The African Development Bank has given its support to Southern African leaders in their efforts to accelerate development and growth in the region.
AfDB President Akinwumi Adesina was among a host of leaders who delivered remarks at the opening ceremony of the 37th SADC Heads of State Summit, which got underway in South Africa’s capital, Pretoria on Saturday. While lending the Bank’s support,
The AfDB President also made a clarion call for action when it comes to power supply, agriculture investment, climate change, industrialization and domestic resource mobilisation in the region.
The Summit is hosted by the incoming Chair of SADC, Jacob Zuma, the President of the Republic of South Africa, under the theme, ‘Partnering with the Private Sector in Developing Industry and Regional Value Chains’, a theme which is strongly aligned with the mandate of the work of the African Development Bank.
The Bank has developed the ‘High 5s’ as a strategy to achieve this accelerated growth. They are: Light up and power Africa, Feed Africa, Industrialize Africa, Integrate Africa and Improve the quality of life for the people of Africa. According to the UNDP, the High 5s will allow Africa to achieve 90% of the Agenda 2063 and 90% of the Sustainable Development Goals.
The Bank’s commitment to the SADC region is unwavering. By 2016, the Bank had made investments totalling US $10 billion, accounting for 22% percent of all Bank investments in Africa. President Adesina has urged regional leaders to deal decisively with some of the structural problems which continue to hamper growth on the continent: “At the top of the list is electricity,” he said. “That’s why the African Development Bank is investing heavily in the power sector. Through our New Deal on Energy for Africa, the Bank is investing $12 billion over the next five years in the energy sector, to leverage between $45-50 billion in financing from the private sector and other sources. Africa cannot develop in the dark.”
Much of this investment in the energy sector is directed towards Southern Africa. Addressing the delegates and Heads of State gathered, President Adesina highlighted some of the ground-breaking initiatives the Bank has undertaken. The power sector accounts for 35% of all the Bank’s financing in the Southern Africa region, with investments in major projects such as Medupi Power Project in South Africa, the Kariba Dam Rehabilitation Project and the hydro-electric scheme on the Zambezi, which supplies 34% and 37% of the power for Zimbabwe and Zambia, respectively.
“This region also inspires the Bank to think big. Last year, the Bank led a loan syndication of $965 million for South Africa’s Eskom, the highest in Africa’s history – to support it to develop 13,000 MW of power generation capacity. The Bank is strongly supporting the government of DRC towards the development of the Inga Dam, which if we all get right, will turn on the lights for all of Africa.”
President Adesina also emphasized the importance of investments in the agriculture sector if the SADC region is to accelerate its growth. He reiterated the Bank’s support for the SADC Agricultural Policy and Investment Plan to transform agriculture. Agriculture is Africa’s biggest asset and yet it remains largely untapped. The size of the food and agriculture market on the continent will rise from current $330 billion to $1 trillion by 2030. He urged leaders to think differently about this sector: “Agriculture is not a way of life and it is not a development activity. Agriculture must be treated as a business for wealth creation. Africa must feed itself, instead of spending $35 billion a year importing food. That is why the African Development Bank is providing $24 billion to support agriculture in the next ten years.”
In tandem with agriculture, there must be a focus on climate change, he said, the impact of which has seen food prices escalate in the SADC region. The African Development Bank provided $549 million in 2016 to support countries in East and Southern Africa affected by droughts, and will invest $1.1 billion this year for the Bank’s Say No to Famine initiative to tackle drought affected African countries. “Africa can no longer suffer in silence,” he said. “I ask that the Heads of State of the SADC region support my call for the Green Climate Fund and the Global Environment Facility to co-pay for disaster risk insurance premiums for all African countries, to the African Risk Capacity facility.”
Adesina also threw his support behind the efforts of SADC leaders to make industrialization a priority: “Developed nations add value to everything that they produce, while poor nations export raw materials. Africa must quit being at the bottom of the global value chains and move to rapidly industrialize, with value addition to everything that it produces. Africa must work for itself, its people, not exporting wealth to others. That is why the African Development Bank strongly applauds and supports the agenda of industrialization of the SADC. The Bank will provide support for the development of special economic zones and industrial parks and equity financing, where appropriate, for major industries.”
The resources required to fast track Africa’s development are immense but Africa must also mobilize domestic resources. Africa has over $334 billion in pension funds, $164 billion in sovereign wealth funds. The size of Africa’s pension funds is estimated to rise to $1 trillion by 2030. What is needed is for Africa to mobilize these institutional investments into much-needed infrastructure. To further attract global pension funds and sovereign wealth funds and other institutional investors to Africa, the African Development Bank has launched the Africa Investment Forum which will take place next year. Adesina concluded his address by urging leaders to continue supporting the AfDB by way of a general capital increase for the Bank, in order for it to fulfill its mandate of enabling Africa’s accelerated growth and development within the next ten years.