Global Policy Forum

AU Plans African Investment Bank


By Charles Mangwiro

August 3, 2007

The African Union (AU) plans to establish an investment bank in the next three years as part of an effort to raise an annual $25 billion for development projects, an AU official said on Thursday. Maxwell Mkwezalamba, the AU's Commissioner for Economic Affairs, said in an interview the resource-rich continent is increasingly growing frustrated over wealthy countries' failure to live up to pledges to double aid for Africa by 2010.

"It's frustrating to note that our partners have not lived up to what they have committed themselves to do, that's why we are going to develop some mechanisms to try and look for our own funding," he said. He said the AU is discussing details that will go into setting up the African Investment Bank and garnering support from African countries for the idea. The bank will likely be funded by AU members and loans granted according to financial and political credentials tracked by a continental monitoring system known as the African Peer Review Mechanism (APRM).

The International Monetary Fund this week also accused the world's richest nations of failing to double development aid to Africa, as promised at the 2005 Group of Eight summit. "We are in the process of establishing some financial institutions, one of which is the African Investment Bank, which will have resources coming from the member states of the AU and the private sector players who will look into financing regional infrastructure, and once we get there, we'll have little dependence on our partners," he said.

Mkwezalamba said the continent needs some $250 billion in the next ten years to double the size of Africa's economy and trade by 2015, while delivering increased domestic and foreign investment. He said the money would lift tens of millions of people out of poverty, broaden access to primary school education, fight conflict and help in the provision of universal access to treatment for AIDS by 2010.

"We will start to exploring our own resources instead of waiting for people from outside (the continent), we need to engage our private sector in these processes so that we get a better quality of our product for export," he said.





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