AFRICA DEVELOPMENT BANK GOVERNORS ENDORSE 10 YEAR DEVELOPMENT PLAN TO REVIVE AFRICA

Author: Dr. Frank Ebo Sagoe, UESTC Alumni

Link : https://opinion.huanqiu.com/article/48t65I0MHJX

The overarching objective of the African Development Bank (AfDB) Group is to spur sustainable economic development and social progress in its regional member countries (RMCs), thus contributing to poverty reduction.

The Bank Group achieves this objective by:

· mobilizing and allocating resources for investment in RMCs; and

· providing policy advice and technical assistance to support development efforts.

In 2015, all multilateral development institutions agreed on a set of objectives, called the Sustainable Development Goals. They are:

Sustainable Development Goals

Goal 1. End poverty in all its forms everywhere

Goal 2. End hunger, achieve food security and improved nutrition and promote sustainable

Goal 3. Ensure healthy lives and promote well-being for all at all ages

Goal 4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

Goal 5. Achieve gender equality and empower all women and girls

Goal 6. Ensure availability and sustainable management of water and sanitation for all

Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all

Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

Goal 10. Reduce inequality within and among countries

Goal 11. Make cities and human settlements inclusive, safe, resilient and sustainable

Goal 12. Ensure sustainable consumption and production patterns

Goal 13. Take urgent action to combat climate change and its impacts

Goal 14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development

Goal 15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

Goal 17. Strengthen the means of implementation and revitalize the global partnership for sustainable development

The AfDB has lived up to its billing of being at the forefront of the continent’s development and the time has come for the bank to do even more, with African countries facing the effects of post-covid global shocks.

The President of AfDB Dr.Akinwumi-Adesina, with some Heads of States and other delegates

The performance of the AfDB over the years has proved the ingenuity and vision of our forefathers. As it was envisioned at the beginning, the bank has evolved to become integral to the sustained and inclusive development of this continent. It is now a triple AAA-rated financial institution, winning global awards and delivering the needed support for its people. Aside the immense socio-economic interventions, especially in infrastructure, agricultural modernisation, social protection and entrepreneurial development, the bank is at the forefront of seeking fairness for Africa in the global arena. These efforts have substantially improved inequality, vulnerability and fragility on the continent. Together with the millions of the people across Africa, we say thank you for your continued belief in the African course and the African dream."

The Bank is more challenged in its support to African economies due to the fall-outs from the Russia-Ukraine war, which are compounding the existing socio-economic vulnerabilities triggered by the COVID-19 pandemic. Following the fall out from the external global factors, the continental average real growth rate is projected to decline from 6.2 percent in 2021 to 4.1 percent in 2022, and the short term economic consequences of this, in the form of rising inflation, subdued growth, increasing inequality, and greater macro-fiscal instability, is affecting cost of living on the African continent.

The Boards of Governors of the Bank have their foresight in endorsing the broad framework of the bank’s Strategic Outlook: 2023 – 2032, for the next ten (10) years, in an attempt to build a prosperous Africa, based on inclusive growth and sustainable development.

Through the Bank’s Strategic Plan, its working closely with the AU Commission and other sub-regional institutions to urgently operationalize and grow the African Financial Stability Mechanism. This will enhance protection for our economies from future shocks and enable us to join the list of regions with such economic buffer arrangements.

The Board of Governors of the African Development Bank (AfDB) has adopted a 10-year strategic plan to help revive African economies from the adverse impact of the COVID-19 pandemic and the Russian-Ukraine war. The strategic plan,has been adopted at the just ended the 57th Annual Meetings in Accra. The meeting was aimed at driving investment into critical areas of the African economy and make the continent prosperous.

It will be implemented from 2022 to 2032 with focus on agriculture mechanisation, value addition and exportation, just and realistic energy transition and private sector investment. Other pillars of the plan include security, debt management, financial stability mechanism, and leveraging the $25 billion equity of the African Development Fund (ADF) on international capital markets.

It is expected that the plan will build “a prosperous Africa, based on inclusive growth and sustainable development,” with special attention to economic growth and recovery, climate change, and energy and a just energy transition. Other priority areas of the plan include selectivity, fragility and insecurity, Gender, women and youth, economic governance, and long-term financial sustainability of the Bank.

“We will expand growth and lift many Africans out of poverty as well as develop a strong financial institution that will support private sector growth on the continent,” Dr Akinwumi Adesina, President of the AfDB Group, said. Dr Adesina encouraged delegates to contribute to transforming Africa and tell its story of hope, noting that they were all “partners in hope who shared a passion for the continent and who should celebrate Africa’s successes.”

African Development Bank Group President is of the view that Africa will not experience a food crisis. “We have the means to overcome this challenge!" Adesina said. He was briefing journalists from 41 countries in Africa and around the world at a media breakfast held to mark the start of the African Development Bank Group's Annual Meetings, held in Accra from 23 to 27 May. "Africa needs only to produce its own food. It should not have to be begging for food. There is no dignity in begging for food," he added.

The President explained all the efforts made and results achieved in terms of resilient agriculture in East Africa, thanks to the Bank, especially in Sudan and Ethiopia, which have been able to avoid importing wheat thanks to record production of 650,000 tonnes. He highlighted the importance of the Technologies for African Agricultural Transformation (TAAT) program for African producers' resilience. US$1.5 billion has already been approved for African Emergency Food Production Facility, developed by the institution to address the food crisis looming over Africa due to the Russia-Ukraine conflict.

The facility will provide agricultural seeds to 20 million African producers. The varieties include wheat, maize, rice and soybeans. The objective is to produce an additional 38 million tonnes of food and to generate $12 billion in value over the next two years. "In agriculture, we know what we're doing. Africa must be a solution for the world in respect of food, and so it shall be. Sixty-five per cent of African land is arable, and the use that Africa makes of this land will determine the future of the entire planet," Adesina said.

Moving towards stable energy systems

The other challenge facing the continent is climate change. "Climate change is a threat to the continent. Its effects are devastating. When I look at what happened in South Africa – where floods led to nearly 500 deaths and a lot of damage – or in Mozambique, Madagascar, or the Horn of Africa, land has been swallowed up," Adesina said. Africa is suffering annual losses from the effects of climate change in the range of $7 billion to $15 billion and this figure will stand at $50 billion by 2040. It will, therefore, take $1.6 trillion between 2020 and 2030 to combat the effects of climate change in Africa. However, the continent does not receive enough funding to cover its needs. African receives only 3% of global climate funding.

The Bank has adopted a position not to finance coal anmore, forming part of our policies in the fight against climate change. Also, renewable energy alone cannot meet Africa's needs, therefore the Bank is determined to support stable energy systems. Natural gas must remain a stable energy system in Africa.Africa’s time to prosper is now. Our people deserve this. And so, they should have stable energy systems. The instution is committed to investing $25 billion for adaptation in Africa. But optimistic that the gains will not suffice on their own,unless support such as the COP15, in Copenhagen, where developed countries promised $100 billion a year is honored and the time to act is now. The theme of the African Development Bank's 2022 Annual Meetings is "Achieving climate resilience and a just energy transition for Africa".

Africa’s economic growth could not have happened without major improvement in economic governance. More than two-thirds of the continent has registered overall improvement in the quality of economic governance in recent years, with increased capacity to deliver economic opportunity and basic services.

The report says the costs of starting a business, for instance, have fallen by more than two-thirds over the past seven years, while delays for starting a business have been halved. It says the private sector has become the main engine of growth as the continent continues to improve its business climate. This growth is increasingly driven by internal demand.

“This progress has brought increased levels of trade and investment, with the annual rate of foreign investment increasing fivefold since 2000. For the future, improvements in such areas as access to finance and quality of infrastructure should help improve Africa’s global competitiveness,” the report states.

Greater regional economic integration on the continent, it says, will improve the prospects for growth by enabling African producers to build regional value chains, achieve economies of scale, increase intra-African trade and become internationally competitive. Recent years have seen progress in this direction, including the launch of regional organizations to manage regional power pools and water basins.

However, Africa’s inadequate infrastructure remains a major constraint to the continent’s economic growth and development. The report urges greater investment in this area. “African currently invests just four per cent of its collective GDP in infrastructure, compared with China’s 14 per cent,” it says. “While sustainable infrastructure entails significant up-front investments, it will prove cost-effective in the longer term.”

According to the ADER, growth in the continent’s low-income countries exceeded 4.5 per cent in 2012 and is forecast to remain at above 5.5 in the next few years. Africa’s collective gross domestic product (GDP) reached US $953 while the number of middle income countries on the continent rose to 26, out of a total of 54.

“Strong economic growth has made major inroads into income poverty. The share of the population living below the poverty line has fallen from 51 per cent to 39 per cent. Some 350 million Africans now earn between US $2 and US $20 a day, and the middle class is increasingly becoming an active consumer market,” the report says. Sub-Saharan Africa, home to more than 1 billion people, half of whom will be under 25 years old by 2050, is a diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty in the region. With the world’s largest free trade area and a 1.2 billion-person market, the continent is creating an entirely new development path, harnessing the potential of its resources and people.

The region is composed of low, lower-middle, upper-middle, and high-income countries, 22 of which are fragile or conflict-affected. Africa also has 13 small states, characterized by a small population, limited human capital, and a confined land area.

The economic impact of the COVID-19 shock in Sub-Saharan Africa (SSA) has been severe, however economic growth in Sub-Saharan Africa (SSA) is set to emerge from the 2020 recession and expand by 3.3 percent in 2021. This rebound, currently fueled by elevated commodity prices, a relaxation of stringent pandemic measures, and recovery in global trade, remains vulnerable in light of low rates of vaccination on the continent, protracted economic damage, and a slow pace of recovery. Growth for 2022 and 2023 will remain just below 4 percent, continuing to lag the recovery in advanced economies and emerging markets.

East and Southern Africa, the hardest hit region by the third wave of the coronavirus, is expected to rebound from a 3.0 percent contraction of GDP in 2020 to growth of 3.3 percent in 2021 and 3.4 percent in 2022. Growth in South Africa is projected to rebound from -6.4 percent in 2020 to 4.6 percent in 2021, and following two consecutive years of recession, economic activity in Angola is projected to rebound from -5.4 percent in 2020 to 0.4 percent in 2021. Excluding Angola and South Africa, the subregion is expected to grow by 3.1 percent in 2021 and 4.3 percent in 2022.

Growth in West and Central Africa is expected at 3.2 percent in 2021, up from -0.8 percent in 2020 and estimated to grow further by 3.6 percent in 2022. The subregion is expected to pick up momentum from last year’s weak performance to 4.5 percent in 2021 and 5.3 percent in 2022. Nigeria is projected to grow from -1.8 percent in 2020 to 2.4 percent in 2021, thanks to better performance of both oil and non-oil sectors. Excluding Nigeria, The West African Economic and Monetary Union is projected to grow at 5.6 percent in 2021 and 6.1 percent in 2022, reflecting favorable terms of trade.

Faster vaccine deployment would accelerate the region’s growth to 5.1 percent in 2022 and 5.4 percent in 2023—as containment measures are lifted faster and spending increases. However, should vaccine delivery and coverage continue to lag, growth could slow to 2.4 percent in 2023.

African countries have seized the opportunity of the crisis to foster structural and macroeconomic reforms that could pave the way for increased inclusive growth over the long-term. Several countries have embarked on difficult but necessary structural reforms, such as the unification of exchange rates in Sudan, fuel subsidy reform in Nigeria, and the opening of the telecommunications sector to the private sector in Ethiopia. Reforms that deliver reliable electricity, including better functioning of public utilities, can power the manufacturing sector and the digital economy. Finally but not the least, reforms that address digital infrastructure gaps and make the digital economy more inclusive—ensuring affordability and building skills for all segments of society—are critical for improving connectivity, boosting digital technology adoption, and generating more and better jobs for men and women.

It, however, cautions that despite this growth, substantial disparities still exist on the African continent. “The challenge will be to address continuing inequality so that all Africans, including those living in isolated rural communities, deprived neighbourhoods, and fragile states are able to benefit from this economic growth. Pursuing an inclusive and sustainable growth agenda is key to reducing these inequalities,” the report says.

The report adds: “The exploitation of oil and minerals has become a major source of economic growth for a growing number of African countries, but these assets need to be effectively managed and used in an accountable and transparent manner.”

References：

1. https://www.afdb.org/en/about/mission-strategy,2022

2. African Development Report 2012 - Towards Green Growth. (2013). , AfDB ; AfDB, . In: African Development Report. RePEc:adb:adbade:460.

3. African Development Report 2005. (2006). , AfDB ; AfDB, . In: African Development

4. https://www.afdb.org/en/news-and-events/press-releases/2022-annual-meetings-president-akinwumi-adesina-outlines-african-development-banks-plan-feed-continent-51816

5. https://docplayer.net/227172086-Accra-bulletin-african-development-bank-group-annual-meetings-bulletin-wednesday-25-may-2022-in-this-edition-afdb_group-am-afdb.html

6. https://au.int/fr/node/19652

7. https://www.caribank.org/newsroom/news-and-events/afdb-president-food-energy-and-health-security-are-priorities-caribbean-and-africa-overcome-mutual

8. https://www.busiweek.com/afdb-group-chief-garners-strong-global-support-for-africa/

9. https://www.worldbank.org/en/region/afr/overview