In the interests of reducing inequality and poverty within the African continent in the long-term, and avoiding the growth of populism across Africa, the G20 countries, headed by Germany, are pushing for a plan that will increase private investment and infrastructure development in Africa.
Speaking at a forum on global infrastructure at the Inter-American Development Bank in Washington, German finance minister Wolfgang Schaeuble set forth a proposed scheme that will see various G20 member countries and international lenders partner with African countries in order to attract global investors.
Known as the ‘Compact with Africa’, the plan was part of discussions at the spring meetings of the International Monetary Fund and the World Bank in the American capital.
International lenders such as the World Bank will be approached to take part, and the first countries that will benefit from the proposal will include Rwanda, Senegal, Tunisia, Morocco and Ivory Coast, according to the IndependentRecorder.
The German finance minister and Christine Lagarde, the IMF managing director, put pen to paper on a $16.3 million deal to support capacity development activities throughout Africa.
The plan will see challenges in Africa addressed through a series of policy changes that are aimed at strengthening domestic resource mobilisation, fostering good financial governance, implementing fair tax systems, and achieving financial stability and inclusion.
Addressing fellow attendees at the IMF and World Bank gathering in his leadership capacity as German finance minister with Germany holding the G20 presidency, Schaeuble did not mince his words when he spoke about the need for the plan to be successfully implemented.
“If we do nothing to change this, we can expect a rise in populist parties and demagogues, and a rise in instability around the world, with all its negative effects for sustainable growth”, Schaeuble said to a selection of his peers, according to EWN.
“We are seeing it already in some parts of the world. If we want to ensure long-term stability and security, we have to continue to reduce the gap in wealth between the rich countries and the poor countries of this world, especially on the African continent”, he said.
The scheme could potentially attract in excess of around $2.4 billion in private investment for African countries, according to The Guardian.