President of the African Development Bank, Akinwunmi Adesina, on Tuesday advised Nigerian government to invest its idle pension funds estimated at N9.56trillion to develop infrastructure, against the backdrop of heavy infrastructure deficit.
Akinwunmi who spoke to State House Correspondents after meeting with President Muhammmadu Buhari at the Presidential Villa , Abuja, stated that African countries with over $1.8trillion pension and sovereign wealth assets, could leverage on such huge resources to development infrastructure in the continent.
This is against the backdrop of the continent’s infrastructure deficit gap valued at about $108b.
“Africa countries have an infrastructure gap of between $68bn to $108bn, which could be adequately addressed by utilising the $1.8tn accrued pension and sovereign wealth funds,” Akinwunmi said.
The AFDB President who previously served as Nigeria’s Minister of Agriculture, urged African leaders to explore the possibility of spending the funds by investing in infrastructure development.
Adesina, while noting that “charity begins at home”, said with such huge resources, African governments have no need looking elsewhere to seek funds for development or investing the funds.
Adesina explained that with good infrastructure, Africa would be better positioned to compete favourably in trading with others.
He commended the continent leaders for increasing the banks shareholders funds to $115bn, and assured that the bank would was now better placed to continue to support the development of infrastructure on the continent.
“Today, Africa has an infrastructure gap of about roughly $68bn to $108bn infrastructure financing gap. At the AfDB, we have been working so hard to close that particular gap.
“When it comes to the issue of attracting capital to do that, there are three things that I will say: first, we have to also look at home. Today, in Africa, the size of the sovereign wealth fund and pension fund and insurance pull of fund (mutual funds) is about $1.8tn.
“If we can just tap a little part of that, we will close very quickly the infrastructure gap that we are talking about. But, you see a lot of sovereign investment funds being invested in other sovereigns outside the continent.
“So, they become the sovereign wealth of others and then you go back and borrow back your own money; it doesn’t really make a lot of sense. I say that charity always begins at home.”
On the proposed single currency for the Economic Community of West Africa sub-region, the Eco, the AfDB President described it as a good development for West African countries.
Adesina described the African Continental Free Trade Area Agreement as the best thing that has happened to the continent, adding that with a unified currency for the sub-region, it also meant West Africa would be better placed to compete with the rest of Africa.
“I support the Eco fully,” Adesina said, adding that the AFCTA is “the biggest thing to happen to Africa”.
“I think that at the end of the day the biggest thing to happen to Africa is the African Continental Free Trade Area (AfCFTA). That free trade area itself is worth over $3.3 trillion in terms of trade.
“So, it makes common sense to have a unified currency and of course for that to even be achieved, I support Eco greatly. I think it’s a great idea to do.
“But, obviously, there are a number of convergence criteria that will have to be met and I am sure that our President is talking with other presidents to be sure that they can meet those criteria and the region can be fully integrated.”
