Kenya’ President Uhuru Kenyatta has urged for the support of bankable projects in energy, transport, ICT, water and sanitation underlining that it provides unprecedented opportunities for private sector participation.
Kenyatta said this while delivering his keynote address at the Africa50 General Shareholders Meeting held in Nairobi.
“The private sector must step up and help us close the infrastructure gap on the African continent. Public funding is limited, and there are competing priorities,” he said.
Kenyatta announced Kenya would double its current shareholding investment in Africa50 to $100 million. “We must have the confidence to trust and invest in our own infrastructure. Let us grow our partnership and make Africa50 a success.”
Met with President of the African Development Bank @akin_adesina at State House. I thank the @afdb_group for recognizing Kenya’s infrastructure development milestones. #Big4Agenda pic.twitter.com/BzaEe2WJCG
— Uhuru Kenyatta (@UKenyatta) July 20, 2018
According to statistics provided by the African Development Bank (AfDB) the continent’s infrastructure funding requirements stand at close to $170 billion a year, leaving a financing gap of between $68 billion to $108 billion.
The bank’s President and Chairman of Africa50, Akinwumi Adesina, said, “We need to act with speed and urgency. Our people expect nothing else.”
He emphasised the importance of tackling factors that inhibit private sector infrastructure investments, including high costs of financing, weak regulations, lack of cost reflective tariffs, low profitability, and weak regulatory frameworks for public-private partnerships.
Private sector infrastructure financing
Private sector infrastructure financing in Africa remains low, averaging $6 billion per year. In 2016, the figure dipped to $2.6 billion. Read more: Kenya highlights path to scaling private power grids
Adesina said Africa requires new models of financing infrastructure. “We must work smart to attract greater levels of investment financing for infrastructure development in Africa. Globally, there is approximately a $120 trillion pool of savings and private equity. Africa must creatively attract some of this into the continent,” he said.
In response to Africa’s infrastructure finance deficit, the AfDB has launched the Africa Investment Forum (AIF) set to take place in South Africa in November 2018.
The transaction-based forum is expected to be a gathering of global pension funds, sovereign wealth funds and institutional investors, and key private sector players.
Adesina commended President Kenyatta for the country’s bold commitment to, and investments in, infrastructure development over the last five years.
Infrastructure accounts for 77% of the Bank’s Kenya portfolio.
“Mr President, you were one of the first African leaders to support the creation of Africa50, which I am honored to chair,” said Adesina. “Africa50 will be a game changer on infrastructure financing.”
He called on countries that have not yet become shareholders of Africa50 to come on board. Africa50 currently has a shareholding base of 25 African states.