Akinwumi Adesina: Africa own its destiny
THE PRESIDENT OF AFRICAN DEVELOPMENT BANK SPEAKS ABOUT THE ADVANCES THAT AFRICA EXPERIENCED, POINTS OUT THE PERSISTENT PROBLEMS AND EXPLAINS HIS OPTIMISM ABOUT THE FUTURE OF THE REGION
The Nigerian economist Akinwumi Ayodeji Adesina is a world reference in economic development policies for the agricultural sector. Current president of the African Development Bank — the eighth person to hold the position and the first of Nigeria — has been working with heads of state, ministers of economic areas, industrial leaders and officials of the central banks of several African countries to leverage bank financing for the continent’s agricultural projects. Took office in September 2015 for a term of five years.
Adesina brings with a successful experience as Minister of Agriculture and Development of his country, a position he held between 2011 and 2015. In 1982, he obtained his Bachelor’s degree in Agricultural Economics from the University of Ife, Nigeria. Then,he received the Master’s degree (1985) and PhD in Agricultural Economics (1988) at Purdue University in the United States.
For ATLANTICO, Adesina talks about the economic development of the African continent and its main challenges, such as strengthening the industrial park, the incentive for small businesses, the empowerment of youth and his priorities as president of the African Development Bank.
Check out the interview.
ATLANTICO — The world sees Africa as a continent full of problems. It has a distorted and erroneous view of the reality. As president of the African Development Bank, you probably have a different point of view. What would that be? How do you perceive the continent today?
ADESINA — Africa is a resilient and dynamic continent, so I see its opportunities and its great potential. In the 21st Century Africa has witnessed improved stability and the introduction of economic reforms which have led to a great increase in foreign direct investment, spurring fast economic growth. In 2015, Africa’s average growth was estimated at 3.5% — that’s second only to Asia, and far ahead of Europe and the richer nations. Despite facing eco-
nomic headwinds — not least the decline in commodity prices and a weakening demand for commodities — the economic projections are still good for Africa, with growth projected to accelerate to 4% in 2016. It could strengthen further to 5% in 2017. Yes, Africa may have some challenges, but African economies are not unraveling.
Africa is clearly a continent on the rise. Six of the ten fastest-growing economies in the world are in Africa. Real income has risen by 30% in the last ten years. Foreign direct investment has risen to USD 64 billion, while remittances have reached USD 56 billion, exceeding total official development assistance. Africa is also leading the way when it comes to female representation in national parliaments, and we have witnessed phenomenal growth in the enrolment of girls in primary education. The continent’s progress on environmental targets is also exceeding global performance.
“DEMOCRACIES IN AFRICA ARE BEGINNING TO BLOOM, THEY ARE MATURING”
ATLANTICO — What are the main challenges that you face as the Head of the Bank?
ADESINA — Our challenge at the Bank reflects the challenge of the continent, to continue to expand opportunities and unlock potential. And we have no illusion as to the mountains we still have to climb. Africa still faces high levels of poverty, with 42% living below the $1.25 poverty line; high levels of inequality, with 6 of the 10 most unequal countries on the planet in Africa;
high levels of unemployment, with the continent creating only 3 million decent paying jobs per year and needing to create 8 million; high levels of ‘energy poverty’, with over 640 million Africans without access to electricity; and very low levels of manufacturing, with Africa’s share in the global total remaining flat over the past decade at just 1.5 percent.
ATLANTICO — Brazil has made extraordinary advances in recent decades and exported social technologies. What is the role of Brazil in the development of the African continent?
ADESINA — We can learn important lessons from Brazil, especially from its economic growth, its success in narrowing social inequality and its development experience. During the last decade, Brazil has developed social safety net programs that have successfully reduced poverty levels and helped break the way that poverty can be bequeathed from one generation to another. Brazil shows how it is possible to eradicate poverty and income inequality, while
sustaining economic growth. This is a good example of how Africa can learn from Brazil, and replicate a similar social protection model. Brazil can also be a gateway for Afri-
can countries to the wider Mercosur market. Brazil also has around 200 Africa cooperation projects — mainly within Portuguese speaking African countries, due to a common culture and language — in areas ranging from agriculture to housing, research, medicine and technical cooperation. The Bank stands ready to act as a catalyst to strengthen the ties and cooperation opportunities between Africa and Brazil.
“SIX OF THE WORLD’S TEN FASTEST GROWING ECONOMIES ARE IN OUR CONTINENT NOWADAYS”
ATLANTICO — Economic development is different from economic growth. And economic development requires or presupposes a context of political stability, with a strong institutional framework. How do the political contexts of some countries affect the development of the continent?
ADESINA — Economically speaking, political instability reduces savings, as well as foreign and domestic investment. It reduces or destroys investment in human capital; it reduces the legitimacy of a government; it obstructs effective policy formulation and implementation in
the long term; and it disfigures public revenues and expenditures. These all present risks to the continent’s peace and security, growth acceleration, and overall development.
The last decade of economic growth in Africa was accompanied by a decline in the number of countries affected by conflict. Political stability is therefore critical for economic development. Democracies in Africa are beginning to flourish, and are maturing, and increasingly governments are being held more accountable by civil society and an increasingly educated population. Much of the ‘Africa rising’ story is the result of this improved political context. The Bank applies a “fragility-lens” to guide its strategic and operational engagement in
its regional member countries. This means addressing fragility and political instability by building partnerships for resilience, at national and regional levels. It also involves strengthening state capacity and effective institutions, stabilizing states and promoting inclusive and equitable patterns of growth and development.
ATLANTICO — What are the social and economic impacts of the latest outbreak of Ebola?
ADESINA — In 2014, the world showed its vulnerability to an emerging epidemic, and we saw how a local outbreak can easily become a global health threat. Ebola has taken a toll on human life, particularly health workers. It has weakened systems of public service delivery, with the shutdown of schools, markets and stores, and it has severely undermined the economic growth and development in the 3 epicenter countries — Guinea, Liberia and Sierra Leone. Mining companies withdrew personnel, agriculture and tourism experienced a downturn, and there was a significant fall in GDP growth.
The outbreak also caused disruptions to travel and cross-border trade, with cumulative losses estimated at more than USD 500 million across the region in 2015 alone.
ATLANTICO — What was the Bank ́s contribution to the Ebola-affected countries?
ADESINA — From the very beginning of the outbreak, the AfDB was at the forefront of the health response efforts in approving 10 operations for a total amount of USD 256 million. Overall, 321 million people in the ECOWAS region benefited directly and indirectly from the Bank’s support. Health systems have also been strengthened through the procure-
ment of medical equipment and supplies, and over 50,000 health staff and volunteers have been trained to respond to EVD and other infectious diseases. Epidemiological surveillance and control in frontline services has been improved, and incentives paid to over 31,000 health workers as well as the 115 health workers that were deployed to the affected countries.
The Bank, in collaboration with the US Department of State, is also supporting the 3 countries in their post-Ebola Recovery efforts by establishing a USD 33.3 million Post Ebola Recovery Social Investment Fund.
This Fund seeks to increase the availability of basic social services and restore livelihoods and economic opportunities, specifically targeting women and girls in cross-border areas. The Bank is also engaged with various partners (the African Union, ECOWAS, the World Bank, the Bill and Melinda Gates Foundation) in supporting the establishment of the African Center for Disease Control (ACDC) starting with the West Africa Region, and in particular Liberia, Sierra Leone and Guinea.
ATLANTICO — The African Development Bank has focused its work on five priorities for Africa (the ‘High 5s’). What are these priorities, what was the reason for choosing them, and which
one is the most challenging?
ADESINA — The High 5s are intended to help accelerate Africa’s development over the next 10 years. The High 5 priority areas of focus are as follows:
i) Light up and Power Africa;
ii) Feed Africa; iii) Industrialize Africa;
iv) Integrate Africa; and
v) Improve the Quality of Life for the People of Africa. These form a blueprint for African countries to embark on a course of sustainable and long-term transformation.
These priorities were set by the needs of the African people themselves, based on what was holding back the development of the continent, not least the lack of energy. Lack of power translates into lack of infrastructure. Children underperform, as over 9 per cent of Africa’s primary schools lack electricity. Access to food is essential for ending hunger and malnutrition and ensuring a healthier and more productive workforce. Africa has enormous poten-
tial to feed itself and the world, yet sub-Saharan Africa still experiences food-deficiency, with about 25 percent of its population suffering from malnutrition.
As a primary commodity exporter, Africa remains at the base of the global value chain and we need to industrialize to move up the chain and become a global growth pole. Integrating Africa’s economies is key to achieving competitiveness and broadening and strengthening the quality of growth. Lastly — and perhaps the most challenging — is the goal to improve the quality of life for the people of Africa. Despite sustained positive economic performance in Africa for nearly a decade and half, many countries still face widespread poverty, socio-economic inequality and gender disparities.
ATLANTICO — According to the AfDB, more than 645 million Africans currently have no access to electricity a. What paths are you taking to change this in the short term?
ADESINA — The African energy sector has evolved significantly in recent years in terms of increased focus, investment, regulation and coordination. The power sector has seen increased emphasis from governments, with significant investment programs and private sector interest in a variety of countries, such as Côte d’Ivoire, Kenya, Morocco and South Africa. Countries are moving or have moved towards unbundling (e.g. Ethiopia), partial or full privatization (e.g. Nigeria), concessions to microgrid operators to generate, distribute and sell electricity (e.g. Kenya), and the introduction of independent energy regulators and IPPs. The ongoing development of Africa’s regional power pools (e.g. East Africa Power Pool) improves the possibilities for developing cross-border energy trade, and for greater regional coordination in energy investment planning and potentially a higher penetration of on-grid renewable energy. In theoil and gas arena, sub-Saharan Africa, especially East Africa, has been in the spotlight with oil and gas investors interested in significant opportunities, despite recent price volatility. At the same time, countries such as Mozambique are putting in place the relevant legal and fiscal frameworks to develop the sector. These recent developments provide a foundation for the New Deal on Energy’s aspirational goal of universal access by 2025.
ATLANTICO — In 2012 the African Development Bank signed an MOU with BNDES in order to expand cooperation between Brazilian and African companies. After 4 years, what can be seen concretely from that agreement?
ADESINA — The 2012 MoU was a first step in our cooperation, allowing BNDES and the Bank to get to know each other. In November 2015, the Bank and Brazil reviewed the MOU and agreed to identify potential joint operations. For example both parties will sign a Risk Participation Agreement in the case of a Trade Finance operation. This was reinforced in March 2016 when BNDES attended the Africa CEO Forum in Abidjan.
ATLANTICO — Africa currently accounts for just over 2% of the world’s exports. How to indus-
trialize the continent and reduce its dependence on commodity exports?
ADESINA — Industrializing Africa is a key priority for the continent, if it is to create more diversified economies and higher quality jobs. The continent should exploit its comparative advantages in commodity-based industrialization, and add value to these resources using its abundant human capital. Developing agro-industry is key. It is also time for African countries to take industrial policies more seriously.
ATLANTICO — While it is necessary to support large investments and develop the financial markets within the continent, there is a demand for micro entrepreneurship projects that have achieved satisfactory results in many parts of the world, such as Brazil. How to keep that balance and meet both needs?
ADESINA — The Bank is a huge supporter of private sector development, and we strongly believe that the private sector, whether in the form of micro or large enterprises, drives the economy. We are also very supportive of SMEs, which create the bulk of Africa’s employment. We have been striving to go deeper and deeper in our support to private sector, including through a growing portfolio of lines of credit to SMEs, and support to Microfinance institutions. AfDB needs to remain a catalyst without taking over the role of local banks: hence the ne-
ed to complement and support local institutions, and maintain the balance between what we can do and what the financial institutions should do.
ATLANTICO — What should we expect for the future of the continent?
ADESINA — The future of Africa will be one in which opportunities continue expand and potential continues to be unleashed — potential for countries, for women, for young people, for the private sector, for the continent. As we unleash this potential we strive to see a new wave of growth and development shared by all.