ARIA Foundations of Growth #3
Donor governments are doing more than ever to mobilize private capital to support economic development. This movement was initiated by the 2015 Addis Ababa Action Agenda and the need to go from ‘billions to trillions’ in terms of investment needed to deliver the UN Sustainable Development Goals.
Achieving this aim in frontier markets requires collaboration – both among development finance institutions and between DFIs and donor agencies. A new publication from the Africa Resilience Investment Accelerator (ARIA) explores this topic in more depth. Titled ‘Building Bridges: The case for DFI and donor collaboration in fostering private sector investment in frontier markets’, it covers how working together can help remove barriers to investment in frontier markets, the ways DFIs and donors can collaborate and future collaboration opportunities.
The publication draws from multiple sources, including responses to a survey of investment professionals from 12 development finance institutions. This research found that:
55% of respondents do not collaborate with donor agencies at all or only to a limited extent
73% of respondents believe the opportunities for enhanced collaboration among DFIs are high or very high
Collaboration among DFIs typically focuses on sharing investment opportunities and co-investing
The publication builds on the ‘Bridging the Gap’ report – produced by British International Investment and Gatsby with support from FMO and DCED – which opened a dialogue on how working together can benefit both DFIs and donors.
This publication is the third in the ARIA Foundations of Growth series. The next report in the series will explore examples of successful collaboration in greater depth.
ARIA, a joint initiative with BII, aims to address systemic barriers in frontier markets in Africa. Market creation is a pivotal ambition in our 2030 Pioneer, Develop, Scale strategy. It aims to generate more investment opportunities for development banks and other large-impact investors seeking to contribute to private sector development in the markets and sectors that it currently cannot reach. For more on our market creation approach, click here.