Private sector financing remains critical to Africa's development agenda - Dr. Amin Adam

The Minister for Finance, Dr. Mohammed Amin Adam, has indicated that significant private sector financing is needed to drive the continent's transformation agenda.

According to him, the imperative to mobilize private sector financing is clear, especially at a time when public finances across the continent have been impacted by multiple crises.

Speaking on the theme "Mobilizing the Private Sector to Accelerate Africa’s Transformation” at the Governors’ Dialogue during the ongoing 2024 African Development Bank Annual General Meetings, Dr. Amin Adam noted that the United Nations estimated that approximately US$1.3 trillion would be required annually to meet Africa’s sustainable development needs by 2030.

“In fact, a report by this Bank indicates that ensuring access to electricity in Africa by 2030 will require over US$35 billion annually, while around US$45 billion are needed per year to achieve Africa’s renewable energy goals,” he said.

Ghana's finance minister revealed that the situation had worsened for most African countries due to their increasing vulnerability to climate change and unmet climate financing pledges, prompting them to allocate scarce public resources to climate action.

“Therefore, private finance is essential for filling the gap and mobilizing additional resources to meet ever-increasing needs. Private finance certainly plays a critical role. We must focus on how to do this at scale and speed,” he stated.

Dr. Amin mentioned that private financing rests on factors such as macroeconomic fundamentals, political risk, and quality of infrastructure adding that the ability to harness the potential of the sector would ensure adequate revenue mobilization.

The Minister disclosed that, for governments to attract sufficient private capital for development, it is important to provide incentives and conditions to catalyze private investments.

This, he explained includes formulating and implementing measures to significantly improve low technical, human, and institutional capacity, which limits the continent’s overall ability to secure private finance.

"Strengthening domestic and continental financial institutions is also crucial to leverage more private capital globally," the finance minister added.

Citing Ghana’s case, Dr. Amin Adam mentioned the country’s aggressive pursuit of bolstering vibrant Small and Medium Enterprises to stimulate economic recovery and ensure sustainable growth.

He also touched on the Ghana Mutual Programme Dialogue Framework, a Public-Private partnership aimed at attracting foreign and local investment by promoting shared growth.

MA