International private equity has been the fast growing capital flow to the sub-Saharan Africa with a five-fold growth and a total of more than $50 billion of inflows since 2008. It now comprises approximately $12 billion annually and 20% of cross-border capital flows.
It offers an unprecedented opportunity to accelerate economic development.
However, new policy is needed from development finance institutions, national governments and bi-lateral agencies to capture their benefits. Policy priorities include;
• Being more proactive at an earlier and smaller level of enterprise development
• More holistic policy that develops “eco-systems” for sectors and industries
• More sophisticated and well-priced risk mitigation that is more closely aligned with investors needs
• Capital flow management to manage risks to financial stability especially from mutual funds and ETFs
• Universal, but pragmatic, standards for responsible investment tailored to the sub-Saharan African context especially for energy, healthcare and education.