A new sub-marine fibre-optic cable in west Africa has been completed and is being heralded as a game-changer in Africa's investment landscape. The cable was funded by the Africa Finance Corporation (AFC) using a new financial model in the continent involving public and private collaboration between governments and the private sector in Africa.

“The fibre-optic cable that starts from Portugal and runs down the west coast of Africa to Nigeria was a $240m project, financed almost entirely with African money,” said Andrew Alli, CEO of AFC. “[This] is a trend we are seeing – Africans investing in projects in Africa. This crossborder project was implemented on time and [it is] up and running. It increases the fibre-optic capacity down the coast by about five times.”

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The AFC, formed in 2007 as a multilateral development finance organisation to catalyse investments into natural resources, infrastructure and heavy industry across Africa, is a prominent example of how the development of Africa’s private sector is being driven from within the continent.

The AFC illustrates how African governments and private sector players are looking into ways of ensuring that Africa’s economic growth can be sustainable through pooling their resources and expertise together. “One of the main initial achievements was [acquiring] more than $1bn-worth of funding raised for AFC’s operations,” said Mr Alli.

With private majority shareholders that include leading African banks, the AFC’s profit-maximising goal compels it to seek a competitive return on capital. “We were the only African institution that provided financing to the Jubilee Field, which is [Ghana’s] big oil and gas field, and it was a landmark transaction for [them],” said Mr Alli. “Some $1bn was raised and we were the only African institution that was asked to be part of that. We did Africa’s first commercial wind farm project, which is a 26 megawatt wind farm in Cape Verde. We worked very closely with the government and other private sector [investors] and this is an ideal energy solution for power in Cape Verde.”  

Also established in 2007, the Investment Climate Facility for Africa (ICF), based in Tanzania, works with businesses and governments to identify and improve priority areas for investment within Africa. Commenting on the ICF’s creation of Rwanda’s commercial court, Neville Isdell, the ICF’s co-chair, said: “ICF is Africa-based, and it sits down to find an adaptive solution. In Rwanda, they did not have a commercial court and we created [one].”

Commenting on its success in completing 20 projects to date across 31 countries in Africa, the ICF's CEO, Omari Issa, said: “When we go to a country, we sit with the private sector and ask what they would like to see changed. We engage with the private sector as [our work] is market driven.”