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‘For the world to respect Africa …’ – Part 3

By Akinwumi Adesina
08 December 2023   |   4:06 am
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.

Akinwumi Adesina

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.