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Dakar Financing Summit: AUDA-NEPAD CEO calls for presidential accountability forum and $9 bn to unlock infrastructure’s funding gap

Dakar Financing Summit: AUDA-NEPAD CEO calls for presidential accountability forum and $9 bn to unlock infrastructure’s funding gap

“We may not be able to change our history or our geography, but we can certainly change our future.”-Nardos Bekele-Thomas, CEO of the African Union Development Agency-NEPAD

African officials at the 2nd Dakar Financing Summit for Africa’s Infrastructure Development have highlighted that significant progress has been made in the last 10 years in terms of investments in infrastructure but noted that the continent is lagging behind the development targets it has set for itself.

At the opening of the Summit in the West African capital city on Thursday, H.E President Macky Sall of Senegal called on private investors to support the continent’s infrastructure agenda. He said, despite Africa’s vast energy resources, 600 million people still do not have electricity on the continent.

President Sall, who is the current Chairperson of the African Union, highlighted that the Covid-19 pandemic had exacerbated the challenges facing the continent, among them, higher financing costs. He called for global financial architecturereforms.

The President of Rwanda, H.E Paul Kagame, was also in attendance and underlined the need for mobilizing domestic resources to close Africa’s infrastructure gap.

Under the theme, “Maintaining the momentum towards world-class infrastructure in Africa,” the Summit sought to catalysepublic, private and blended funding for identified priority infrastructure projects.

Moussa Faki Mahamat, Chairperson of the African Union Commission, said the infrastructure backlog was conspicuous in the energy (access to electricity) and transport sector, which results in 40% productivity loss.

Referring to the reduced fiscal space, Faki Mahamat said: “It is against this background of budget restrictions that we have toget closer to the African private sector and the international private sector. But this is not enough, we have to come up with new tools, new funding models.”

Ms Nardos Bekele-Thomas, CEO of the African Union Development Agency-NEPAD (AUDA-NEPAD), detailed the progress that had been made since the launch of the Programme for Infrastructure Development in Africa (PIDA) in 2012 – the African Union’s strategic framework for regional and continental infrastructure development.

Out of 400 projects that form part of the PIDA Priority Action Plan, 76 are operational, 78 are under construction and 23 are in the tendering stage. The remaining projects are on their way to bankability.

Bekele-Thomas proposed a Presidential Accountability Forum to encourage leaders to champion projects towards completion.

“The political agenda should reflect the will of the people and not our sovereign desires. We need to really look always at the beneficiaries, the people of Africa…We may not be able to change our history or our geography, but we can certainly change our future. We are all counting on you,” Bekele-Thomas said.

The Dakar Financing Summit (DFS2.0) featured also 22 projects in transport, energy, water and ICT. More than 20 deals rooms were organized between investors and project sponsors where several investments interests for about 65 billions dollars were raised. Project sponsors, partners and investors all called on AUDA NEPAD to continue support and accelerate engagements with the private sector, the community of investors and risk guarantee ecosystems.

AUDA-NEPAD aims to mobilise $8 billion for project preparation and $1 billion for early-stage project preparation over the next five years. Bekele-Thomas cited several African countries that had found innovative sources of infrastructure funding, including Egypt, Algeria, Rwanda, Senegal, Côte d'Ivoire, Kenya, Ethiopia, and Morocco.

A framework agreement on a joint project preparation facility between AUDA-NEPAD and Afreximbank was also signed in the margins of the Summit. The framework agreement will enable Afreximbank and AUDA-NEPAD to initiate transactions for the JPPF – accelerating the mobilization of funds. The agreement enables Afreximbank and AUDA-NEPAD to de-risk sectors and markets, thereby forging a clear path for projects towards bankability.

The Summit also featured sessions on the second PIDA Priority Action Plan (PIDA PAP 2), including a presidential roundtable and various high-level panel discussions.

During a panel discussion on Friday, Mike Salawou, Ag. Director of Infrastructure and Urbanization at the African Development Bank, said Africa must bridge the infrastructure gap in Africa if it wants to achieve the PIDA objectives.

H.E HORIUCHI Toshihiko, Japan’s Ambassador to the African Union, said PIDA should respond effectively to Africa’s infrastructure projects to foster integration.

Mr Amine IDRISS, director for programme delivery of AUDA NEPAD said PIDA and infrastructures development projects will be concluded faster if African countries invest in creating an enabling environment and tackling challenges of governance.

Friday also saw a critical moment of the Summit focused on the first 10 years of PIDA, as well as strategic deal rooms on various priority projects, including Amilcar Cabral submarine cable system, the Lesotho-Botswana water transfer project, the VICMED (establishment of a navigational line between Lake Victoria and the Mediterranean Sea), and the Luapula hydropower project.

The closing of the Summit was centered around the Summit Declaration, which included a call for technical and financial partners, multilateral development banks, development finance institutions and the banking and finance sectors to ease conditions for financing and to work closely with regional and continental institutions in order to achieve synergy and coherence between their various infrastructure financing mechanisms .

The 2nd Dakar Financing Summit was hosted by the Republic of Senegal, and organized by the the AUDA-NEPAD, with the African Union Commission, in partnership with the African Development Bank and the United Nations Economic Commission for Africa.

The continent’s infrastructure development is highly dependent on regional cohesion. In line with this, regional economic communities are taking part in these discussions, namely the Arab Maghreb Union (UMA), the Common Market for Eastern and Southern Africa (COMESA), the Community of Sahel-Saharan States (CEN–SAD), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the Intergovernmental Authority on Development (IGAD) and the Southern African Development Community (SADC).

Other partners are: Afreximbank, the African Solidarity Fund, the Arab Bank for Economic Development in Africa, the European Union, Japan International Cooperation Agency,African Fund for Guarantee and Economic Cooperation, Deutsche Gesellschaft für Internationale ZusammenarbeitGmbH, World Bank, Intergovernmental Authority on Development and African Business.