Is Africa Really at Rise or Not ?

AfDB Meeting in Kigali Rwanda 2

By: Otai Michael

Africa recorded nearly 4% GDP growth last year, a two-percentage point decline compared to 2012, according to 2013 results released by the African Development Bank Group (AfDB) at the annual meeting in Kigali. The performance compares favorably with other regions and was driven by investments, urban demand, trade and natural resources, as well as bounties from infrastructure and good policies put in place in the countries, the AfDB report says. Highlights are available in the Executive Summary [PDF] According to the Bank’s 2014 Economic Outlook, external financial inflows as well as tax revenues and regional integration are tipped to remain the key drivers of Africa’s development and growth prospect

Sharing their assessment of Africa’s last 50 years, the African Leaders who attended the African Development Bank Group’s 2014 Annual Meetings noted that the continent had made progress but the road had been uneven. “…we have sometimes stumbled or stalled…but have forged ahead.”

According tp Rwanda’s President Paul Kagame across the continent, there is a renewed sense of optimism that gives meaning to the now familiar phrase of “Africa Rising”‘.

Since 2007, the intra-African investment had grown at a rate of 32 per cent, more than double that of non-African emerging markets, and almost four times faster than FDI from developed markets, although, there is still a lot of potential to be realised and we can do more to encourage this trend.

He said no country can tackle some of today’s most important challenges on its own, urging closer ties on infrastructure, trade facilitation, policy harmonisation, and marketing.

He reiterated the need for African countries to work together to ensure that all countries realize even rise. He however, acknowledged that to some extent African Countries were, responsible for each other.”Instability in any part of Africa affects us all.

“Further progress depends on Africa’s ability to work together and with other partners on meaningful mechanisms to resolve conflicts. It also calls for continued strengthening of our respective internal systems to prevent conflicts in the first place,” Kagame told delegates at the AfDB Annual Meetings.

We cannot afford to sit back and take the future of our continent for granted, he said, in keeping with the event’s theme “The next 50 Years: The Africa We Want”.

The other sessions were attended by, among others, the Chairperson of the African Union, President Mohamed Ould Abdel Aziz of Mauritania; President Yoweri Museveni of Uganda; President Ali Bongo Ondimba of Gabon; and Kenyan Deputy President William Ruto.

Also in attendance were former Heads of State Benjamin Mkapa of Tanzania and Festus Mogae of Botswana; and African Union Commission chairperson Nkosazana Dlamini Zuma.

Earlier, participants had discussed strategies that could help shape the continent over the next half a century, with emphasis on opening up borders to ease movement of people across Africa, consolidating peace and security, facilitating businesses, and imparting the right skills to the youth. The participant’s also discussed ways to deepen regional and continental integration, saying that would give the “Africa Rising” narrative a better chance of “becoming a reality within our lifetimes”.

The event also saw the official launch of Africa50, an ambitious $100 billion AfDB flagship project that seeks to significantly scale up infrastructure investments across the continent over the next 50 years.

The Chinese government and the African Development Bank also entered a new $2-billion (about Rwf 1.5 trillion) financing agreement setting up an Africa-wide investment vehicle dubbed, “Africa Growing Together Fund.”

The Fund is the biggest the Chinese government has signed off at once to Africa since the commencement of their partnership about four decades ago.

The resources from the AGTF are expected to be provided over a 10-year period and will be used alongside the AfDB’s resources to finance eligible sovereign and non-sovereign guaranteed development projects in Africa.

Kagame praised AfDB, describing it as “an essential bridge between Africa and the wider world”.

It keeps the focus on Africa’s unique economic priorities, yet speaks a language everyone understands, he said.

“The African Development Bank is a model of how Africa and the developed world can work together for mutual benefit and with mutual respect,” he added. “Africans are very clear about what is important: we all want peace, progress and opportunity.”

He congratulated AfDB president Donald Kaberuka for being “a real asset” to Africa’s development process, telling him “you have made not only the Bank, but Rwanda and the African continent proud”.

Kaberuka, whose second five-year term at the helm of the continental Bank ends next year, previously served as Rwanda’s minister for finance and economic planning shortly after the 1994 Genocide against the Tutsi.

Footprint in Africa’s Development

According to the report, the Bank has approved over 4,501 projects amounting to US $118.7 billion from 1967 when it commenced operations to the end of 2013.

Infrastructure development, Africa’s Achilles’ heel, accounted for the largest share of the commitments with 1,404 projects worth US $45,455 million followed by 550 Multisector projects estimated at US $17,212 million. Some 498 “Other approvals” (Include HIPC Debt Relief, Equity Participation, Guarantee, Loan Reallocations, Post Conflict Country Facility and Special Fund for Water) account for US $14,512 million.

The environment had 22 projects worth US $365 million compared to 681 social projects worth US $10,251 million; 285 Finance projects estimated at US $13,013 million; 910 Agriculture & rural development projects worth US $13,001 million; 148 Industry, mining, and quarrying projects worth US $4,875 million, and three urban development projects estimated at $4.4 million.

Experts say more than the amount of resources committed, the multiple sectors covered is a clear demonstration of the Bank’s ambition to accompany its regional member countries.

However, the year 2009 stands out as one of the Bank’s finest moment when it implemented the innovative counter cyclical resource mobilization mechanism to rescue countries that were negatively affected by the crisis.

In line with the Ten-Year Strategy, the Bank has launched a massive infrastructure development programme to the tune of US $1.8 billion in transport, US $3.2 billion approved for infrastructure in 2013 alone; US $882 million in energy; US $462 million in water and US $54 million in communications.

Thus, AfDB which has emerged as the largest external financier for infrastructure in Africa took the business to the next level with the establishment of the Africa50 Fund to deliver infrastructure through a new global partnership platform championing projects that tackle Africa’s infrastructure deficit. The Fund which aims to mobilise up to US $100 billion in the first instance, can be a game changer in Africa’s quest for development.

These accomplishments have helped to advertise the Bank, to consolidate its triple “A” ratings as well as bolster its attractiveness to potential new members. South Sudan and Turkey joined recently, while Luxemburg is on course to come on board.

In addition to the many trust funds set up by member countries within the Bank, South Africa, Angola, Libya and Lesotho have joined the African Development Fund, the concessional window of the group, thereby boosting its development resources.

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