AFDB President, Adesina highlights Africa’s vast economic potential at Chatham House

IN a packed auditorium at Chatham House, African Development Bank President Dr Akinwumi Adesina delivered an inspiring address to a diverse audience of diplomats, investors, academics, politicians, and media, emphasizing Africa’s untapped potential and abundant opportunities.

During his presentation on Friday, titled Envisioning Africa’s Economic Prospects, Adesina highlighted his optimism and passion for Africa’s future. He described Africa as a continent of tremendous opportunities, characterized by a young and dynamic workforce, vast renewable energy potential, rich biodiversity, rapid regional integration, and innovative solutions to unlock its natural capital.

Adesina outlined the resilience of Africa’s economies despite global challenges, noting that the continent remains the second-fastest-growing region after Asia. He cited the Bank’s African Economic Outlook Report, which forecasts 3.7 percent economic growth for 2024, increasing to 4.3 percent in 2025. The report revealed that 15 African countries achieved real growth rates of at least 5 percent, and half of the world’s 20 fastest-growing economies are in Africa.

However, Adesina acknowledged that achieving strong economic prospects and resilience will require overcoming significant headwinds, including tackling climate change and rising debt, and implementing critical global financial reforms.

‘As Africa’s economic resilience is bolstered, unlocking its economic prospects requires ensuring structural change in its economies, raising the productivity of agriculture, providing electricity, accelerating infrastructure investments, supporting faster digitization, unleashing economic and job opportunities for women and youth, and driving industrialization through greater mobilization of the private sector,’ he stated.

Addressing infrastructure and agricultural production, Adesina shared successes like the Bank’s Technologies for African Agricultural Transformation (TAAT) programme, which has helped 13 million farmers increase crop productivity. In Ethiopia, distributing 65 metric tons of heat-resistant wheat has led to self-sufficiency in wheat production, covering 2.2 million hectares.

The event, attended by over 150 guests in person and hundreds more virtually, included diplomats from more than 18 African countries, the Commonwealth Secretariat, international financial institutions, private and corporate investors, startups, civil society, students, and academics from leading UK institutions and international media houses.

Adesina addressed challenges such as youth unemployment, poverty, debt vulnerability, and political instability, but dispelled perceptions of Africa as a risky investment destination. He referenced a 14-year Moody’s Analytics study showing Africa’s low infrastructure loan default rate at 1.9 percent, compared to between 4.6 and 12.4 percent in other regions globally.

He reiterated the Bank’s advocacy for an independent African credit rating agency to counteract misperceptions that lead to underinvestment due to excessive risk premiums. Quoting the United Nations Development Programme, Adesina said fairer credit ratings for African countries could save at least $75bn annually in debt service payments.

‘The trajectory for Africa will be much stronger as we tackle these challenges, as well as improve security and expand more concessional and private sector financing,’ he emphasised.

Reflecting on the bank’s achievements, Adesina highlighted the recent approval of a $117 billion callable capital increase, raising the bank’s total authorized capital to $318 billion to preserve its AAA credit rating and enhance its lending capacity. This approval will align the institution with the changing global financial architecture and enhance its support for the continent.

‘We’re going to be bigger, bolder, and better,’ he declared, predicting Africa’s rise as a pivotal global region.

Adesina also mentioned the Bank’s Alliance for Green Infrastructure in Africa (AGIA), supported by a $150 million G7 contribution, working to leverage $3 billion in private sector investment for green projects. He cited the $20 billion Desert-to-Power project in the Sahel to generate 10,000 megawatts of solar power for nearly 250 million people across 11 countries, which will become the largest solar zone in the world.

Additionally, Adesina and World Bank President Ajay Banga announced a joint effort to connect 300 million Africans to electricity by 2030.

The Bank Group president praised the recent IMF approval of $20 billion in Special Drawing Rights channeling for hybrid capital, in line with proposals by the African Development Bank and the Inter-American Development Bank.

Adesina noted the Bank’s support for major projects, including a $24 billion LNG project in Mozambique, a $19.5 billion Dangote Refinery Complex, and a $13 billion OCP phosphate company in Morocco, demonstrating the Bank’s ambition to drive Africa’s economic transformation as outlined in its new ten-year strategy (2024-2033).

‘Africa can no longer be ignored. I fully expect Africa to be the pivotal continent in the world, given its economic prospects,’ he said, emphasizing the importance of tapping into Africa’s youth potential and investing in education and skills development.

He added that the African Development Bank is heavily focusing on women, citing the Affirmative Finance Action for Women in Africa (AFAWA), which has mobilized $1.7 billion in financing for 18,300 women-led businesses, with a goal to mobilize $5 billion.

Adesina also highlighted the Africa Investment Forum, which has attracted investor interests worth over $180 billion since its establishment in 2018.

Adesina expressed optimism that Africa’s prosperity is within reach and that the continent will emerge as a pivotal force in the global economy. ‘Africa is critical to the future of the world. It’s a vision Africa deserves and it’s a vision we’ll achieve,’ he affirmed.

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