In a major prelude to the 2024 Africa Investment Forum (AIF) Market Days, top African investors converged in Casablanca, Morocco, on November 12, to engage Moroccan investors and business leaders. This gathering aimed to mobilize financial backing and prepare stakeholders for the annual Market Days event, scheduled for December 4-6 in Rabat, Morocco. The Africa Investment Forum, organized by the African Development Bank (AfDB) in partnership with Africa50 and other founding entities, serves as a critical platform for promoting African infrastructure projects, securing investments, and accelerating financial transactions.

The Casablanca meeting emphasized the importance of Moroccan participation in transforming Africa through sustainable investments. Morocco’s increasing role as a regional investment hub was underscored, and investors were encouraged to explore high-impact projects aligning with the African Development Bank’s “High 5” priorities, the African Union’s Agenda 2063, and the Sustainable Development Goals (SDGs). The event featured prominent speakers, including Abdelkrim Achir from Morocco’s Ministry of Economy and Finance, Yacine Fal from the AfDB, and Zurina Saban from Africa50, each highlighting Morocco’s position as an investment gateway for the African continent.

Morocco: A Key Investment Gateway

Abdelkrim Achir, Deputy Director of Treasury and External Finance at Morocco’s Ministry of Economy and Finance, expressed Morocco’s commitment to the Forum, stating that hosting the AIF for a second consecutive year reflects Morocco’s growing influence as a hub for African investments. He credited King Mohammed VI for propelling Morocco’s positioning as a leading investment destination. Morocco’s strategic geographic location, combined with its stable political and economic environment, makes it an ideal launchpad for investment across Africa, particularly for projects in sectors like renewable energy, transport, and technology infrastructure.

Morocco has recently launched several national programs to improve investment conditions, focusing on simplifying investment processes, enhancing infrastructure, and promoting public-private partnerships (PPPs). For instance, the government has developed special economic zones that offer incentives for foreign investors and local businesses to cooperate on projects that spur job creation and economic growth. Morocco’s appeal is further boosted by its advanced infrastructure, including Africa’s first high-speed rail line and world-class ports in Tangier and Casablanca, which improve intra-African trade connectivity.

Africa50’s Role in Bridging the Investment Gap

A key organizer of the event, Africa50, is a pan-African investment platform that seeks to bridge Africa’s substantial infrastructure financing gap, estimated at over $100 billion annually. With 35 shareholders, including 32 African countries and major financial institutions such as the AfDB, Africa50 plays an instrumental role in de-risking projects to attract both local and international investors.

Zurina Saban, General Counsel of Africa50, stressed the critical need for collaborative efforts to address Africa’s infrastructure challenges. She highlighted that the Forum provides an essential mechanism to bring investors together, facilitating connections to bankable projects that have the potential to transform Africa’s economic landscape. By mobilizing both public and private sector capital, Africa50 enables the continent to finance infrastructure projects in energy, transport, healthcare, and other key sectors.

Africa50’s innovative investment approach includes identifying high-impact projects that meet sustainability standards while ensuring returns for investors. For instance, Africa50 has spearheaded renewable energy projects such as the 120 MW Nachtigal hydropower plant in Cameroon, which will provide affordable electricity to local communities, promoting economic growth and environmental sustainability.

The Power of Strategic Partnerships in Africa’s Economic Transformation

The 2024 Market Days event will operate under the theme “Leveraging Innovative Partnerships for Scale,” underscoring the importance of strategic collaborations. Over 2,000 participants from more than 50 countries, including project sponsors, government representatives, and financiers, are expected to attend. This year’s event will focus on expediting deals to financial close, a critical phase for ensuring the viability of large-scale infrastructure and development projects.

Recent technological advancements by the Africa Investment Forum have optimized the project tracking process, improving transparency and efficiency. With the automation of its project and investment tracking system, the AIF can now streamline deal-making, which is essential in connecting investors with projects that align with both profit and sustainability goals. This enhancement will allow for better project supervision and a smoother investment process, enabling capital to flow more effectively to where it is most needed.

The AIF’s approach also emphasizes cross-border cooperation, fostering intra-African investments that allow member countries to collaborate on projects that span multiple regions. For example, Africa50 and AfDB have supported cross-border energy infrastructure initiatives, including the Central African interconnection project that will provide a regional energy network among Cameroon, Chad, and the Central African Republic, thus reducing dependency on external energy sources and enhancing energy security.

AIF’s Founding Partners: Strengthening Africa’s Investment Landscape

The AIF is a collaboration between the AfDB and eight other founding partners: Africa50, the Africa Finance Corporation, the African Export-Import Bank (Afreximbank), the Development Bank of Southern Africa, the Eastern and Southern African Trade and Development Bank (TDB), the European Investment Bank (EIB), the Islamic Development Bank (IsDB), and the Arab Bank for Economic Development in Africa (BADEA). This diverse coalition brings a wealth of financial and technical expertise, which is critical for addressing the multifaceted investment needs of the continent.

In 2024, the Arab Bank for Economic Development in Africa (BADEA) joined the AIF as a founding partner, further strengthening its investment capacity. BADEA has been a prominent player in financing development projects in Africa, focusing on infrastructure, healthcare, and education. Its addition to the AIF reflects a growing recognition of the need for a pan-African investment ecosystem that leverages both regional expertise and international support.

The combined resources and networks of these partners facilitate a holistic approach to African development, ensuring that projects are not only financially viable but also socially and environmentally responsible. This collaborative model aligns with the African Union’s Agenda 2063, which seeks to achieve a prosperous and integrated Africa driven by its own citizens.

Innovations for Sustainable Investment Growth

One of the AIF’s primary goals is to align African investment opportunities with global trends in sustainable finance. Africa is at the forefront of renewable energy potential, with abundant resources for solar, wind, and hydropower. By promoting green investment strategies, the AIF hopes to attract a growing segment of investors who prioritize environmental, social, and governance (ESG) standards.

For example, recent AIF projects have focused on sustainable urban development and green energy initiatives. In Kenya, the AIF has supported the development of large-scale solar farms that provide affordable, renewable energy to thousands of households. The Forum has also facilitated investments in green bond markets in Nigeria and South Africa, creating avenues for sustainable infrastructure financing.

The AIF has introduced metrics to assess the sustainability impact of each project, including its carbon footprint, social impact, and economic contributions to local communities. This commitment to ESG principles not only aligns with global investment trends but also ensures that projects contribute positively to the well-being of African citizens.

Expectations and Key Deals for 2024 Market Days

With Market Days fast approaching, anticipation is high for landmark deals that could drive Africa’s economic growth. Some of the anticipated deals involve renewable energy, digital infrastructure, healthcare, and transport projects, which have been identified as priority areas for the continent. Analysts expect that the event will result in record-breaking commitments, with several deals already in advanced stages of discussion.

AIF’s success over the years includes mobilizing billions of dollars in commitments for African projects, with high-profile agreements like the $500 million financing deal for the Inga III Hydropower Project in the Democratic Republic of the Congo, which aims to provide electricity to over half of Africa. In addition, digital transformation projects, such as data center expansions in West Africa, have garnered significant interest as the continent works to bridge its digital divide.

The AIF Market Days also serve as a launchpad for innovative financing solutions, such as blended finance models and impact investment funds, which are essential for making large-scale projects viable in regions with limited access to traditional financing.

Conclusion: Africa Investment Forum as a Catalyst for Growth

The Africa Investment Forum’s gathering in Casablanca underscores the urgency and commitment to mobilize resources for Africa’s development. With the continent facing a vast infrastructure deficit, the AIF provides a strategic avenue for bringing together key players to close financing gaps and advance transformative projects. As African nations continue to prioritize regional integration and sustainable growth, the AIF is poised to be a driving force in achieving these ambitions, setting the stage for an empowered, self-reliant Africa that is resilient in the face of global economic challenges.

The 2024 Market Days promise to reinforce this vision, facilitating partnerships and catalyzing investments that will shape Africa’s future. Through its collaborative approach, commitment to sustainability, and focus on bankable projects, the Africa Investment Forum is not only transforming Africa’s investment landscape but also positioning the continent as a global leader in sustainable development.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

14th November, 2024