Trade, not aid — the old chestnut is roaring back under the second Trump administration.
As Devex’s Ayenat Mersie reports, the U.S. State Department’s top Africa official, Troy Fitrell, unveiled a six-point plan in Abidjan, Côte d’Ivoire, earlier this month. The focus is on market reforms and infrastructure projects, meant to create market opportunities in Africa for American companies.
There’s an elephant in the room: How does a trade-based policy get implemented amid global trade wars? (Development economist Justin Sandefur has a good graph on that.) And who is going to do it?
The U.S. Millennium Challenge Corporation’s fate is up in the air. USAID has been dismantled. Ambassadors may be evaluated according to how many “deals” they can secure. Attention is also turning to the U.S. International Development Finance Corporation, or DFC — an agency whose star seems to be on the rise and which we've been following closely.
Bloomberg also has some interesting details about DFC, including the personnel around incoming CEO Ben Black, the son of billionaire Leon Black.
Christian Novogratz, the 27-year-old son of Wall Street billionaire Michael Novogratz, is reportedly in the mix, as is 29-year-old Conor Coleman — as incoming chief of staff and head of investments — who worked at the Ben Black-founded investment firm, Fortinbras Enterprises.
Read: Inside the United States’ new ‘trade, not aid’ strategy in Africa (Pro)
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Over 5,000 delegates from 91 countries are in sunny, humid Abidjan this week for the African Development Bank’s annual meetings, running through Friday. The theme? “Making Africa’s Capital Work Better for Africa’s Development.”
The urgency is rising as key players pull back: The U.S. plans to slash about half a billion dollars from its contribution to the African Development Fund, AfDB’s concessional financing arm for the continent’s lowest-income countries.
And there will also soon be a new player in town: the African Union Development Fund, a sovereign finance mechanism meant to support Agenda 2063. It’s expected to be up and running by July, said Nardos Bekele-Thomas, CEO of the AU’s development agency, speaking virtually at the meeting.
Details of the fund — which was first presented to AU member states back in 2019 — remain scant for now. But Bekele-Thomas called on “all threads of Africa, to support its operationalization through voluntary contributions and through investments.”
The conversation at the top of everyone’s mind in Abidjan this week? The AfDB presidential election. Five contenders are in the ring, and outgoing President Akinwumi Adesina has a warning for them: “This is not a job. If anyone is looking for a job, please don’t take it. This is not a job. This is a mission ... I have had no life. Completely zero. I worked every single day.”
With trade tensions rising and donors pulling back, the next AfDB president faces a steep climb, and the outgoing president believes global capital is the only way up. “Aid isn’t going to develop anybody,” Adesina said.
ICYMI: Inside the race to lead the African Development Bank
By Thursday, one of the three authors of this Devex opinion piece could be president of the African Development Bank. So it’s doubly worth reading candidates Amadou Hott, Samuel Munzele Maimbo, and Sidi Ould Tah on the four pillars of reform they say the Group of 20 major economies should embrace to tackle unsustainable borrowing costs for African nations.
1. Fix risk perception: Credit rating agencies must be held to higher standards. Biases, data gaps, and a lack of granularity inflate sovereign risk for African economies.
2. Scale credit enhancements: Partial guarantees and insurance mechanisms can de-risk investment and attract private capital at scale.
3. Modernize regulation: Elements of Basel III and other global rules, while designed to ensure stability, unintentionally penalize investment in Africa. These frameworks must be reviewed to balance prudence with development needs.
4. Empower domestic systems: African countries must invest in data, governance, and local currency bond markets. The G20 should support this with technical assistance, not just rhetoric.
Opinion: Africa’s cost of capital crisis is a G20 test of global fairness
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We lodged a question on notice to the European Bank for Reconstruction and Development and the European Commission last week. The pair had announced a €15 million ($17 million) technical assistance facility, designed to “identify and support new investment opportunities in Benin, Côte d’Ivoire, Ghana, Kenya, Nigeria and Senegal.”
But hang on, wasn’t the bank’s much-debated (by shareholders), much-resented (by the European Investment Bank), and still-questioned (by the head of the Private Infrastructure Development Group in Invested earlier this year, for instance) move into sub-Saharan Africa meant to be cost-neutral?
A 2023 amendment to EBRD’s founding agreement saw shareholders — of whom the European Commission is one of the biggest — greenlight a “limited and incremental” expansion to Iraq and sub-Saharan Africa, on the condition that the bank remain fully supportive of Ukraine and not require additional capital contributions.
So, why now the need for €15 million from one of its main shareholders in order to identify investment opportunities in a region where many local, international, and European development banks have been present and presumably identifying opportunities for many years?
An EBRD spokesperson tells us via email: “We use technical cooperation funds from donors to help us prepare investments in our countries of operations and support them with the transfer of knowledge all the time. This is completely normal investment practice for us.”
A commission spokesperson, meanwhile, tells us that in putting up the €15 million, “The EU has not done this in its role as shareholder, but as a partner, in the same way that we have developed similar TA Facilities with other partner development finance institutions.”
Related: Nigeria becomes EBRD shareholder as it continues African expansion
As official development aid retreats, capital is searching for new channels — and MDBs, DFIs, and sovereign debt experts are being thrust to the front lines. With the fourth Financing for Development, or FfD4, summit in Seville, Spain, just weeks away, Devex Pro is hosting a virtual event series to map what’s next for development finance.
Tomorrow, May 28, MDBs take center stage. Vera Songwe, Homi Kharas, and Rick Samans join Devex President and Editor-in-Chief Raj Kumar to explore whether these institutions are truly equipped — structurally and politically — to absorb more risk, unlock more private capital, and anchor global development in a post-aid reality. Register for the event here.
On June 3, it’s all about debt. Iolanda Fresnillo, David Grigorian, Eric LeCompte, and Hannah Ryder unpack the geopolitical stakes of debt relief and restructuring, and whether FfD4 can deliver more than vague commitments. Save your spot now.
And on June 5, British International Investment’s Chris Chijiutomi takes us inside BII’s Africa portfolio — including hard-won lessons from fragile markets and what makes a project bankable when everything’s on the line. Register to join us.
Join the “Road to Sevilla” virtual briefing series and get investor-grade insights before the summit.
The Emerging Africa & Asia Infrastructure Fund raised $325 million in new debt facilities, exceeding its $500 million target ahead of schedule. [EAAIF]
New research shows clear tension between how Europe sees itself and how it is increasingly viewed by others when it comes to development cooperation. [ECDPM]
The European Union’s 27 states called for an “ambitious and impactful outcome” to the Fourth International Conference on Financing for Development, in Spain, from June 30. [Council of the EU]
Ayenat Mersie contributed to this edition of Devex Invested.