NEPAD director confident Africa can fund its own infrastructure projects with smarter investments » Capital News
NAIROBI, Kenya, Apr 18 – A senior official at an African Union development agency has cited a 2017 initiative aimed at bridging Africa’s infrastructure gap as one of the reasons why the continent’s development projects may not stall, despite funding cuts introduced by former U.S. President Donald Trump.
Amine Idriss, Director of Energy, Industrialization, Trade, and Regional Integration at the African Union Development Agency (AUDA-NEPAD), expressed concern, however, that Trump’s decision to halt USAID operations could adversely affect programs in critical social sectors such as education and health.
In an exclusive interview with Fellaris Wambui, (co-host of the Financial Forecast podcast), Idriss said the funding freeze presents an opportunity for many African governments to reassess their investment priorities.
“I don’t think what’s happening in the U.S. will have a major impact on infrastructure. We know no one can match U.S. aid investments, but this is an opportunity for our governments to rethink and repurpose their financing, particularly in health, education, and manufacturing,” he explained.
The 5% Agenda
Idriss noted that the agency has observed a significant shift from development aid to investment-based financing, helping narrow the funding gap for well-prepared infrastructure projects.
“Today in Africa, if you combine all assets under management from pension funds and sovereign wealth funds, you get about US$1.7 trillion. If just 5 percent of that were invested in infrastructure, it could close the US$80 billion gap we face,” he said.
He emphasized the need for African states to improve governance both at national and regional levels and to establish systems that reduce the risk associated with infrastructure investments.
The 5% Agenda aims to increase African asset owners’ allocation to local infrastructure from the current 1.5 percent to a more impactful 5 percent of assets under management.
Idriss also pointed to a growing trend over the past five years, where private firms and African financial institutions are taking a more active role in infrastructure investments.
“We recently released the first 10-year implementation report for the Programme for Infrastructure Development in Africa (PIDA). It shows that around 50 percent of infrastructure development is now financed directly by African governments, with the other 50 percent coming from debt and multilateral partners through the Infrastructure Consortium for Africa (ICA),” he noted.
AUDA-NEPAD’s goal is to have 20–25 percent of Africa’s infrastructure investments come from the private sector by 2030.
Today, that figure has risen to between 10 and 15 percent, signaling a big jump from just 3 percent in 2018.