Prez Akufo-Addo calls for support for AfDB to lead continent’s transformation
President Akufo-Addo, has called on all African states to support the African Development Bank (AfDB), to turn the financial institution into the dominant player in the development of Africa.
The AfDB, according to President Akufo-Addo, with its current portfolio, is in the best of positions to spearhead Africa’s quest to develop rapidly in order to achieve the African Union’s (AU’s) Agenda 2063.
Addressing attendees of the 57th Annual Meetings of the African Development Bank Group at the Accra International Conference Centre (AICC) on May 24, 2022, under the theme; Achieving Climate Resilience and a Just Energy Transition for Africa, President Akufo-Addo identified six major challenges that the African continent needs to address.
Mobilizing to invest
The challenges, the President noted, can be dealt with if the AfDB is supported to mobilize funds from the capital markets using its assets and to invest same on the continent.
“In addition to the pressing food, fuel and physical challenges, we still have to ensure that; one, the remaining 85% of the continent’s population are vaccinated against COVID-19″.
“Two, the remaining 60% of health facilities on the continent are connected to reliable source of electricity. Three, the teaming youth who are over 60% of our population, are better educated and equipped for the job market”.
“Four, the African Continental Free Trade Africa transforms Africa with a combined GDP of 3.3 trillion United States dollars”.
“Five, the physical and digital infrastructure deficits are addressed; and six, the unrelenting insecurity and violence creating about 2.5 million internally displaced people in the Sahel and elsewhere are permanently addressed,” President Akufo-Addo said.
“The stakes could not be higher and clearer. To move towards resolving these, we must support the bank to do what a bank does; to mobilize and invest funds. We must activate the process that moves this bank from the corridors of billions to trillions given the scale of the challenges on this continent,” the President added.
To this end, President Akufo-Addo indicated, “Ultimately, AfDB must become the dominant financial institution for Africa’s transformation in the medium term.”
Elevated role
Emphasizing on his call for a more empowered AfDB, President Akufo-Addo noted: “The combined effects of the debt situation, rising interest rates, and rising cost of living are resulting in severe micro-economic and financial instability.
“What is clear is that the resulting damage cannot be cured so easily with the limited physical tools at our disposal and national policy adjustments.
“Therefore, I reiterate my call for an elevated role for Africa’s premier bank, the AfDB; only that at this time, I respectfully ask for a sense of urgency due to our mutual enlightened awareness,” Akufo-Addo said.
“As a ‘triple-A’ rated financial institution, with an active portfolio of some USD 61 billion United States dollars, and more than one hundred and forty-two thousand locations, the AfDB, is in the position to drive sustained transformation in Africa,” he added.
Protective cover
On the proposed African Financial Stability Mechanism, the AfDB intends to introduce, President Akufo-Addo, said he is “encouraged to hear that the right noises are being made” towards its establishment to protect African economies from “future shocks”.
“The irony that we have a history riddled with economic shocks but are the only continent in the world without financial buffers, has to be urgently remedied.
“I am persuaded that the African Financial Stability Mechanism will provide such protective cover for our economies, thus, enabling us to counter the effects of future pandemics amongst others,” President Akufo-Addo noted.
Leveraging AfDB equity
President of the African Development Bank Group, Dr. Akinwumi Adesina, in his keynote address, indicated that the bank through its subsidiary, the African Development Fund is looking forward to the opportunity to use its accumulated equity to raise funds from the capital markets.
“To give greater hope to cope with increasing challenges, the African Development Fund (ADF) countries need greater resources. One way to achieve this is to allow that African Development Fund to use its accumulated equity of 25 billion dollars to leverage 33 billion dollars from the capital markets,” Adesina said.
Should this be granted, Mr Adesina noted that “the bank will be able to deliver more.”
“The fund will provide greater leverage for donor contributions, and greater value of the money of tax payers from all donor countries”.
“The fund will become more sustainable as it will generate more income. The fund will reduce debt of countries as it will deliver much lower concessional lending rates compared to the very high rates African countries get on the capital global markets”.
“Then together, we will build a more equitable growth and development, from the middle income countries, to the low income countries and to the fragile states, no development of any country will be left behind,” the AfDB President added.
