By AKINWUMI ADESINA

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The potential to transform Africa’s economies and accelerate development in the coming decade lies in a number of innovative platforms and tools to finance infrastructure projects and international partnerships. And this is exciting news.

This year, six of the world’s 10 fastest growing economies are in Africa. Three of them – Djibouti, Ethiopia and Tanzania – are located in East Africa.

The 2018 growth rate forecast for the continent is 4.1 per cent, up from 3.7 per cent in 2017.

We have become the second most attractive investment destination in the world. FDI inflows to Africa rose from just about $10 billion in 2000 to over $60 billion in 2016. Africa’s share of global foreign direct investment was 11.4 per cent in 2016, an increase from 3.9 per cent in 2008.

To enable other African countries to join this small Group of Six will require more than maintaining current growth rates and trade levels.

Resource mobilisation and managing risks linked to reforms and transactions in the public and private sector remain the key challenge. Africa needs to galvanise domestic capital and attract foreign investors if it is ever to close its huge infrastructure gap.

Investment must be channelled to other sectors too – healthcare, education and research, economic and processing zones, urban develop and mass transit systems and digital information, to mention but a few. These are all vital to the wellbeing of the world’s fastest-growing population.

The African Development Bank puts the continent’s infrastructure gap at $130-170 billion per year.

According to the Global Infrastructure Hub, 10 of its major economies have infrastructure investment gaps of $1 trillion over the next 22 years.

They will need $621 billion between 2016 and 2030 to meet the United Nations’ Sustainable Development Goals for universal access to electricity, water and sanitation. Comparatively, Asia’s infrastructure deficit is estimated to be at $8 trillion.

Without sufficient financing, economic transformation won’t happen. Yet, the resources are available. Within Africa, assets under the management of domestic institutional investors will rise to $1.8 trillion by 2020, triple the $634 billion figure for 2014.

The reality however, is that African governments and regional development banks alone do not have sufficient resources to finance infrastructure projects. The private sector must therefore play a critical role in bridging the gap.

The African Development Bank has embarked on an ambitious mission to either fund development or provide viable platforms for countries to obtain finance for development through innovative platforms and mechanisms that bring together global pension funds, sovereign wealth funds, and a vibrant private sector.

The Bank has launched the Africa Investment Forum, transaction-based platform that will help shape bankable projects, raise capital and accelerate financial closure of infrastructure deals, while fostering partnerships between governments, multilateral institutions and private sector entities.

The first convening of the Africa Investment Forum, which has already been dubbed “Africa’s own investment marketplace for accelerated economic transformation,” is scheduled for November 7-9 in Johannesburg, South Africa.

Success stories from across the region already affirm the value of this new focus.

For example, the Bank has supported Tanzania’s ongoing macroeconomic reform programme with a $40 million budget-support loan provided by the African Development Fund, the concessional arm of the Bank Group.

Recently, Rwanda’s new Volkswagen assembly plant became a beneficiary of a $20 million investment from the German car manufacturer. Located in Kigali’s Economic Zone, the plant is expected to create some 500-1,000 jobs and produce at least 1,000 vehicles in its first year of operation.

In Ethiopia, textile manufacturers such as H&M have started operations with plans to produce and distribute finished products to the global market.

Last but not the least, the 2018 general shareholders meeting of Africa50, an investment vehicle created by the Bank to complement its infrastructure investment funding, took place in Nairobi on 19 May.

Africa50 is uniquely positioned to act as a bridge between governments and private investors to channel and optimise funding. Africa50’s project finance company is dedicated to deploying innovative financing debt and equity instruments to finance infrastructure needs on the continent.

With a new fully private-sector window expected to be launched soon, Africa50 will be able to offer very attractive market rates of return to private investors, especially institutional investors.

Already, it has been able to mobilise over $850 million to support infrastructure investments. With its private-sector window, it expects to mobilise up to $3 billion.

Akinwumi Adesina is president of the African Development Bank.