AfDB Report says Structural change needed to spur innovation in Africa

Abidjan, Cote D’Ivoire (Capital Markets in Africa):- To make economic growth self-sustaining, African countries must urgently make deep structural changes to propel innovation, notably boosting public investment and strengthening social services. Innovation is needed to create jobs and offer livelihood opportunities to lift the majority of Africans out of poverty, according to the African Development Bank’s 5th Annual Development Effectiveness Review (ADER) released Wednesday in Abidjan.

This year’s ADER has innovation as its theme. “While Africa today is celebrating unprecedented levels of economic growth, we recognise that the African economy still needs to undergo a profound structural transformation. Innovation is absolutely imperative for Africa to adapt products, services and business models to local conditions,” said AfDB President Donald Kaberuka. “Africa is leading the way in finding home-grown solutions that leapfrog old technologies, but these actions must be stepped up.

“The AfDB promotes innovation by expanding markets through regional integration, nurturing skills in science and technology, and above all by building the backbone infrastructure – the roads and the power lines and the fiber optic cables – on which innovation depends,” President Kaberuka went on to say.

The report shows Africa has made development progress on several fronts since 2010:

• Telephone access has grown over 4%, largely due to mobile subscriptions
• The time to start a business has fallen to 26 days from 42 days
• Intra-African trade has grown steadily to $145 billion

At the same time, the 2015 ADER projects that by 2030, Africa’s middle class will reach half a billion. “Africa will be an increasingly attractive market, and investors will be lining up to reach 500 million outward-looking, mainly young people, “ said Simon Mizrahi, Director of the AfDB’s Quality Assurance and Results Department, which authored the ADER.

The report also shows how Bank projects have improved the lives of Africans:

• 19 million people have benefitted from 5,000 km of new roads
• 6 million people have benefitted from improvements in agriculture
• 1 million people have benefitted from better access to education

The ADER is an annual report that shows how the Bank contributes to Africa’s development and how well it manages its portfolio and itself as an organization, examining the Bank’s strengths and weaknesses and sharing reforms it is undertaking to become a stronger development partner.