The average annual GDP (Gross Domestic Product) growth in Africa was 3.4% between 2010 and 2021, according to African Development Bank data. This is well below the targeted yearly average growth of 7%. Combined with population growth, GDP per inhabitant has barely changed.
At the same time, average purchasing power in Africa has deteriorated due to inflation, which has accelerated over the last 10 years. As well as the challenges of governance, the reality of African economies means that periods of optimism have often been disrupted by external shocks such as Covid-19, and the Russian war in Ukraine, resulting in lower GDP growth rates over the last few years.
The issue has raised questions in the region. The African Union Commission, the African Development Bank and the African Union Development Agency - New Partnership for Africa's Development (AUDA-NEPAD) jointly conducted a study to identify the key actions needed to put every African country on the path to steady growth of 7 to 10% over the next 40 years.
The preliminary report of the study will be discussed at the Annual Meetings of the African Development Bank Group from 22 to 26 May 2023 in Sharm el-Sheikh, Egypt. The event will bring together global experts in inclusive growth and sustainable development, some of whom worked on the report.
Multiple issues
Apart from the main theme of the meeting, the issues raised touch directly on the role of multilateral and regional development banks in promoting inclusive growth in African countries.
Today, such an objective has multiple pillars for promoting economic growth in line with the role of multilateral development banks to stimulate growth and support sustainable development in Africa. To achieve this, they can fund infrastructure projects (in areas such as roads, energy and telecommunications) and economic initiatives that encourage job creation and increase revenue.
Next comes the issue of poverty reduction: multilateral development banks can help to reduce poverty by funding projects to improve the livelihoods of populations. They can also support African governments in implementing inclusive and effective economic and social policies.
Finally, promoting sustainable development will need to continue: multilateral development banks can help to promote sustainable development in Africa by funding projects that protect the environment and support green economies. They can also help African countries to adapt to climate change by funding their mitigation and adaptation initiatives.
The African Development Bank understands the scale of the issues
The African Development Bank has a clear mandate to help African countries achieve their socio-economic development objectives. The bank is involved in funding infrastructure, agriculture, energy, education, health and governance projects, and other sectors relevant to economic growth and poverty reduction.
It closely cooperates with African governments, civil society organizations, and the private sector to implement inclusive and effective socio-economic policies. The bank also promotes international cooperation and public-private partnerships to maximize the impact of its projects and initiatives.
More importantly, it promotes green economic growth and climate change reduction while supporting the shift to renewable energies, energy efficiency, sustainable management of natural resources and resilience to climate change.
