Rabat, Morocco — The African Development Bank and the UN Refugee Agency (UNHCR), convened a high-level meeting of leading private sector investors, business leaders and development partners, to discuss ways to unlock investment opportunities in forced displacement settings across Africa.
The meeting, moderated by Julie Gichuru, President and CEO of the Africa Leadership and Dialogue Institute, took place on Friday December 6 as part of the Africa Investment Forum 2024 Market Days held in Rabat, Morocco.
Co-hosted by African Development Bank Vice President for Finance and Chief Financial Officer, Hassatou Diop N'Sele, and UNHCR's Assistant High Commissioner for Operations, Raouf Mazou, the meeting centered on the business case for private sector engagement in forced displacement settings.
Africa hosts almost 45 million forcibly displaced people, including 8.8 million refugees and 34.5 million internally displaced people, two times as many as ten years ago, with conflict and adverse climate change impacts being major drivers.
Too often seen solely from a humanitarian response lens, new and protracted displacement settings also represent vibrant economic hubs.
N'Sele said the African Development Bank's Transition Support Facility (TSF), which invests in addressing the root causes of fragility, also finances programs benefitting host communities, refugees and internally displaced themselves, including through a focus on private sector and entrepreneurship.
"Forced displacement is a humanitarian issue but also a development challenge. It's important to create synergies between humanitarian aid, peace and international development. We need to combine short term funding with long-term development finance that leverages the private sector to achieve sustainable development in Africa," she added.
For this purpose, the African Development Bank is developing the Security-Indexed Investment Bonds (SIIB) in consultation with the African Union and regional economic communities to rebuild economic and social infrastructure damaged by conflict and protect zones where countries have important economic assets. The bonds would receive contributions from African countries and mobilize resources at scale from the capital market. "It is important that it is Africa-led," N'Sele said.
"Despite a drastic increase in the number of displaced people and the inadequacy of current systems in place to fully address the challenges they face, there has been a positive signal from the development sector and increased involvement by the private sector", said UNHCR's Mazou.
"There is a greater understanding today of the fact that it is not because you find yourself in a situation of displacement that you stop being somebody who can contribute to the economy of the country or region which has welcomed you," he added. "If provided with the right support one can rapidly become self-sufficient" said Mazou, commending the crucial role of the African Development Bank in advancing development solutions for forcibly displaced persons.
Dagmawit Bekele, Director of the African Union (AU) Peace Fund underscored the importance of the engagement of the AU Peace Fund as a channel for conflict prevention. "The private sector is going to benefit from peace and stability," Bekele said, adding that governments were not the sole actors in peacebuilding and conflict prevention. "We cannot think of having sustainable development without peace."
Cheick-Oumar Sylla, Regional Director for North Africa and the Horn of Africa, International Finance Corporation (IFC), the private sector arm of the World Bank Group, underlined its increasing engagement in forced displacement contexts across the continent and elaborated on private investment opportunities in infrastructure development including roads, renewable energy, agri-business and telecommunications, among others.
During the session, Douglas Cox, Director of African Project Development of Renewvia Energy, a global solar power developer, shared experiences of providing solar mini-grid projects, providing access to clean, reliable electricity to 100,000 households and over 20,000 businesses across Kakuma and Dadaab municipalities in Kenya, with ambition to scale-up further.
Investment advisory firm CrossBoundary's Roukaya El Houda discussed the firm's role in helping structure investments that can attract commercial capital while effectively managing risks. Their involvement demonstrates the growing sophistication of the investment landscape in refugee-hosting and return areas.
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Jonathan Bellish of One Earth Future said when his company began in Somalia it was considered a country only in need of humanitarian assistance. But there has since been a growing realization that "private sector investment and SME support shouldn't be a reward that you get for improving the country but a means of doing so." SMEs represent 60% of GDP and 90% of jobs, Bellish said, with One Earth providing technical assistance for business plans, relying on the resilience of each country's entrepreneurs.
"Everyone needs to be at the table. Without the private sector we will not have the scale that is needed for sustainable development. We need to be bolder - and this is why we are pursuing the Security-Indexed Investment Bonds Initiative,"N'Sele said, thanking all partners.
"Lending programs to refugee and host community entrepreneurs consistently achieve repayment rates of over 95%," Mazou said. "These markets represent untapped potential for strategic investors seeking both impact and returns."
Session recording: https://vimeo.com/event/4763114
