How investment banks can help finance Africa’s Covid-19 fight
Amid calls by the UN and the G20 for the private sector to do more, Citi has proposed a $100 billion coronavirus fund.
While G20 leaders have praised the swift response of development banks in deploying funding to low-income countries, they have also called on these organizations, together with the private sector, to further step up the coordination of their actions.
Public-sector relief packages are large, targeted and essential – the World Bank Group has pledged $160 billion – but not enough to help low-income countries fight the immediate impact of the disease, nor to help them cope with a longer-term economic slowdown.
International Development Association (IDA)-eligible countries have a fiscal need of between $150 billion and $200 billion to deal with the health and economic implications of Covid-19, according to the Center for Global Development (CGD), but much of sub-Saharan Africa falls through funding gaps in part because investing there is deemed too risky.
It is likely as the crisis continues, investors will want to put money to work in an investment grade instrument – it could be only way to deploy private-sector capital - Peter Sullivan, Citi
Investment banks have a central role to play here.