The European Investment Bank is intensifying its operations in Africa, as the world’s largest multilateral development lender seeks to build infrastructure, boost growth and foster innovation on the promising but poverty-stricken continent.
In an exclusive interview with GlobalMarkets, EIB president Werner Hoyer said the Luxembourg-based multilateral’s commitment to Africa has grown exponentially since the migration crisis peaked in Europe in 2015. “It was a wake-up call for Europe,” he says. “Until then, development was a side issue.”
No longer. Over the past 10 years, the EIB has supported €100bn worth of investments in Africa. The bank has €25.8bn worth of lending in Africa, now its biggest arena of activity outside the single market.
“We are boosting our additional investments in Africa to unknown dimensions,” Hoyer said. “In Africa, it is time to think development, and to think big.”
This was no mercy mission, he was quick to emphasise. “Africa’s population is set to hit two billion people by mid-century, so it is in our own interests to help to support economic development.”
Nor were EU countries simply there to fund projects that extract resources for external consumption. Hoyer outlined Europe’s aim of fostering sticky growth that generated jobs and wealth — starkly contrasting its ambitions with China’s neo-colonial smash-and-grab approach.
“Chinese firms roll in with huge amounts of money, cement and people. They are still arriving, and they create Chinese jobs, not African jobs, and Europeans are waking up [to that fact]. There are similar developments with Russia in the Middle East, and with Turkish projects in Islamic countries.
“This is a huge challenge for us, as these countries have autocratic regimes able to make decisions quickly and implement them fast. The imperial attitude of the Chinese in Africa, of Russians in the Middle East, or of the Americans with the International Development Finance Corporation [the US’s increasingly assertive development finance institution] require a strategic response from Europe. We won the last Cold War due not just to having better values and democratic institutions, but also because we had great solutions.” At present, Hoyer added, he would not bet on winning the next Cold War.
Turning to the future of the EIB, Hoyer was asked which of the three potential pathways outlined by the High Level Group of Wise Persons on the European Financial Architecture for Development in a landmark October 2019 report would be pursued by the development bank. He pointed to option three, which would see a new lender, the European Bank for Sustainable Development, built to house the EIB’s non-EU activities, and owned by the EIB, European Union member states, and national development banks.
He poured cold water on the suggestion the EIB could work in harmony with the EBRD. “I don’t see how we can have the Russians and Americans around the table,” he said. Both countries are shareholders of the EBRD.