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Oliver Kazunga, Senior Business Reporter
THE African Development Bank (AfDB) says development finance institutions and multilateral partners have committed to investing US$80 billion in the private sector over the next five years to promote sustainable economic recovery in Africa.

AfDB noted that the Covid-19 pandemic had caused a severe global economic and health crisis and thus the announcement is a welcome boost to support the long-term development objectives of African economies.

In a statement, AfDB said: “The G7 Development Finance Institutions (DFIs), the International Finance Corporation, the private sector arm of the AfDB, European Bank for Reconstruction and Development (EBRD) and the European Investment Bank today announced that they were committed to investing $80 billion in the private sector over the next five years to support sustainable economic recovery and growth in Africa.”

AfDB said this is the first time that the G7 DFIs have come together to make a collective partnership commitment to the African continent.

The International Monetary Fund estimates that sub-Saharan Africa needs additional financing of around US$425 billion between now and 2025 to help strengthen the pandemic response spending and reduce poverty in the region.

The United Kingdom Minister for Africa Mr James Duddridge was quoted as saying: “The UK is proud to back this commitment by world leaders at the G7 Summit to invest more than US$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”

European Investment Bank (EIB) president Mr Werner Hoyer said his institution welcomes the G7 leadership’s decision to enhance support for high-impact investment across Africa during and after the pandemic.

He said last year the European Union 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,” he said.

Each DFI has its own investment criteria which are aligned to an assessment of the need to achieve development impact across a range of sectors. Over the years, DFIs have played an important role in helping to build markets, mitigate risk and pave the way for other investors to enter new markets. — @okazunga.