President Akufo-Addo calls for risk re-allocation for Africa
President Nana Addo Dankwa Akufo Addo has stressed the need for multilateral development banks to offer Africa nations deals with risk re-allocation to trigger investments and to ensure debt sustainability and growth.
He said because investors made decisions on the basis of their perception of risk and uncertainty, it was important that development finance institutions offered financial instruments like guarantees and insurance, to be deployed to trigger additional investments.
“For example, a $700 million World Bank Group guarantee enabled us to mobilise $7.9 billion of private investment. These are the kind of deals that should happen more often in Africa, as development finance institutions partner with private capital,” he said at the opening of the 2017 World Bank Development Financing Forum in Accra on Wednesday.
“Our actions are only a part of the equation. We need risk re-allocation instruments from the multilateral developments banks. It brings into sharp focus the subject matter of this conference: leveraging development financing and partnerships to attract private capital to finance infrastructure development in mainly developing and distressed countries in line with the new thinking, referred to as “From Billions to Trillions: Transforming Development Finance”.
The two-day event, aimed at unlocking private investment in African markets, is the third in the series of annual events convened by the World Bank group, and the first to be hosted outside Europe. It brings together stakeholders that can change the risk-return landscape in the least developed countries and to explore ideas, initiatives and partnerships to make economies successful.
Commending the World bank group for convening experience and knowledge from across West Africa and beyond at the Forum, President Akufo-Addo said the moves underscored the importance of regional cooperation in the agenda of transformation.
He said: “The failure of one country will negatively affect the success of all. This is why my government applauds the members of the International Development Association, IDA, for a strong replenishment that scales up support to countries in fragility, and invests in private sector through their bold move to establish a $2.5 billion Private Sector Window.
“Through the Window, public finance will be used to catalyse private investments in low-income countries, and, in particular, in economies that are under stress of conflict and fragility. Several of these countries are in this region of West Africa,” he noted.
President Akufo-Addo Stressed the need for synergy between public and private sectors, development finance institutions and multilateral development banks, in order to catalyse additional private finance for development.
“There is one thing that the public and private sectors need to do more of and where we are all equally responsible: to mobilise the good power of finance, we need to cooperate more and we need to cooperate smartly. Amidst all the complexity of the 21st century world, our inter-dependence requires such cooperation.
“This spirit is captured in the adinkra symbol associated with this conference: ‘Boa Me Na Me Mmoa Wo’, representing co-operation and inter-dependence. The public and private sectors need each other, need to understand each other and adapt their strategies in order to contribute to each other’s success. ‘Help me, so I can help you”. That is the literal meaning of the adinkra symbol,” he said.
He called on multilateral development banks such as the World Bank Group to facilitate partnerships and create the platforms that generate ideas and “nurture these to success, just like you will do here in Accra.”
“Building partnerships takes time and commitment, and their rewards often only show after a long time has passed. The World Bank Group, African Development Bank and other multilateral financing institutions can help lower the transactional costs for the public and private sectors to enter into partnerships and alliances. As a shareholder and a client of the World Bank Group, I ask you to continue to invest and improve in that role.”
Source: GNA