COVID-19: Pushing us to refocus priorities, says bank VP - ITREALMS

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The African Development Bank hosted an online seminar on 7 October as part of the fourth annual Global Infrastructure Forum, drawing together representatives of government, the private sector and multilateral development institutions to discuss strengthening infrastructure development in the COVID-19 pandemic era.

The Bank’s workshop, titled Infrastructure Project Preparation: Ensuring Sustainability and Resilience Post COVID-19, took the form of a panel discussion on the critical roles that government, multilateral lenders and the private sector can play in building much-needed infrastructure in an economic climate made more challenging by the ongoing pandemic.

The COVID-19 pandemic has sharpened Africa’s already urgent need for added infrastructure spending. The African Development Bank estimates Africa’s infrastructure financing needs at up to $170 billion a year by 2025, with an estimated financing gap of as much as $108 billion a year.

The webinar panel comprised Lamine Lo, Director, Financing and PPPs in the Ministry of Economic Planning and Cooperation, Senegal; Solomon Quaynor, Bank Vice President, Private Sector, Infrastructure & Industrialization; Jerome Haegeli, Group Chief Economist and Managing Director, Swiss Re, and Dr. Srinivas Sampath, Chief of the PPP Thematic Group, Asian Development Bank.

Quaynor noted that African countries typically lack the fiscal space of wealthier ones to cushion the pandemic’s impacts. He also noted that the pandemic posed a challenge also for institutions like the African Development Bank. “We’re going to have to innovate, come up with better project preparation approaches, we’re going to have to design risk mitigation instruments because a lot of private sector would not be willing to take the risk of government obligations without a counter-guarantee.”

The follow-up question and answer session led to a wide-ranging discussion that offered the panelists an opportunity to showcase some of the innovations that are being rolled out and share their projections. Topics included climate change, infrastructure recycling and leveraging pension funds and sovereign wealth funds to develop infrastructure.

In response to a question about government’s role in creating an enabling environment, Lamine Lo laid out Senegal’s priorities post COVID-19, listing the health sector, agriculture, education and pharmaceutical sector. “Why these sectors? It is driven by lessons learned from COVID-19 but it is also driven by the need to build an economy which is sustainable.”

Underscoring the longer-term nature of climate change impacts, Haegeli observed that “COVID-19 is a human tragedy, it’s the deepest recession of our lifetimes, but it has an expiry date, climate change and biodiversity don’t, that’s why I think there’s even more upside to act.”

There was consensus among the panelists that MDIs, including the African Development Bank and Asian Development Bank, have a critical role to play in preparing projects for investment, tapping new sources of financing and supporting the recycling of assets.

“There is enough project preparation support available in the multilateral community. There is ADB’s project preparation facility, EBRD’s facility, the World Bank, GIF, and clients should use them,” said ADB’s Sampath.

In their closing remarks, panelists blended realism with optimism while reaffirming the need for change and collaboration.

“We need to refuel the global economy’s tank. While we refuel, let’s exchange the engine, let’s put in new batteries. And that’s why we need sustainable infrastructure. That’s at the core of the global recovery,” Haegeli said.

“There are many building blocks we can put in place, both in terms of managing the crisis, as well as medium to long-term infrastructure, quality preparation of infrastructure projects, and making sure they are structured and attractive for the private sector to come in and invest because this is not something MDBs and the government alone can do,” said Sampath.

“Never waste a crisis, advised VP Quaynor. “One of the potential positive impacts of this crisis is it’s pushing all of us to really focus priorities. And also make sure that we build quality infrastructure that maximizes the positive impacts to the economy and we also build it to withstand natural disasters, pandemics and epidemics going forward.”

The Global Infrastructure Forum 2020, themed Building a resilient future post COVID-19, runs from 6-8 October across multiple time zones. Short URLs: goo.gl, mcaf.ee, cli.gs