Development finance institutions funded by the G7 nations have announced the launch of a new platform designed to boost investment in fragile and conflict-affected states in Africa.
The Africa Resilience Investment Accelerator (ARIA) aims to unlock investment in fragile states through collective influence and by pooling expertise to overcome the challenges of providing capital in these countries.
Historically, development finance institutions have tried to originate investments in fragile states with mixed results. ARIA aims to engage proactively in such markets in a way that would improve investment-readiness – both a country’s readiness to benefit from development finance institution investment and their ability to invest in these economies.
The UK’s FCDO will support ARIA, which will be incubated in CDC’s office in London. Vivianne Infante, CDC’s current Ethiopia Country Director, will be seconded to run ARIA for the first two years.
She said: “Development finance institutions have a mandate to provide investment to those that need it the most. Fragile states are desperately in need of capital to provide jobs and bring economic growth but investing in these markets is complex and challenging. ARIA’s work will be vital in addressing these challenges.”
ARIA will also identify several countries in which it will provide targeted coverage, develop expertise and arrange country missions. The intention is for ARIA’s country activities to foster greater collaboration amongst development finance institutions, with a longer-term ambition for more coordinated activities.
It is expected that ARIA’s work will uncover additional investment opportunities in targeted countries.
UK Minister for Africa, Vicky Ford, said: “Providing honest and reliable finance is one of the most effective ways to support countries to recover from conflict, create jobs and boost economic growth.”
The Africa Resilience Investment Accelerator will help development finance institutions to support the G7’s landmark commitment of providing $80 billion of investment in the African private sector by 2027.
The African Development Bank is one of the members of ARIA. “The African Development Bank’s new private sector development strategy deepens our focus on fragile states.
We have the on-the-ground presence in all fragile states, and will be dialoguing with and supporting governments to design and implement the policy, regulatory, institutional and legal reforms necessary to enable and scale up private sector development.
This should unlock the potential for investments in the private sector, which we will work with ARIA and its members to deliver,” said Solomon Quaynor, Vice President for the Private Sector, Infrastructure & Industrialization at the African Development Bank.