In 2018, the African Development Bank (AfDB), under its president Dr Akinwumi Adesina, founded the African Investment Forum (AIF).
This it did with the African Development Bank, African Export-Import Bank (Afreximbank), European Investment Bank, Development Bank of Southern Africa, Africa Finance Corporation, Islamic Development Bank, Trade and Development Bank, and Africa50 as founding partners.
The historic move was informed by the need for a premier multi-stakeholder and multi-disciplinary transactional platform for accelerating the closure of Africa’s investment gaps and ultimately transform the African continent.
It was also informed by the need to manage perception and change the negative African narratives. This includes reduction of perception risk and branding the Africa market along its strengths, not weaknesses.
The AIF is central to Africa’s quest to emerge from being an aid-seeking continent to a flourishing one, living the dreams of the nationalists who championed the continent’s independence from colonial masters.
True to the founders’ dream, the AIF has continued to power from strength to strength, as its Market Days events clearly show.
The maiden AIF Market Days attracted US$39 billion in investment interests for bankable deals in Africa. It attracted 1,943 participants from 87 countries, including the presidents of South Africa, Nigeria, Ethiopia, Ghana, Cameroun, Senegal, Guinea, and Rwanda.
The second edition in 2019 attracted several Heads of State and recorded 2,291 participants and 57 boardroom deals valued at US$67.7 billion.
To President of South Africa Cyril Ramaphosa, the AIF is “a significant milestone in our quest to reshape the fortunes of the African continent”.
While the world was upbeat about converging in Africa again for the third annual Market Days in November 2020 in Johannesburg, it was put off owing to the COVID-19 pandemic.
Nevertheless, since the AIF is not an event, but indeed a veritable and institutionalised platform for the economic redemption and transformation of Africa through investments, it has continued to facilitate the acceleration of deals towards financial close.
The coronavirus pandemic came upon the world like a thief in the night, and Africa was not left out. Although it is still spared of the worst of the pandemic in terms of infections and deaths, African economies have not been as lucky.
The poorer and smaller nations and those nations that are dependent on a single resource, commodity or sector are worse off.
This has been due mainly to respective domestic and border shutdowns that hit tourism and trade flows hard as well as the collapse of global demand for products like oil.
In the regional economic outlook published by the IMF in June 2020, for instance, the organisation projected that Sub-Saharan African economy would contract by 3.2 percent in 2020 before recovering to a growth of 3.4 percent in 2021. When compared to the global growth recovery estimate of 5.4 percent in 2021 from a deterioration of 2020, the prognosis doesn’t not looking good.
The IMF also projected that the region will not return to a pre-pandemic GDP level until 2022/2023.
Furthermore, according to a May 2020 policy brief published by the International Growth Centre, an additional 9.1 percent of Sub-Saharan Africa populations have already been pushed into extreme poverty by COVID-19, while 3.6 percent of the population, including 3.9 million children under the age of five, are grappling with food deprivation.
Thus, Africa’s economic recovery is not just about resuscitating growth, but equally about helping those that dropped below the poverty line back up again.
The AfDB President brought the reality home in January when he said that the continent’s economies would in two years record a cumulative loss of US$409 billion due to the COVID-19 pandemic with the continent’s GDP estimated to lose US$236 billion in 2021.
“Before the pandemic, six of the 10 fastest growing economies in the world were in Africa. With the pandemic shock, growth plummeted. Africa’s GDP growth declined by 2.1 percent last year, the worst in two decades. As economies went into lockdowns, people’s incomes declined, millions lost their jobs, trade volumes fell, and demand for goods and services declined.
“Cumulative loss to Africa’s GDP is estimated at US$173 to US$236 billion for 2020 and 2021, respectively”, he said.
Amidst the gloom, the AIF gives hope as it continues to show up as the continent’s pathway out of the COVID-19 quagmire.
Not only has it been strategically intervening to ameliorate the socio-economic impact of the pandemic on the continent, it continues to drive strategic investments.
The AfDB announced a whopping US$10 billion COVID-19 response. Out of this, US$5.5 billion is for the bank’s sovereign operations in the AfDB countries, while US$3.1 billion is for operations under the African Development Fund. AfDB launched a US$3 billion COVID-19 social bond of which eight percent is reserved exclusively for African nations. Fifty-three percent goes to the central banks and official institutions, 27 percent goes to Bank treasuries, while 20 percent goes to asset managers.
President of the Bank, Adesina, captured that commitment when he said: “Africa will come out of this pandemic, tough as it is, and will build better and stronger economies. As partners of the Africa Investment Forum, the premier investment platform for Africa, our gaze must be clear: help Africa reboot its economy”.
AIF’s founding partners emphasised the imperatives of boosting local manufacturing while also leveraging the continent’s vast resources to unlock investment.
To walk the talk, the AIF earmarked 15 deals in its portfolio worth US$3.79 billion to address the impact of COVID-19. In a virtual Marketplace, a look-alike of the archetypal sessions of its annual Market-Days, the AIF brought together more than 190 participants – current and prospective partners, investors and project sponsors.
It was at that meeting that the AIF unveiled 15 projects identified across five sectors for priority funding consideration under its multi-sectorial Unified COVID-19 Response. Sponsors were invited to pitch their deals to over 100 investors, while AIF’s deal tracker mechanism was instantly utilised to capture investment interest and continue to ensure that investors are effectually matched to projects.
These deals include: diary milk and corn to non-fuel ethanol projects worth US$75.6 million in Angola; a US$362 million cotton complex in Burkina Faso; a food emporium in South Africa worth US$300 million; US$514 million integrated power projects in Nigeria; a US$40 million teaching hospital in Cameroon; a US$96 million specialist hospital in Ghana; a US$45 million vaccine plant project in Kenya; and a US$70 million cotton yarn project in Mozambique, among others.
But the proof of the pudding is in the eating. It is, therefore, up to the AIF to walk the talk, not only in helping Africa in the present dire circumstances imposed by Covid-19, but also increasing the continent’s self-sufficiency and resilience against future shocks.
Given the many times that Africa’s hopes have been compromised by once promising institutions, initiatives, and leaders, it is hoped, with cautious optimism, that AIF emerges stronger as that turning point for socio-economic prosperity the continent has been looking for and that it consistently and uncompromisingly leads the way to lend the requisite supports that would make it possible for Africa to truly rise to take its rightful places, braving the challenges. – Excerpted from This Day