Africa’s outlook is positive, AfDB tells Indian investors, officials

BY: Ben Eguzozie, with agency report

• Sets aside $100m for projects in LICs

African Development Bank (AfDB), Africa’s key development financial institution, in a bid to position the continent for post-pandemic resurgence, has laid groundwork for Indian investors to look towards Africa.

The bank called for Indo-African partnerships to go beyond government-to-government cooperation and promote private sector participation in order to accelerate Africa’s development, noting that Africa’s outlook despite Covid-19 pandemic looks positive, an indication that the continent is investment-receptive.

During a recent virtual conference hosted by the Confederation of Indian Industry (CII) and its partners, on “Innovative Financing Mechanisms for Doing Business

with Africa,” Bajabulile Swazi Tshabalala, acting senior vice president and CFO of the African Development Bank Group, highlighted business potentials in Africa; noting that the continent has great prospects for investors, with a growing consumer market that Indian firms cannot afford to miss.

“The positive outlook for Africa is reinforced by the establishment of the African Continental Free Trade Area (AfCFTA), which seeks to deepen regional integration across the continent and allow the free movement of people and trade across borders,” Tshabalala said.

Africa has 1.307 billion people as at 2019, with a $2.58 trillion GDP and per capita income of $1,790 (2020).

The AfDB acting senior vice president and CFO said there was a tremendous opportunity for Indian industry to work together with the bank in sectors such as: power generation and transmission, energy, agricultural transformation, healthcare and pharmaceuticals, technology, transportation, and industrialization.

The CII conference attracted more than 600 participants from over 45 countries. Besides Africa and India, there were also participants from the Middle East, Europe, and

Asia, representing businesses, governments, financial institutions, and business promotion agencies.

Akhilesh Mishra, India’s additional secretary in the Ministry of External Affairs urged the private sector to consider investing in youth and start-ups, because those sectors have enormous potential for employment generation. He noted that, aside from the long-term funding traditionally provided as official development assistance, African countries will require more targeted short-term financing.

The bank is seeking to expand the number of bankable projects in Africa; and has set aside $100 million for project preparation activities in low-income countries. It is also keen to mobilize greater private sector participation in these projects from all countries, she added.

David Rasquinha, managing director of the Export-Import Bank of India, highlighted the need to expand Indian financial inflows to Africa by expanding the Indian banking network. He said India and Africa could work together in areas such as healthcare and pharmaceuticals, the financial sector and infrastructure development.

Nana Spio-Garbrah, chief financing analyst from the African Development Bank’s syndications, co-financing and client solutions department, spoke on the bank’s capacity to mitigate risk for foreign investors, especially during this era of COVID-19.

Spio-Garbrah also talked about AfDB’s Partial Risk Guarantee (PRG) and Partial Credit Guarantee (PCG), which he said, has been upgraded to meet client needs better. She listed the bank’s syndication services, particularly the A/B loan product, which allows B-lenders to benefit from the bank’s Preferred Creditor Status; the Co-Guarantee Platform – a new cooperative of four risk mitigation providers and the African Union, which collectively pools their capacities to de-risk African projects.

Takashi Hanajiri, head of AfDB’s Asia External Representation Office made a presentation on the partnership between India and the bank, and the bank’s Covid-19 Response Facility. Hanajiri pointed out the huge potential of the Africa Investment Forum; and encouraged Indian partners to participate to find investment opportunities in Africa.