The World Bank Group and the African Center for Economic Transformation (ACET) on Wednesday launched a two-day forum, bringing together public and private sector leaders from around the world to explore innovative approaches to radically increase private sector investment in Africa’s priority sectors.
Kicking off the proceedings, President Nana Addo Dankwa Akufo-Addo, told the more than 300 participants about the steps his country is taking to boost private investment to create jobs and raise standards of living for all by transforming the fundamentals of Ghana’s economy.
The President’s remarks came at the third annual Development Finance Forum—an event that brings together the public and private sectors to discuss ideas, initiatives and partnerships that can help unlock the potential of the world’s poorest countries.
The forum, co-hosted by ACET—a Ghanaian think tank focused on addressing the policy and institutional barriers that hamper sustained economic growth in Africa—aims to identify constraints to developing a vibrant private sector and opportunities for attracting investments that can make a positive impact on people’s lives.
“Large sums of capital in the developed world are seeking higher returns yet only a small fraction of it is channeled to meet the major demand for investments in the least-developed countries,” said Joaquim Levy, World Bank Group Managing Director and CFO. “By blending public and private resources to de-risk investments, World Bank Group initiatives can help broaden the private sector’s ability to invest in these countries, creating markets and making them sustainable afterwards.”
The forum aims to contribute to the development of a pipeline of projects and programs by offering a pre-investment platform for the public and private sectors to explore market-building alliances and opportunities. This year’s event focuses on critical sectors for Africa, including infrastructure, agribusiness, manufacturing, and technology.
“We are delighted to organize this year’s Development Finance Forum in Ghana,” said Axel van Trotsenburg, World Bank Group Vice President of Development Finance. “We believe strongly that there are excellent investment opportunities to be undertaken together with the private sector to advance the development agenda. We are eager to work with the African and international private sector. Equally important is our partnership with governments to ensure that the business climate encourages investments that create jobs and opportunities for the people of Ghana and beyond.”
In the past year, several initiatives have been developed to crowd-in private finance for development and contribute to achieving the ambition of the 2030 Agenda and the Addis Ababa Action Agenda. In December 2016, the World Bank Group’s International Development Association (IDA) completed a record $75 billion replenishment, a pivotal step in the movement to end extreme poverty. $45 billion of this is targeted to Africa.
A groundbreaking new initiative under IDA18 is the new $2.5 billion Private Sector Window (PSW)—a joint initiative of IDA, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA)—to mobilize private sector investments with strong development impact in the most challenging areas: those countries eligible for IDA support and post-conflict environments
“The IDA Private Sector Window gives IFC another tool in our toolbox in situations when commercial solutions are not yet possible and where none of our other financial instruments are sufficient to address the constraints faced by the private sector.
This will enable IFC’s own investment in IDA and post-conflict countries to crowd in other investors where it was not possible in the past,” said Nena Stoiljkovic, IFC’s Vice President for Blended Finance and Partnerships. “Combined with policy and regulatory reforms that governments are doing, with the support of the World Bank and others, and IFC’s advisory offering to companies we can create markets where they are needed most.”
Over the past decade, IDA, IFC, and MIGA have together supported more than $100 billion in private sector investment in IDA countries to create an enabling environment, make complementary investments, provide guarantees, and directly invest in the private sector.
“The Private Sector Window helps us extend our guarantees to investors in more countries across a wider range of sectors,” said Karin Finkelston, Vice President and Chief Operating Officer at the Multilateral Investment Guarantee Agency. “The outcome will be more private capital flowing to Sub-Saharan Africa, and ultimately, more opportunities and greater development impact.”
The Development Finance Forum in Ghana is one of three events taking place in West Africa to explore the World Bank Group’s instruments to unlock opportunities for private sector investment. Two other sessions took place on May 29 in Freetown, Sierra Leone, and Abidjan, Cote d’Ivoire.