AFRICA NEWS AGENCY
How to Finance AFCFTA ?
A NEW GAME CHANGER FOR INVESTMENT IN AFRICA If the implementation of the AfCFTA carries a large legal part, at least initially, other fundamentals are necessary for a real liberalization of intra-African trade. Starting with roads, all elements related to transport and logistics, energy, digital infrastructure ... Works that require significant funds. The Initiative has put a figure on this need: one thousand billion dollars will be required for implementation. Will the alternative come from African public funds?
opens up opportunities for investment funds to identify sectors where profitability is more important than others. According to recent studies, two trends are emerging among investment funds in Africa: «focusing on specific sectors and multi-regionalizing investments».
1.7 billion raised in 2019 Thus, in early 2019, investment funds active on the continent managed to raise $1.7 billion, nearly 70% of which came from sectoral funds, said the Association of African Private Equity and Venture Capital Companies (AVCA). In other words, funds are specializing to better focus on identifying and leveraging opportunities in their areas of expertise.
The creation of the African Continental Free Trade Area (AfCFTA) could indeed change the investment landscape on the African continent. Some public funds are already active in certain sectors. But first, it is interesting to note that public funds are defined as «all the money belonging to the state and subject to the rules of public accounting». In the context of the AfCFTA, this refers to investments that African states, each within its own perimeter, could allocate for the success of this common market. However, here we will refer to all the funds that are able to contribute to the construction of the largest free trade area in the world. Clearly, the creation of the AfCFTA
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In fact, nearly 90% of the money raised in fundraising is taken up by only four sectors of activity, namely finance, consumer staples, industry and consumer discretionary (consumer durables, media, automotive, entertainment, etc.).
«Nearly 90% of the money raised in fundraising is taken up by only four sectors of activity, namely finance, consumer staples, industry and consumer discretionary”
Sign that specific opportunities are coveted by all, even generalist funds are increasingly interested in them. This is the case, for example, with the development of cutting-edge technologies on the African continent, which are attracting more and more investors. As Enitan Obasanjo-Adeleye, Director of Research at AVCA, attests, «fundraising in this area in Africa is increasing.” That being the case, the AfCFTA, in its development, must not leave many people by the wayside at the risk of having a «backlash» against free trade. Therefore, it is up to the states, but also to the AfCFTA Secretariat, to put in
