Mobilizing Institutional Investors to Develop Africa's Infrastructure ("MiDA")
For Mutually Beneficial U.S. - Africa Investment Opportunities
In September, 2016, Bloomberg and the U.S. Department of Commerce co-hosted the 2nd U.S.-Africa Business Forum held in conjunction with the 71st United Nations General Assembly. Delegations from 44 African countries, including 29 African heads of state, joined President Barack Obama and hundreds of CEOs from the U.S. and Africa to recognize opportunities for investments and growth in both regions. In addition to announcing over $9 billion mobilized at the forum, USAID Administrator Gayle Smith and National Association of Securities Professionals (NASP) Chair-Elect Donna Sims-Wilson formally launched “MiDA”, to expose U.S. public plan sponsors and other institutional investors to opportunities to co-invest with African counterparts in Africa’s infrastructure.
USAID is the United States Government Agency for International Development. Its mandate is to promote broad-scale human progress at the same time it creates markets and trade partners for the United States. NASP and USAID are joining forces at a time when the global agenda for mobilizing institutional investors for Infrastructure is undeniably moving forward, with many high-level initiatives at the United Nations, World Bank, IMF, African Development Bank, and the G-20. The prevailing consensus suggests that the primary financing sources for filling the infrastructure finance gap are institutional investors, primarily pension funds, based on the alignment between the needs for enhanced yields and longer tenors to meet their liability structure, and infrastructure assets potential to provide predictable inflation-adjusted cash flows that have low correlations with existing investment returns. And nowhere is the lack of infrastructure more crucial, transformational, and potentially profitable than in sub-Saharan Africa, which needs about $93 billion per year to fill its infrastructure gap, mainly in energy, transportation, water, and telecommunications.
This partnership exemplifies a mutually beneficial U.S.-Africa commercial and development relationship, spearheaded by a first of its kind U.S. and Africa Institutional Investor conference in sub-Saharan Africa in 2017 to facilitate relationships that build the capacity of local investors and expose U.S. financiers to investment opportunities. The partnership will bring U.S. financial professionals to sub-Saharan Africa to help structure and advise on transactions and financial vehicles that support infrastructure development. At the same time, it provides new opportunities for U.S. businesses and individuals, with an emphasis on women and minority businesses, seeking access to opportunities in sub-Saharan Africa’s fast growing markets.