Africa’s key growth constraints are infrastructure deficits, extreme poverty — Steve Kayizzi-Mugerwa

Kinshasa, DR Congo, Capital Markets in Africa — In September of 2015, global leaders gathered in New York to adopt the Sustainable Development Goals. Back home in Africa a number of constraints will need to be removed to make progress.

The lack of adequate infrastructure, particularly energy, is a major constraint. It has been estimated that electricity supply for Africa as a whole is equivalent to that of Belgium, a country of only 11 million compared to Africa’s over 1 billion.

Structural constraints to employment creation is another major impediment. The inability of Africa’s economies to absorb millions of young Africans entering the labour market every year is a serious threat to its social fabric, and lowers its potential.

Africa, especially Sub-Saharan Africa, needs to address extreme poverty. In Sub-Saharan Africa over 40% of the population survive on less than USD 1.90 a day. Indeed 30% of the world’s poorest people live in Africa.

The African Development Banks strategic priorities, the High-5, are: light up Africa; feed Africa; industrialize Africa; integrate Africa; and enhance the welfare of Africa’s households. In the area of energy, the Bank has just launched a New Deal on Energy for Africa that will strengthen and scale up current initiatives on an active portfolio of some USD 10 billion.

To feed Africa adequately, agricultural productivity must rise as well as farmers’ incomes. The Bank believes that agriculture must be seen as a business and not as a mere source of subsistence. A consultative conference held last week in Dakar gave support to Bank plans to scale up its engagement in agriculture.

Regional integration was the reason for the creation of our Bank in the early 1960s and many of its projects have a regional element. The Inga power project of this country is a good combination of the Bank’s goal of boosting energy and regional integration in Africa when completed Inga will be a game changer indeed.

Africa’s industrialization is a must if the continent is to achieve sustainable development. Projects and policy dialogue to this end will receive emphasis in the Bank’s investments and its policy dialogue. It will be important to go beyond mere aspiration and to start seeing concrete results.

Lastly, Africa must raise the welfare of its people, through employment creation and by eradicating gender gaps. The Bank will work with other partners to establish a US$300-million facility for Affirmative Finance Action for Women in Africa – which will be used to leverage up to US$3 billion from commercial sources – a factor of one to ten.

The labels coined about Africa such as “Africa rising”, “African lions” will not be worth much if not combined with credible national efforts to eliminate poverty and ensure more equitable distribution of income and opportunity. African mothers and fathers want to see more of their children celebrating their first anniversaries; while malnutrition must become a thing of the past.

Source: Excerpt from Statement by Steve Kayizzi-Mugerwa, Chief Economist and Vice-President African Development Bank Group at the 10th African Economic Conference – Kinshasa, DRC – 2 November 2015.