AfDB Seeks New Funding Models Amid Declining Foreign Aid
African leaders are meeting in Congo Republic to discuss the New African Financial Architecture for Development as foreign aid flows decline. The plan aims to tap four trillion dollars in domestic institutional capital to bridge a four hundred billion dollar annual development financing gap.
The African Development Bank (AfDB) convened its annual meeting in the Congo Republic on Monday to address a $400 billion annual development financing gap. The summit arrives as global overseas development aid fell 25% to $174.3 billion last year. Additionally, the meeting is overshadowed by an Ebola outbreak in the neighboring Democratic Republic of the Congo, which could curb attendance. For investors, the shift toward mobilizing $4 trillion in domestic African institutional capital signals a major pivot in continental project financing.
### Tapping Domestic Capital to Offset Aid Cuts The United States led recent funding cuts to the AfDB’s concessional lending arm, forcing the AfDB to seek internal solutions. AfDB President Sidi Ould Tah, who assumed office last September, is pitching the New African Financial Architecture for Development (NAFAD). This framework aims to pool fragmented resources from pension funds and sovereign wealth funds to finance energy and infrastructure projects.
