Africa’s $1.8trillion pension and sovereign wealth assets should be used to develop infrastructure in the continent, the President of the African Development Bank (AfDB), Dr Akinwunmi Adesina, has said.
Dr Adesina, who spoke with State House correspondents yesterday at the Presidential Villa, Abuja, after a meeting with Muhammadu Buhari, added that such investment would bridge the current infrastructure gap.
He said: “Today, Africa has an infrastructure gap of about roughly $68bn to $108bn infrastructure financing gap. At the AfDB, we have been working so hard to close that particular gap.
“When it comes to the issue of attracting capital to do that, there are three things that I will say; first, we have to also look at home. Today, in Africa, the size of the sovereign wealth fund and pension fund and insurance pull of fund (mutual funds) is about $1.8tn.
“If we can just tap a little part of that, we will close very quickly the infrastructure gap that we are talking about. But, you see a lot of sovereign investment funds being invested in other sovereigns outside the continent.
“So, they become the sovereign wealth of others and then you go back and borrow back your own money; it doesn’t really make a lot of sense. I say that charity always begins at home.”
Dr Adesina, who said the AfDB stakeholders had strengthened the bank with $115bn to further support the development of the continent, described the proposed single currency for the Economic Community of West Africa sub-region, the Eco, as a good development.
He said a unified currency for the sub-region would place the West African countries on a higher pedestal to compete with the rest of Africa in view of the African Continental Free Trade Area Agreement (AfCFTA).
“At the end of the day, the biggest thing to happen to Africa is the AfCFTA. That free trade area itself is worth over $3.3tn in terms of trade. Obviously, it’s not optimum to trade in so many currencies.
“So, it makes common sense to have a unified currency and of course for that to even be achieved, the Eco; I support Eco greatly. I think it’s a great idea to do.
“But, obviously, there are a number of convergence criteria that will have to be met and I am sure that our President is talking with other presidents to be sure that they can meet those criteria and the region can be fully integrated,” he said.