IMF, Germany, IFC dangle over $2.4 billion investments
Nigeria is in line to benefit from series of multilateral initiatives brokered by the International Monetary Fund (IMF), Germany, the International Finance Corporation (IFC) and leaders of the top Multilateral Development Banks (MDBs).
Under the G-20 Compact with Africa scheme, IMF Managing Director, Christine Lagarde and Germany’s Minister of Finance, Wolfgang Schäuble, at the weekend in Washington DC, signed a €15 million pact in support of capacity development activities across Africa.
The move is to ensure capacity development support for African policymakers’ to address reform challenges in strengthening domestic resource mobilisation, implementing fair tax systems, achieving good financial governance, and fostering financial stability and inclusion.
This also, is in support of 2030 Agenda for Sustainable Development.The Compact with Africa is an initiative launched under Germany’s G-20 Presidency in December 2016 and aims to boost private investment and increase infrastructure development in Africa.
Meanwhile, leaders of MDBs have also agreed to deepen their collaboration to encourage private sector investment in vital infrastructure needed to support sustainable and inclusive economic growth throughout the world and Africa in particular.
At the Global Infrastructure Forum 2017, titled “Delivering Inclusive, Sustainable Infrastructure”, strategies on how MDBs can best work with countries and the private sector to create markets for infrastructure projects topped agenda.
Discussing the challenges of infrastructure at forum, the Deputy Secretary-General of the United Nations, Amina Mohammed, harped on charting enabling framework, rather than identification of the challenges.
Basic infrastructure services- roads, water and sewage lines, and electrical power – are scarce in many developing countries, while more than one billion people that live without electricity.more than 660 million without access to clean water; and one in three people that lack access to flushing toilets and sewerage infrastructure are targeted.
The event brought together potential investors, representatives of the United Nations and the G20 with the heads of the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, Inter-American Investment Corporation, International Finance Corporation, Islamic Development Bank, New Development Bank and the World Bank.
Similarly, IFC and Europe’s largest asset manager, Amundi, have agreed to create the largest green-bond fund dedicated to emerging markets, estimated at $2 billion, in efforts to deepen local capital markets and expand financing for climate investments.
IFC will invest up to $325 million in the new Green Cornerstone Bond Fund, which will buy green bonds issued by banks in Africa, Asia, the Middle East, Latin America, Eastern Europe, and Central Asia.
On the other hand, Amundi will raise the rest of the $2 billion from institutional investors worldwide and will provide its services in managing emerging-market debt. The fund aims to be fully invested in green bonds within seven years.
Lagarde noted that with trillions of dollars in capital sitting on the sidelines earning low or even negative returns, deeper engagement with the private sector can create win-win scenarios where investors earn better returns on long-term investments and developing countries get much needed investment and expertise.
“This compact has the potential to mobilize investment and energize inclusive economic growth in Africa. The IMF greatly appreciates the support of the German government for our capacity-building efforts in Africa.”
Schäuble added: “Capacity development is important to improve conditions for private investment in Africa. This is why we support the IMF’s very valuable efforts both financially and conceptually.”
The Guardian
