MFW4A participated in a panel discussion on 'Banking in sub-Saharan Africa: Digital Financial Inclusion, Housing Finance and Long-Term Investment'. The discussion was part of pre-launch activities for EIB's Annual Survey of Banking Sub-Saharan Africa, which this year focuses on Digital Finance. David Ashiagbor, MFW4A Partnership Coordinator joined Dr Issa Faye, Manager, AfDB Research Division, Mr. Michael Fuchs, Senior Financial Sector Expert and Ms. Minerva Kotei of the SME Forum, to discuss how to boost financial inclusion, housing finance and long-term investment in Sub-Saharan Africa.
The lack of long-term finance is a major constraint to economic development in Sub-Saharan Africa. There are major challenges in addressing the vast needs of the manufacturing and mining sectors, infrastructure (last estimated at about US$100 billion annually), agriculture (estimated at another US$100 billion annually), and the growing needs for housing finance to keep pace with urbanization. Whilst long-term efforts to strengthen the necessary institutional and legal framework are undertaken, "low-hanging fruit" approaches have to be pursued given the urgency of the needs. The session focused on unpacking these critical issues.
MFW4A Partnership Coordinator, David Ashiagbor, highlighted the role of local institutional investors in mobilizing long term domestic savings. Whilst many countries in Africa have seen significant increases pension assets (sometimes as much as 30% per year) this has not been accompanied by increased investment in productive assets.
'There is a need to better understand the needs and investment objectives of local institutional investors, and design products to meet those needs in order to unlock capital for long-term investment', Mr. Ashiagbor stated.
*The Making Finance Work for African Partnership (MFW4A) provides a platform for joint action, dissemination of ideas and coordination amongst donors and African financial sector stakeholders to address African priorities on financial sector development issues. MFW4A's work programme encompasses three inter-linked strategic priorities: Financial Inclusion, Long-Term Finance, and Financial Stability and Governance, supported by Knowledge Management and Advocacy, as a cross cutting pillar.
Under Long-Term Finance, MFW4A works to support the mobilization of long-term finance to support Africa's real economy. MFW4A in 2014, established the African Pension Funds Network (APFN), a platform aimed at facilitating cross-country collaboration through co-investments, peer to peer learning and providing a forum for engagement with other financial sector stakeholders at the Pan-African level.
For more information on other MFW4A's activities and initiatives under long term finance, download the MFW4A Yearly Report 2015.
*European Investment Bank (EIB) is a Founding Member of the Making Finance Working for Africa (MFW4A) Partnership.