ContextAddress in Banjul, The Gambia, to the African Caucus of IMF and World Bank governors, before the President of The Gambia and other African leaders.
Why it mattersAfrica's development bank chief puts a figure on the continent's financing gap and calls for consolidating African financial institutions.
- Africa faces a US$400 billion financing gap.
- Development banks cannot close it alone.
- African financial institutions are fragmented.
- Leverage, de-risk and crowd in private capital.
- Reform and consolidate Africa's financial institutions.
- Support countries' domestic reforms.
Read the speech summary
1. Four paradoxes
Addressing the IMF and World Bank African Caucus in Banjul, African Development Bank President Sidi Ould Tah thanked The Gambia for its reforms and its early pledge to the Fund's seventeenth replenishment, the largest ever, and described Africa as a rising growth frontier with twelve of the twenty fastest-growing economies. He named four paradoxes: size without influence (18% of people, over 30% of mineral reserves, but about 3% of trade and output); financing (over 400 billion dollars a year needed while over 4 trillion sits in African banks, pension funds and insurers); opportunity (only about 6% of global investment inflows, held back by perceived risk and a guarantee gap near 50 billion dollars); and fragmentation (intra-African trade of 16% against nearly 60% in Asia).
2. The four cardinal points
The bank's strategy answers each: mobilise capital at scale by leveraging and de-risking; consolidate Africa's more than 100 small development finance institutions under the New African Financial Architecture; harness the demographic dividend through skills, jobs and support for small firms, since 60% of people are under 25; and build resilient infrastructure and local value addition, instead of exporting raw materials and importing them refined. The Senegambia Bridge shows how recycling an asset's value attracts institutional investors.
3. Four messages
To African governments: he praised debt management efforts and a South African-led borrowers' club, and urged support for turning the continental guarantee agency ATIDI into a larger pan-African mechanism, where the bank has multiplied its stake fivefold. To the IMF: after three successive shocks, Africa needs flexibility, fresh concessional resources and more channelled special drawing rights, citing research that each dollar spent on conflict prevention can save up to 103. To the World Bank: continued support for IDA and joint initiatives. To all partners: trade and investment rather than aid, delivered with speed, scale, synergy and shared prosperity.