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The G20 Compact with Africa will aid investment flows

Wednesday, August 9, 2017

Subject

G20 turns its focus to Africa

Significance

In July 2017, the G20 launched the Compact with Africa (CWA), an initiative that aims to catalyse private investments by letting participant countries set their objectives and select implementing measures and instruments. It emphasises ‘country ownership’, the core tenet of development, but targets the countries that are most willing and able to reform their investment frameworks. This approach marks a departure from the conventional practices of multilateral institutions.

Impacts

  • Tailored Investment Compacts will increase foreign investments into participating countries, especially into infrastructure.
  • In most countries, the influx of private financing for infrastructure is likely to complement -- and not substitute for -- public financing.
  • The Compact for Africa may mark the start of an expansion of the G20’s sphere of responsibility, at the expense of the G7.
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