Financing the private sector is the key to development – Dr. Amin

Finance Minister Dr. Mohammed Amin Adam acknowledged that significant financial resources are needed to drive the continent’s transformation, noting that this need can only be met by working closely with the private sector.

According to him, the imperative to mobilize private sector financing is so clear; especially at a time when public finances across the continent are affected by numerous crises.

Speaking on the theme “Mobilizing the Private Sector to Accelerate Africa’s Transformation” at the Governors’ Dialogue at the ongoing 2024 Annual General Meetings of the African Development Bank, he noted that the United Nations estimates that approximately 1.3 million will be needed to meet Africa’s sustainable development requirements. trillion dollars a year needed by 2030

“In fact, the Bank’s report indicates that ensuring access to electricity in Africa by 2030 will require over $35 billion per year, while approximately $45 billion per year will be needed to achieve Africa’s renewable energy goals,” he said.

The Minister disclosed that the situation has worsened in most African countries due to their increasing vulnerability to climate change and unfulfilled climate financing commitments, prompting them to allocate limited public resources to climate action.

“Therefore, private financing is essential to fill the gap and further mobilize additional resources to meet the ever-increasing needs. Private finance certainly plays a key role. We need to focus on how to do it on a large scale and quickly,” he said.

As Dr. Amin revealed, private financing is based on factors such as macroeconomic fundamentals, political risk and infrastructure quality; and the ability to tap the sector’s potential would ensure adequate revenue mobilization.

The Minister asserted that for governments to attract sufficient private capital for development, it is important to provide incentives and conditions that catalyze private investment – including the formulation, implementation and significant improvement of the low technical, human and institutional capacity limiting the continent’s overall capacity to secure private finance ; and strengthen domestic and continental financial institutions to leverage more private capital around the world

Citing the case of Ghana, he said the country was aggressively pursuing support for vibrant small and medium-sized enterprises to drive economic recovery and ensure sustainable growth.

He also touched on the dialogue framework for Ghana’s Mutual Programme, a public-private partnership aimed at attracting foreign and local investment by promoting shared growth.