G7 Development finance institutions, others pledge to invest $80 billion in Nigeria and other African countries in the next 5 years

G7 countries Development finance institutions

The G7 Development Finance Institutions and a host of other multilateral partners that comprises of the IFC, a private sector arm of the African Development Bank, European Bank for Reconstruction and Development and the European Investment Bank, have all pledged to support African businesses with a $80 billion investment, in the next five years.

This is according to a disclosure made available on the website of the African Development Bank Group, and seen by naijabusiness.com.ng.

According to the notice, the decision to invest the aforementioned sum became imperative owing to the hard biting consequences of the COVID-19 pandemic, which caused an untold economic and social hardship in most African countries. In this light, the recent announcement comes as a relief to the economies that are badly affected.

Naijabusiness.com.ng understands that this is the first time the G7 DFIs will have to come together to make a collective partnership commitment to the African continent. It is pertinent to note that the G7 DFIs consists of CDC, Proparco (France), JICA and JBIC (Japan), DFC (USA), FinDev Canada (Canada), DEG(Germany) and CDP (Italy).

Recall that the International Monetary Fund (IMF) had earlier estimated that sub-Saharan Africa needs additional financing of around $245 million in the next five years to help strengthen the pandemic response and reduce poverty in the region.

READ: World Bank partners AU to provide COVID-19 vaccines for 400million Africans

Reaction of experts:

Commenting on the recent development, the UK Minister for Africa, James Duddridge, said: “The UK is proud to back this commitment by world leaders at the G7 Summit to invest more than $80 billion in Africa’s private sector over the next 5 years.

“This investment will create jobs, boost economic growth, help tackle climate change and fight poverty. It comes at a crucial time as the continent rebuilds its economies, severely impacted by Covid-19.

Nick O’Donohoe, the CEO of CDC Group, said: “The patient, high quality capital that DFIs provide is urgently needed if African economies are to start to rebuild quickly from the impact of the pandemic. CDC is committed to building long term investment partnerships in Africa that fuel sustainable private sector growth in support of the UN’s Sustainable Development Goals.”

Makhtar Diop, IFC’s Managing Director, said: “Ensuring an inclusive and sustainable recovery for people, businesses and economies across Africa in coordination with our development partners, is at the core of IFC’s development mandate today. We know that the private sector will play a major role in financing Africa’s future by creating millions of jobs that are essential to ensuring sustained economic growth and poverty reduction. We therefore welcome this important partnership and are proud to provide financing and to work with partners to help create the right conditions to bring more private investment to Africa.’’Werner Hoyer, President of the European Investment Bank, said: “The EIB welcomes G7 leadership to enhance support for high-impact investment across Africa during and after the pandemic. Last year the EU Bank’s engagement in Africa, as part of Team Europe, represented the largest ever support for climate action and investment in fragile states in 55 years of EIB operations on the continent. We stand ready to cooperate further with African and multilateral partners to tackle both COVID-19 and accelerate the green transition in Africa.”