The World Bank has called for the private sector to scale up its ambitions investments, which would have strong impact on the economic development of the country, a high official has said.
The Bank’s Vice President, Development Finance, Alex van Trotsenburg, speaking at the 3rd Development Finance Forum, indicated that bulk of financing needed to make the SDGs a reality will need to come from the private sector.
Mr van Trotsenburg said the private sector is the engine of job growth for the millions of unemployed African youth and it is a critical shift, as there are not enough jobs to absorb labour force entrants.
He added in order to keep employment rates stable, there is a need to create 600 million new jobs over the next 15 years.
The forum, which was hosted jointly by the World Bank Group and the African Center for Economic Transformation (ACET), convened both public and private sector leaders from Ghana and around the world to explore innovative ways to bring more private finance into Africa’s priority sectors
Two years ago, world leaders of the global community convened in Addis Ababa, to agree on ways to finance the ambitious Sustainable Development Goals (SDGs), with the objective of virtually eliminating extreme poverty.
van Trotsenburg noted that development needs of today, and through the year 2030, are enormous.
“Therefore, with this recognition, we are no longer talking about the billions of dollars that will be needed to support the renewed development goals—we are talking about the trillions,” he added.
van Trotsenburg said developing countries have the capacity to mobilize much of this money, through improved investment climates, public financial management and tax collection, with support from the World Bank.
At the same time, official development assistance (ODA) from donor governments will also help fill the gap. Nevertheless, this is still not enough.
van Trotsenburg revealed that the World Bank Group would be stimulating private investment in challenging environments through the Group’s concessional financing arm, the International Development Association (IDA).
He, added that a new US$2.5 billion Private Sector Window (PSW), seeks to mobilize private capital, particularly in fragile situations, by offering a range of solutions—such as risk mitigation, blended finance and local currency lending¬—to encourage investments that have failed to materialize due to perceived risks. The PSW is set to launch in July 2017.
The Private Sector Window is part of a US$75 billion package of support for low-income countries eligible for IDA financing over the next three years. US$45 billion of this amount is expected to go to Africa.
Although Ghana is classified as a lower middle-income country, it will receive US$1.2bn of the US$75 billion 18th replenishment of the IDA , which has been pledged by the Bank to support poor countries.
The allocation will span July 2017 to June 2020, and will be channeled into budget support and special social intervention projects.
Through the PSW, the World Bank Group (IDA, IFC and MIGA) will work jointly with private sector entities and governments to help projects with a strong development impact get off the ground.
GSB