Assessing the EU's plan to boost investment in Africa

The European Union is stepping up its efforts to boost investment in Africa through its External Investment Plan, with a focus on de-risking private sector lending in high-risk sectors and countries. Jyrki Katainen, the Vice President at the European Union Commission for Jobs, Growth, Investment, and Competitiveness, discussed the key elements of the plan in an interview with CNBC Africa's Christy Cole at the Togo-EU Economic Forum. The External Investment Plan consists of three key elements. The first element involves a new fund that provides grant financing, loans, and currencies to de-risk investment projects across various African countries. This aims to attract private investors to participate in projects that may have been considered too risky previously. The second part of the plan focuses on providing technical assistance to ensure the quality of projects. This assistance helps improve the development and viability of projects, especially in sectors like energy. The third element involves fostering a conducive business environment through dialogue with governments to attract foreign direct investment (FDI) by improving regulatory frameworks. Katainen highlighted the importance of not only providing funding but also creating a favorable investment climate to make countries more attractive to investors. One interesting aspect of the European Union's approach is its focus on supporting medium and small-scale businesses in Africa. Katainen emphasized the significance of improving financial opportunities for these enterprises, as access to affordable financing is often a challenge for smaller businesses. The EU is utilizing its new investment vehicle to provide financing to SMEs through financial institutions like commercial banks and national development banks. By leveraging EU currencies, member states' development agencies can enhance SME financing in various African countries, underscoring the EU's commitment to promoting inclusive economic growth. Discussing specific examples of the plan in action, Katainen mentioned Togo as a recipient of funding from the EU. Projects such as a new waste management center in Lomé and the construction of a highway to the Benin border are examples of innovative initiatives supported by the EU's investments. Additionally, the French development agency is also utilizing EU currencies to bolster SME financing in Togo, demonstrating the collaborative efforts within the EU framework to drive economic development. In a refreshing departure from the usual focus on high-end investors, the EU's External Investment Plan seeks to empower smaller enterprises and promote sustainable economic growth in Africa. By addressing the diverse needs of the continent, the EU is paving the way for a more inclusive and resilient investment landscape. As Africa continues to attract interest from global investors, initiatives like the EU's plan play a crucial role in unlocking the continent's potential and fostering sustainable development.