Africa's premier multilateral financial partner, the African Development Bank (AfDB), has added its weight behind the call to augment intra-Africa trade, pointing out that the continent needs to enhance governance and leadership to realize its trade potential.
Speaking on Wednesday, September 4 at the 4th annual Africa Governance, Leadership and Management Convention in Mombasa, AfDB's Regional Director for the East Africa Regional Resource Center (EARC), Gabriel Negatu called on African leaders to take up a synchronized value chain development approach that touches all aspects of inclusive growth in Africa through enhanced governance and leadership.
Negatu said that owing to the strong economic growth and resilience, poverty has gone down significantly "as the share of the African population living below the poverty line ($1.25 a day) has fallen from 51 per cent in 2005 to 39 per cent in 2012."
"Of the 20 fastest-growing countries in the world in 2012, 13 were from Africa; out of a total of 54, the number of middle income countries in the continent, with annual per capita incomes above $1,000, is now 26," Negatu said.
"These impressive resilience and growth achievements" over the last decade resulted from success in the areas of macroeconomic management and getting the basics right, said Negatu. Those measures included a series of economic reforms that improved the Business Enabling Environment, as well as the international commodity prices boom that shifted the terms of trade in favour of the continent's major export items.
Addressing a gathering comprising senior government officials, private sector operators and stakeholder representatives in a plenary session, Negatu outlined how the Bank and the continent are striving to build shared prosperity in the continent, by promoting good governance and leadership. "AfDB and its member countries have taken major strides to improve governance and leadership, necessary for shared prosperity," he highlighted.
Drawing from the Bank's experience in the field, he affirmed that the "business climate in the continent continues to improve in most of the countries. The costs of starting a business in the continent have fallen by more than two-thirds, while delays for starting a business have been halved over the past seven years. Also, the private sector has increasingly become the main engine of growth, and foreign investment has increased fivefold since 2000," he said.
Consequently, Negatu observed, "the generalization about the continent by The Economist magazine changed from 'a Hopeless Continent' just about a decade ago to 'the Hopeful Continent' recently. Africa is also dubbed as 'continent on the rise' and it is now the fastest-growing continent in the world."
Despite these achievements, Negatu pointed out that enormous challenges remain. He noted that the continent's infrastructure deficit remains a major constraint to sustainable development, and access to affordable and reliable energy is still a dream to millions of African households and enterprises.
However, Negatu noted that there are also a number of opportunities for the continent to unlock and build upon its current growth achievements. These include: the continued discovery of oil and other natural resources, coupled with a growing global demand for such resources; a rising middle class and consumerism that will propel domestic demand for goods and services; improved access to information and communications technology (ICT) that enhances innovation and availability of information; the continent's increasing access to international capital and improved participation of the private sector as demonstrated by the increasing foreign direct investment (FDI) inflows into the continent and the recent over subscriptions to Eurobonds issued by a number of African countries such as Rwanda, Ghana and Kenya.
In a bid to support its member countries, the AfDB is working on an innovative financing vehicle called the Africa50 Fund, which is intended to close the huge infrastructure gap by tapping into African own resources. "The funds will be used for financing greener and high-return transformational regional infrastructure projects," Negatu said.
He reassured participants of the Bank's continued support "for accelerated, environmentally sustainable and inclusive growth where jobs to the majority would be created and the continent's people are employed and employable."
