AFRICA NEWS AGENCY
FINANCING:
SPOTLIGHT ON TEN INITIATIVES TO WATCH FOR Shaken economically by the COVID-19 pandemic, Africa must now mobilize the financial resources needed for its recovery. A considerable challenge. Yet, far from the usual clichés about the supposed lack of funding, solutions exist. Innovative and above all adapted to the realities of the continent. Here is a review of ten of them. By Dounia Ben Mohamed
In the wake of the COVID-19 health and economic crisis, which severely impacted the public finances of African states in 2020, the issue of the lack of financial resources on the continent is more topical than ever. For infrastructure alone, the African Development Bank estimates that there is an annual shortfall of around 100 billion dollars in financing for the whole of Africa, while Proparco, the subsidiary of the French Development Agency (AFD) dedicated to the private sector, estimated the uncovered financing needs of very small and medium-sized enterprises (SMEs) in sub-Saharan Africa at 330 billion dollars in 2019, with only 20% of SMEs being financed by banks. However, solutions do exist and when put together they can make a difference. In addition to public initiatives such as deposit funds, which allow governments to mobilize long-term local financial resources – besides funds from abroad - formulas based on mobile money applications could also serve as a catalyst for accessing a portion of household savings, thus creating forms of institutionalized «tontines”. As we can see, when it comes to financial engineering, the only limit in the search for solutions is creativity, as shown below by these ten initiatives or trends, which could be game changers in terms of financing. Here is an overview.
Active in France and around the world in several real estate-related segments (shopping centers, golf courses, senior residences), the Duval group is increasingly focusing on Africa with the development of activities as diverse as drilling, waste recycling, microfinance and insurance. In addition to its commercial operations, the company at the end of October announced its intention to position itself in the impact investing niche, a financing solution designed to support economic activities with a strong and immediate impact on local populations. For this occasion, the Duval group will mobilize, with the support of the French bank Crédit Agricole, a fund of 30 million euros dedicated to microfinance and impact investing on the continent. In practice, the fund will enable the Duval Group to finance investments and external growth operations or to refinance already-made investments. As for the projects supported, they should primarily concern social housing, microfinance, microinsurance and access to drinking water.
A SHORT-TERM FINANCING VEHICLE TO SUPPORT ENERGY COMPANIES
A 30-MILLION-EURO FUND DEDICATED TO IMPACT INVESTING
The Energy Access Relief Fund (EARF), established by a consortium of investors and development financing institutions, is a financing vehicle designed to provide short-term solutions to African - and also Asian - energy companies facing difficulties in accessing finance, par-
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