On the sidelines of the World Economic Forum, which took place last week in Davos, Switzerland, African Development Bank Group President Donald Kaberuka emphasized that building human capital is essential for the African continent to achieve inclusive growth and economic transformation.
World leaders gathered from January 23 to 27 at the WEF annual meeting to discuss this year's theme of "resilient dynamism", which President Kaberuka noted is particularly relevant in the African context.
In an interview on January 24, Kaberuka stressed that the biggest challenges facing in African development are sustainability, inclusion and dealing with inequalities.
Despite having six of the top 10 fastest-growing economies in the world, Sub-Saharan Africa is also home to six of the top 10 most unequal countries in terms of economic disparity. President Kaberuka highlighted that growing inequality is a threat to economic growth and will lead to significant lost opportunity. The incidence of poverty is especially high among young people, he said, explaining that the problem of inequality is especially pertinent in African countries with a large youthful population.
Kaberuka stressed the need to take advantage of Africa's "youth bulge" to ensure inclusive growth. "It's not about social rights or opportunities in the classic sense," he said. "It is about how to make sure 60 per cent of the people who are under 25 years old are interacting in the economy, are educated, so that they can reap the demographic dividend." Creating broad-based opportunities and job opportunities for Africa's young population is critical to inclusive growth, progress and social dynamism, Kaberuka added.
"The challenge for Africa is how to move to the next level, which is economic transformation," said Kaberuka. This requires a structural change, he continued, "that means you have to change the structure of the economy, involve a broad segment of the population; you have to diversify from reliance on a narrow range of unsophisticated products to integrate the global value chains, and that is not easy."
Sustaining growth and making it inclusive "requires investment in human capital; it requires investment in infrastructure, and in institutions which ensure that there is confidence in the economy," Kaberuka said.
The AfDB President also underscored the importance of the mobile revolution, which means an increasing number of young people have access to information, education and efficient service delivery. "The mobile revolution has done two things which are first in history: The young don't need fixed lines; they can access education opportunities and information. It has brought down dramatically the cost of service delivery. We don't have to deliver education and health as we have done in the past."
Kaberuka's interview echoes the AfDB's Human Capital Development Strategy, which guides the Human Development Department's operational framework. The strategy rests upon three pillars, and the department supports interventions that increase employment, promote risk protection, inclusion and social cohesion, and ensure value for money and accountability in service delivery.