At the launch of the 2020 African Economic Outlook of the African Development Bank (AfDB), a flagship annual publication that projects economic growth trends on the continent, the Bank President, Akinwunmi Adesina, offered the political leaders of the continent some hard nuts to crack.
Adesina wants governments in Africa to urgently work towards improving the quality of lives of their citizenry beyond what economic statistics tend to show, stressing that growth must be felt in the lives of the people because ‘’at the end of the day, it is not Gross Domestic Product (GDP) growth that matters. Nobody eats GDP’’.
‘’Growth’’, according to him, ‘’ must be visible. Growth must be equitable. Growth must be felt in the lives of people. That is why the African Development Bank places particular emphasis on one of our High 5s: Improving the Quality of Life of the People of Africa.’’
Adesina who served as Nigeria’s Agriculture Minister under the Goodluck Jonathan administration, also pointed out a number of issues he said must be redressed if the continent must continue to ‘’ make the dreams of improving quality of life for millions of Africans a reality’’.
While explaining that although African economies are growing well higher than the global average, global trade tension, among others, are a source of concern, the AfDB big boss decried the effects of climate change such as cyclone, droughts, etc. on the continent, adding that African countries cannot continue to reel from one emergency to another.
Continuing, he said, ‘’AfDB has used its Africa Disaster Risk Insurance Facility to pay for insurance premiums for countries facing extreme weather events that have helped to provide $36 million in payout to countries. It is time now for the international community to help scale up this facility to reach many more countries.’’
He pointed out that rising insecurity in West Africa, especially in the Sahel countries of Niger, Mali, Burkina Faso, and Chad, is impacting on economic growth. ‘’It is now time for the African Development Bank, IMF, and the World Bank to work out a financial support system that will help address these exogenous security shocks, which if left unaddressed, will have broader spillover effects that will lower growth and investment in the region.
‘’In this context, I wish to commend the ECOWAS Heads of State and Governments for their bold decision to set up a fund to help address these insecurity issues in the sub-region’’, he said and observed that although the continent has “no systemic debt crisis”, Africa’s rising debt profile (external and domestic) of about $500 billion, need to be checked.
Adesina is, therefore, calling for prudence in expenditure and the embrace of a sustainable debt management system that relies more on domestic resources to close fiscal deficit gaps, pointing out that the bulk of the continent’s debt is spent on infrastructural projects which although remain a major challenge for many countries in the continent is not enough to drive growth and productivity.
To tackle the menace, he has advised that African governments can improve infrastructural spending by sharply focusing on quality infrastructure, improved efficiency of public expenditure and promotion of greater participation of the private sector in its provision.