- June 7, 2022
- Posted by: Amos Ekow Coffie
- Category: Economics
African Development Bank Group President Dr Akinwumi Adesina wrapped up his official visit to Kenya on Friday, meeting with African diplomatic envoys and international development partners in Nairobi. He called for joint collaborative support to help accelerate Africa’s development.
“Africa’s pace of development must be accelerated. We must work together for the continent to prosper, be competitive, and address the challenges facing it,” he said.
Adesina said Africa was the continent being impacted the most from climate change. He said as the world prepared for the next global climate summit (COP27) in Egypt this November, many African countries could still not access green climate financing because they had not developed required national determined contributions and long-term strategies. So far, only three African countries—Benin, Morocco and South Africa—have developed long term strategies.
Adesina told the envoys that the majority of countries that were most vulnerable to the impact of climate change were beneficiaries of the Bank Group’s concessionary arm, the African Development Fund. He said development partner financing, however, remained low and in decline. “The African Development Fund must be financially sustainable to meet the growing development needs of its beneficiaries,” he stressed.
The Bank Group president cited some of the projects financed by the African Development Fund—which he said were transforming lives. He gave the example of the Thwake Multipurpose Water Development Program in Kenya, explaining that this project will uplift millions of lives in the country’s semi-arid eastern region. He said it would do so through electricity generation, water supply and irrigation of 40,000 hectares of land.
The Bank Group president asked international development partners to support the case for the African Development Fund to be allowed to go to the capital markets with its $25 billion equity to raise an additional $33 billion. Adesina sought to allay their fears that this could lead to an even bigger debt burden for the Fund’s beneficiaries. He expressed concern that countries were already resorting to commercial borrowing at very high interest rates.
The Covid-19 has caused Africa’s commercial debt to increase. That debt is expected to worsen because of the impact of Russia’s war in Ukraine. The war has already produced an increase in energy and food prices. Adesina spoke about the dangers of governments resorting to commercial borrowing at exorbitant interest rates.
The African Development Bank has been pushing for the channelling of International Monetary Fund Special Drawing Rights to African countries through the Bank. The president explained that in this manner, they could be leveraged by a factor of four on the international capital market. He said this could help African countries deal with debt issues and allow them to invest more in transformative developments.
Adesina highlighted insecurity as a big concern, which he said had recently seen military expenditure rise while financing for development was declining. “As a result, poverty levels are rising, particularly in rural areas, which have become zones of misery and fertile recruitment grounds for terrorists,” he said.
The African Development Bank Group president emphasized the importance of security indexed investment. He cited the institution’s initiative to introduce security indexed bonds linked to investment, growth and development. He said the Bank and the Africa Union Commission were working together to support countries as they built their own security defense architecture.
Adesina also spoke about initiatives to empower youth, who he described as the African Development Bank’s biggest partners. The Bank is working with African governments and international partners to set up youth entrepreneurship investment banks. They will provide support to businesses run by young people. Adesina said: “The future of Africa’s youth is not overseas but in an Africa that is thriving in a sustainable and equitable manner. Young people do not need handouts or what is often referred to as ‘empowerment.’ Show me one young person who can readily tell you they have been empowered. Young people need investment.”
At his wrap-up media briefing, Adesina commended President Uhuru Kenyatta’s government for developing what he called ‘world class infrastructure, particularly the expansion of the country’s roads network.’ He also commended the speed with which road projects were being implemented and the quality of work.
Adesina also gave high marks to ongoing construction of the African Development Bank-funded Kenol-Sagana-Marua Road, which he toured at the start of his visit. The 84-kilometre road—which will connect Nairobi with commercial and agricultural towns of central, upper eastern and northern Kenya—is expected to be completed in six months, two years earlier than planned. It is part of the Great Trans-Africa Highway that runs from the Egyptian capital of Cairo to Cape Town, South Africa. The highway will also facilitate regional integration by linking Kenya with Ethiopia and Somalia.
The African Development Bank Group president also spoke of the 454-kilometer Malindi – Mombasa – Lunga Lunga/Horohoro and Tanga – Pangani – Bagamoyo Road connecting Kenya and Tanzania. He said this is a highway that will provide a big boost for regional integration. Lastly, he cited the 894-kilometer Nairobi-Addis Ababa Road, which has, among other things, expanded trade between Kenya and Ethiopia by up to 400%.
“Infrastructure is the backbone of any economy,” Adesina emphasized, adding that quality infrastructure spurs economic activity. He pointed out that the last seven years had seen the African Development Bank invest more than $40 billion in infrastructure in Africa.
He said he had urged the Kenyan government to seriously consider a zero-slum policy that would clear the country of slums, with the introduction of quality and decent low housing program.
The Bank Group chief said: “As we develop infrastructure, we must ensure that we do not create inequalities between rich and poor areas. We should use infrastructure to transform all the slum areas. We must reduce inequity and we must create new hope and new opportunities for the poor.”
During his four-day visit, Adesina met with President Uhuru Kenyatta, senior government officials, including Cabinet Secretary for Transport, Infrastructure and Housing, James Macharia, Cabinet Secretary for Energy and Petroleum, Monica Juma, and Principal Secretaries of various other line ministries.