Ghana’s minister of finance has called on global pension funds to help meet Africa’s vast infrastructure needs, easing the funding burden which has seen several African countries load up on unsustainable levels of expensive dollar-denominated debt.
The African Development Bank estimates that Africa’s infrastructure needs are between $130 billion and $170 billion a year; however, financing for African infrastructure currently falls short by between $68 billion and $108 billion a year.
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Ken Ofori-Atta |
“The question we need to confront is how do we get appropriate financing to be able to do that,” says Ghana’s minister of finance Ken Ofori-Atta. “The debt burden that comes with infrastructure financing is too heavy.”
Part of this funding will come from development banks such as the World Bank, European Investment Bank and IFC, as well as from China, but officials are urging for action from one of the world’s largest sources of private capital.
“There needs to be a sit down with global pension funds to make infrastructure an asset class, which now it isn’t, which would be able to give certain accommodation,” says Ofori-Atta.
Private investment in Africa stood at just $8 billion, out of a global spend of $90 billion in 2019 so far, according to World Bank data.
