UBA Africa Day 2020: U.S. Says New Development Finance Corporation to Unlock $60bn Investment Inflow into Africa

The United States has said the new Development Finance Corporation, formerly Overseas Private Investment Corporation (OPIC), will unlock $60 billion worth of US investments into the continent through private businesses and other means.

The investment is expected to serve as an antidote to the economic crisis, according to Senator Chris Coons, US Senator and Member of the Senate Foreign Relations Committee, who recently worked on the new Development Finance Corporation project aimed at providing secure private investment opportunities for emerging markets.

Senator Coons disclosed at the UBA Africa Day 2020 where he was a panelist along with global leaders such as HE George Weah, President of the Republic of Liberia; HE Macky Sall, President of Senegal; and H.E. Georges Chikoti, Secretary-General of the African, Caribbean, and Pacific Group of States.

The panel, which spoke on “Growth, Jobs and Sustainable Development Amidst a Global Pandemic”, also included Amir Ben Yahmed, President and Founder, AFRICA CEO Forum; Peter Maurer, President, International Committee of the Red Cross [ICRC]; Professor Benedict Okey Oramah, President and Chairman of the Board of Directors of the African Export-Import Bank [AFREXIMBANK].

Arbiterz’s check confirms that last year, Mr. Worku Gachou, Managing Director for Africa at OPIC promised to up their lending cap to $60 billion. The OPIC has been transformed into the U.S. International Development Finance Corporation.

Senator Coons, at UBA’s Africa Day 2020, also said the Young African Leaders Initiative [YALI] network, the Obama administration’s brainchild, was an example of multilateral efforts to develop the continent’s human resources.

While discussing the United States’ role in building global solidarity in the fight against the virus, he expressed dissatisfaction with President Donald Trump’s anti-globalist actions, such as pulling funding from the WHO and encouraged all parties to partner in creating multilateral solutions to fight the pandemic.

At the event, President Weah gave a brief run-down of Liberia’s efforts in cushioning the effects of the coronavirus pandemic on its citizens. According to him, the government provided stimulus packages for its citizens in a bid to “alleviate the financial and social burden placed on individuals” following the outbreak. It is also in the process of facilitating loans for small businesses that are at risk of closing down. He also mentioned the massive job loss crisis as a problem the government has reacted to. Weah explained that his administration is currently working with banks to repay loans on behalf of citizens who cannot do so due to loss of income.

Also highlighting the economic aspect of the epidemic, ICRC’s Maurer warned against treating the coronavirus as a health problem only. He noted that the secondary impact, in Africa especially, is on the economy. He went on to call on African leaders to unite with a common vision in the fight against the coming economic disaster while implementing smart pan-African policies. “We have to decide how to co-operate and how we can marry short-term emergency humanitarian assistance with innovative community-built corporations and services as a value chain to which everyone can add something.”

Echoing Maurer’s viewpoint, Professor Oramah of AFREXIMBANK stated that this is the time for Africans to stand on their own and embrace the new independence thrust upon them. He advised that the best reaction to the new reality would be taking advantage of it to integrate better, increase intra-continental trade and encourage investments within Africa without looking to foreign powers for bailouts.

This will also eliminate dependency on the fund from other countries, according to Oramah.

Oramah said Africa is currently acquiring way too much debt than it can pay off, often resorting to asking for debt reliefs or giving up national structures to pay off its debts. However, he said this can be tackled through the establishment of “a dynamic economy that is dependent on goods and services which are not vulnerable to episodic shocks”.

Oramah called on leaders to build a thriving domestic capital market on the continent.

Also offering solutions to ensure post-COVID growth, Yahmed said the crisis will be a “super-accelerator” of existing trends. For this reason, it is important to rethink our current systems. He prescribed two solutions: creating alternative means of revenue while abandoning the commodity-driven economic model, and breeding a culture of self-reliance. On self-reliance, he berates African countries’ propensity to import much more than is necessary, while refusing to trade with their neighbours. He called for African countries to look inward and invest heavily in their sectors including healthcare, agriculture and digital infrastructure – all of which have proven indispensable since the pandemic began.

Expressing optimism that the continent can surmount these challenges, Chikoto, Secretary-General of the African, Caribbean and Pacific Group of States, said: “Africa should show leadership in combating the consequences of the pandemic on our economy.” Also impressed with Africa’s chances of defeating the coronavirus was Senator Coons. He noted that as many Americans have died from the disease as there are cases on the continent as of Monday. He commended the African health sectors for putting the experience from handling the Ebola outbreak to good use and managing the outbreak with science-based expertise.