Zimbabwe is interested in becoming a shareholder of a fund meant to finance infrastructure development on the continent, a senior executive from the fund has said.
BY NDAMU SANDU IN DAKAR, SENEGAL
Estimates show that the continent has an infrastructure gap of $100 billion annually, of which Africa is able to finance half of that.
Africa50 chief executive officer Alassane Ba told Standardbusiness that the fund seeks to raise additional capital from African countries who will become shareholders. In this first stage which closed in July, Africa50 raised $830 million from 20 African countries and the African Development Bank (AfDB).
“The second financing is closing in December and we want to attract Zambia, Zimbabwe and other African countries,” he said, confirming that Zimbabwe had shown an interest in joining the fund which is set to surpass the $1 billion mark post the December capitalisation exercise.
Ba said Africa50 was a new approach to finance infrastructure on the continent.
“The pace at which we are moving, we cannot be happy. We need to find new approaches to provide infrastructure financing. Africa50 was established to speed up infrastructure financing in Africa. The big problem is how to develop bankable projects,” he said.
“Our objective is to shorten it, which will make a difference in terms of provision and costing.”
Africa50 will provide financing for infrastructure projects in energy, transport, ICT and water.
He said if papers were in order, a country or institution could access funding from the fund within five months on long tenure basis and at a favourable cost.
“It [Africa50] will be nimble, flexible and agile,” Ba said.
In the initial stage, Africa50 will see African states coming on board. The second stage will involve financial institutions both African and non-African. The third stage will see the participation of the private sector.
Ba said the potential was huge and Africa50 “will be a profitable institution and will pay a dividend”.
He said Africa50 will be a public-private sector partnership arrangement.
“Infrastructure in Africa is driven by the public sector. We want to get the private sector coming to help government provide the infrastructure,” Ba said.
Zimbabwe is estimated to have an infrastructure gap of $16 billion emanating from years of neglect and inadequate financing. Infrastructure funding has been crowded out by the ballooning salaries bill for the civil service chewing about 80% of the total expenditure.
Donors have contributed resources under the Multi-Donor Trust Fund (Zim Fund) to rehabilitate water and sanitation and power infrastructures. Zim Fund is supported by United Kingdom, Germany, Sweden, Norway, Switzerland, Denmark and Australia, and administered by a dedicated AfDB special management unit.