Experts want MFIs to provide comprehensive financing support to businesses
Participants at the 2021 Intra African Trade Fair (IATF) conference 2021 have called for collaborative efforts of all multilateral finance institutions (MFIs) in pulling resources together to provide comprehensive financing assistance to Nigeria and other African businesses, especially SMEs and promote value addition to support post-pandemic growth.
MDIs consist of member nations from developed and developing countries. MDBs provide loans and grants to member nations to fund projects that support social and economic development.
They believe that there is a need to adopt more holistic strategies on development financing to support developing countries that are mostly hit by the pandemic so they can recover from uncertainty.
The experts noted that while all businesses had been adversely affected by the COVID-19, the impacts have been especially profound for SMEs and the institutions that support them.
They pointed out that development finance was currently under extreme pressure and at the risk of decline at a time when the pandemic has dramatically increased development needs.
Consequently, they said there is a need for DFIs to restructure their policy responses around the needs of the region and their enterprises to provide support to struggling institutions.
The Executive Vice President, Business Development and Corporate Banking, Afreximbank, Amr Kamel, described MFIs as growth enhancers that provide access to finance, including credits and grants to public and private sector projects in multiple development sectors.
Kamel said Nigeria and other African countries are currently facing a very significant funding gap, adding that sub-Saharan Africa needs massive additional funding to navigate the negative impact of the pandemic in the continent and accelerate economic recovery and prosperity.
He said the SMEs provide up to 98 per cent of jobs across the continent but still lack the needed support in terms of funding.
“More needs to be done if we are to liberate our continent economically. This impact can only be achieved if we work together and combine our resources in that force.”
Also speaking, Vice President, Private Sector Infrastructure and Industrialisation, African Developments Bank Group, Solomon Quaynor, said the bank would continue to scale up investments in the IATF to ensure that resources support African fundraising.
He said: “We have plans to invest in women entrepreneurs and businesses. Capital raising activities have been affected and we need to scale up in the areas of the financial system but we have not achieved the skill.”
The Chief Executive Officer, ITFC, Hanif Salem Sonbol, said the group was partnering with other African countries to provide subsistence support to Africans through infrastructure development.
He also underscored the need to provide an integrated solution for SMEs to have access to finance and digital infrastructure that would enable them to harmonise their operations and avoid working in silos.
According to him, the company is currently working with South Africa to develop telephone lines and other digital transformations.
“We will support digital technological payment solutions to grow ACFTA. This is to ensure that any investor in the continent is successful in terms of the payment system”
In his own contribution, the Executive Director and Board Member, African Finance Corporation, Sanjeev Gupta, said there is a need for MFIs to work with the global capital market to solve the issue of financial conundrum which the pandemic has created.
He also affirmed that only the collaborative efforts of all the developing finance institutes in pulling resources together would attract the much-needed support and investment in Africa.