AfDB moves to strengthen investment finance in Africa

The African Development Bank (AfDB) has launched the Africa Long-Term Finance website as part of its strategy to strengthen availability of investment finance on the continent.
Mr Lamin Drammeh, Trade Finance Division Manager, AfDB said this at the opening of a webinar entitled: “Introducing the Africa Long-Term Finance Website” on Thursday.
Drammeh said the launch was as a result of a longstanding collaboration between the bank and its development partners.
The partners are Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the UK Government’s Finance Sector Deepening Africa (FSD Africa) and the Making Finance Work for Africa (MFW4A).
“Together with these partners, the African Development Bank launched the Africa Long-Term Finance Initiative in 2017 as part of its strategy to strengthen the availability of investment finance on the continent.
“The initiative is a unique collaboration with development partners. Financial inclusion is at the top of the agenda for policy makers and the donor community and enormous progress has been made in the date of collection, financial innovation and policy formulation.”
The manager noted another area of finance that deserved greater attention was the availability of long-term finance relating to funding.
He said this was to support medium-term and long-term investments by households and governments.
He stressed the importance of long-term finance as it enabled growth and investments in key economic sectors.
“It is needed to close Africa’s infrastructure gap to expand the productive capacity of firms of all sizes and to support Africa’s housing markets in view of increased urbanisation and population growth.”
Drammeh added that the initiative adopted two approaches to achieving the objective of expanding and deepening long-term finance in Africa.
“We have embarked in the process of data collection to better understand the gaps in the availability of long-term finance in Africa.
“The focus of this data collection, which is the focus of today’s webinar, is to help various stakeholders better understand the evolution and status of the long-term finance market.
“The second purpose is to undertake country diagnostics. These studies will help identify and analyse the constraints in the deepening of markets for long-term finance in particular countries and to present policy recommendations for improvement.”
He expressed hope in the data to enable public and private sector actors to deepen their engagement in fostering market development and in removing constraints where they existed.
He further added that the initiative would create interest among stakeholders in Africa on the importance and urgency of deepening markets for productive investments.
Also, Mr Mark Napier, Chief Executive Officer, FSD Africa lauded the AfDB for its support to the initiative, adding that “long-term data requires a long-term programme”.
Napier emphasised that the purpose of FSD Africa was to build long-term finance markets.
“We all know that markets, especially finance, are dependent on data to function properly. It is sometimes quite difficult to recognise the value of data. It is only with usage that the value is recognised.
“Our new mandate as FSD Africa is very much settled on capital market development, building on the policy in regulatory infrastructure on the continent for long-term finance. We cannot do that unless there is good quality data in the markets.
“We see the long-term finance scoreboard and the diagnostics as very important building blocks in helping us understand how to support regulators and policymakers in the countries in which we operate to do their jobs more easily,” he said.
The Africa Long-Term Finance Initiative’s objective is to boost the intermediation of Long-Term Finance (LTF) so as to close the financing gaps experienced by the infrastructure, housing and enterprise sectors in Africa.
The initiative seeks to improve market intelligence on LTF in Africa through the LTF scoreboard.
It also provides the impetus for effective reforms to deepen long-term finance markets at the national level by carrying out a series of Country Diagnostics.