During his investiture as the 8th elected President of the African Development Bank Group on 1st September 2015, Akinwumi Adesina pledged “to help build a new Africa with prosperous, sustainable and inclusive growth; one that is peaceful, secure and united, regionally integrated and globally competitive.” The ultimate goal: to remake Africa in a decade.
Participants at the ceremony were excited with the well-articulated optimism from the new President. Some feared the targets were too high to be attained. However, one year on, those goals now appear within reach as the Bank rolls out strategies, forges partnerships and mobilises resources to make the pledges a reality. People are beginning to pay attention. Last May at the Bank’s Annual Meetings in Lusaka, Governors representing the 80 member-countries of the Bank Group agreed that the institution’s work programmes were on track to achieve the inaugural promise.
Leveraging resources for critical projects
The facts on the ground speak for themselves – the new administration has scaled up the Bank’s operations to unprecedented levels while developing a ten-year transformation agenda designed to resolve five critical existential challenges, which the continent has grappled with over the years.
For instance, loan and grant approvals shot up to a new annual high of US $9 billion at the end of 2015; with projections that the amount would rise by 20% to US $11 billion by the end of 2016. Actual disbursement is programmed to reach US $6.6 billion, with one third of the amount already disbursed. This represents a giant step compared with the US $4.55 billion realised in 2015 and 4.14 billion in 2014. It is worth noting that actual disbursements rates against targets had been falling steadily from 98% in 2012 to 81.9% in 2015, largely due to disbursement delays which have now been reduced substantially.
The mobilisation of jumbo loans amounting to nearly US $2 billion through syndication to South Africa’s energy utility (Eskom); Morocco’s Ouarzazate solar complex, which is considered to be the largest in Africa; and for the extension of Ethiopia’s growing energy industry under the Bank’s New Deal on Energy for Africa in a couple of months clearly signposted its high ambition and its future directions. “We should never have a low ambition for Africa,” says Adesina.
When vast areas of Eastern and Southern Africa were hit by a devastating drought, the Bank immediately packaged US $549 million in financing to help the countries concerned to deal with the situation and reduce their vulnerability to the hazards.
The High 5s to drive Africa’s transformation
All of these were implemented at the same time that the Bank crafted a set of critical priorities programs within its Ten Year Strategy called the “High 5s” – Light up and power Africa, Feed Africa, Industrialise Africa, Integrate Africa, and Improve the quality of life for the people of Africa.
Although it is difficult to contemplate one of these priorities without the other, energy (Light up and power Africa), was identified as the key priority by Governors and participants at the Lusaka meetings. It is the lifeblood of all human activity, a sine qua non in agriculture and food production, industry integration and for improving people’s living conditions. It is also worthy to note that the New Deal on Energy for Africa is the 23rd such initiative in the sector on the continent with exception that this time, the AfDB, an Africa institution, is taking the lead. Thus, a dedicated team has been constituted to implement the energy programme by tapping the continent’s huge energy resources and to accelerate universal access to electricity in Africa by 2025. The Bank plans to invest US $12 billion in the energy sector over the next five years and leverage US $40-50 billion to the energy sector, though a wide range of co-development partnerships.
In a short period of time, the Bank has taken the leadership position on electrification of Africa. An ambitious African Renewable Energy Initiative (AREI) was launched during theCOP21 climate talks in Paris. At the AU Summit in Kigali in July, the African Heads of State approved the establishment of the AREI, to be based at the African Development Bank. The Bank moved quickly and the Director of the Initiative was recruited and assumed work in August. The European Union, France and Germany have pledged significant financing for the initiative.
Making agro-business the foundation for growth
The approval of the “Feed Africa: Strategy for Agricultural Transformation in Africa, 2016-2025,” followed with a projected investment estimated at US $315-400 billion and annual returns of US $85 billion, when fully funded. The idea is to drive transformation through 15 priority commodity value chains in agro-ecological zones specifically to achieve self-sufficiency in key commodities such as rice, wheat, fish, palm oil, horticulture, cassava; move up the value chain in key export-oriented commodities like cocoa, coffee, cotton, cashew; create a food-secure Sahel in sorghum, millet, livestock; and realize the potential of the Guinea savannah in maize, soybean and livestock.
The Feed Africa Strategy makes a strong case for reversing the scandalous situation of a continent that spends US $35.4 billion on food imports annually despite being home to 65% of the world’s undeveloped arable land.
Crowding resources through co-development
In July, the Bank approved the Industrialisation Strategy which aims to develop industrial sector and policy framework; enhance trade and integrate Africa into the regional and international value chains as well as boost competitiveness and value creation by expanding supply of business services.
Under the strategy, the Bank will support countries by championing six flagship programs: foster successful industrial policies; catalyse funding in infrastructure and industry projects; grow liquid and effective capital markets; promote and drive enterprise development; promote strategic partnerships; and develop efficient industry clusters.
The Bank would also increase its level of funding and crowding-in third party resources to the tune of US $35-56 billion over the next decade. It will also leverage additional resources through partnerships, with other development finance institutions, relevant UN agencies, the African Union Commission, regional economic communities, and special purpose vehicles providing seed funds. In addition, substantial amounts will be mobilized through syndication and co-financing in support of phased programs that would be specific to local contexts and in line with the countries’ development goals.
At the 2016 Annual Meetings, the Bank launched the new Jobs for Youth in Africa Strategy, which aims to create 25 million jobs in 10 years, and provide needed skills to another 50 million.
The Bank also initiated a new partnership for promoting nutrition in Africa which underscores the critical importance of nutrition on development with Bill and Melinda Gates Foundation, Dangote Foundation and Big Win Philanthropy. “It is clear that the first 1,000 days from conception to the development of the child is crucial with regards to nutrition. We need to lead the charge where nutrition is the outcome of development,” Adesina said.
At the Sixth Tokyo International Conference on African Development (TICAD VI) in Nairobi from August 27-28, Japan’s Prime Minister, Shinzo Abe, said his country would provide US$ 10 billion for infrastructure development in Africa. A significant share of the resources will be channeled through the AfDB, which is a huge mark of confidence in the Bank and its High 5s. The Bank and Japan will also provide US $3 billion to support Africa’s private sector under the third phase of the Enhanced Private Sector Assistance for Africa (EPSA) initiative.
Analysts have commended the diligence and sense of urgency, which underlie the design and rollout of these programmes following wide consultations and buy-ins from stakeholders and potential public and private sector partners that provide a strong guarantee for success.
A new model for innovation and change
The entire process will be driven by a new Development and Business Delivery Model (DBDM) approved by the Board in April to streamline the Bank’s work and improve its efficiency.
The DBDM is anchored on five pillars – move closer to the Bank’s clients to enhance delivery; reconfigure the headquarters to support the regions to deliver better outcomes, strengthen the performance culture to attract and maintain talent, streamline business processes to promote efficiency and effectiveness, and improve financial performance and increase development impact – to deliver the High 5s.
Under the DBDM, four sector complexes, led by Vice-Presidents, have been created. Three of them are focusing on four of the High 5 priorities, with a mandate to develop a strategy to achieve them, and the fourth will cover Economic Governance.
The new Power, Energy and Green Growth sector complex will deliver the “Light up and power Africa” priority. The new Agriculture, Human and Social Development Complex sector complex will work to “Feed Africa” and “Improve the quality of life for the people of Africa”. A slightly adjusted Private Sector, Infrastructure and Industrialisation complex will focus on “Industrialise Africa”. The final High 5 priority, “Integrate Africa”, will be driven collectively by the regional development, integration and business delivery hubs. The Chief Economist’s Office will provide leadership for macroeconomic management, governance and counter-cyclical budget support.
“I believe we can all be proud that this Bank has an exceptional record in serving Africa,” President Adesina wrote in a message to all staff announcing the DBDM. “When it reached its 50th anniversary in 2014, it had many millions of reasons to celebrate, in the form of the many millions of lives it has touched. Our task now is to ensure that the Bank continues to move forward to deliver greater development impact for the people of Africa. We must constantly have greater ambitions for Africa. Africa must think big, act big and deliver big.”
Reinvigorating countries on the path to transformation
AfDB President Akinwumi A. Adesina ended his first year on a state visit to Madagascar from August 29 to 31, where the President of the country, Hery Rajaonarimampianina, and the government appreciated his visit as reinvigorating them on the path to transformation. The government authorities highlighted the alignment of their national development strategy with the Bank’s High 5s with agriculture and energy being very high on their agenda.
Adesina said that the African Development Bank stands by the Government in its development efforts to improve the living conditions of the people of Madagascar. The Bank, he added, will provide the necessary support to improve the business environment which is crucial for the promotion of a vibrant private sector. During the coming years, the Bank will also strengthen its cooperation in the sectors of road, agriculture, mining, water, health and education.
In recognition of his visit and his leadership for Africa’s development, President Adesina was decorated with the highest honour of the National Order Award. This seemed not only a befitting way to begin the work in earnest of implementing the High 5s. And if indeed there is a country where the Bank can make a huge difference it is Madagascar.
The decoration by the government on Madagascar recalls a previous one. In October 2015, President Adesina was decorated by the Senegalese Government. He was named Grand Officer of the National Order of the Lion (Grand Officier de l’Ordre National du Lion). He received the decoration from Senegalese President Macky Sall, who saluted his commitment to take African agriculture to a higher level that will make it the true engine of Africa’s economic growth. The decoration took place in Dakar during the Bank’s High-Level Conference on Agriculture.
By every standard, Adesina’s first year in office has been remarkable for the momentum it has unleashed for Africa’s economic transformation. This change is critical for Africa and Africans.