NAIROBI, KENYA, JULY 19 ― Kenya has committed to double its shareholding at Africa50, the pan-African infrastructure platform, in a renewed effort to support bridge the infrastructure funding gap in the continent.
President Uhuru Kenyatta announced on Thursday, his government will increase the country’s shareholding at Africa50 to US$100 million, from the current US$50million.
This will go towards helping the Africa Development Bank (AfDB) backed entity to bridge Africa’s infrastructure funding gap, currently standing at US$108 billion a year.
Speaking when he presided over the official opening of the 2018 Africa50-General Shareholders Meeting, in Nairobi, President Kenyatta said the move is a show of confidence in the fund’s work in Kenya and the region.
“We will remain a strong and committed partner, ready to cooperate on projects that transform the lives of our people in Kenya as well as the continent at large,” President Kenyatta said, calling on member states and private sector to support growth of the fund for development.
“If African private capital is not willing to invest on the African continent, how can we can expect anybody else to invest, “President Kenyatta posed,“ We must have the confidence and trust to invest in our own continent.”
Kenya’s pledge now brings the total capitalization at Africa50 to around US$819 million.
According to AfDB President Akinwumi Adesina, the continent requires at least US$170 billion annually to fund infrastructural projects.
“Infrastructure is key for Africa’s development. We need support from governments and the private sector to invest in infrastructure,” Adesina said adding, “Kenya doubling of its shareholder to US$100 million, that is what we want to see other African countries do.”
Adesina who is also the chairman of Africa50 lauded President Kenyatta’s administration for its commitment and achievements in infrastructure development in the country.
The Jubilee government has invested heavily in key projects which include the Standard Gauge Railway, whose phase one; 472 kilometres Mombasa-Nairobi stretch is currently operational, ferrying both passengers and cargo.
The government has also invested in roads, ports and the energy sector among other key areas; with President Kenyatta noting that proper infrastructure in the country remain critical in achieving the key areas in His Big Four Agenda.
They include expanding the manufacturing sector and its contribution to the Gross Domestic Product to 15 per cent by 2022 from the current 11 per cent, Affordable Housing for Kenyans, Universal Healthcare and Food Security.
“Though we have made strides, more needs to be done,” President Kenyatta said, calling on the private sector to “step up” and help in closing the infrastructure funding gap in the country and the continent at large.
AfDB has invested about US$3.1 billion in Kenya, with 70 per cent of the funds going to infrastructure mainly on roads and the energy sector.
The government is currently closing on a deal to fund building of a 300-kilometre electricity transmission line in Western Kenya.
Africa50 CEO Alain Ebobisse said the fund is ready to work with governments and shareholders to grow infrastructure development in Africa, adding that the entity hopes to invest more in Kenya, a key member from the East Africa region.
Shareholder members from the region include DR Congo, Sudan and Kenya.
He called on governments, key institutions and the private sector to support growth of the fund which has a capitalization target of US$3 billion in the medium-term.
“We are getting ready to start our fundraising with institutional investors from within and outside Africa. It is clear that more infrastructure projects will be implemented in Africa if the private sector participates, which is at the core of our mission,” Ebobisse said.
“Africa50 is in a comparatively unique position to catalyse more private investments in infrastructure in Africa,” he added.
This was the first time Africa50 was holding its General Shareholder Meeting in Kenya and the East Africa region.
The fund was established by African governments and the AfDB to bridge the continent’s infrastructure funding gap by mobilising public and private sector finance and facilitating project development.
With an investor base composed of 25 African countries, the fund which also has the backing of the Central Bank of West African States (BCEAO) and Bank Al-Maghrib, focuses on medium to large- scale projects(with a total value of over US$100 million), that have a significant development impact while offering an appropriate return to investors.
The biggest challenge in the continent’s infrastructural development continues to be the lack of enough bankable projects, the fund has noted, which is due to a large extent to the investment climates in many countries, “which need to be improved to scale up private investments in infrastructure.”
According to Africa50, governments must demonstrate political will to implement sector reforms and efficient, private sector-friendly regulations that can attract investors and financiers.