AfDB looks to boost ties to Arab funders to plug development finance gap

Source: Reuters.

The new president of the AfDB, Africa's biggest development lender, said closer ties with the Arab Coordination Group were key to bridging the growing gap in development finance as donor nations including the United States cut spending abroad.

"What is necessary now is a more structured partnership which is quite strategic," said Sidi Ould Tah, a former finance minister for Mauritania, who took the helm of the AfDB last year.

Tah said working more closely with the ACG, which includes the Arab Bank for Economic Development in Africa, the OPEC Fund for International Development and the Saudi Fund for Development, could mobilise added long-term funding for priorities including industrialisation and job creation.

The sides signed a formal declaration setting out the new terms of engagement, including co-financing priorities, the AfDB said.

Rami Ahmad, vice president for operations at the OPEC Fund for International Development, said the new approach would involve the creation of a co-ordination platform to target long-term, big-ticket spending across regions, rather than one-off investments in individual countries.

The Arab financial institutions have provided billions of dollars for Africa's development over the years in projects such as infrastructure, sanitation and farming.

Tah said "external shocks" had widened the development financing gap - the shortfall between current financing and the amount of money the AfDB says is needed to invest in ports, agriculture and other infrastructure to enable development across Africa's economies.

In December, he pegged the gap at $402bn annually.