African countries are facing rising financing needs whether to support SMEs, climate adaptation, women’s entrepreneurship, or infrastructure – at a time when fiscal space is tightening. Africa has trillions of dollars in domestic assets – pension funds, insurance companies, and sovereign wealth funds. But much of that money sits in low-yield government securities instead of financing infrastructure, energy, agribusiness, healthcare, tourism and value-added manufacturing projects which have the greatest opportunities to create jobs. It is essential to build domestic and regional financial sectors in Africa capable of carrying their fair share of the financing needed for the continent’s job creation, sustainable growth, prosperity, and sustainability. Deep, efficient, and innovative capital markets are essential to lower the cost of capital and mobilise the scale of private capital required to unlock Africa’s development.
Key Points:
- The key obstacles currently preventing institutional capital in Africa from being deployed at scale for long-term development, including regulatory environment, access to reliable data, transaction costs, and pipeline of commercially viable projects.
- Priorities for regulators and industry players in Africa as we build the markets to mobilize our domestic capital into key sectors of the economy, including the specific regulatory, policy, or market reforms that would make domestic capital more willing and able to invest in productive sectors.
- The lessons learned from recent issuance of innovative capital market financing tools gaining traction in Africa and from elsewhere and how to scale these instruments to drive economic activity and create jobs.