The African Development Bank (AfDB) has announced that the G7 development finance institutions (DFIs) and multilateral partners have pledged to invest $80 billion in the continent’s private sector.
In a statement issued on Monday, the bank said the investment would support sustainable economic recovery and growth in Africa for the next five years.
The International Monetary Fund (IMF) estimates that sub-Saharan Africa will need additional financing of around $425 billion between now and 2025 to help strengthen the COVID-19 pandemic response spending and reduce poverty in the region.
In 2020, it approved Nigeria’s $3.4 billion financial aid request.
The G7 DFIs include CDC Group; Promotion et Participation pour la Coopération Économique (Proparco), the French development finance institution, and Japan International Cooperation Agency (JICA).
Others are Japan Bank for International Cooperation (JBIC); Development Finance Institute (FinDev Canada); German development finance institution (DEG); and Cassa Depositi e Prestiti (CDP), an Italian investment bank.
Also, AfDB, International Financial Corporation (IFC), European Bank for Reconstruction and Development (EBRD), and the European Investment Bank (EIB) pledged commitments to invest in Africa.
According to the statement, this is the first time the G7 DFIs have made a collective partnership commitment to the African continent.
AfDB said this is a welcome boost to support the long-term development objectives of African economies that the COVID-19 pandemic has negatively impacted.
Speaking on the development, James Duddridge, UK minister for Africa, 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 five 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”.
Werner Hoyer, EIB president, said: “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”.