Investment Will Continue Despite Us Aid Cuts: Infrastructure Boss

The decision by the US and other Western nations to curtail development aid represents a major setback for Africa. Numerous projects that heavily rely on foreign assistance in critical sectors such as education, healthcare, and infrastructure have been halted in the wake of these funding cuts, rendering thousands jobless and impeding the delivery of much-needed development.

Adding to the strain is the fact that, under the Trump administration, the US is less inclined to support climate initiatives in Africa and around the world. While these events have fuelled widespread pessimism about Africa's development prospects, Philippe Valahu, CEO of Private Infrastructure Development Group PIDG, tells African Business that he is "more optimistic than most." He concedes that there are "concerns about some of the headlines coming out of the US" but stresses that development on the continent "will continue in one shape or another."

Founded in 2002 as a multi-donor initiative, PIDG focuses on leveraging aid to mobilise private sector investment for critical infrastructure projects in developing nations. Between 2002 and 2023, the group allocated the majority of its financial commitments to energy 34, followed by digital communications infrastructure 15 and transportation 14. During this period, the group successfully supported 233 projects to reach financial close.

"Over the years, we have mobilised over 40bn for projects, of which 26bn was from the private sector," Valahu says, noting that 70 of projects supported since inception have been in Africa and the balance in Asia.

He argues that the current debate on the implications of aid reduction on Africa is inordinately focused on the short-term risks instead of the untapped long-term opportunities in sectors such as energy.