AfDB president Adesina outlines agenda to boost Africa's devt

 

The African Development Bank President Dr Akinwumi Adesina was among the world leaders who attended the World Economic Forum on Africa that was held in Kigali last week. It is eight months since the Nigerian economist replaced Rwanda’s Dr Donald Kaberuka as AfDB President; in an exclusive interview with Kenneth Agutamba and Samantha Teta, he talked about his early wins, views on Rwanda, agenda for Africa, as well as the blueprint to achieve his targets.

Below are the excerpts:

Eight months now at the helm of the African Development Bank, what has it been like and any early wins or challenges to share?

I am surprised it is already eight months; it feels like two years given what we have been able to do, it has been quite exciting. When I was elected President of the Bank last year, we hit the ground running to build upon the legacy of our predecessors.

The critical thing we have is what we call our 10-year strategy for the Bank and so my task right away was to focus on what kind of things the Bank could do differently to accelerate its developmental impact on countries. So we decided to focus on five major areas and those areas we call them the ‘high five.’ These include: light up and empower Africa, feed Africa, industrialize Africa, integrate Africa, and improve the quality of life for the people of Africa.

Why those five?

If you take the situation of electricity alone, we have over 650 million people that do not have access to electricity and I do not think that is acceptable. Without electricity you can’t do anything at all so it’s one of the most important of five areas that we are looking at, so in the last few months, we have developed all our strategies for all these five areas which are going forward.

We have developed a new business model for the Bank aimed at taking the Bank closer to its clients. We are decentralising the AfDB completely. There will be full delegation of authority to Directors General that will be running business in our regional offices in West Africa, East Africa, Central Africa, North Africa and in Southern Africa. That way, we will be closer to our clients.

Over the last eight months, we have fast-tracked the approach of the delivery of our ten-year strategy by focusing on the high-five areas but also change our business model to do more for African countries.

We have also, in the last eight months, expanded our climate financing to support African countries to meet their challenges of climate change and I have announced that the Bank will triple its climate financing to US$5billion annually, by 2020. Therefore, from the angle of strategy development in terms of business development, in terms of supporting countries, I think a lot has been done in the last eight months.

The decentralization model sounds like a total overhaul of the Bank, is this the blueprint to execute your five-point agenda?

Yes. Look at it the way you want to play a soccer game. You hire the best people but you have to put them in front to score. Everybody can’t be behind otherwise you won’t score. We have got to score a lot more goals on development; Africa’s development needs fast-tracking. I am somebody that is impatient with seeing this continent’s high levels of poverty.

The fact that we do not have electricity does not make any sense to me. Without electricity you cannot industrialise, without electricity these small and medium enterprises cannot create the much-needed jobs. Africa today loses five to seven percent of its GDP because of lack of electricity and Africa cannot compete globally because of lack of electricity.

Here at the World Economic Forum we are going to be talking about the 4th industrial revolution, I don’t care about what revolution you talk about because if you don’t have electricity you don’t have anything and so this new business model will allow us to deliver on these needs.

We plan to invest US$12bn over the next five years just on the electricity sector alone and leverage 45 to 50 billion dollars on the energy sector in Africa over the next five years.

In the agriculture space, our model will allow African countries to take agriculture as a business; to focus on not just producing primary commodities but producing value chains that allow them to process and add value to every single thing that they produce. The Bank is rolling out a major investment framework that will focus on helping countries promote agro-allied industrialization.

We have an exciting initiative about creating jobs for Africa’s youth. We have 10 to fifteen million young people entering the labour market annually but with only three million of them being able to get jobs.

With that I think Africa today has an unemployment crisis. So we are going to fast track the provision of jobs for young people. The Bank has developed and will be rolling out ‘Jobs for Africa’s youth initiative’ aiming at creating 25 million jobs in ten years.

The initiative will focus on enhancing skills, entrepreneurship development, special financing facilities for young business that are owned by young people but also to help to reduce the skills mismatch between the labour market and the kind of skills that people have. So you can see that we are kind of pragmatic to see things happen fast.

Your five-point agenda is identical to Rwanda’s own national agenda; there is a close relationship already but what should we expect under your leadership?

The AfDB will continue to strongly support Rwanda. I am a great fan of President Paul Kagame and his leadership. Your economy has been growing very well, bouncing back from 3.7 per cent in 2013 to 7 per cent in 2015. This is a country that is doing very well in terms of macroeconomic development.

Today, we have around 26 operations in Rwanda, worth US$586 million, and covering different sectors, including energy, agriculture, transport development and higher education where we are supporting Rwanda with the Carnegie Mellon University to train the next generation of ICT experts for Africa.

I think Rwanda is at the forefront in developing the next generation of those that will be in computer sciences that will be the breakthrough for Africa so we are supporting a lot of work in that area.

We have a country strategy paper that we have just developed, from 2016 to 2018, and the sectors in which we shall further intensify our support will be energy, infrastructure, in particular, but also agriculture and jobs for young people.

Ebola is defeated. WEF-Africa was themed around connecting Africa’s resources with digital transformation. Plenty of opportunities. But what do you see as the lingering threats?

There are three things; the end of the commodities super-cycle that we enjoyed, characterized by high commodity demand from Europe and from China. With weak growth now, countries are facing significant balance of payment problems.

The other challenge, as I said, is Africa’s jobless young people. Between now and 2050 or 2030, we are going to be adding literally 500, 000 young people between the age of 15 and 24 to the population. If we don’t create jobs for them, it will heighten socio-economic and political fragility of the continent.

Therefore, the biggest challenge is how we can help countries build resilience from the economic shock, to diversify further their economies and create new opportunities for inclusive growth, especially turning Africa’s demographic asset into economic dividend. These, in my view, are the challenges facing Africa today.

Let us talk about African integration. Is this something we can achieve, considering all the restrictive visa regimes that countries have in place?

Africa has no choice but to integrate. You cannot prosper as a continent of 54 countries that are all small countries and isolated from each other. The critical way to prosper is for Africa to open up and reduce tariff and non-tariff barriers all across the continent. Some progress has been made but we need to do more considering that the percentage of intra-Africa trade is not more than 11 per cent. It is about 65 per cent in Europe and 45 per cent in Asia.

We recently released a visa openness index that found that Africans can only travel to 55 per cent of African countries without needing a visa. It means you cannot do businesses or hire skilled labour from one country to the other.The idea of an African Passport must be fast-tracked.

African Development Bank President Dr Akinwumi Adesina (L) together with Dominic Barton, Global Managing Director, McKinsey & Company during the World Economic Forum on Africa, last week. (Timothy Kisambira)

Integration requires connectivity in particular, of infrastructure, that is why we’re investing heavily in East Africa’s Northern Corridor projects because it’s very critical integrating landlocked countries to coastal countries. We must also integrate Africa’s financial markets because I firmly believe that African countries should not be going to the international market to raise capital through euro-bonds.

Between 2006 and 2015, African countries have raised about US$26.3 billion from Eurobonds, withUS$8 billion raised last year alone. It was good as long as the interest rates were low, but today they are rising meaning African countries will have to pay significantly on a higher cost based on the bonds they have issued.

We need to tap into domestic capital markets, its immense the amount of money they have on their hands, you take a look at pension funds we have today, it’s about US$334 billion, sovereign fund has US$164 billion, private equity fund have US$22 billion dollars.

We must integrate the financial markets across Africa deep into those financial markets and find instruments that make it easier for our pension funds to invest in Africa’s development.

The AfDB recently launched Africa50 in response to the urgent need of raising more funds for high impact infrastructure development in Africa, any updates?

Africa50 is a great initiative. We expect it to help push the agenda forward on the issue of infrastructure development considering there’s currently a funding gap of about US$70 billion. We just recruited the Africa50 Chief Executive Officer with experience from running the IFC global ventures; he’s well tested to run the fund.

Country subscription to Africa50 has increased tremendously, from seven two years ago to over 25 today, raising US$823 million as of January this year. The fund will deploy its instruments to help with the development of bankable infrastructure projects.

The global conversation is now on the 4th industrial revolution involving intelligent robots and self-driving cars; is Africa ready for that conversation considering that most of the continent is still dealing with 2nd industrial revolution issues of electricity generation and mass production?

I don’t really care what type of revolution we talk about because everything revolves around elements that are needed for the industrial set-up. For any industries to work, you absolutely need to have energy and so you can not have any industrial revolution without energy and that’s the AfDB’s number one priority.

We are launching what we call a ‘new deal on energy for Africa’ to allow Africa to have access to electricity within the next ten years which will allow Africa to industrialize.

The 4th industrial revolution is all about artificial intelligence and smart technologies which rely on computers but computers require electricity, so without electricity you are not even in the game. That’s why electricity is one of our high five points.

Even then, for Africa to benefit from these technological advancements, we have to expand our investment in research and development as well as significantly raise scientific investment to match countries such as Denmark and Finland with about 10,000 scientists per 1million people.

From large to small economies, resources are being lost to corruption; is this something AfDB is concerned about?

Resources for countries don’t belong to individuals. They belong to the people of the country and they should be managed wisely with great transparency and accountability. That is why illicit capital flows out of Africa must end.

The AFDB is working closely on this issue of illicit capital flows with President Thabo Mbeki’s committee that is engaged in that particular effort.

Through the African Natural Resource Centre established at the Bank, we are also helping the continent manage its tremendous amount of natural resources like the blue economy, huge amount of forest and agriculture, gas and oil resources.

Africa is not a poor continent but Africa has many poor people because we have not managed those assets properly. So transparency, accountability and rule of law are fundamental to changing this phenomenon.

Finally, the AfDB Annual Meetings later this month in Zambia, what should we expect?

It will be my first Annual Meetings and I am very excited about it. The focus this year is energy and climate change because I believe that Africans are tired of living in the dark and, therefore, we have to accelerate universal access to electricity. Climate change because many African countries as you see even right now are suffering from extreme floods and drought.

We are going to talk about how African countries can be supported to adapt to climate change.We are going to have a lot of discussions and many heads of state are going to be there.

 http://www.newtimes.co.rw/section/article/2016-05-16/199905/

3 ways to transform agriculture in Africa

The economic outlook for Sub-Saharan Africa for 2016 gives room for cautious optimism. A 4.7% increase in GDP across the region in 2016 has been higher than expected. However, the World Bank warns that low commodity prices and high borrowing costs, combined with security issues in some areas, will continue to affect growth rates. To overcome a historic dependence on oil and mining revenues, African economies must continue to diversify into other sectors – particularly those that can provide jobs to a restless and growing young population.
Sustaining economic growth will require fiscal discipline, productivity improvements, infrastructure improvements, increased regional trade, and greater focus on stimulating and supporting innovation. All stakeholders – including government, donors and the private sector – must align and target their investments towards a shared goal of sustainable and inclusive growth.
While an absolute increase in investment is important in almost all sectors, in many of those sectors, there is an untapped margin of potential economic impact to be had from applying existing funds in a more targeted and coordinated way. A major opportunity for increasing growth through a “smart” and coordinated approach can be found in the agricultural sector. Agriculture today accounts for 32% of GDP in Africa and is the sector that offers greatest potential for poverty reduction and job creation, particularly among vulnerable rural populations and urban dwellers with limited job opportunities. Growth generated by agriculture in sub-Saharan Africa is estimated to be 11 times more effective in reducing poverty than GDP growth in other sectors – a vital multiplier given that 65% of the continent’s labour force is engaged in agriculture. Yet the sector has suffered sustained neglect and, as a result, Africa has gone from being an exporter of agricultural products in the 1960s to a net importer of agricultural and food products today.

The past 10 years have seen significant improvements in coordinated activity at national, regional and continental level to boost agricultural productivity and contribution to economic growth. The Comprehensive Africa Agricultural Development Program (CAADP), launched in 2003, has driven commitments by 42 African governments to increase public spending on agriculture. As a result, 14 of the 42 member states of the African Union have signed up to CAADP and have met or exceeded a national investment target of 10% of public resources into agriculture. But Africa has not achieved the second CAADP target, of a 6% increase in agricultural GDP. In fact, the annual average agricultural GDP growth rate decreased slightly from 6.2% in 1995-2003 to 5.1% in 2003-2012. And while the share of intraregional trade has almost doubled over the past 20 years, it still only accounts for 3.5% of the region’s GDP. The 2014 Malabo Declaration, signed by African governments, aims to address this, with a bold target of tripling intra-African trade of agricultural and food products and services by 2025.

Increasing GDP growth will bring both food security and job opportunities to the continent, and requires a coordinated effort between the public and private sectors. Public-sector investment must be targeted to reduce real and perceived business risk, enable financing and improve infrastructure in order to attract investors. Currently, prohibitive lending rates are stunting the growth of small-to-medium-sized agribusinesses (SMEs), which have the potential to be the backbone of sub-Saharan agricultural economies.
We must innovate to break this cycle and accelerate the agricultural transformation under way in many African countries. We need to design new models for investment financing to achieve a structural transformation in the agricultural sector. In particular, we need to engage the private sector. A historic focus on public investment resulted in a financial dependency to which only donors could respond. We need a mix of public, private-sector and development financing, and as a continent we must demonstrate that we are proactive in injecting our own resources into agriculture.
Achieving the transformation we seek will only come if we demonstrate stronger leadership and accountability. Specifically:

1. Heads of state must demonstrate vision, champion agriculture and lend their leadership to national agricultural plans and multistakeholder platforms to drive agricultural transformation.

2. Greater alignment, accountability, and measurement of progress on agricultural targets: The CAADP Implementation Strategy and Roadmap, signed off by heads of state in 2014, provides a framework for measuring progress against country goals, but it needs national leadership to ensure implementation and to respond swiftly to gaps. Many countries are currently reviewing their National Agriculture and Food Security Investment Plan and others should be encouraged to do the same. Agricultural development plans must be linked to national development plans, something that has not happened in some countries in the past. Too many policies are agreed upon but then not implemented effectively on the ground. We need a predictable, reliable and functioning policy environment if we are to attract greater private-sector investment. Too often, improved policies are agreed but not fully implemented. The first decade of CAADP has delivered a key lesson that improving this track record will require strengthening government capacity for administering policy at regional and local levels.

3. Strong frameworks for collaboration and mutual accountability between the government, private sector, development partners and other CAADP actors: A number of proven models for public-private sector collaboration have emerged at national and continental level and we need to build on and scale these initiatives. One example is Grow Africa, a partnership co-founded in 2011 by the African Union Commission, the NEPAD Agency and the World Economic Forum as an African-owned, country-led, market-based platform for cross-sector collaboration to increase inclusive and responsible investment in African agriculture. Now hosted by the NEPAD Agency following an initial incubation at the World Economic Forum, Grow Africa has helped generate a private-sector investment commitment to agriculture of over $10 billion. Of that committed investment, $2.5 billion has been implemented between 2013 and 2015, benefiting more than 10 million smallholder farmers and creating over 88,000 jobs.

Equally promising is the emergence of multistakeholder platforms focused on specific commodity markets or clustered around specific geographic areas. “Agro-pole” models that target public sector policy instruments and spending to particular geographic area, making the area attractive to private sector companies, investors and workers, have been applied successfully in other industries and geographies – think of Silicon Valley. These approaches are now being adapted to the agricultural sector in some countries.
Much progress has been made in the past decade. Governments, the private sector and donors have proven they can work together. To realize agriculture’s potential at a critical time in most African economies, we must now work smarter, reviewing and improving the partnership structures that have brought us to where we are today.

This article is part of our Africa series. You can read more here.
The World Economic Forum on Africa is taking place in Kigali, Rwanda from 11 to 13 May.

source: https://www.weforum.org/agenda/2016/05/3-ways-to-transform-agriculture-in-africa?utm_content=bufferffee7&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Africa: WEF Kigali Meeting to Address Skills, Energy Gap

                                          photo source RDB Website

By Collins Mwai

The World Economic Forum for Africa, scheduled to kick off in Kigali tomorrow, will be an opportunity to create awareness about the anticipated Fourth Industrial Revolution, which technology enthusiasts term as 'disruptive.'

Organisers say the forum will be a platform to discuss the changes expected in economies, corporations and societies courtesy of the industrial era, as well as deliberate on opportunities within and emerging risks.

The forum will run under the theme, "Connecting Africa's Resources through Digital Transformation."

In essence, the theme according to officials, seeks to open up discussions such as how African economies can use digital technologies to facilitate development as well as build resilience in an increasingly competitive global market place.

The Fourth Industrial Revolution is expected to see a transition from the current digital technologies era into the industrial revolution which experts have said will influence production, consumption and interactions, significantly impacting economies

In his book, The Fourth Industrial Revolution, Prof. Klaus Schwab, the executive chair of the World Economic Forum, defines the era as one to be characterised by intelligent robots, 3D printing, artificial intelligence, self-driving cars, neuro-technological brain enhancements, genetic editing, among other disruptive changes.

Prof. Schwab's book explains that previous industrial revolutions have seen mankind move from dependence on animal power to digital technology, enabling mass production.

New technologies

The anticipated era, however, will see a range of new technologies that will combine the physical, digital and biological aspects, impacting all disciplines, economies and industries, according to the book.

In a pre-forum media conference in Kigali, yesterday, Elsie Kanza, the head of WEF Africa division and member of the Executive Committee of the World Economic Forum, said the meet will not only focus on what needs to be done to prepare the continent for the digital era but also highlight how it can be done.

This will involve aspects like change of polices as well as re-prioritisation of resources, she said.

"Right now, only about 20 per cent of Africans are connected to the internet which is a core infrastructure for the fourth industrial revolution. We need to look at the challenge of the inequality gap to ensure no one is locked out," Kanza said.

This will also inform and influence new business models that require to be put in place to facilitate trade.

The forum will also address the skills gap being experienced in a number of countries on the continent to ensure that a huge section of Africans are digitally literate to participate in the fourth industrial revolution.

The energy deficit across the continent will also be up for review at the forum as the digital technologies largely rely on energy solutions.

On the relevance of the theme at a time when countries are dealing with far more 'pressing' challenges such as food security, security, poor education systems and insufficient health care, Kanza said the digital era would connect Africa's resources to address underlying issues.

"The agenda is feasible because if we accept that we are living in this new reality, then we can consider how we engage with it. This is looking at how we can drive digital transformation by connecting all of our resources and not just some of them. This will also be through sharing stories of those that have been connected and have been transformed as well as the development story of Rwanda and how it can be scaled up," Kanza said.

Fruits of the forum

Over the years, the forum has served the continent's development through the launch of a number of initiatives such as the Global Alliance for Vaccines and Immunisations in 2000 and the launch of the NEPAD agency, a partnership for Africa's development.

The Investment Climate Facility for Africa, which is another facility for Africa that works to help governments to improve their environments for doing business, was also borne of the forum.

From Rwanda's perspective, the forum will serve multiple purposes, including showcasing the opportunities in the country, sharing progress attributed to digital transformation and networking with potential partners.

The Minister for Finance and Economic Planning, Amb. Claver Gatete, said the choice of the theme and agenda resonate well with the path taken by Rwanda in development outlined in Vision 2020.

The vision, among other targets, aims at positioning Rwanda as a middle income country by 2020 and transforming it into a service-led economy.

Gatete said information technology and digital transformation was a key pillar in the much sought growth and development.

He said already, the IT sector was responsible for about 3 per cent of the gross domestic product, and was responsible for supporting multiple other sectors, including provision of public services.

"That is why we believe that the Fourth Industrial Revolution is going to become a big pillar in our development path," Gatete said.

More than 1,500 delegates from across the world are expected to participate at the forum.

About 10 heads of state and government have confirmed attendance as well as numerous business leaders representing corporations from all across the world