CAPE TOWN, March 1st (AMSP/CGTN) – – African development has taken center stage in South Africa at a ‘Finance in Common’ Summit.
The Cape Town gathering, which fell under the theme “Fostering Infrastructure and Finance for Just and Sustainable Growth”, was held alongside the G20 Finance Ministers Meeting. During the summit, development banks reaffirmed their commitment to tackling inequality, climate change, and biodiversity loss in Africa, and drive the continent towards realizing the UN’s Sustainable Development Goals.
Infrastructure continues to be one of Africa’s biggest challenges. Experts say the continent needs massive investment to help build roads, expand energy access, and modernize water systems, as well as financing to address climate resilience and support the transition to the digital economy.
At the Finance in Common Summit, the European Investment Bank pledged millions of dollars to support these efforts,channeling funds into digital infrastructure and a climate resilience fund. The Development Bank of Southern Africa also signed a memorandum to boost rural development.
“The capital needs to flow to places where it’s needed. That’s the one thing. But the other key thing for me is, which also talks to the capital flowing a lot less, is the question of projects, originating projects and preparing projects to make sure that the capital finds that there’s proper projects in place,” said Zeph Nhleko, Chief Economist at the Development Bank of South Africa.
Reports continue to highlight the scale of Africa’s development needs and how it needs urgent investment in infrastructure, climate solutions, and digital technology.
“We are working very closely with the governments to understand their needs, to understand their capabilities. We are not looking at the next three years. We are looking at the next 20. We are looking at the next 40. That’s the right way of avoiding the issues with that coming down the line,” Rodrigo Salvado, Director General of the Operational Partnership Department Asian Infrastructure Investment Bank said.
The African Development Bank estimates that at least $130 billion is needed annually to build essential infrastructure. But financing comes at a steep cost, according to the Economic Commission for Africa. African economies lose at least 2% of their GDP every year servicing their debts, a burden that weighs heavily on citizens.
“If you look at many developing economies, they’re using over 50 or 60, 40 percent of their annual budget to service debts. And we need now to find a relief around that, such that governments in this developing and emerging economies can have resources that can be used to address social investment programs, to help solve health challenges and also improve educational outcomes as a threat,” said Oluseyi Oyebisi, Executive Director of Nigeria Network of NGOs.
South Africa alone requires an estimated $500 billion to upgrade its infrastructure. “We are not closing the gap. I mean, here in South Africa, we’ve done an assessment of the infrastructure needs by 2020 to close the SDG gaps. And just the four network sectors, energy, transport, ICT and water, the gap that we have identified is R10tn, just to 2030, 2035,” Zeph Nhleko pointed out.
It’s been a decade since United Nations plan on Sustainable Development Goals was put in progress in Africa, but it has since been steady but slow, and there’s consensus at the Finance in Common Summit that much more needs to be done to address Africa’s rebuilding and the challenges of poverty and inequality.
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