The World Bank’s Multilateral Investment Guarantee Agency (MIGA) has unveiled plans to scale up its guarantee issuance in Africa to $6.4 billion annually over the next three and a half years, in a move expected to mobilise about $23 billion in private capital for critical sectors across the continent.
The planned expansion comes as multilateral lenders intensify efforts to attract private sector investment into Africa amid shrinking global aid budgets and rising demand for financing infrastructure, energy and food security projects.
MIGA said the guarantees would support projects spanning food and energy security, digital connectivity, trade finance, debt swaps and lending support for local banks across several African countries.
The agency noted that the scaled up guarantees are part of the broader reforms within the World Bank Group following the consolidation of its guarantee operations under a single umbrella nearly two years ago.
According to the agency, the guarantees have already supported the World Bank’s first debt swap transactions in Ivory Coast and Angola, alongside food security initiatives in Kenya, more than 100 energy projects and bank lending programmes in Ghana and Zambia.
MIGA, however, did not disclose details of its upcoming project pipeline but maintained that future guarantees would continue to focus on strategic sectors considered critical to Africa’s economic resilience and long term growth.
The instruments to be deployed under the expanded programme include political risk insurance, credit enhancement facilities, debt swaps and portfolio guarantees across multiple countries.
Managing Director of MIGA, Tsutomu Yamamoto, said the initiative would play a significant role in unlocking investments into the continent.
He said the scaled up guarantees would play a “critical role” in attracting investments, creating jobs and “ultimately help to build robust and stable economies.”
The development comes at a time when major economies are reducing foreign aid spending while simultaneously seeking greater access to Africa’s vast mineral resources.
MIGA added that the broader target of the World Bank Group is to increase global guarantee issuance to $20 billion annually by 2030.
SOURCE: Leadership