Apart from infrastructure deficiency in Africa, there are other equally critical factors keeping investment away from Africa.
For instance, beyond infrastructure, investors considering investing in Africa always ask a very critical question which is: where are the bankable projects? It’s not enough to sing about the huge investment potential Africa has. If there are no bankable projects through which investors can invest in these potential, then, the investment advocacy is useless.
Also, investors ask: do we have robust capital markets that can facilitate domestic capital formation for investment? This means that stabilizing our capital markets are essential to attracting the right volume of investments into Africa.
Again, investors always ask: how do we manage the project, political, financial and market risks associated with investments in Africa? Therefore a key component of any investment attraction campaign must be to provide, through development finance institutions, partial risk guarantees and partial credit guarantees that derisk investments coming into the continent.
When investors are sure that their investments are protected in the event that governments or other private sector players default in their obligations to them, they will feel more comfortable bringing quantum investments into the continent.
Thus, if we provide a constant pipeline of bankable projects, strengthen our capital markets and provide derisking instruments for investments that land on the continent, we will have high quality investments streaming into Africa.
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A strong proof of this concept is the 1st Africa Investment Forum (#AIF2018) organized by the African Development Bank on November 6-9, 2018 in Johannesburg, South Africa.
Because of the pipeline of bankable projects prepared by the African Development Bank as well as the derisking instruments put in place by the Bank alongside its partners, in less than 72 hours, Africa was able to attract investment in excess of US$38.7 billion.
Therefore, we must look beyond infrastructure and also address other pertinent investment-related issues if we genuinely want to attract the right volume/quality of investments that would allow Africa grow its GDP at double digits, and lift millions of its people out of poverty into wealth.
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