At the second edition of the Africa Prosperity Dialogues on Thursday, 25 January 2024, Ghanaian President Nana Addo Dankwa Akufo-Addo made a profound statement about how blessed and rich the African continent is, yet her people are still confronted with poverty. “We all know that Africa is blessed, Africa is not a poor continent. She is too rich to be poor. A continent that has every natural resource imaginable: oil, gas, minerals and an abundance of sunlight. We have some 65 per cent of all arable land available to feed 9 billion people globally by 2030, and our continent is filled with the most youthful population in the world – everything we need to transform Africa into a global powerhouse of the future”, Mr Akufo-Addo listed to buttress his point.
He also said: “I’m now encouraged that Africa now has a private sector that is ready, deliberate and eager to see that the 60-year-old dream of the United Africa manifests. The difference perhaps, of the then and today is that the focus is on an area where there can be no debate – economic integration. How we facilitate the free movement of people, goods and services across this vast and resourceful mass Africa is what we must devote our energies to.”
Africa has some 431 million out of the continent’s 1.4 billion people living in extreme poverty, a number that has increased, with an additional 84 million people since the impacts of the COVID-19 pandemic in 2020. South Asia, East Asia and the Pacific had roughly 50% and 2/3 of their population in extreme poverty in 1990 and saw significant declines to 9% and 1%, respectively in 2019. Sub-Saharan Africa, which had 50% of its population in extreme poverty in 1990 just like South Asia, saw it decline only to 35% by 2019.
Why is Africa poor despite her riches?
For starters, the Transatlantic slave trade robbed the continent of an estimated 12 million abled men and women, who were shipped to Europe and the Americas. This continued for 400 good years – from the 1400s well in the late 1880s. Such dehumanising human resource plunder should surely have a scathing economic, sociological and psychological effect on the continent’s fortunes. With slavery came colonialism, through which Africa’s other natural resources – gold, diamonds, wood, etc., were stolen and shipped away to develop the economics of the West. The Portuguese, Spanish, Dutch, English and French had their fair share of the plundered loot and also divided the continent among themselves in the 1884 Berlin Conference.
Lopsided global economic system & unjust trade structures
Patrick Loch Otieno Lumumba (P.L.O. Lumumba), a Kenyan lawyer and activist, who once served as the director of the Kenya Anti-Corruption Commission, has always labelled the Bretton Woods institutions – the International Monetary Fund (IMF) and the World Bank (WB) – as “enslavers” of African countries.
These were his words in one of his many interviews: “When the IMF and the World Bank were created in Bretton Woods in New Hampshire in the United States, it was in 1944. None of the African countries participated in its creation. It was [created by] British and American economists and it was specifically designed, at that time, during the rebuilding of Europe and the implementation of the Marshall Plan; and when we regained our independence as African countries, we were then drafted into it. IMF and World Bank are economic enslavers: what they are designed to do is to ensure that we are in a perpetual state of debt; you can never get out of the IMF and Bretton Woods institutions, generally because they want to ensure that they control your economy and when they control your economy, they control your politics; and when they control your politics, they control you; and when they control you, they bring in military bases and when they bring in military bases, they determine who governs you because if you don’t play ball, they are going to instigate the armies to overthrow you because in any event, African armies want to be trained in Sandhurst, they still want to be trained in the United States of America, so, their worldview is dictated by those foreign powers”. So, the IMF and World Bank, the Kenyan Pan-Africanist believes, is to keep Africa in perpetual poverty so the continent and her leaders become constant beggars and dependents on Western crumbs.
Bad African leadership
Must Africa always blame her unfortunate history and external forces for her poverty? There surely are internal contributing factors to Africa’s poverty. Africa has had her fair share of bad leaders who, in some cases, impoverished their peoples even worse. There have been dictators, dynasties and coupists who only took advantage of circumstances to propel themselves to power to just enrich themselves and their families. Dictators are unchallenged while in power. They can and often do whatever they will. In such situations, no one can stop the plundering, corruption, nepotism, bad policies and decisions. The impact, therefore, is devastating on any country and generally the continent. Repetitive coups mean frequent interruption of development programmes and projects. Countries then get caught in a cyclical rut of taking two backward steps for every forward step. Some African leaders, whether democratically elected or not, mortgage their countries’ natural resources to foreign powers and companies in return for loans that eventually debt-trap them. In such cases, those natural resources are owned by foreign creditor nations or corporations, leaving those African countries poorer. The sad aspect is that often, the loans taken in the name of the country are squandered by corrupt leaders and their extravagant families. This is why Africa has experienced one coup after another since her countries started gaining independence in the late 1950s into the 60s. There is unbridled corruption eating away the continent’s resources and wealth to the benefit of just a handful of people. The beneficiaries are no different from the Transatlantic slavers and colonialists who plundered the continent and left her desolate and poor.
Ethnoreligious wars, civil strife & conflicts
Africa has suffered a plethora of wars and civil conflicts, some of them deeply rooted in religious differences or ethnocentrism. Of notable mention is the 1994 Rwandan Genocide in which almost one million Tutsis and moderate Hutus were massacred by the Hutus. The socio-economic impact on Rwanda was devastating for years. Thankfully, the country’s current president, Mr Paul Kagame, through his own specially fashioned version of democracy, has worked some ‘miracle’ in Rwanda. The country is currently flourishing and has been hailed by the world as a success. Rwanda, however, may be an exception. Several African countries suffered years and even decades of civil wars and conflicts, and are still finding it difficult, decades later, to find their feet. Liberia is an example. After two devastating wars, the country has been tottering. Such wars destroy infrastructure, waste human lives (brains, talents, skills), decimate agricultural lands and, thus, instigate food insecurity, famine, malnutrition and death. Thousands of youth are drafted into such conflicts and are either killed at war or left maimed for life. Civilians also suffer a similar fate as happened in Sierra Leone, where people’s arms and legs were dastardly mutilated by fighters and women raped at will.
Exporting raw natural resources while importing almost everything else
Africa has yet to industrialise to the point that she can add value to her natural resources (gold, oil, manganese, silver, bauxite, lithium, woods, cobalt, etc.) for export. These minerals and resources are often exported in their raw form, leaving the continent short-changed. Sadly, Africa then imports products that are made from her own raw materials at exorbitant costs with foreign currencies of trade, which, in turn, weaken her own currencies, with a domino effect of rising inflation that leaves the continent the poorer. Some, if not many African countries, have also signed bad resource exploitation agreements and deals, that tend to make international mining companies rich at the expense of the continent.
Neo-colonialism
Franceafrique – a system where 14 Francophone African countries’ economies are intricately tied to the dictates of France, their colonial master – is the quintessence of the pervasive neo-colonialist economic and political interference in the affairs of the continent. This economic neo-colonisation of these African states requires that a portion of their budget continues to flow to the French central bank, allowing France to appropriate about 85% of the former colonies’ annual income. They are, essentially, modern economic slaves of France through the use of the CFA franc. This is the ‘slavery’ that the military leaders of Burkina Faso, Mali and Niger, are strategising to set their countries free from. They have decided to form a confederate government and sever ties with France and the CFA franc in favour of the ‘Sahel’, a new common currency they envisage will set them free from the French.
Solutions to Africa’s poverty
Yes, Africa is rich. She is blessed with so much and there’s a lot she can take advantage of to become an industrialised and prosperous continent and set her people free from poverty. Sadly, however, the continent is home to 33 (all found in Sub-Saharan Africa) of the 47 (70 per cent) of the least developed countries (LDCs) in the world. Despite the continent’s unfortunate history, she can, on her own, with determination, change the narrative. All she needs are good, visionary, altruistic leaders who can cause change and rally their peoples behind them.
On 28 November 2023, Dr Akinwumi A. Adesina, President of the African Development Bank Group, provided a blueprint for Africa’s escape from poverty when he keynoted at the 40th anniversary celebration of The Guardian newspapers in Lagos, Nigeria. “We must take a critical look around us: the underdevelopment, the poverty amid plenty and the fact that we are far behind other regions of the world, despite our enormous resources, and determine enough is enough”, Dr Adesina urged, adding: “Poverty must not become the comparative advantage of Africa.”
Putting the continent’s wealth vis-à-vis her poverty into proper perspective, Dr Adesina said: “Nearly half the world’s gold and one-third of all minerals are in Africa. With her vast mineral resources and human resource capacity, Africa should not be where it is today. Nigeria and many other African nations were once at the same level of development as some East Asian nations—notably Malaysia, Indonesia, South Korea and several others. We must ask ourselves: when will we make the shift that South Korea made, from being a country that was once on the low end of the development ladder to the rich, industrialised nation that it is today”. There was a period, Dr Adesina recalled, “during which some East Asian countries like South Korea struggled to obtain World Bank loans. Today, South Korea is the 7th largest exporter of goods in the world. Not only that, its GDP per capita towers at 266 per cent of the global average.” “We must find solutions to our many challenges in Africa. While we must deal with bread-and-butter development issues, we must think strategically as we set ourselves upon a path of also becoming wealthy nations. Our countries must become great contributors to global wealth and development financing for others”. “We simply must turn the tide”, Dr Adesina urged, noting: “Ultimately, we must put ourselves in a position where we, too, can give. That is how Africa will earn respect. It is time for poverty accountability for governments. Africa will not earn respect globally until we end poverty at scale. For too long, we have allowed poverty to linger pervasively in the midst of plenty. Our nation is resource rich and yet the majority of our fellow citizens remain poor. We often tend to accept poverty as normal. Let me be unequivocally clear. Poverty is not normal. It is abnormal, especially when it has been pervasive for so long. This is why I believe Africa should not become a museum of poverty”.
To reverse this trend, Dr Adesina proposed, “We must have public accountability on poverty. Our governments must realise that it is their responsibility to lift all their people out of poverty and into wealth as fast as possible. It is doable. We have seen clear examples of such progress in other regions of the world, especially in Asia, over the last three decades. There is no reason why acute poverty cannot be eradicated in Nigeria and across Africa. We have to become a continent that grows inclusive and well-distributed wealth”.
By tackling poverty, he explained: “I do not mean so-called ‘poverty alleviation’ because this is a term that I reject in its entirety. We cannot be comfortable with poverty. If you are sick from malaria and you visit with your doctor who says, ‘I will alleviate your malaria’, please get out and look for a better doctor! I do not believe in ‘poverty alleviation’. If someone moves from $1.30 or $1.50 per day to $1.60 per day, they are still poor. We must eliminate poverty and create wealth”.
To buttress his point, Dr Adesina said: “South Korea moved from a GDP per capita of $350 in the 1960s to approximately $33,000 in 2023. That is the kind of quantum leap that we need, rather than attempt to ‘alleviate’ poverty. When we rapidly take our people out of poverty, we will begin to earn respect”.
He wondered why oil-rich Nigeria, for example, has not made as much progress as other OPEC and oil-rich countries. “Saudi Arabia has oil, as does Nigeria. Kuwait has oil, as does Nigeria. Qatar has abundant gas, as does Nigeria and other countries. Yet, Nigeria is the country with the largest share of its population living below the extreme poverty line in 2023 in Africa. Clearly, there is something fundamentally wrong in our management, or rather mismanagement, of our natural resources. It is also clear that if we continue to mismanage these natural resources, we will remain stuck. When we look at pervasive state capture, in several instances, of oil, gas, minerals, and metals, it is abundantly clear that there is no transparency in or accountability for how we manage these resources. Consequently, in the midst of plenty, the majority of the people remain poor”.
Dr Adesina has always urged “African governments to stop securing loans backed by their natural resources. Natural resource-backed loans are non-transparent. They are expensive, and they make debt resolution difficult. If the trend continues, it will be a disaster for Africa”.
Also, he said: “Some speak about the natural resource curse. They say that countries become poor when they have natural resources. I do not buy this. The so-called resource curse has not applied to Saudi Arabia. It has not been relevant for Qatar, or Norway. These are all nations that are rich in natural resources that have served them well. Why should it be different for Africa’s resource-rich states? It all comes down to governance, transparency, accountability and the sound management of our natural resources.”
The AfDB President believes “if we manage our natural resources well, Africa has no reason to be poor. We have $6.5 trillion in natural resources. So how in the world are we still poor? We simply need to pull up our socks, stamp out corruption, and manage our resources in the interest of our countries and our people”.
Again, he said “Africa will gain respect when it is able to feed itself”, pointing out: “Any nation or region that begs for food is free only in words, but dependent on others for life. Feeding 9.5 billion people in the world by 2050 will be a challenge, given climate change and the limited amount of arable land in many countries, including developed countries. Africa will play a critical role in this as the continent has 65% of all the uncultivated arable land left in the world. But despite this, Africa has not been able to feed itself. Africa’s food import bill hit $85 billion in 2021, and is expected to surpass $110 billion by 2025, with 283 million people going to be hungry every year.”
The African Development Bank, Dr Adesina mentioned, is changing the narrative. He said the bank has invested over $8 billion in agriculture over the past seven years which has improved food security for 250 million people. “When the Russian-Ukraine war broke out and disrupted wheat and maize exports, Africa faced a potential food crisis. I said, ‘Africa will not see a food crisis’ and that ‘Africa should not go around begging for food, or pleading with Russia to have food, but rather put its own seeds in the ground and produce food’. The African Development Bank rapidly approved a $1.5 billion emergency food production facility for African countries. Today, this facility is supporting 20 million farmers in 36 countries to produce 38 million tons of food valued at $12 billion. That is 8 million metric tons above the 30 million metric tons of food Africa was losing from imports from Russia and Ukraine. Africa did not beg. Africa produced more food. And Africa gained respect”.
“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 organize 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 produce more food and agricultural commodities. Take for example, that Africa which accounts for 65% of the production of cocoa, receives only 2% 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”, he noted.
Dr Adesina was emphatic that “the export of raw commodities is the door to poverty”. Instead, he contrasted, “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”. He strongly believes that “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, Dr Adesina pointed out, also applies to Africa’s minerals, oil, gas and metals, such as copper, cobalt, manganese, graphite and lithium. “Africa accounts for 70% of the global reserves of platinum, 52% of cobalt and 48% of manganese. Democratic Republic of Congo alone accounts for 70% of global supplies of cobalt. However, China accounts for a high percentage of refining of the strategic minerals: cobalt (73%), nickel (68%), lithium (59%) and copper (40%). As the world transitions into renewable energy sources, Africa has the largest sources of solar resource 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 make, as the size of the electric vehicles market is estimated to rise from $7 trillion currently to $57 trillion by 2050, with projections showing a 500% increase in demand for cobalt, graphite and lithium in the next two years”.
In his view, Africa must strategically position itself in this new industry dynamics. A study by Bloomberg NEF, he quoted, “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 of 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, Dr Adesina proposed, “must become Africa’s green wealth”.
Further, he said Africa will gain respect when it becomes an important player in global manufacturing. “Today, Africa accounts for just 3% 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, Dr Adesina, who is Nigerian, said his country “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”.
He stressed the need for a strong manufacturing base “if Africa is to come into its own and reach its full potential”. “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”.
Additionally, he acknowledged that 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% of all historical emissions, now bears the most severe effects of climate change. Nine 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% of the global carbon budget.”
Africa’s carbon emissions, he compared, “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.”
He reported that 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.
He said building off its successful programme that ensures countries against extreme weather patterns covering 15 countries, the Bank also launched a $1 billion Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) to scale up insurance of countries against climate risks.
Universal electricity access, Dr Adesina noted, is also important for the continent’s prosperity and doing away with “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% of global solar power potential, it uses only 1%. 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%) of the $3 trillion of global investments in renewable energy in the past two decades, and accounts for only 3% of all jobs created in renewable energy. Clearly, there is underinvestment globally in supporting Africa to unlock the full potential of its vast renewable energy sources. This is unfair, unjust and unacceptable”.
That is why, Dr Adesina noted, “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, the electricity access rate in Africa has expanded from 32% to 57%. Despite setbacks due to COVID-19, some countries such as Ethiopia, Tanzania and Kenya have achieved remarkable progress and accounted for more than 50% of those gaining access to electricity in Africa between 2015 and 2019. The Bank’s support to Morocco helped it achieve 98% 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 programme, 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”.
He suggested that 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 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% electricity access is achievable. Africa will gain respect when it can secure the health of people.”
He recounted that when Covid struck, Africa was caught unprepared due to several decades of underinvesting in the health and development of its pharmaceutical industry. The continent had just two laboratories to test for COVID-19. “Africa produces 20–30% of its pharmaceutical drugs. And it produces a mere 1% of its vaccines. When the rest of the world was 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, the majority of which are subject to intellectual property rights protection under the World Trade Organization”.
He said 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 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, Dr Adesina said the African Development Bank has also launched a $3 billion programme to build Africa’s health infrastructure. When Africans have access to quality healthcare services, medicines and vaccines, it will boost productivity, and 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”, he said.
Apart from the above, Dr Adesina said an Africa with good governance and rule of law will be on the path of prosperity. “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, terrorism and insecurity thrive just as it does currently in many parts of Northern Nigeria”.
He emphasised that several countries now spend more resources on security, increasingly displacing financing for development in a context where 85% 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. 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”.
He said 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, Dr Adesina stressed, “must be backed by economic and financial sovereignty”.
Africa, he posited, will earn respect when it is able to mobilise 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% 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% of their GDP to service debt”.
Using Nigeria as an example, he said 98% 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, he noted, 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 [she] takes care of [her] 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”.
Referencing the New York Times, he said the 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 Africa’s population. We must turn our youth bulge into a powerful and productive youth dividend”.
To him, the lack of opportunity for Africa’s 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 assets 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 the 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% 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”, he said. The future, he believes, is bright for Africa, adding: “And investors know this”. According to him, at the Africa Investment Forum held in Marrakesh, Morocco, a month earlier, “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 fertiliser 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.”