity through unused arable land.”
Cristina Duarte, Cape Verde’s finance and planning minister, who has announced her candidacy for the ADB’s presidency, says Africa must keep trying to grow investment at home, adding: “How can we convince others to invest in our continent and in our development if we are not doing the same to the full extent of our ability?”
Source: Africa Renewl
