The African Development Bank (AfDB) and the African Union Commission (AUC) have signed a grant agreement worth US $45 million to boost the Pan African University.

This grant from AfDB Group's concessional window, the African Development Fund, will help the African Union establish the Pan African University with a view to enhancing Africa's competitiveness and growth through the creation of high quality higher education and research capabilities.

"The Bank's support to the Pan-African University is a clear demonstration of our commitment to play a key role in Africa's transformation," said AfDB Vice-President in charge of Agriculture, Human Development and Governance, Aly Abou-Sabaa, during the signing ceremony on Tuesday, August 20 in Tunis. "The AfDB has an active human development portfolio of over 70 projects totaling more than US $2 billion demonstrating our commitment to skills development and science technology," he added.

Recent studies have shown that a large majority of young people in Africa are out of work, accounting for up to 60% of unemployment in the region. And even if working, most young people engage in low-productivity and poor-quality jobs, mostly in the informal economy. Hampering the productivity of young workers is their lack of technical and entrepreneurial skills - and of information about jobs and market needs.

Accordingly, the AfDB will invest, in line with its Ten Year Strategy 2013-2022, in skills and technology to improve competitiveness. It will ensure that those skills better match the opportunities and requirements of local and global job markets.

"AfDB's decision to support the Pan African University has breathed new life into the project," said AU Commissioner for Human Resources, Science and Technology, Martial De-Paul Ikounga. Speaking at the signing ceremony, he said "the project would not have been able to materialize without the support of such a powerful partner as the AfDB."

Backed by AfDB's expertise and credibility, "the Pan African University ambitions to compete with Western universities in attracting brilliant young Africans, poised to become Africa's pride," De-Paul Ikounga added.

African countries have the lowest ratio of scientists and engineers in research and development and the Pan African University holds the promise to create a cadre of scientists and engineers and build knowledge societies in Africa.

The Pan African University will cover key development areas through regional institutes and centers hosted by existing universities selected on a competitive basis. The first three lead thematic institutes (out of five) are established in Kenya (for Sciences, Engineering, and Technology), Cameroon (for Governance, Humanities and Social Sciences), and Nigeria (for Life and Earth Sciences). They will serve all African countries. Algeria has been recently chosen for North Africa while selection for the host country for Southern Africa is in progress.

AfDB and AUC also explored ways to strengthen their cooperation with a view to preparing the next generation of entrepreneurs through specific programmes aimed at developing the skills to create and manage small businesses. "Young Africans are resourceful, but they often lack a conducive environment which can help them turn their ideas in action, for example through incubators, training, and venture capital," said the AU Commissioner.

In order to operationalize its skills & technology development agenda, the AfDB is finalizing its Human Capital Strategy, which presents a New Model for Education in Africa (NEMA) with a strong focus on addressing the critical issue of unemployment among youth.