This is a common phrase, applied world over with increasing frequency each passing year. Africa is proving to be the new frontier market for the world; a game changer, I dare say, for the global economy. This, in my personal opinion, and belief, is a fantastic development.

Despite the fact that we are on the rise, we need to ask ourselves some questions I deem fundamental. Why is it that some African countries are progressing much faster than others? What should be done by those slacking to catch up with the frontrunners and level the playing field of opportunity for all Africans? In my opinion, answers to these questions lie squarely on development. Development of people, institutions and infrastructure. African Governments certainly recognise the fact that they have an obstacle in the way of achieving development and transformation. One that is a skills problem, an institutional problem and an infrastructure problem. They, however, lack the financial and, sometimes, technical capacity to bridge this gap by themselves, prompting a need for mobilization of capital and, sometimes, technical expertise. All this brings me to one question. A question that is the theme of this entire essay; How would I finance “development and transformation” if I was, hypothetically, an African leader?First and foremost, we need to establish a basic understanding of what “development and transformation” entails. We also need to establish existing problems that make funding difficult to come by. In my opinion, “development and transformation” covers a wide array of fields. From infrastructural development, to capacity building, to policy-making. These three fields, I believe, are key to unlocking subsequent entities of “development and transformation. I have also identified 4 key challenges that urgently need to be addressed so as to attain confidence of available investors: We have narrow financial markets. They are largely inactive and display large fluctuations in prices due to low trading volumes. We have financial systems of an inferior calibre, disabling us from attracting upper-tier investors. We are victims of rampant and unchecked corruption that is practiced all over. We lack the human capacity and institutional capabilities to support rapid growth of infrastructure. I hope to provide answers on how to address these issues in subsequent paragraphs.

Following the 2008/2009 global financial crisis, it is a well-known fact that banks all over have become more restrictive in their lending. There has also emerged a noteworthy increase in competition from similar emerging markets in Africa, all intent on securing financing for investing in similar capital intensive projects, all with an aim of spurring development and transformation for themselves. This means that traditional funding methods will not work at this day and age. We will need to get creative.

I intend to obtain financing via the following channels, both local and international. Locally, I intend to use available money from public coffers to set up Development Finance Institutions (DFIs) which are specialized development banks that support private sector growth. These will, in time, compound greatly, resulting in a rise in tax revenue collected from the private sector, adding more funds to the development kitty. I also intend to set up public-private partnerships (PPPs) with an aim of capital generation. Using available natural resources, I will also be willing to negotiate and sign natural-resource-backed contracts with interested investment partners for capital acquisition. By now you must have noticed my not-so-subtle bias for the private sector. This is because I, and African governments should, understand that a stronger private sector presence in the infrastructure development space is a most efficient way of achieving capacity growth and intensive job creation. I also believe that this a crucial component in the development of domestic capital markets5 that provide lower financing costs and longer tenures. The markets would increase my governments access to our local currency for infrastructural project finance. They would also support refinancing, giving room for it to reach an optimal capital structure, thus allowing for the revolving of the existing debt component.

Following an improvement of the private sector, the international market will be courted by my government to offer funding, mostly via grants and syndicated loans. These will be obtained from floating bonds in international markets, attaining funding from international investment aid institutions, Export Import banks and the World Bank. There will also be a need for us to develop a strong policy framework. One that is anchored on enforcing anti-corruption agencies, promoting anti-wastage, alleviating transparency and ensuring a routine follow-up on all active projects to their conclusion. The policy framework would also be clear on how exactly my government intends to repay acquired debts. Law enforcement will also be strengthened to boost confidence of investors.

A World Bank publication dubbed “Africa Pulse” indicates that narrowing of the existing infrastructure gap, especially in Sub-Saharan Africa, will positively impact GDPs of countries by up to 2. 6% per annum. Since I consider infrastructure as one of the aforementioned key fields in “development and transformation”, I intend to provide an effective blueprint on the approach that will be undertaken in tackling infrastructural development per-se. Infrastructure should be divided into 3 basic categories: Infrastructure that is difficult to make economically profitable. This the government can undertake on its own. Infrastructure that is financially viable when subjected to appropriate tariffs. This can be undertaken via Public-Private-Partnerships (PPPs). Infrastructure that is marginally profitable, but not to a level sufficient enough to justify the use of PPPs. This can be handled via operation and maintenance contracts. 8 All these steps, I believe, if undertaken, will have a huge impact in finance generation for our development and transformation. My parting shot. If I was an African leader, hypothetically of course, I would be one with an entrepreneurial outlook, rather than that of a hands-off financier. This is because entrepreneurs are known to possess an end-to-end view on projects being undertaken, thus yielding much better results for a prosperous future.