MIGA (Multilateral Investment Guarantee Agency), a member of the World Bank Group, currently supports investments of $6.3bn in North and Sub Sahara Africa, over double that from six years ago, according to a statement released by the Agency.
Projects MIGA supported in the past six years in Africa are expected to provide 25.4m people with access to power, generate $2.2bn in tax revenues annually for governments, and avoid 6.4m tons in CO2 emissions each year.
Meanwhile, MIGA as well as investors and lenders from Japan have together channelled sizeable investments to help improve lives across Africa.
Against the backdrop of the Seventh Tokyo International Conference on African Development (TICAD7) to be held on 28-30 August, the Agency sees opportunity for further ramping up the role of Japanese investors in helping meet development challenges in the continent.
“With the fastest growing population in the world, Africa offers tremendous opportunities for investors,” said Keiko Honda, CEO of MIGA. We have proven expertise and hands-on experience of working in the continent, reflected in a doubling of our outstanding Africa portfolio over the last six years. We stand ready to offer our capabilities to African nations and Japanese investors.”
MIGA currently supports investments by Japanese firms such as Mizuho, Sojitz, Itochu and Hitachi for infrastructure, energy and manufacturing projects across the continent, including in Ghana, Sierra Leone and Zambia.
To support private cross-border investors, MIGA also collaborates regularly around the world with Nippon Export Investment and Insurance (NEXI) and the Japan Bank for International Cooperation (JBIC).
There are significant opportunities in Africa across multiple sectors, including:
- Urbanisation: Sub-Saharan Africa (SSA) is the world's fastest urbanising region, with 472m people currently living in urban areas and double that expected over the next 25 years.
- Power generation and distribution: an estimated 2 out of 3 people in the continent continue to lack access to electricity
- Telecommunications: an estimated 72% of the people in Sub-Saharan Africa have a mobile cellular subscription, which is lower than mobile penetration rates in other regions of the world.
- Abundant talent: the continent is home to a large number of entry level workers in the informal sector, which accounts for almost 90 percent of total employment
These opportunities come with some challenges. Public debt levels and risks to debt sustainability are rising, which could jeopardise macroeconomic stability and development in some countries. Creation of good jobs has also not kept pace with the large number of entrants into the labour force, and fragility is costing the subcontinent a half of a percentage point of growth per year.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $55bn in guarantees across 114 developing countries.