African countries urged to consider innovative infrastructure finance solutions
African countries should consider innovative solutions to finance infrastructure development that would enable the continent to unlock quality growth, the Africa Progress Panel (APP) said on Monday.
The organisation said a 2009 estimate pegged plugging the continent’s infrastructure gaps at $48-billion a year for a decade.
“By extending their tax reforms to African countries, G20 and Organisation for Economic Cooperation and Development countries can support a clampdown on tax avoidance and evasion, which cost Africa billions of dollars each year.
“African governments can boost available infrastructure funds by reforming domestic tax systems and making banking systems more competitive,” the organisation said. “However, Africa’s interest rates deter both savings and investment.”
Further, the continent must overcome perception that its infrastructure projects were high risk. “The global community can help by scaling up operations of the Multilateral Investment Guarantee Agency and by using the International Development Association to cover the costs of insurance premiums on infrastructure projects.
“Africa could tap into its combined foreign exchange reserves – $450-billion in 2012 – to finance infrastructure bonds,” the APP suggested.fff
By: Leandi Kolver