The African Development Bank is holding talks with financiers, with the aim of finding ways to mobilize around $4 trillion in untapped domestic capital to fund the continent’s development needs, its president said. Sidi Ould Tah said the goal was to plug a development financing gap estimated to be worth $400 billion a year.
Tah told the S&P emerging markets conference in London that the multilateral lender was working to improve coordination between Africa-based pension funds, banks, and capital markets to enable more local financing through better “risk allocation.”
Tah, who took the helm of the continent’s largest development lender in September last year, said the AfDB will launch an initiative to help African countries to better prepare for credit ratings because “opacity in some markets creates this notion of high risk, which leads to high cost of borrowing.” He said the bank would work with governments to prepare data to improve transparency. African policymakers have long said Western institutions’ influence over risk perceptions have led to unfairly high funding costs.