ADESINA: Africa must industrialise so that its global share of trade moves beyond just 2pc

Monday February 14 2022
Akinwumi Adesina, the president of the African Development Bank.

Akinwumi Adesina, the president of the African Development Bank. PHOTO | POOL | AFP


Akinwumi Adesina, the president of the African Development Bank spoke to Jackson Mutinda on the institution’s place in the continent’s aspirations as far as economy, trade, food security and stability are concerned.


You addressed African leaders at the African Union Summit in Addis on Sunday, what did you tell them?

First, this was a particularly exciting period for us at the African Development Bank, because it was the first time that the president of the Bank was allowed to give a substantive address to the African heads of state and government. It's a demonstration of the strong commitment and alignment that the African Development Bank has towards the (AU) Agenda 2063.

We (at AfDB) have the high fives: to light and power Africa, to feed Africa, to integrate Africa, to industrialise Africa, and to improve the quality of life of the people of Africa. These high fives help to advance the Agenda 2063. I told them that in the past five years alone, these high fives have impacted 335 million people in terms of getting access to electricity, access to agricultural technologies to boost security. Over 50 million people benefited from improved water and sanitation.

So the first thing is a message of hope that things are actually happening on the ground. The others are things that we need to do to address the current challenges.


I spoke to them about why it is important to address the ease of access to vaccines and pharmaceutical products. It is time for Africa to have an African health defence system that will begin to look at our health just the way we look at national security. This has three components. One is to have an African quality healthcare infrastructure. The second one is to build Africa’s capacity for manufacturing of vaccines on the continent. The third one is to build Africa's pharmaceutical manufacturing capacity.

Today, we've made progress; 11 percent of the population has been vaccinated. Now we have roughly 16 percent who at least have one vaccine dose, but the rest of the world has 80 percent… Some countries have universal access to vaccines. Unless and until we deal with this issue, Africa's economic recovery will be tepid. While the developed world is having booster shots, Africa is struggling with basic shots.

The African Development Bank plans to invest $3 billion in support in Africa’s pharmaceutical industry to tackle the issues.

The other issue that I mentioned was debt. We have to help Africa to deal with the pandemic-induced debt challenges, and one of the ways is through the IMF allocation of the Special Drawing Rights to Africa -- and the rest of the world, actually. Of the $650 billion allocated, Africa only got $33 billion. Given that Africa needs a significant amount of resources to cope -- our GDP has gone down by $165 billion as a result of Covid-19 -- we need a lot more resources to recover.

How would the AfDB help?

The African heads of state asked for a reallocation of $100 billion. I asked for these to be passed through the African Development Bank, as it’s the continent’s premier financial institution. Any SDRs that come to the AfDB, we can leverage it up to four times. If we get $50 billion, we can deliver $200 billion of financing support as well as help to recapitalise several African financial institutions.

Then I talked about some of the challenges that Africa faced. And one of those challenges is insecurity. If you wake me up, and you asked me, “As president of AfDB, what keeps you up at night?” I'll tell you it is insecurity, because the rising insecurity is crowding out the investable space in many African countries. So we must link security to investment, growth and development. Security is not exogenous.

The AfDB is working on developing Security Index investment bonds, which, when ready, will be used to do four things. First, to help African countries to upgrade their security architecture and second, to help them to rebuild infrastructure in conflict-affected areas. Third, of course, is to help them to rebuild social infrastructure. If people don't have water, sanitation and schools, they give up on government, and they are easier targets for terrorists. Fourth is to help African countries to secure areas in which they have strategic investments. Look, you can’t just wake up and go to Saudi Arabia to take out their oil refineries. In Africa, these are just open spaces.

We also have to stabilise Africa financially, and that's why I explained to the heads of state, and they strongly supported the need to establish an African financial stability system.  Africa needs a stable financial environment and an African Financial Stability Mechanism will provide a liquidity buffer.

Now, let's talk about intra-Africa trade. Covid has slowed down the implementation of the African Continental Free Trade Area. But isn’t this now a good time for Africa to accelerate this pact and trade more among themselves?

The African Continental Free Trade Area is a game-changing development for Africa; it links an economy worth $3.3 trillion and a market of close to 1.4 billion people. The AfDB is strongly supporting that. We provided $4.5 million to establish the AfCFTA secretariat in Ghana. We've been connecting countries, people and businesses. For example, one of the big infrastructure that we connected, is a 1,000km road to link Addis Ababa to Nairobi, going all the way to Mombasa. That's an investment of $1 billion, which will allow trade between Ethiopia and Kenya to increase by about 400 percent. The cost of moving goods will reduce by about 30 percent.

Another example is the Kazungula bridge that is connecting Zambia to Namibia and other parts, facilitating trade within the Southern Africa Development Community.

We’ve invested in ports in Morocco, in Namibia, we invested in doubling the capacity of the Togo port and airport in Ghana. So, whether it is road infrastructure, digital infrastructure, airports, seaports, the AfDB is investing massively.

In the past 10 years, we have invested well over $40 billion in infrastructure. But we are doing more than that. We are helping connect financial markets. For example, we've invested heavily in the African Stock Exchanges Linkage Project, which links the stock exchanges of Johannesburg, Nairobi, Lagos, Casablanca and Cairo. These exchanges are dealing with about $1.3 trillion worth of assets.

To facilitate this movement, the African Development Bank releases every year, together with African Union Commission, the Africa Visa Openness Index, which allows us to know the extent to which people can move on the continent. And we are encouraged that 58 percent of the countries allow Africans without a visa or to get a visa on arrival.

But let me say one last thing with regard to the Africa continental free trade area. You know, I don't want the African Continental Free Trade Area to just be an area for trade. And that's because we've been trading forever, right? The issue is what are we trading? What value are we adding to what we're trading? And how is that helping to increase economic growth and development? That's why the African Development Bank supports the African Union Commission on industrialisation.

We must develop regional value chains, whether it's for cotton for textiles and garments or pharmaceuticals, electronics, automobiles, food and agriculture... The AfCFTA is an incubation zone for us to develop and industrialise. We must industrialise so that Africa's share of trade globally is not just two percent. We want to play globally, so why not start with viable and competitive, well financed, and -- with infrastructure and finance -- value chains?

This year's theme for the AU Summit was around nutrition, which is one of your high fives. Twenty years of AU, we are still talking about hunger, and malnutrition… children out of school because of hunger and lack of resources. What are your recommendations to Africa to fix this problem of nutrition and food security?

The situation has been challenging, but it's been made worse by Covid-19. Covid-19 has affected farm production in many areas, because it made it really hard to get access to seeds and fertilisers. And many people did not go to the farm because of the economic lockdowns. That means the price of food went up, and the poor were more impacted. The level of hunger and malnutrition has increased. As you know, when you have high prices of food, it's the children who suffer most.

At the African Development Bank, we have our Feed Africa strategy. We have technologies for African agricultural transformation, a programme that delivers disease-resistant, drought-tolerant, and nutrition-rich crops to farmers. The Bank has deployed technologies to farmers across East Africa that control the fall armyworm. In Southern Africa, when the drought hit, we provided 5.6 million farmers access to water-efficient maize varieties that thrive on low rainfall.

In Sudan, we provided heat-tolerant wheat lines to allow them to cultivate 290,000 hectares of wheat. And they've improved that from about 29 percent when they started to 54 percent today.

We also supported Ethiopia with the same heat-tolerant varieties. I was speaking to the Prime Minister of Ethiopia Abiy Ahmed on Sunday, and he told me, “In the next three years, I expect to be self-sufficient in wheat, and I will be able to export.” That makes me very excited about the technologies.

Every year, we have roughly 283 million Africans who go to bed hungry, which is unacceptable. So, we have launched a financing facility for food and nutrition security. That facility was presented at the United Nations Food Systems Summit, and was approved globally. Now, we have changed the name to Mission 1 for 200. That means we are going to raise a billion dollars to provide drought-tolerant or climate-resilient technologies for 40 million farmers, who will produce 100 million tonnes of food. That is more than enough to feed 200 million people. We have the technologies, we have the delivery platforms, and now we are leveraging finance and our skills to deploy those techniques to our farmers at scale.

Back to nutrition. We have to realise that children who don't have enough food are not going to develop well mentally. And if they are not developing well mentally, they will not contribute to society. Stunted children today will lead to stunted economies.

That brings me to the question of climate change. It has affected food security, production and nutrition. What programmes does the bank have for Africa in terms of climate resilience and what would you like to see the rest of the world do for Africa, especially considering that it suffers most of the impact of climate change, yet it contributes less to global warming?

Africa does not contribute more than three percent of global greenhouse gas emissions, but it is suffering -- disproportionately -- the impact of that. And, therefore, Africa deserves accelerated support to adapt to climate change. The biggest problem Africa has today is how to adapt to what it didn't create.

We were delighted when the UN Secretary General (Antonio Guterres) singled out the African Development Bank at the UN General Assembly this year and said everybody else should emulate us in terms of leadership. Now, what are the critical things that we are doing to do that? First is deploying climate-resilient agriculture to 40 million farmers. Second is putting in place an African disaster risk management facility that ensures that when there is drought, floods, or cyclones, we provide premiums for countries to insure themselves against catastrophic events.

The AfDB has put together strategic engagement with the Global Centre for adaptation that is chaired by the former UN Secretary General Ban Ki Moon. I work with Ban on this and we have developed the African Adaptation Acceleration Programme, through which we are mobilising $25 billion for climate adaptation for Africa. Some of those resources will allow us to support climate-resilient infrastructure for African countries.

 Lastly, look at two big areas. One is the issue of the Great Green Wall, which is an 8,000km wall built to provide a buffer for the Sahel against degradation. The AfDB has committed $6.5 billion towards that.

In addition to that, energy is a key part of how you adapt to climate change. We financed the 310MW Lake Turkana Wind Project in Kenya, which is Africa's largest wind power project. We also financed the world's largest concentrated solar power complex, the Ouarzazate, in Morocco. And we are also financing a $20 billion Desert to Power I, which is to develop 10,000MW for the Sahelian zone, which will provide electricity for 250 million people. And that will become the world's largest solar project.

This is also a way of dealing with the other aspect of climate change, which is climate mitigation.

Lastly, everything we have talked about seems to need political will and we've seen instability in the past year or so in some of the African countries. With bad governance, how do you police African governments to direct money where it is supposed to go?

Well, at the African Development Bank we just don't lend money. We also support capacity in how those monies are used. We hold governments to account. We also support the countries to have very good fiscal policy management systems, good and transparent debt management systems, and good project monitoring systems.

A good example is in Kenya. I came in one day to the Rift Valley to see the progress of the Last Mile connectivity project. And I landed by helicopter with a minister in this particular place. As we were walking towards this particular house, there was a woman behind me and the Minister of Energy told her, “You know the guy walking in front of you, his name is Adesina, the president of the African Development Bank.” You know what she said? “I don't know African Development Bank, I do not know Adesina. All I know is that we have electricity. We were once in the dark, and now we have light.”

That tells me that the programme worked. If she was happy, I will be very, very happy. That's what matters. We are silent enablers of change. Africa should not be known as a zone of poverty. It must be rezoned for wealth.



Akinwumi Adesina is a Nigerian economist who served as Nigeria's Minister of Agriculture and Rural Development from 2011 until 2015 when he was. He was elected AfDB president. He was named Forbes Africa Person of the Year in 2013 for his "bold reforms" in farming sector. He holds a PhD in agricultural economics from Purdue University, US.