The African Development Bank (AfDB) will focus on African Continental Free Trade Area (AfCFTA) as well as investments in infrastructure in 2020, the President of the Bank, Akinwumi Adesina, has said.
Mr Adesina, who spoke in Abuja on Tuesday on the bank’s performance in the outgoing year as well as the outlook for 2020, said the AfCFTA has the potential to become “the biggest thing to happen to Africa in the near future.”
Reviewing the growth of the African economy in 2019 against the performance of other regions in the world, Mr Adesina said the AfDB was “very proud of what Africa achieved in terms of economic growth in the past year (2019).”
“Essentially, this year (2019), there are 37 countries that are growing at 3 to 5 per cent, and 20 countries that grow at above 5 per cent. That is incredible,” he said.
He said the growth could be validated by understanding what is happening globally, particularly the foreign direct investments coming to Africa, which he described as fantastic.
“Africa’s foreign direct investment this year grew by 11 per cent. When one looks at Asia, which grew by 4 per cent, while globally, foreign direct investment declined by 13 per cent and developed countries declined by 23 per cent, one will appreciate that Africa is actually doing quite well,” he said.
To sustain the economic growth going forward, Mr Adesina said the priority should be to support the AfCFTA, estimated to be worth over $3.3 trillion in terms of trade volume.
“At the end of the day, this will be the biggest thing to happen to Africa, which is why we have resolved as a Bank to focus our attention and resources on in the coming year.
“We will continue to do a lot in infrastructure. We are working very hard in the Lagos-Abidjan Highway, the construction that will start by 2022, all the work is currently being done.
“We will continue to invest quite a lot in energy, power, which is the source of development. Without energy, there cannot be development. So, the bank is going to do quite a lot this year and beyond,” he said.
With the bank’s shareholders giving a new boost of capital, he said his bank secured a $115 billion ‘new capital’ that will enable it to dedicate more resources to support African countries, Nigeria and other countries to be able to do more.
Aid, Trade support
On aid to African countries, Mr Adesina stated what the AfDB is doing to ensure the free trade agreement does not affect locally produced goods.
On issues to facilitate trade and competitiveness, he said there are still some basic things that have to be done to realise these goals, particularly infrastructural development.
He said Africa currently has an infrastructure gap of between $68 billion to $108 billion financing gap, adding the AfDB has been working hard to close the gap.
To attract capital for infrastructure development, he proposed the use of the pool of funds totaling about $1.8 trillion from sovereign wealth, pension and insurance (mutual) funds.
“If we can just tap a little from these funds, we will close very quickly the infrastructure gap that we are talking about.
However, he said there is “the investment of a lot of the sovereign investment funds in other sovereigns outside the continent, thereby making them become the sovereign wealth of others, which they go back to borrow.”
He said the African Investment Forum was to enable the bank to garner investment into Africa and to address some of the political, market, and high risks that hinder development in Africa.
Reviewing the achievement of the forum since into operation last year, Mr Adesina said the AfDB was able “to secure an investment interest of $37.8 billion in less than 72 hours, with the second forum yielding investment interest of $40.1 billion.”