Africa Investment Forum roots for innovative financing

In Morocco's capital Rabat, global leaders have gathered for the Africa Investment Forum, which is centered around the theme 'Leveraging Innovative Partnerships for Scale'. The forum aims to deepen investments into the continent of Africa, with a particular focus on using innovative financial mechanisms to mobilize private capital for development. Hani Salem Sonbol, Acting Chief Executive Officer of ICD, spoke to CNBC Africa's Godfrey Mutizwa at the forum, emphasizing the importance of innovative financing in scaling up investments in Africa. Sonbol highlighted the evolving needs of African countries and the increasing complexity of challenges faced by them. Traditional methods of financing, while still important, may not always be sufficient to address these challenges effectively. He stressed the importance of exploring innovative ways to finance projects, particularly in light of pressing issues such as climate change. Climate change, according to Sonbol, requires a shift towards more innovative approaches to financing. With 57 member countries, each with unique needs, the Islamic Development Bank and other Multilateral Development Banks (MDBs) must tailor their solutions to provide integrated support, which combines financing with programs, initiatives, and capacity building. At the heart of the forum is the concept of blended finance, which seeks to leverage different sources of funding, including concessional finance, to meet Africa's development needs comprehensively. The goal is to foster collaboration among diverse stakeholders to unlock opportunities and support Africa's development plans. Sonbol acknowledged that while traditional financing methods remain essential, attracting private sector capital is crucial to bridge the significant funding gaps in Africa. He emphasized the need to create an enabling environment for private sector engagement by implementing reforms and providing legislative support. One of the key challenges in mobilizing private sector resources, Sonbol noted, is ensuring that investments are perceived as low-risk with potential for high returns. Countries must demonstrate their readiness to support private sector involvement in development finance by implementing necessary reforms. Looking ahead, Sonbol outlined the Islamic Development Bank's priorities, particularly in the aftermath of the COVID-19 pandemic. The health sector and climate change emerged as top priorities, underscoring the importance of building policy frameworks and skills to facilitate green financing projects. The Africa Investment Forum serves as a platform for stakeholders to collaborate, innovate, and drive sustainable development across the continent. By fostering partnerships and exploring innovative financing solutions, the forum aims to catalyze investments that will spur economic growth and address pressing challenges in Africa.