Strong governance is the missing link in Africa’s quest for sustainable development financing. While development banks are crucial in mobilizing resources for economic transformation, their success hinges on transparency, accountability, and effective regulatory frameworks. Without these, even the most well-intended financial initiatives risk inefficiency, misallocation, and corruption.
At the Finance in Common Summit (FiCS) 2025 in Cape Town, financial economist and Professor of Finance at the University of Ghana Business School, Prof. Joshua Yindenaba Abor, made a compelling case for why public development banks (PDBs) must prioritize governance to secure long-term investment for Africa’s transformation.
He stressed that while PDBs can provide critical funding for infrastructure and SMEs, weak governance can derail their impact, making financial sustainability impossible.
The session on “Unlocking Sustainable Investment in Africa” focused on strengthening a sustainable finance system through innovative finance and multi-stakeholder dialogue on international cooperation and partnerships. Discussions centered on actionable recommendations for mobilizing resources to achieve the SDGs, renewing international financial structures, and scaling up investment in Africa without worsening government debt burdens.
Prof. Abor maintained that transparency, accountability, and regulatory stability are essential in ensuring that development banks effectively support infrastructure projects, Small Medium Enterprises (SMEs), and sustainable development initiatives. He stressed that strong governance frameworks enhance project performance by reducing cost overruns, mitigating risks, and promoting inclusive stakeholder engagement.
“In PPP arrangements, governance enhances project performance by reducing cost overruns and delays, while ensuring inclusive stakeholder engagement,” Prof. Abor noted. “Robust governance ensures the success and sustainability of infrastructure investments, which hinge on key elements such as regulatory and policy frameworks, institutional coordination, PPPs, anti-corruption measures, and stakeholder engagement.”
He further explained that governance reforms within institutions like the Development Bank Ghana (DBG) are critical in enhancing their ability to attract investments, foster sustainable development, and ensure long-term financial stability.
The discussions at the summit underscored the importance of defining the roles and instruments of Multilateral Development Banks (MDBs), Public Development Banks (PDBs), private investors, and civil society in securing blended finance mechanisms for Africa’s frontier markets.
