AfDB Promises $2 Billion Investment in the Revolutionary Growth Initiative, Which Powers Cities
Akinwumi Adesina, the President of the African Development Bank (AfDB), has passionately reaffirmed the bank’s dedication towards the advancement of cities, emphasizing the imperative of amplified investments and enhanced independence for municipalities.
At the “Leveraging Cities and Municipalities for National Development” mayors’ conference, which coincided with the Africa Investment Forum (AIF) 2023 Market Days in Marrakech, Morocco, Adesina emphasized the critical role that cities play as engines of economic development.
The assembly convened mayors and governors from key African cities, such as Lagos, Dakar, Addis Ababa, Abidjan, Kigali, and Nairobi, alongside representatives from governmental bodies, financial institutions, and developmental agencies.
The primary objective of the event was to instigate fresh collaborations among financial institutions, cities, states, and municipalities to accelerate Africa’s growth trajectory and overall development.
The presentation of a recent report titled “From Millions to Billions: Financing the Development of African Cities,” which was commissioned by the African Development Bank, was one of the session’s main highlights. This report accentuated the soaring urban populace in Africa, projected to nearly triple in the coming 25 years, reaching an estimated 1.5 billion inhabitants by 2050.
In response to this burgeoning challenge, it is estimated that African nations will need to invest approximately 5.5% of their annual GDP in their cities, amounting to roughly $140 billion per year.
Adesina delineated four strategic avenues aimed at attracting private investments into cities. These include giving cities more financial authority and accountability, utilizing debt securities as a source of funding, encouraging better mortgage financing for low-income housing, and developing new regulatory frameworks to make it easier to raise money through municipal and green bonds issued on the local capital markets.
Furthermore, Adesina announced the approvals granted by the Board of Directors of the African Development Bank, notably the establishment of the Urban and Municipal Development Fund (UMDF), with a mobilization of $50 million allocated for the period 2023–2027. This fund aims to bolster urban project preparation and urban planning and facilitate municipal access to financial support ecosystems.
In addition to this commitment, the African Development Bank is set to extend projected lending of approximately $2 billion in 2024, specifically directed towards bolstering cities and municipalities.
The Africa Investment Forum has pledged to give precedence to bankable projects for cities, dedicating dedicated sessions to cities as a regular agenda item.
This resolute commitment signifies a concerted endeavor to accord priority and backing to urban development initiatives across the continent.
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