Private financiers are reluctant to invest in poor, non-resource-rich African countries, and low-income countries in Africa attract only 25 percent of investment flows into Africa. Access to development finance at affordable rates is therefore critical for developing countries.
Unfortunately, there is a growing gap between the need for and the availability of infrastructure financing for low-income countries.
One of the reasons for this is that the African Development Fund, the concessional branch of the African Development Bank (AFDB), is both insufficiently financed and unable to ensure the efficient disbursement of funding required to meet the needs of Africa’s poorest countries.
It is therefore critical that financing institutions that provide concessional funds for low income countries, like the African Development Fund, are well capitalised.
Equally important, however, is that the available funds should be dispersed in a manner that effectively addresses the development needs of Africa’s poorest.
The fund is reliant on loan repayments that the bank obtains from African middle-income countries and contributions from predomi- nantly developed economies. This has meant that the influence of developed countries on the lending policies of the fund is disproportionately high.
As one of few African voices at the fund’s replenishment meeting (where countries pledged new finances for the next three years) held last month, South Africa had an opportunity to flag the concerns of low-income countries and provide important suggestions on how the fund can improve its services and assistance.
As a beneficiary country, Lesotho was invited to attend the replenishment meeting, where it offered critical insights into the chal-