🇿🇼NewsDay Zimbabwe·53 mins ago
AfDB supports new financial architecture to address Africa’s funding gap
The African Development Bank AfDB is backing a new financial architecture, the New Architecture for Africa’s Development NAFAD, to help close the continent's financing gap and accelerate structural transformation. This initiative aims to leverage the balance sheets of African development finance institutions DFIs, along with pension funds, banks, and insurance companies, to pool resources and maximize capital impact. AfDB president Sidi Ould Tah champions this collaborative approach, which focuses on risk mitigation and sharing to optimize the value of invested funds. Kevin Urama, the bank’s chief economist and vice-president for Economic Governance and Knowledge Management, emphasized that collective action leads to greater long-term impact. African governments are also urged to play a critical role through stronger domestic resource mobilization, improved macroeconomic management, and governance reforms to attract additional investment. Africa requires significant funding, including US$1.3 trillion for Sustainable Development Goals, US$221 billion annually for infrastructure, and US$402.2 billion annually for structural transformation. Urama noted the paradox of vast financing needs coexisting with an estimated US$4 trillion in untapped domestic capital. The challenge is compounded by rising geopolitical fragmentation and declining official development assistance, as major economies redirect resources domestically.
