Tag Archives: AfDB

Building a Transparent African Development Bank

 

Transparency is required for realising goals, boosting performance and leveraging impacts of any business operations. This is why transparency is a key element in the operations of the African Development Bank. Efforts at improved operations and efficient systems grounded in transparency are paying off.

This year’s Aid Transparency Index has ranked the African Development Bank 4th among 45 development organizations. It gained 6 positions since 2016.

The index revealed that the African Development Bank discloses details or summaries of pre-project impact appraisals, evaluations and review documents and results. This provides a further boost for efficient and effective programme delivery for its stakeholders and clients alike.

But why does transparency matter?

As Africa’s leading development finance institution, the African Development Bank is mandated to change the lives of Africans. To make this change happen, priority must be given to transparency to make sure that all funds invested in projects and programmes count. The Bank has embedded good governance and transparency to make sure resources it deploys change lives and empowers citizens.

The continent has entered into exciting moment. This year growth has rebounded, with GDP expected to grow at a rate of 4.1% this year, an increase from 3.6% in 2017. This is why the continent has six of the world’s ten fastest-growing economies. But Africa still has unmet needs. Let’s take infrastructure, for example. The region will require $130–170 billion per year to bridge its infrastructure gap.

These will require financial resources. The Bank, through its accelerated delivery agenda, has committed to using its leverage to raise additional capital to help meet borrowers’ financing needs and deliver on the High 5 agenda. This has yielded good results.

The African Development Bank’s New Deal on Energy for Africa has, over the last three years, installed an average of 460 MW of new power capacity installed, of which 151 MW is on renewable power capacity. The deal has had more than half a million people connected to the grid. As part of its Feed Africa strategy, the Bank has provided support to about 8.4 million farmers, half of them women, and 1,900 km of feeder roads built or rehabilitated.

The success of these project listed above depend on a reinvented African Development Bank to leverage and scale up project impacts and interventions. President of the Bank Akinwumi Adesina is right to say: “Proactive stakeholder relations and governance anchored on transparency are critical and at the heart of the impact-driven work that makes the African Development Bank Africa’s leading development finance institution”.

A transparent African Development Bank matters for Africa’s development. A system has to be in place to allow citizens to follow the money that the Bank gives.

The Aid Transparency Index, calls for timely, accurate, comprehensive and proactive reporting and publication of all forms of aid and related development activities, is crucial for an efficient and effective AfDB-led transformation.

Akinwumi Adesina: Africa must trade smart by ensuring rapid growth

 

 

The president of the African Development Bank (AfDB), Dr. Akinwumi Adesina, has said that with the rapidly changing world of trade and rising echoes of unilateralism, Africa must trade smartly, starting by ensuring rapid growth in intra-African trade.

Adesina pointed to the important role of the African Continental Free Trade Area (AfCFTA) in that regard, saying that, when fully implemented, the AfCFTA would raise the share of intra-African trade in Africa’s total trade from 16 per cent to 52 per cent.

It would also increase the value of Africa’s traded goods and services by $35 billion per year, he added.

He made the remarks in Abuja during a gala dinner organised to mark the 2018 Annual Meetings and 25th Anniversary of the African Export-Import Bank (Afreximbank).

Adesina commented Afreximbank for its achievements, saying that the AfDB was very proud that the institution it helped create 25 years ago had fully come of age.

“Today, Afreximbank is the leader on financing trade in Africa,” he said.

Highlighting the importance of trade finance, especially for small and medium-sized enterprises (SMEs), Adesina noted that the AfDB had provided trade finance lines of credit of $650 million and trade finance mitigation support of $250 million to support Afreximbank’s trade finance activities.

He called for strong partnership between AfDB and Afreximbank in the development of export processing zones, especially staple crop processing zones, so as to help transform rural economies based on agricultural industrialisation and value addition.

Earlier, Dr. Mahmud Isa-Dutse, permanent secretary in the ministry of finance of Nigeria, which hosted the gala dinner, congratulated Afreximbank on the celebration of its 25th anniversary.

He pledged Nigeria’s continuing support for the bank as it continued to deliver on its mandate of promoting African trade.

OPINION: Energy is a key catalyst in moving Africa forward

 

 

JOHANNESBURG – ‘We have to be impatient in moving Africa forward”. These were the words of Akinwumi Ayodeji Adesina, President of the African Development Bank at the World Economic Forum in 2016.

Two years on, this quote is as relevant today as it was when it was spoken in the snow-capped hills of Davos, Switzerland.

I believe that energy can be a key catalyst in moving Africa forward. But first, let’s look at the macro-economic indicators of Africa holistically. Compared with the rest of the world, Africa as a continent has enjoyed “above-average” growth. The aggregated gross domestic product growth (GDP) was 3.6percent for 2017, with a forecast growth of 4.1percent in 2018 (Source: African Development Bank Economic Outlook 2018).

According to the World Bank Report released earlier this year, Ghana and Ethiopia are expected to achieve GDP growth of 8.3percent and 8.2percent, respectively. In fact, the World Bank predicts that Ethiopia economy will double by 2025. (Source – World Bank Global Economic Prospects 2018: Africa analysis)

Admittedly closer to home, South Africa’s economy has seen a -2.2percent contraction in the last quarter. However, the reforms being implemented (especially with respect to state-owned enterprises) should create fertile soil for “green shoots” come 2019 and 2020.

Taking a closer look at the homogeneous challenges facing the African continent, they can be grouped into several principal areas: job creation, food security, water stewardship and climate change.

While these challenges may vary in degree of severity from country to country, their impact is the same. These issues stifle economic growth and create widening gaps of inequality in our citizens. However, shifts in the regulatory environments coupled with innovation, are creating opportunities for addressing these societal ills.

Job creation

In Botswana, legislative changes in 2016 have opened the country’s energy market to Independent Power Producers (IPPs). As we have seen in South Africa, the Renewable Independent Power Producer Programme (Reipppp) has spawned multiple manufacturing and service industries in addition to achieving significant job growth since its inception.

Given Botswana’s unemployment rate of 18.1percent against a population of just more than 2million, a programme like Reipppp would serve to reduce levels of unemployment and create sustainable manufacturing capacity.

The levels of solar radiation in the country and methane gas opportunities resulting from the thriving livestock industry are clear indicators that this country is primed for renewable energy expansion.

Food security

In Kenya the reduction of connection charges and end-user tariffs for both domestic and commercial/industrial consumers is anticipated to alleviate the country’s low levels of electrification. This country is heavily reliant on food produce exports (coffee, tea, spices).

Therefore, there is a need for promoting the use of renewable energy systems for sustainable agriculture. For example, solar photovoltaic water pumps, and solar water heaters can provide irrigation and input into production processes for produce such as milk, as well as staple crops (for example, maize).

As part of accelerating electrification, a programme dubbed the Green Mini Grid (GMG) facility in Kenya has been rolled out. This programme aims to connect 14000 homes and businesses to green mini-grids by the end of 2018.

Water scarcity

Ethiopia, as one of the top five ranked driest countries on earth faces a dire water scarcity threat. With a projected economic growth of above 8percent for 2018, the scarcity of water could throttle economic growth if serious measures are not taken.

Innovation could be Ethiopia’s saviour. For example, the Sahara Forest Project in Australia uses seawater as an energy source. In a nutshell, the seawater is pumped from the sea and dripped over a “honeycomb” structure inside a greenhouse, where it evaporates. The evaporation cools down the indoor environment, while the resulting water vapour condenses on the greenhouse roof forming fresh water.

Emissions

South Africa, as the most industrialised economy, is also understandably the biggest emitter, with emissions states at 468 metric tons of carbon dioxide as at the end of 2016. While the Reipppp has gone some way to reducing the reliance on coal-fired power, more than 70percent of the country’s power comes from fossil-powered generation.

Companies across the country are seeing the benefits of reducing energy costs through the installation of renewable energy solutions, via tax incentives.

Given the capital outlay of installing solar PV systems on large building roofs, such tax incentives help to accelerate the payback period, thereby alleviating the cost for the business.

By harnessing the power of our natural resources, we can unlock endless possibilities for energy, the catalyst for change in Africa.