AfDB seeks recapitalization to close infrastructural gap in Africa
Adnan Adams Mohammed
Dr Akinwumi A. Adesina, President of the African Development Bank has called on member countries to increase the General Capital Increase of the Bank and help replenish the African Development Fund.
Supporting this call, Mr Ken Ofori-Atta said the move is in the right direction. According to him, the time has come for Africa to build its own Development Bank.
The call for building up and increasing the AfDB funds is to help increase the financial capacity of the Bank and address the numerous lingering infrastructure and social developmental needs of the continent. It is said that, poor infrastructure is understood to cut-off up to two percent (2%) of Africa’s average per capita growth rates.
New estimates show that, the continent’s infrastructure needs an amount between US$130 to 170 billion a year, with a financing gap in the range of US$68 to 108 billion.
“Africa’s unique potential in terms of demographic and institutional changes requires of us to address this issue with urgency.” Mr Ofori-Atta said at the AfDB’s 54th Annual Meetings in Malabo, Equatorial Guinea, adding that, while Africa is not unique in its infrastructure investment gap, given that there is a global need for US$3.7 trillion in infrastructure investment each year, with only US$2.7 trillion of which is invested.
Ghana’s Finance Minister, who is a governor to the AfDB has therefore urged African states to spare no effort at growing the African Development Bank (AfDB) as the largest provider of capital to the continent.
Ofori-Atta believes that, confronting the structural and institutional networks challenges on the continent, which are at the core of integration efforts, is an urgent one.
Ghana is already scaling up and offering infrastructure development a big-push.
The efforts toward constructing the ‘Central Spine’ railway that runs from the port cities of Accra, Tema and Takoradi through the heart land of Ghana to the borders of Burkina Faso is illustrative of commitments in this direction.
In spite of the scope of some projects which are so costly that national balance sheets alone may not make them viable, from that perspective, supporting the institution of both regional and sub-regional risk sharing schemes that leverage financing for infrastructure would be essential.
“This could unlock significant flows of over US$40 trillion of private capital from the rich countries for infrastructure improvements on the continent,” he said.
“Achieving this would be a key breakthrough for infrastructural and institutional integration that supports transformation for wealth creation across the continent.
“In previous meetings, I proposed, among other things, the need to consider the recapitalization of our Bank in order for it to play these key roles that meet the aspiration of all members and partners. Today, I urge member states to redouble their efforts to pay-up and to support strongly the Bank in its current drive to increase its capital even as we encourage non-regionals to strongly support us. Ghana is committed to putting AfDB on the path to be the largest provider of capital on the continent. An Africa Beyond Aid cannot be achieved if we do not bring the full brunt of our history and legacy of resilience to bear on this most crucial continental need,” he reiterated.