The African Union (AU) is calling on state-run sovereign, pension and insurance funds from Egypt, South Africa, Morocco, Kenya, Angola, and Nigeria to invest up to 5 percent of their capital in a planned infrastructure fund, Raila Odinga, the AU\u2019s high representative for infrastructure, told Reuters.<\/p>\n
The new fund will finance the building of roads, power plants, and railways across the continent.<\/p>\n
This comes as African authorities look for fresh sources of funding to plug an annual infrastructure financing deficit of $ 60-90 bn that has stunted development across the continent.<\/p>\n
Infrastructure has been a key obstacle to making use of the African Continental Freetrade Agreement (AfCFTA), which officially launched earlier this year and brings together 24 countries in a pan-African freetrade bloc with a combined GDP of $3.4 tn, making it one of the largest in the world in terms of participating countries.<\/p>\n
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Getting goods across the continent<\/strong>: The countries that comprise the bloc (including Egypt) began trading under the terms of AfCFTA, which removes tariffs on most goods, with the start of 2021.<\/p>\n But with Africa\u2019s infrastructure mainly geared to serve trade outside the continent, \u201cinfrastructure is urgent for the realization of the AfCFTA, otherwise it is just going to remain on paper,\u201d Odinga told Reuters.<\/p>\n Several landlocked countries are disconnected from major ports and transcontinental highways have missing links, making intra-regional trade difficult. Intra-African trade stands at only 15%, compared with 70% and 50% in Europe and Asia, Odinga said.<\/p>\n Turning to alternative sources of funding<\/strong>: The fund, which will be run by the newly established African Union Development Agency, is seeking to diversify funding sources by moving away from reliance on wealthy donor nations and international debt markets. With developed countries repurposing funds and large lender China scaling back on its involvement amid high debt levels to individual countries, \u201cAfrica is financially starved as far as the need for infrastructure development,\u201d Odinga said. The AU has already begun courting investors, and is working to set up the planned fund\u2019s legal and financial structure, according to Odinga.<\/p>\n Is the SFE on board<\/strong>? Infrastructure and energy are among the SFE\u2019s key mandates, but the fund has so far focused on domestic projects, including the EuroAfrica transmission link to import electricity from Egypt, as well as the Sixth of October dry port. As of late last year, the SFE had EGP 26 bn in assets under management, and a EGP 13 bn portfolio of owned assets, CEO Ayman Soliman told CNBC Arabia in December.<\/p>\n","protected":false},"excerpt":{"rendered":" The African Union (AU) is calling on state-run sovereign, pension and insurance funds from Egypt, South Africa, Morocco, Kenya, Angola, and Nigeria to invest up to 5 percent of their capital in a planned infrastructure fund, Raila Odinga, the AU\u2019s high representative for infrastructure, told Reuters.<\/p>\n","protected":false},"author":4,"featured_media":321241,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[24],"tags":[158],"class_list":["post-321240","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development-partners","tag-african-continental-free-trade-agreement"],"yoast_head":"\n