THE African Development Bank (AfDB) Group is
re-focusing its development agenda on the continent by emphasising on
employment creation through agriculture, small and medium entrepreneurship and
infrastructure development, reports BENEDICT TEMBO, who attended the
bank’s 47th annual meetings in Arusha.
DONALD Kaberuka is happy with the economic
developments taking place in Africa.
However, the African Development Bank (AfDB) Group president is sad that despite the growth, job creation has remained static and the continent is still vulnerable to external shocks.
Dr. Kaberuka says most of sub-Sahara African economies continue to perform quite strongly, 5.9 percent in 2011 and probably 6 percent in 2012.
“A third of the countries in the region are clocking 7 percent growth and above – and a few are seeing double digit growth,” he said.
In his opening statement at the 47th annual general assembly in Arusha, Dr. Kaberuka said: “These are not numbers sufficient to dent in poverty fast enough, given the low base, population increase, and the narrow set of growth drivers, but poverty is steadily declining.”
The theme of the conference was “Africa and the Emerging Global Landscape: Challenges and Opportunities”
However, the African Development Bank (AfDB) Group president is sad that despite the growth, job creation has remained static and the continent is still vulnerable to external shocks.
Dr. Kaberuka says most of sub-Sahara African economies continue to perform quite strongly, 5.9 percent in 2011 and probably 6 percent in 2012.
“A third of the countries in the region are clocking 7 percent growth and above – and a few are seeing double digit growth,” he said.
In his opening statement at the 47th annual general assembly in Arusha, Dr. Kaberuka said: “These are not numbers sufficient to dent in poverty fast enough, given the low base, population increase, and the narrow set of growth drivers, but poverty is steadily declining.”
The theme of the conference was “Africa and the Emerging Global Landscape: Challenges and Opportunities”
Risks
At a time when the continent is doing well economically generally, it is at the same time suffering setbacks.
The AfDB president cited the dramatic situation in Mali – the return of the military, the democratic reversal, the threatened partition of the country, the chronic instability in Guinea Bissau, the 22-year mayhem in Somalia and the desolation in the Sahel and the Horn of Africa.
“These are certainly isolated cases but they are an indication of some of the potential risks on the way,” he said.
Euro zone
When the world witnessed unprecedented upheavals, including the financial meltdown, high food and oil prices and ultimately the economic slowdown, Africa seemingly survived.
According to the International Monetary Fund (IMF) data, world economic growth declined from 5.4 percent in 2007 to -0.6 percent in 2009 before recovering to 3.9 percent in 2010.
The decline in the developed countries was from 2.8 percent in 2007 to -3.6 percent in 2009 before recovering modestly to 1.6 percent in 2012.
In Africa, growth declined from 7.1 percent in 2007 to 2.8 percent in 2009 and recovered to 5.3 percent in 2010.
“As you see, developed economies were more affected than African economies, but that does not make us better off,” Tanzanian PresidentJakaya Kikwete said.
Dr. Kikwete, opening the AfDB general assembly, noted that during the first wave of the global economic crisis, African economies were able to ride the storm partly because “our financial markets were not fully integrated into the international financial system.”
He added: “Also, because of stronger fiscal and external balances resulting from rapid growth, fiscal consolidation and the build-up of foreign exchange reserves in the previous decade.”
But Dr. Kaberuka said in 2008 when the financial crisis was at its apex, Africa was in a much stronger position to withstand the external shocks.
“This time around, the resilience is not as robust, the shock absorbers, the fiscal space is weaker,” he said.
He noted that until a few months ago, the impact of the Euro zone turbulence was rather muted.
“However, information now available indicates that already some of the smaller countries are beginning to experience problematic access to trade finance. Several frontier markets have postponed the launch of sovereign bonds. Unemployment
The AfDB and its partners used the marathon meetings to launch the African Economic Outlook (AEO) report which indicated that with the number of youths on the continent set to double by 2045, countries should boost job creation and help young people acquire new skills.
The 2012 AEO edition authored by the AfDB, the OECD Development Centre, the United Nations Economic Commission for Africa (UNECA) and the United Nations Development Programme says between 2000 and 2008, despite world-topping economic growth rates, and a better educated youth, Africa created only 16 million jobs for young people aged between 15 and 24.
“The strong headline growth has not commensurately translated into jobs, opportunities for the young and visible improvements in people’s lives,” AfDB boss Dr. Kaberuka said.
Today, the youth represent 60 percent of the continent’s unemployed, and of these 40 million youths, 22 have given up on finding a job, many of them women.
“The continent is experiencing jobless growth. That is an unacceptable reality on a continent with such an impressive pool of youth, talent and creativity,” Mthuli Ncube, the AfDB chief economist and vice-president said.
Solutions
With the help of Denmark, the AfDB has launched the African Guarantee Fund (AGF).
The bank also launched a fund for Agriculture known as Agvance Fund.
The AGF will target businesses by young people and promote access to finance.
Development of SMEs, which are generally low capital enterprises, holds key potential for Africa.
The Agvance Fund, on the other hand, will target agricultural business along the entire value chain and help transform Africa’s potential of becoming a granary.
“These are small but very important initiatives,” Dr. Kaberuka said.
Education
Dr. Kaberuka said Africa can reap that dividend – by investing the rent from natural resources, the “inherited wealth” – through quality education, healthcare, quality infrastructure, skills, innovation –especially in the science and technology.
“That is what will attract firms that seek to delocalise from the emerging markets where costs are rising,” he said, adding, “we need to be ready with skills, infrastructure, industrial parks, and the right regulations.”
Infrastructure
The biggest obstacle to effective utilisation of Africa’s potential and overall growth is poor infrastructure.
Launched during the gathering in Arusha was the Programme for Infrastructure in Africa (PIDA), which assumes that the average economic growth rate for African countries will be 6 percent a year between 2010 and 2040, driven by a surging population, increasing levels of education and technology absorption.
The PIDA programme is looking at reducing energy costs and increasing access while in the transport sector, is about slashing costs as well as boosting intra-African trade by increasing transport volumes by six to eight times.
Under water, PIDA will enable the water storage infrastructure needed for food production and trade.
With ICTs expected to play a pivotal role in employment creation, PIDA will boost broadband connectivity by 20 percent points, increasing broadband penetration by 10 percent, expected by 2018, will increase GDP by 1 percent.
Strategy
With the Medium Term Strategy (2008-2012) coming to an end, the bank has come up with a Long Term Strategy for the next decade.
Sudan
The meeting admitted South Sudan, with a pledge by the AfDB to help rebuild the new country, on economic integration and peace co-existence with its neighbours.
Australia attended as an observer but already considering membership of the bank.
Cote d’Ivoire President Allasane Ouattara attended the meeting, with a plea for the bank to return to Abidjan.
The bank relocated from Abidjan to Tunis about 10 years ago due to political instability but President Ouattara assured that calm has returned to his country.
AfDB has been a pillar for Africa’s development since its establishment in 1964 and is determined to fulfil the aspirations of the continent.
At a time when the continent is doing well economically generally, it is at the same time suffering setbacks.
The AfDB president cited the dramatic situation in Mali – the return of the military, the democratic reversal, the threatened partition of the country, the chronic instability in Guinea Bissau, the 22-year mayhem in Somalia and the desolation in the Sahel and the Horn of Africa.
“These are certainly isolated cases but they are an indication of some of the potential risks on the way,” he said.
Euro zone
When the world witnessed unprecedented upheavals, including the financial meltdown, high food and oil prices and ultimately the economic slowdown, Africa seemingly survived.
According to the International Monetary Fund (IMF) data, world economic growth declined from 5.4 percent in 2007 to -0.6 percent in 2009 before recovering to 3.9 percent in 2010.
The decline in the developed countries was from 2.8 percent in 2007 to -3.6 percent in 2009 before recovering modestly to 1.6 percent in 2012.
In Africa, growth declined from 7.1 percent in 2007 to 2.8 percent in 2009 and recovered to 5.3 percent in 2010.
“As you see, developed economies were more affected than African economies, but that does not make us better off,” Tanzanian PresidentJakaya Kikwete said.
Dr. Kikwete, opening the AfDB general assembly, noted that during the first wave of the global economic crisis, African economies were able to ride the storm partly because “our financial markets were not fully integrated into the international financial system.”
He added: “Also, because of stronger fiscal and external balances resulting from rapid growth, fiscal consolidation and the build-up of foreign exchange reserves in the previous decade.”
But Dr. Kaberuka said in 2008 when the financial crisis was at its apex, Africa was in a much stronger position to withstand the external shocks.
“This time around, the resilience is not as robust, the shock absorbers, the fiscal space is weaker,” he said.
He noted that until a few months ago, the impact of the Euro zone turbulence was rather muted.
“However, information now available indicates that already some of the smaller countries are beginning to experience problematic access to trade finance. Several frontier markets have postponed the launch of sovereign bonds. Unemployment
The AfDB and its partners used the marathon meetings to launch the African Economic Outlook (AEO) report which indicated that with the number of youths on the continent set to double by 2045, countries should boost job creation and help young people acquire new skills.
The 2012 AEO edition authored by the AfDB, the OECD Development Centre, the United Nations Economic Commission for Africa (UNECA) and the United Nations Development Programme says between 2000 and 2008, despite world-topping economic growth rates, and a better educated youth, Africa created only 16 million jobs for young people aged between 15 and 24.
“The strong headline growth has not commensurately translated into jobs, opportunities for the young and visible improvements in people’s lives,” AfDB boss Dr. Kaberuka said.
Today, the youth represent 60 percent of the continent’s unemployed, and of these 40 million youths, 22 have given up on finding a job, many of them women.
“The continent is experiencing jobless growth. That is an unacceptable reality on a continent with such an impressive pool of youth, talent and creativity,” Mthuli Ncube, the AfDB chief economist and vice-president said.
Solutions
With the help of Denmark, the AfDB has launched the African Guarantee Fund (AGF).
The bank also launched a fund for Agriculture known as Agvance Fund.
The AGF will target businesses by young people and promote access to finance.
Development of SMEs, which are generally low capital enterprises, holds key potential for Africa.
The Agvance Fund, on the other hand, will target agricultural business along the entire value chain and help transform Africa’s potential of becoming a granary.
“These are small but very important initiatives,” Dr. Kaberuka said.
Education
Dr. Kaberuka said Africa can reap that dividend – by investing the rent from natural resources, the “inherited wealth” – through quality education, healthcare, quality infrastructure, skills, innovation –especially in the science and technology.
“That is what will attract firms that seek to delocalise from the emerging markets where costs are rising,” he said, adding, “we need to be ready with skills, infrastructure, industrial parks, and the right regulations.”
Infrastructure
The biggest obstacle to effective utilisation of Africa’s potential and overall growth is poor infrastructure.
Launched during the gathering in Arusha was the Programme for Infrastructure in Africa (PIDA), which assumes that the average economic growth rate for African countries will be 6 percent a year between 2010 and 2040, driven by a surging population, increasing levels of education and technology absorption.
The PIDA programme is looking at reducing energy costs and increasing access while in the transport sector, is about slashing costs as well as boosting intra-African trade by increasing transport volumes by six to eight times.
Under water, PIDA will enable the water storage infrastructure needed for food production and trade.
With ICTs expected to play a pivotal role in employment creation, PIDA will boost broadband connectivity by 20 percent points, increasing broadband penetration by 10 percent, expected by 2018, will increase GDP by 1 percent.
Strategy
With the Medium Term Strategy (2008-2012) coming to an end, the bank has come up with a Long Term Strategy for the next decade.
Sudan
The meeting admitted South Sudan, with a pledge by the AfDB to help rebuild the new country, on economic integration and peace co-existence with its neighbours.
Australia attended as an observer but already considering membership of the bank.
Cote d’Ivoire President Allasane Ouattara attended the meeting, with a plea for the bank to return to Abidjan.
The bank relocated from Abidjan to Tunis about 10 years ago due to political instability but President Ouattara assured that calm has returned to his country.
AfDB has been a pillar for Africa’s development since its establishment in 1964 and is determined to fulfil the aspirations of the continent.
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