Widespread poverty in Africa has been at the top of the agenda at the African Economic Conference (AEC) in Kinshasa. According to Akinwumi Adesina, President of the African Development Bank, this is a scourge that "the continent must not simply manage, but eradicate." Yet what is the best way to address this problem, and with what resources? Expectations are high. In an interview before the opening of the AEC, Issa Faye, Manager of the AfDB's Research Division, gives us an insight into the Bank's approach to this issue.
What is new at this 10th edition of the African Economic Conference, which seeks to address poverty and inequality in Africa?
Issa Faye: This particular edition of the AEC comes in a pivotal year, marking the end of the Millennium Development Goals (MDGs) period and signalling the start of the Post 2015 Agenda, and in particular the new Sustainable Development Goals (SDGs). This is the main reason behind the choice of theme for this year's conference: "Addressing Poverty and Inequality in the Post 2015 Development Agenda".
The results of previous AECs have shown that major progress has been made in African economies, despite persistent challenges, such as governance issues, weak institutions and conflict. Now that the focus has switched to sustainable development, how, in your view, should governments act differently to avoid widespread poverty?
Issa Faye: I'm tempted to argue that the challenges that governments face will not change simply because the development agenda has changed. Nevertheless, governments will now have to do deal with more demanding requirements. This, in turn, will force them to adapt their strategies, capacities and procedures to ensure that they can implement the Sustainable Development Goals (SDGs) successfully.
In practical terms, they will need to build on their achievements to date, particularly in terms of improved economic performance over the last decade, strengthening of the macro-economic framework in the majority of countries, the establishment of strong institutions, greater transparency and good governance in public affairs. Structural reform programmes will also need to be accelerated in order to improve the business climate, strengthen infrastructure (in terms of both volume and quality), enhance social dialogue and develop human capital. Considerable effort will also be required to mobilise national resources and to reduce, or even eliminate, fraud and money-laundering, among other aspects.
Beyond these practical considerations, a change of mindset is also needed. This will involve attacking the root causes of the problems, focusing in particular on the fundamental barriers to Africa's development, rather than simply addressing the symptoms of these problems. In other words, governments will now need to make a substantial effort to ensure that the economic growth that their countries have achieved over the last decade is more inclusive, while laying the foundations for comprehensive structural reform of their economies.
In his inauguration speech on September 1, the new AfDB President, Akinwumi Adesina, stressed his particular concern for widespread poverty, calling it a scourge that "the continent must not simply manage, but eradicate". What practical steps can the AfDB take, in conjunction with other organisations and regional member countries, to achieve this goal? In other words, what does the Bank intend to do eradicate widespread poverty?
Issa Faye: As Adesina stated in his address, the Bank will continue to support member countries in their efforts to implement the SDGs. In practical terms, this will involve mobilising financial resources, providing technical assistance - to those countries that request this support - to help member countries strengthen their capacities and institutions, and offering policy advice. The Bank has reviewed its credit policy and its risk appetite with a view to strengthening its interventions and improving the way in which it serves its regional member countries. Its activities are now focused on five priority areas:
Electrification: Ensuring universal, sustainable access to energy. The Bank intends to build on its leadership role, its portfolio (approximately US $10 billion) and its achievements to date in the sector, in order to mobilise substantial funding for the energy industry. The Africa50 Fund may make a significant contribution to this objective.
Food self-sufficiency: Tapping into the vast potential in the agricultural sector. The time has come for the African agricultural sector to feed the continent's population. This can be achieved by overhauling the image of agriculture and establishing it as a formal, respectable business, modernising the sector with technological and financial solutions, pushing ahead with reforms of the sector (focusing in particular on land reforms), and establishing closer links between production zones and markets.
Regional integration: Achieving economies of scale, promoting diversification at regional level and increasing internal trade within Africa through the implementation of major structural projects at the regional level and by pressing ahead with reforms in conjunction with regional economic communities.
Industrialisation: Making a quantum leap and transforming Africa from a continent that imports food products to a continent that exports high value-added products, and placing agriculture at the centre of the industrialisation process.
Improved living conditions: Reducing gender disparities, promoting women's education, and ensuring that women have access to productive resources and decision-making bodies. A positive discrimination programme designed to enhance access to funding for women is currently being developed. Significant investment will also be required in jobs for young people, to tap into their potential and ensure they have the necessary capabilities and skills to support the industrialisation and structural transformation process. Particular emphasis will also need to be placed on fostering entrepreneurship among young people. Further efforts will also be required to increase investment in social sectors, with a view to supporting nutrition, education and skills development programmes, establishing social safety nets, developing human capital and creating jobs.
This is an ambitious programme that will require vast resources...
Issa Faye: It goes without saying that the SDGs can only be implemented successfully if the right conditions are established. In particular, we need to ensure that sufficient financial and non-financial resources are available, including capacity-building, technical assistance and policy advice. With its revised credit policy, the Bank now has the necessary credit rating and balance-sheet resources to play a leading role in mobilising a greater volume of resources. This should help the Bank to be more flexible in its actions, ensuring that it can implement innovative instruments and solutions to better serve its regional member countries. For example, the Bank may use solutions such as blending, the Africa50 Fund and public-private partnerships to prepare for and fund major infrastructure projects. Efforts must also be made to strengthen the commitment and impact of partnerships with global and regional development partners. This, in turn, will ensure that assistance is provided in a more coordinated and targeted manner, via co-financing mechanisms. Wherever possible, these mechanisms will need to be implemented via national systems. It would also be wise to establish a robust monitoring and evaluation framework for these interventions, to ensure that the expected development outcomes are actually attained.
