‘For the world to respect Africa…’ (2)

Continued from Tuesday

Our support to Ethiopia helped it achieve self-sufficiency in wheat within four years, turning it into a wheat exporting nation. To replicate global success, the African Development Bank helped organise the Feed Africa summit in January, which attracted 34 heads of state and government.

Leaders did more than speak, they committed to driving self-sufficiency and food sovereignty within five years.

I am glad to report that globally, we were able to mobilize $72 billion to help Africa achieve these targets.

But even as we do this, we must do more than simply producing more food and agricultural commodities. Take for example, that Africa which accounts for 65 per cent of the production of cocoa, receives only 2 per cent of the $120 billion global value for chocolates.

While African farmers languish in poverty, chocolate processors smile all the way to the bank. One is condemned to penury and the other creates wealth. The same can be said of cotton, tea, coffee, cashew, and other raw commodities that Africa exports at a significant loss in revenues and jobs.

Let me be very clear on two issues on this:
The export of raw commodities is the door to poverty.
The export of value-added products is the highway to wealth.

To gain respect, Africa must turn itself into a global powerhouse in food and agriculture. That is why the Bank and its partners have provided $1.6 billion for the development of Special Agro-Industrial Processing Zones to support private sector processing and value addition to commodities in 25 zones across 15 countries.

Our newly launched $3 billion Alliance for Special Agro-Industrial Processing Zones will support the development of these zones in 11 more countries.

Africa must turn the sweat of its farmers into wealth
Africa will gain respect when it takes advantage of its vast natural resources to develop its economies and to transform the lives of the people.

What applies to agriculture also applies to Africa’s minerals, oil, gas and metals, such as copper, cobalt, manganese, graphite and lithium. Africa accounts for 70 per cent of the global reserves of platinum, 52 per cent of cobalt and 48 per cent of manganese. Democratic Republic of Congo alone accounts for 70 per cent global supplies of cobalt.

However, China accounts for a high percentage of refining of the strategic minerals: cobalt (73 per cent), nickel (68 per cent), lithium (59 per cent) and copper (40 per cent).

As the world transitions into renewable energy sources, Africa has the largest sources of solar resources potential in the world. The renewable energy revolution will depend on these critical metals for the manufacturing of wind turbines, solar panels, battery energy storage systems and electric vehicles.

There will be so much money to made, as the size of electric vehicles market is estimated to rise from $7 trillion currently to $57 trillion by 2050, with projections showing a 500 per cent increase in demand for cobalt, graphite and lithium in the next two years.

Africa must strategically position itself in this new industry dynamics.
A study by Bloomberg NEF indicates that manufacturing lithium-ion precursor batteries in the Democratic Republic of Congo, will be three times less expensive than in the U.S, Poland, and China. Africa should therefore, not simply be an exporter critical minerals. Rather, Africa must develop its value chains in order to process, add value and become well integrated into global supply chains.

While geopolitical issues and interests drive international engagements on critical metals, Africa should strategically position itself to build its own industrial manufacturing capabilities with infrastructure, skills, knowledge and competencies, and investment partnerships.

Africa’s green metals must become Africa’s green wealth.
Africa will gain respect when it becomes an important player in global manufacturing.

Today, Africa accounts for just 3 per cent of global manufacturing. Industrialising is the fastest way to wealth. And here, once again, permit me to focus on Nigeria especially. Nigeria must unleash an industrial revolution on this continent. The day Nigeria wakes up and becomes a lion king, everything will change for its people and for Africa.

Malaysia and Vietnam have used aggressive horizontal and vertical diversification of industrial production to move from low-value to high-value market products. The result is reflected in the comparative wealth of both countries and Nigeria. While the per capita export value for Malaysia is $7,100, and $3,600 for Vietnam, it is only $160 for Nigeria.

Malaysia and Vietnam have long moved into global manufacturing growth. They are creating massive wealth and jobs for themselves. Nigeria, meanwhile, has remained in survival mode.

Sadly, Nigeria is still unable to replace its imports of petroleum products, despite being one of the largest exporters of crude oil in the world.

For now, Nigeria is developing too slowly and far below its potential. I am hopeful that the current administration will revive Nigeria’s manufacturing sector.

Everything I have said so far about Africa coming into its own and reaching its full potential is underpinned by a strong manufacturing base.

To get there, we simply must implement the right policies, make the right investments, get our infrastructure in order, and improve logistics and financing frameworks. We must make sure that this is driven by a highly skilled dynamic and youthful workforce.

Africa will gain respect, when its voice is heard and respected as the world grapples with the greatest threat to human existence: climate change.

Next week, the whole of the world will descend in United Arab Emirates for the COP 28, the annual meeting of the Conference of Parties of the United Nations Framework Convention on Climate Change. I will be traveling to Dubai this evening after this event, to add my voice to Africa’s call.

Climate change is devastating many parts of Africa. Drought and desertification across the Sahel, and in the Horn of Africa, and cyclones in Mozambique, Zimbabwe, Malawi, and Madagascar, have had devastating effects.

Africa, which accounts for just 3 per cent of all historical emissions, now bears the most severe effects of climate change. 9 of the 10 countries most vulnerable to climate change in the world are in Africa.

Africa’s wealth is being lost at a frenetic pace to climate change, with $7-15 billion in annual losses. This is estimated to rise to $50 billion a year by 2030.

While the developed world grew their economies, created massive wealth, jobs and raised living standards from the industrial revolution, they did so at the expense of the global common, the environment, by using 85 per cent of the global carbon budget.

Africa’s carbon emissions are dwarfed by the emissions of other continents. To put it in perspective, an average American or Australian emits as much CO2 in a month as an individual in Africa does in one year.

However, global finance for climate is short-changing Africa, providing only $29 billion of the $653 billion in climate finance globally.

To give zest to Africa’s voice and needs, the African Development Bank launched the $25 billion African Adaptation Acceleration Program to deliver greater financing for climate adaptation in Africa.

Building off its successful program that insures countries against extreme weather patterns covering 15 countries, the Bank has launched a $1 billion Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) to scale up insurance of countries against climate risks.

Africa will gain respect when it can provide universal electricity access to all its people and drop the garb of being known as the “dark continent.”

Africa has the largest renewable energy potential in the world, including solar, hydro, wind and geothermal. The problem is that while it has 60 per cent of global solar power potential, it uses only 1 per cent. Yet, it has 600 million people without electricity.

In addition, close to 1 billion Africans do not have access to clean cooking energy, and as a result over 300,000 women die annually from the use of polluting cooking fuels such as biomass and kerosene, while another 300,000 of their children also die annually because of indoor pollution.

Unfortunately, according to the International Renewable Energy Agency, Africa “has been overlooked in the global energy transition.” The facts bear this out: Africa received just $60 billion (or 2 per cent) of the $3 trillion of global investments in renewable energy in the past two decades, and accounts for only 3 per cent of all jobs created in renewable energy.

Clearly, there is underinvestment globally in supporting Africa to unlock the full potentials of its vast renewable energy sources.

This is unfair, unjust and unacceptable.
That is why in 2016, one year after my election at the African Development Bank, I launched the New Deal on Energy for Africa. A new deal that will accelerate the access of Africans to electricity. Since the African Development Bank launched its New Deal on Energy in 2016, electricity access rate in Africa has expanded from 32 per cent to 57 per cent.

Despite setbacks due to Covid, some countries such as Ethiopia, Tanzania and Kenya have achieved remarkable progress and accounted for more than 50 per cent of those gaining access to electricity in Africa between 2015 and 2019. The Bank’s support to Morocco helped it achieve 98 per cent of electricity access across its rural areas.

The African Development Bank is at the fore of unlocking Africa’s renewable energy potential. We supported the building of the largest concentrated solar power station in the world, in Morocco; supported the building of the largest wind power station in Africa, in Kenya.

We have invested $210 million in the development of the transmission lines for Nigeria and plan to support a 1,000 MW solar power plant in Jigawa, as well as Nigeria’s first public-private partnership power transmission lines in Lagos State.

We are implementing a $20 billion program, Desert to Power, to develop 10,000 MW of solar across 11 countries of the Sahel zone, which will provide electricity for 250 million people.

When completed this will become the world’s largest solar zone.
Africa must fully unlock the massive potential of the Grand Inga dam in the Democratic Republic of the Congo with its 44,000 MW hydropower potential. Despite huge potential, it remains untapped.
On a visit to this amazing site, I asked of the community where Inga is located what the name “Inga means. I was told it means “Yes.” Asked to sign the visitor’s book, I wrote, “The African Development Bank says “Yes.” With all its potential, Africa cannot justify not having electricity.

Yes! 100 per cent electricity access is achievable.
Africa will gain respect when it can secure the health of people.
When Covid struck, Africa was caught unprepared due to several decades of underinvesting in health and development of its pharmaceutical industry. The continent had just two laboratories to test for Covid. Africa produces 20-30 per cent of its pharmaceutical drugs. And it produces a mere 1 per cent of its vaccines. When the rest of the world were receiving second and third vaccine booster shots, Africa’s 1.4 billion population waited in vain to receive one basic vaccine shot.

It was disheartening. I said to myself: never again!
To reverse the problem, the Bank supported African countries with a $10 billion emergency facility. Africa cannot be respected when its leaders had to scramble around the globe seeking medicines, hand sanitisers, surgical masks, and vaccines. Africa subjected its health security to the benevolence of others.

This should never be. What if others were not so benevolent?
Yet, the manufacturing of medicines and vaccines require that Africa gains access to technologies and processes, majority of which are subject to intellectual property rights protection under the World Trade Organisation.
To fix this and break this cycle of dependence, the African Development Bank launched a $3 billion facility to support the development of local pharmaceutical companies in Africa.

To assure the companies can have access to intellectual proprietary technologies and processes to manufacture vaccines, the African Development Bank established the Africa Pharmaceutical Technology Foundation.

The Foundation will intermediate between African pharmaceutical companies and the global pharmaceutical companies to access the technologies, active pharmaceutical ingredients and antigens they need to produce quality drugs and vaccines in Africa.

The Foundation, whose Eminent Advisory Council is co-chaired by President Kagame of Rwanda and former German Chancellor Angela Merkel, will officially open its offices in Kigali in December.

To further improve access to quality health services, the African Development Bank has also launched a $3 billion program to build Africa’s health infrastructure. When Africans have access to quality health care services, medicines and vaccines, it will boost productivity, life expectancy and eliminate the $2.6 trillion of GDP lost annually from diseases and illnesses.

A healthier Africa will be a much richer Africa.
Africa will earn respect when it deepens good governance and the rule of law.

For now, the erosion of the democratic space in several African countries is disturbing. The Mo Ibrahim governance index declined in 2022-2023. The return and rise in the number of military coups in parts of Africa, especially in the Sahel, poses a potent and imminent danger to reversing the continent’s stability, growth, and development.

Fixing this, however, requires understanding that the Sahel region has continued to suffer for decades from climate change, desertification, and extreme poverty, and more recently from terrorism.

Terrorists don’t just appear. They thrive where three drivers exist —extreme poverty, high youth unemployment and climate and environmental degradation — what I call a “disaster triangle.” Anywhere this disaster triangle is found, terrorisms and insecurity thrive just as it does currently in many parts of Northern Nigeria.

Several countries now spend more resources on security, increasingly displacing financing for development in a context where 85 per cent of the continent’s population is either living in or sharing borders with a conflict-affected country.

We must urgently and comprehensively tackle this challenge to prevent reversals of gains in development.

This calls for the strengthening of the overall security architecture, rebuilding of damaged physical and social infrastructure (such as schools, health care facilities, water, and sanitation) in conflict-affected areas, and protecting areas where strategic resources exist.

Africa will garner the respect it deserves when it can assure the security of its nations and territories, itself.

That is why just two weeks ago, I met with seven governors from Northwest Nigeria who visited me in Abidjan. The African Development Bank will support them to reduce insecurity and vulnerabilities in the region, through significant investments in agriculture, infrastructure, and electricity, to boost the economic prospects of the region.

Significantly raising the size of the peace and security fund of the African Union, with standby forces that can intervene to restore stability in areas experiencing conflicts, will also garner more respect for Africa.

The call for “African solutions to Africa’s problems” is loud, but it will only be respected when “Africa’s problems are financed by Africa’s resources.” Political sovereignty must be backed by economic and financial sovereignty.

Africa will earn respect when it is able to mobilize financing for its own development.
Today, Africa’s high debt levels are of great concern. Buoyed by low global interest rates following the 2008 global financial crisis,, several African countries rushed to the global capital markets to source cheaper loans to develop their economies, especially to build critically important infrastructure.

The Eurobond euphoria saw the number of countries which issued Eurobonds increase from 2 to 21 between 2007 and 2022. They collectively issued $140 billion worth of Eurobonds. Several African countries also rushed to secure cheaper loans from China, as the volume of Chinese loans exploded.

Now the debt load is heavy as debt service payments have been increasing as global interest rates rise to tame global inflation.

Sub Saharan Africa’s debt ratio has doubled in just a decade and reached 60 per cent of total GDP in 2022. The region’s ratio of interest payments to revenue has more than doubled since the early 2010s and is now close to four times the ratio in advanced economies: African countries now spend on average 7.6 per cent of their GDP to service debt.

Right here, in Nigeria, 98 per cent of government revenue is used to service debt.

Africa must find a better and more sustainable way to finance its development. Africa can do this if it manages its natural resources well. That’s because Africa’s natural resources are estimated at $6.5 trillion. Given Africa’s enormous wealth of natural resources, Africa should not be a poor continent.

It is high time for Africa to truly assert its aspiration, to move up from being low income and highly indebted nations, and become a donor to other less privileged nations.
Global respect comes when nations do not overly depend on others.

If such dependence did not exist, single nations would not be in a position to convene summits with Africa, a whole continent. Rather, it would be the opposite: they would be lining up in Africa, for Africa’s Summit with them.
If we can dream it, we can achieve it.
Africa will earn respect when it takes care of its youth and unleashes their potential.

The continent has the largest population of youth in the world, with over 477 million between the ages of 15 and 35. By 2050, one out of four people in the world will be Africans.

Just a few weeks ago, the New York Times newspaper published an interesting article emphasising that the world was becoming African. It posited that Africa is going to play a much more important role in the world, especially given that demographically, Africa’s population growth—most notably its youth bulge—surpasses population growth in other regions of the world.

This is something I have highlighted for some time, based on demographic trends and related facts. So, it was gratifying to see this perspective now echoed in the New York Times too.

However, I have also been very clear that the demographic dividend is not given. We still have much work to do to ensure that we reap the benefits of this youth potential.

One other area that gives me great concern is that our continent is still not able to take care of and create jobs for our young people, who constitute the majority of the Africa’s ’s population. We must turn our youth bulge into a powerful and productive youth dividend.

The lack of opportunity for our youth is why we see disturbing migration journeys played out on our TV screens. This has produced a migration crisis in Europe. It has led, in many instances to ever stronger anti-immigrant sentiment in Europe and more extreme national movements.
And Africans are often the main targets.
We must turn our demographic growth into an asset, not a liability. Right now, continued waves of illegal migration ensure that what is an asset is a liability … for us and for others. We must therefore harness our youth asset and create conditions and environments that are conducive for them to find jobs and prosper.

Africa’s youth are well skilled, knowledgeable and are deploying their talents across various fields, from creative industry, fintech industry for digital payments, artificial intelligence, food and agribusiness, and music.

Today, Nigeria’s Nollywood has become the second largest in the world after Hollywood. From Nigeria to South Africa, Morocco, Egypt, Kenya and Rwanda, young Africans are blazing the trail in the fintech industry, which raised over $5.2 billion last year.

Africa has 7 unicorns, start-up companies which have grown to be worth $1 billion. However, Africa accounts for only 1 per cent of the source of their venture capital funds. That means Africa is losing its businesses to others outside of Africa, who see and value their talents.
Africa must finance the businesses of its young population, at scale.
That is why the African Development Bank launched Youth Entrepreneurship Investment Banks. They are new financial institutions that will build and support the enterprises and businesses of young people at scale. Our goal is simple: unleash the creation of youth-based wealth and jobs across Africa.

Right here in Nigeria, the African Development Bank, Islamic Development Bank, and the French Development Agency jointly provided $614 million in financing for the I-DICE program (Digital Innovation and Creative Enterprises). The initiative will support hundreds of digital small and medium-sized enterprise and creative enterprises, create 6 million jobs, and add $6.4 billion to Nigeria’s GDP.

There is no doubt that the future is bright for Africa.
And investors know this.

At the Africa Investment Forum held in Marrakesh, Morocco, last month, we were able to secure $34.8 billion of investment interests for projects in Africa.

In the past five years, since the inception of the Forum, it has secured $177 billion in investment interest across Africa. This includes $15.2 billion for the construction of the Lagos to Abidjan highway corridor, which will transform the economies of West Africa. It also includes the $24 billion liquified natural gas project in Mozambique, which will make it one of the largest exporters of liquified natural gas globally.

The African Development Bank has also provided $400 million to the Dangote Refinery, $400 million to Indorama, both of which are critical Nigerian fertilizer producers, $100 million to the BUA cement company.

The African Development Bank has provided a cumulative total of $10 billion to Nigeria since it commenced its operations, with $ 4 billion in current operations.
We see huge opportunities in Nigeria, and we believe in Nigeria.
I am optimistic about Nigeria.
I am optimistic about Africa.
I believe in Africa.

The African Development Bank Group continues to work hard to help improve and transform the economic prospects and trajectories of Africa.

The African Development Bank takes considerable pride in our role as Africa’s premier financial institution, which in itself has garnered global respect.

In 2022, the African Development Bank was ranked as the best financial institution in the world.

And in 2023, the African Development Bank was ranked as the most transparent financial institution in the world.

That is a testimony to African respect and recognition.
And it all comes from doing the right things.
We stand, now, at an intersection point in world history.
Let’s bring Africa’s prosperous future into the present.
A more prosperous Africa will be a more respected Africa.
An Africa that unleashes its full potential.
An Africa, which like a lighthouse at the harbour, will attract all ships to it.
An Africa that cannot be ignored.
An Africa that develops with pride.
An Africa that asserts itself globally.
An Africa that’s a beacon of hope for all of its people.
Together, let’s make it happen.
Thank you all very much.

Being keynote speech by Dr Akinwumi A. Adesina President, African Development Bank Group (AfDB) at the 40th anniversary of The Guardian on November 28, 2023.

QUOTE 3: One other area that gives me great concern is that our continent is still not able to take care of and create jobs for our young people, who constitute the majority of the Africa’s ’s population. We must turn our youth bulge into a powerful and productive youth dividend.