At the press conference in his first annual meetings since occupying the President’s office at the African Development Bank, Dr Akinwumi Adesina regaled members of the pen fraternity with his grasp of the issues impeding Africa’s development and growth. The new Bank boss reiterated his famed passion for the continent’s transformation, coursing through the High 5s, the meetings’ theme of “Energy and Climate Change” and the challenges of delivering on the Bank’s mandate in a flourish. Done, Dr Adesina took questions from the journalists who equally showed concern for the continent’s future. Excerpts:
What are the major highlights and issues you expect the Lusaka 2016 meetings to address?
Let me first of all thank the Zambian government for the fantastic hospitality that they gave us and all the preparations. We are so delighted to be here. The turnout for this annual meeting is quiet impressive. When I came in yesterday, I understood 3000 participants had been registered; so it is a great turnout from the private sector, civil society, youths and top government officials. At this Annual Meetings, a lot of Heads of States are attending. Of course, President Edgar Lungu of Zambia; President Idriss Derby of Chad, who is the chairperson of the African Union will also be attending. President Uhuru Kenyatta of Kenya, Vice President Yemi Osinbajo of Nigeria, President John Mahama of Ghana and a couple of Prime Ministers will be in attendance. What that tells you is that African leaders support the African Development Bank very strongly. But those that you don’t actually see here at this very moment are the ones that I want to talk about. I want to talk about the 500 million Africans that live on less than $1 a day; they are not here. I want to talk about the 645 million Africans that do not have access to electricity; they cannot see all the light that you have here. I want to talk about the 700 million Africans that can’t have access to clean cooking energy; the 600, 000 people that die every year because they do not have access to clean cooking energy. Half of those are women, children— those are the ones that I want to talk about. I want to talk about the huge African youth with unemployment so high. They are not in this room today, and this annual meetings is going to be about them. I want to talk about the 54 million African children that are malnourished, therefore they can’t even be here; the over 14 million African children that are wasted, the 10 million African children that are obese. Those are the people you work for, and I just want us to hear their voices and see their faces in everything that we talk about at this annual meetings. This annual meetings is not about us; it is about what we are going to do to address all the challenges that face them. We are called the African Development Bank and that is why we are here.
However, let me just be clear that Africa is quite resilient. When you look at the African Economic Outlook, you will notice that Africa as a continent is today growing at 4 percent. Our projection shows that it will grow by 4.4 percent this year. If you look at the economic growth globally, it is about 3%. In fact, it has been lowered to less than 3%, and you look at Europe today, it is growing at 1.9 percent. So, when you swim and learn to keep your head above water, it shows you are a very good swimmer. So, despite the economic challenges, I think Africa’s economy is stable; they are resilient and they continue to perform well. I expect them to perform even better as we go ahead. I also want to say that the African Development Bank is dynamic and working well to meet the development challenges that Africa has, as well as help the countries to unlock their potential.
The big vision of AfDB and Africa is encapsulated in the ‘High 5s’. Could you elaborate on these five priority areas geared towards scaling up the continent’s transformation?
Let me say that the High 5s is really important to us. You will hear about the High 5s throughout these annual meetings and they are our priorities for the Bank. Those priorities are basically to Light Up and Power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and Improve the Quality of Life of the People of Africa. These are the things that we will be talking about. Why are these things so important to us in Africa? I just mentioned energy. How can a continent that accounts for 16 percent of the global population account for 53 percent of the population of the world without access to energy? That doesn’t make any sense, which is why the theme of this meetings is about energy and climate change. It is very important. The second issue regarding feeding of Africa is also so crucial. Here, we are in this nice place but there are hundreds of millions of people in Africa that don’t have access to food, and yet Africa spends $34 billion importing food. If we don’t change that situation, that is going to be $100 times 10 billion by 2025.
We are going to make sure that Africa saves its money, produce everything and get to the top of the value chain, which is what we are talking about. When you take a look at the third dimension which is industrialisation – why is that important? Today, Africa only accounts for 1.9 percent of the total value of global manufacturing; it’s been flat like that for more than 20 years. No economy in the world ever develops without industrial capacity, and so the African Development Bank is working with others to fast track Africa’s industrialisation. If you have industries with manufacturing capacity, you create jobs and become more competitive, and for that, you also need energy – that is why we are talking about energy at these annual meetings. The fourth one is about integration. You all here came from different countries. You can imagine if you didn’t get visa; then I would have been speaking to an empty room. It is very difficult to get visa in many African countries. Regional integration is very important.We believe at the African Development Bank that we should completely tear down all the walls that separate us in Africa, pull all those walls down and build a bigger African market that is more resilient and we can actually have growth and prosperity.
How do you intend to raise the funds to achieve set goals in these five priority areas to scale up the continent’s transformation?
First and foremost, charity begins at home. The AfDB is going to put its own money where its mouth really is. If you take, for example, the case of energy, the Bank is going to invest $12 billion of its own money over the next five years. But we are also going to use this money to leverage other people’s money, particularly from the private sector. We expect that the $12 billion will leverage for us $50 billion by using credit enhancement facilities to be able to leverage and de-risk the capital markets to lend to the energy sector. Now when it comes to how to deal with all I have said, clearly the amount of money required is much. So, how is the Bank going to do it? In three ways: First, we are going to work with countries to dedicate a significant high share of their GDP to some of these critical areas we are speaking of. Take energy for example, which is the theme of this year’s meetings. African countries today dedicate only 3.0 percent of their GDP to the energy sector. If they increase that to 3.4, it will make available about $54 billion a year, which is the gap that we have to fill annually to solve Africa’s energy problem. If you take a look at the amount of tax revenues African countries collect today, which is about $500 billion a year, if we take 10 percent of that and put it in the energy sector, it will solve the problem. Also, take a look at the massive amount of money that is available from domestic capital market, which we most leverage on —Sovereign fund of about $164 billion, and equity fund of about $34 billion. And finally, we must make sure that the more than $60 billion which goes walking away and missing in illicit capital flows come to an end because it is money that must go into solving these issues that we have. So, I believe that Africa is not poor at all. It may have a lot of poor people but it is not a poor continent. So, we have to mobilise our resources and channel them better.
How has it been since you assumed office as the President of the African Development Bank last year?
Let me say that since I resumed office on September 1, last year, it has been fun. It has been exciting. The Bank is working very hard in its disbursement. Last year, we approved a total of $9 billion for our regional member countries and the private sector. $2 billion of that actually went to the private sector as well. We are also in a year where we are doing an African Development Fund which is the other part of the Bank and that fund has continued to do impressively well. Basically, in the 40th year of that fund, we have been able to deploy $40 billion and impacted more than 40 countries.
What is the Bank’s strategy for creating jobs for the teeming unemployed African youths?
We are launching at the Lusaka meetings what we call Jobs for African Youths Initiative .It is a brand new programme which we have developed to respond to the unemployment crisis that we see on the African continent. It is also our response to the migration crisis that you see in Europe. If you take a look at what happened last year when we lost about 3,500 people sinking at the bottom of the Mediterranean Sea all trying to get out of Africa and go to Europe. That is not the kind of Africa we want. We want an Africa where we are able to create jobs for the young people to thrive on this continent. Africa today is the youngest continent in the world but at the same time, we have a situation where over 60 percent of Africa’s youths are either unemployed or are in employment that are vulnerable and unsatisfying. When you have those kinds of situations, our demographic dividend becomes a demographic problem. That can worsen social, political and economic fragility of the continent. So, we at the AfDB have recognised that we need to actually support our countries to create a lot of jobs for the young people.
The Jobs for African Youths Initiative is directed at creating 25 million jobs over 10 years’ period. What are the areas we are going to support in this? First, we are going to support the whole issue of skill development. Unfortunately what we have in Africa today is young people going into the labour market without having the skills the labour market needs. You can go to school but not have the skill for the employer. So, we will focus a lot on skills development.
We are also going to focus on particular sectors. One of them is the ICT sector. We are going to focus on agriculture. We are also going to focus on the industrial sector. Let me break this down for better understanding. First take a look at the ICT sector where everybody is talking about the fourth industrial revolution. But you cannot have a digital revolution without the necessary skills. So, the AfDB initiative is going to be looking at how to build the computer skills of young Africans and their ability to do coding, so that they can actually connect to the ICT industry. In the agricultural sector, I have always said that the future billionaires and millionaires of Africa will not come from the oil and gas sector. They are going to come from the agricultural sector because everybody eats food. Africa should be the global power house in food and agriculture. We are going to work to help the young people to get into agriculture as a business. The rich people you find in America and Europe are farmers. There is absolutely no reason why young Africans should not go into agriculture as a business.
We are launching an initiative called Enable Youths Programme. It is an initiative that will work in 25 countries to get access to finance to grow their businesses. It does not matter how brilliant you are and how great your ideas are. If you don’t have money to turn them into real business, they cannot work. So, as part of our job in the African Youth Initiative, we are going to put together a financing facility of about $5 billion dedicated exclusively to supporting business incubating facilities for young business entrepreneurs in Africa and also help our young people who have gone to the universities and may have challenges paying for their own fees. So, we will work with banks to be able to deal with issues like financing of education. Let me also say that as part of the programme, we will work with the industries to create what we call Skills Enhancement Zones. These are zones that when young people come out of universities and polytechnics, they will be exposed to skills across different sectors by spending about six months within these industrial zones to upgrade their skills and have a labour market entry and also be able to have their own businesses. The future of Africa lies in its young people. We want more Bill Gates to rise from Africa. We have full confidence and faith in Africa’s youths. They are the future of this continent and we are going to support them to be able to unlock their potential.
How would you describe the relationship between the AfDB and the African Union, especially in terms of collaborating to transform the continent?
We are also working in collaboration with the African Union and the Economic Commission for Africa. We have a joint Secretariat between the AfDB, the African Union and the ECA, where we try to look at projects together, co-develop ideas and make sure that we are synergising together and being complementary to each other. I can give three examples. Take the case of infrastructure. The New Partnership for Africa’s Development (NEPAD) has what it calls PEDA Africa Infrastructure Development Facility Programme, which is actually hosted by the AfDB. And we have regional infrastructure projects that have been selected by NEPAD which are funded by the Bank and other partners.
The second way I can give an example is agriculture. From the Malabo Declaration in terms of our commitment toward agriculture, the AfDB held a meeting shortly after I became President to say what we should do to make agriculture a business. That is from where the Bank’s strategy on agriculture was developed. So, AfDB is working with NEPAD and the AU to grow Africa and make agriculture a business that can work for everybody, including the small holder farmers, the women, the youths and also the commercial farmers because we have room for everybody.
And the third one which I think is very important is on the issue of regional integration. The Board of Directors of the AfDB approved our new business model less than a month ago. Under this new business model, we are decentralising the AfDB. We are going to get closer to our clients by having regional offices in each of our regions: East, West, North, South and Central Africa. Each of these offices will be headed by a director general. We want to work closely with the regional economic communities and there are big regional projects we have to deliver. The Bank is getting closer to work and support the regional economic communities.
What have been your achievements since you assumed office last year?
In the last eight months, we have been working. Within that period of time, we have been able to develop our strategy which is the High 5s in less than six months. The Bank staff and myself as the President of the Bank have worked so hard.
And secondly, as I mentioned earlier, we developed the New Deal on Energy for Africa. We launched the transformative partnership on energy for Africa that brought all the global communities together around energy for Africa in Davos in January. It tells you what we have achieved in less than a year. I am very excited about how hard working the staff have been. Obviously you can have a vision but you need the staff to deliver that and I am quite proud of the Bank staff and I appreciate all the hard work they have put into their work.
Also I thank the Executive Directors that have allowed us to process and move with our strategy. We have succeeded in developing our new business model. I want the AfDB to be like a leopard that moves fast. So, our business development model is designed to make us more efficient, faster but able to work with others at scale. We know we can’t do it alone. We have to work with others and that is what we have been doing.
How gender sensitive is your administration and what is AfDB’s economic empowerment plan for African women involved in small and medium-sized enterprises (SMEs)?
You would realise that we have done a lot of recruitment and we have been gender sensitive in our recent recruitments. Dr Frannie Leautier is our new Senior Vice President and Dr Sipho Moyo is the Chief of Staff to the President. We also have Nnenna Nwabufo who has been acting as our Vice President, Corporate Services. I believe firmly in gender equity. Secondly, in terms of funding for women, we have been able to develop a programme called “Affirmative Finance Action for Women”. It will be launched at this annual meetings and the fund will leverage $3 billion specifically for women businesses and entrepreneurs. I believe that women are better at managing credit because women pay back about 97 percent of their loans.