Acting President Yemi Osinbajo yesterday advocated a new paradigm in financing infrastructure projects in Africa to close the huge growth gap in the continent.
He spoke at a forum to mark Africa Finance Corporation’s 10th anniversary in Abuja.
Osinbajo noted that the idea of a public-private development finance institution was wholly African from scratch and not born of the will and wishes of the other international multilateral Development Financing Institutions (DFIs).
The Acting President, according to a statement by his Senior Special Assistant on Media and Publicity, Laolu Akande, said the story of AFC is the story of a core of solid African professionals, whose courage and faith in leaving the safety and certainty of institutions, where they had established firm reputations, for the unknown world.
He said: “But uncertain and turbulent as the last decade was for African and indeed world economies, it appears inevitable that the next decade will be even rockier. Indeed, it would seem that the only certainty in the future is the uncertainty.
“But for the student of history and social phenomena, that milieu is the precursor of some of the most phenomenal opportunities for prosperity and growth that we have seen thus far. The coming years may well call for a different mindset and a more nuanced skill set. For example, who could have predicted the phenomenal success of the so-called disruptive technologies and businesses riding on their backs.
“So, today the owners of the largest taxi fleet in the world own no cars and have no permanent drivers, the largest real estate agency in the world actually also owns no real estate of note and their clients – both landlords and tenants – sign up to their company. So technology, its accelerative power and the capacity to disrupt established business, thought and even creative value chains will clearly stretch all our theories and assumptions on financing and management. But if we begin with the known, even in this unknown, it might help.
“Investments in broadband infrastructure, for example, is crucial. Broadband infrastructure has now won its place as the new utility alongside electricity, transportation, telecoms and water supply.
“And it is bound to affect and indeed is already defining how every one of these other utilities work and will work in the coming years,” he added
Noting how in the past most nations, especially African countries, were able to pay up for infrastructure projects, he said the sovereign risk environment is changing quickly.
According to him, governments had always in the past been the largest contributor to infrastructure even when payments were always never really smooth.
“But today, that is no longer forthcoming given the huge deficits and sovereign debts that most governments now experience.
“So, the time certainly calls for new thinking. AFCs and DFIs like that must now begin to look for new ways of engaging with governments. You must look for new ways of engaging with African governments.
“We cannot forget that unless corporations like AFC recognise that what is important to do in these times, the next 10 years will indeed be very difficult years for our economies, for the African economy. We will be relying on AFC, our own DFIs to do much more; we will be relying on them to show much leadership to take greater risks.
“There is no question at all that all of what is required, all of what we need will not be provided just by government. Government cannot finance the huge infrastructure needs of most countries. As a matter of fact, without the private sector, it is completely impossible for government to finance all the infrastructure needs.
“Take Nigeria for example, all our refineries put together at the moment do not produce 600,000 barrels of oil. We don’t refine 600,000 barrels of oil. But one single private sector investor is building one single line of 650,000 barrels. So, there is no question at all that government cannot match the power of the private sector and the resources that the private sector can put together.
“It is the AFC that can bring the private sector and public sector together to deliver on the kind of infrastructure need that our country requires,” he said
Osinbajo hailed the AFC for its work in the past 10 years.
He lauded the leadership of Andrew Alli, Olusegun Akin-Olugbade and other professionals, who come together to make the financial institution what it is.
“And I pray that the next ten years will be the best ten years yet,” he added.