What Africa needs to bridge development, infrastructure gaps -Osinbajo (Photos)

Acting President Yemi Osinbajo, SAN, has advocated a new paradigm in financing infrastructure projects in Africa in order to close the huge infrastructure gap in the continent.

He stated this on Tuesday at a forum to mark the 10th anniversary of Africa Finance Corporation (AFC) in Abuja.

Speaking on how AFC came to be, Osinbajo noted that the idea of a public- private development finance institution, wholly African from scratch, not born of the will and wishes of the other international multilateral Development Financing Institutions (DFIs) but of the will of African nations, African leaders and institutions, seemed a little far-fetched barely a decade ago.

According to him, “the greatest ideas that become the sort that we celebrate today never really seem anywhere near what they turn out to be, they are just a seed and if that seed is planted, if it ever gets done, then there is a good chance that it can become what it is today”.

He continued, that “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 of the start-up multilateral DFI has formed an ethos that today defines the corporation”.

The acting president noted that “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”.

According to him, “It is important to mention also how in the past most nations, especially African countries were able to pay up for infrastructure projects in one way or the other. But that sovereign risk environment is changing quickly.

Read also: Nigeria records downward inflationary movement in April

“Governments had always in the past been the largest contributor to infrastructure even when payments were always never really smooth, but they were able to offer sovereign guarantees or cash support.

“But today, that is no longer forthcoming given the huge deficits and sovereign debts that most governments now experience”.

Osinbajo further stated , that “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 does 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.

“It cannot be any form of central planning, of course government will interfere, but I think all of us have agreed today that we must ensure that market determines all things; it is the markets that has led to the mobile technology boom. The fact that we allowed the private sector to take the lead and we created the regulatory environment that made it possible, is why today in, Africa 750 million Africans have access to phones”, he said.

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