Unlocking private capital to advance Africa's growth

The Director of African Financial & Technical Assistance, Nixon Bugo, highlighted the crucial need for directing attention towards sectors that currently lack sufficient financing during the recent AfDB gatherings. Bugo stressed that these underserved sectors hold the key to Africa's transformation and development. He emphasized that now is the opportune time for Africa to address the issue of funding and investment to drive the continent's progress effectively. Bugo pointed out that while some sectors are vital for Africa's advancement, they receive the lowest levels of investment and financing, hindering their potential impact on the continent's growth. Sectors such as small and micro enterprises, youth, agribusiness, women, and the green economy are considered critical but face high risk profiles, making them unattractive to private sector investors. To address this challenge, Bugo suggested the need to de-risk these sectors to attract private sector capital and enable them to contribute significantly to Africa's development. He called for the development of de-risking mechanisms, instruments, and models to encourage private sector investment in these key areas. Bugo acknowledged that unlocking private capital is essential for Africa's growth and highlighted the significance of creating a favorable policy environment to attract investments. He emphasized the importance of structured development strategies, enhanced technical capacity, and a conducive policy framework to harness Africa's vast resources effectively. By improving the policy operating environment and leveraging digital transformation, African countries can enhance the attractiveness of bankable projects and provide a solid foundation for private sector investments. In terms of funding potential, Bugo revealed that the private sector holds over a trillion U.S. dollars in liquidity. He noted that traditional sources of capital, such as public sector and development partners, are overstretched, making private sector investment a crucial factor in driving Africa's transformation. Bugo emphasized the need to mobilize this substantial funding towards sectors that require investments urgently to accelerate Africa's sustainable development. Overall, Bugo's insights underscore the essential role of private capital in advancing Africa's growth and the critical steps needed to unlock its full potential for the continent's benefit.