“It is not right that money from sovereign wealth funds and pension funds go to invest in Europe and the USA where returns are lower compared to here,” Donald Kaberuka, the African Development Bank president told CNBC Africa.
“We should be able to mobilise African savings to build Africa of the future and we should ensure that money has to be secure and must get good returns. Our financial model demonstrates that by investing here, [investors] will get five times more than they are currently getting.”
Kaberuka added that, provided the region can offer African investments the same conditions such as good returns, security and some liquidity surely investors will have a reason to invest in the continent especially since the region has the bases for future growth.
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To help build the required liquidity and aid the regional growth, the bank is also working on the African Development Fund.
“The AfDB has 54 members and with current policies only 16 were eligible to borrow from the bank with the rest depending on concessional window called the African Development Fund because they are not credit worthy,” he said.
“Those who qualify are middle income countries such as South Africa, Namibia, Botswana, Mauritius, Egypt, Tunisia and Morocco.”
AfDB has proposed the establishment of a new delivery vehicle called Africa50 Infrastructure Fund which is aimed at mobilising private financing to accelerate the speed of infrastructure delivery in Africa, thereby creating a new platform for Africa’s growth.
“Africa50 is an attempt to get this vehicle in place beginning from 3 billion dollars, to 10 billion and 100 billion dollars,” noted Kaberuka.