COVID-19, International Private Capital, and Infrastructure-Led Recovery


In the immediate aftermath of COVID-19, business leaders, policymakers, and key players from global financial institutions and multilateral development banks emphasized the need to prioritize infrastructure investment in a bid to drive the post-pandemic economic recovery. However, in the last five years, most emerging markets and developing economies (EMDEs) have witnessed low commodity prices, sluggish GDP growth, low levels of domestic savings, and weak private capital inflows. As a result of the concomitant high debt levels and limited fiscal space, many EMDEs and sovereign entities face credit downgrade risks in the current environment. While the notion of an infrastructure‐led recovery remains popular in many developed countries, clearly, traditional sources of infrastructure financing will likely not thrive in many post-pandemic EMDEs, particularly in Africa.