AfDB meets under Ebola's cloud as Africa hunts for development cash at home

African ‌leaders ​and financiers gathered for the African Development Bank's annual meeting on Monday as the continent faces shrinking aid flows, with this week's event in Congo Republic overshadowed by an Ebola outbreak across the border.

Overseas development aid from the ‌world's richest nations to poorer countries dropped by nearly a quarter last year to $174.3 billion. The U.S. led the cuts, including reduced funding to the concessional lending arm of the AfDB - Africa's largest development lender. Against that backdrop, the bank is pushing for a fundamental shift - tapping Africa's own financial resources to plug what it estimates ‌is a $400 billion annual development financing gap.

"Africa needs long-term finance for energy, food security, climate adaptation, infrastructure, and jobs for a growing and anxious population," ‌the AfDB said in a pre-meeting statement. "That chasm demands audacious solutions." EBOLA MAY HIT ATTENDANCE

AfDB President Sidi Ould Tah, who took office last September, has made that shift central to his agenda and proposed the New African Financial Architecture for Development (NAFAD) to help Africa "raise development finance at scale, at speed, and at lower cost, primarily from its own resources." The AfDB meeting ⁠is usually ​a key fixture for policymakers and market ⁠participants debating Africa's development finance agenda, but an Ebola outbreak in the neighbouring Democratic Republic of Congo could curb attendance.

The outbreak has spread to Uganda and caused more than 170 suspected deaths. ⁠No cases have been reported in Congo Republic and the government said last week there were no restrictions on the AfDB meeting, based on World Health Organization guidelines. POOLS ​OF CASH TO TAP

Backers of the NAFAD plan, including African governments, say the continent has $4 trillion in institutional capital - including in pensions, sovereign wealth ⁠funds and savings schemes - which could be tapped to fund development. At the moment, however, much of it is fragmented and invested in a disjointed manner, they say.

"There is capital in Africa, but ⁠Africa's ​development projects remain starved of financing," said Kenyan President William Ruto at a conference in Nairobi earlier this month. NAFAD aims at pooling financial resources to finance viable projects in areas such as infrastructure, he said.

Critics say the stocks of capital cited by officials are already invested, arguing that governments ⁠should instead focus on boosting savings rates. Sub-Saharan Africa's savings rate is about 18%, less than half the global average, World Bank data shows, reflecting low incomes and ⁠a young population.

"The size of the ⁠continent's developmental needs means that domestic savings and other forms of domestic capital will not be able to do the job," said Jacques Nel, head of Africa macro at the Oxford Economics advisory firm. "Focus should be on leveraging ‌domestic capital to catalyse foreign ‌capital inflows (and) ... Derisking projects by providing some forms of guarantees."

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)