Jonathan Miles, Editor of Open Access Government, charts the importance of economic development in Africa despite COVID-19
Spurring sustainable economic development and social progress in the regional member countries (RMCs) is how the overall aim of the African Development Bank (AfDB) can be summed up, an effort that contributes to the reduction of poverty. This objective is achieved by allocating and mobilising resources that target investment in RMCs, as well as giving advice on policy and technical assistance in support development endeavours.1
“This urges us to avoid the one-size-fits-all solution to address the effects of COVID-19 in Africa. For that, the AEO Supplement notes that the continent will need the support and expertise of all. This is an opportunity to enrich the debate on what appropriate measures are needed to support African countries to recover from the pandemic, drawing particularly from Asian experience.”
Africa: Economic transformation
The AfDB’s Strategy for 2013–2022 is reflective of the aspirations of the entire African continent. Certainly, it has its origins in deep experience and understanding of how Africa’s progress during the last 10 years and where it wants to go to next. It’s encouraging to know that Africa has embarked on the journey economic transformation, as a process that has seen sustained and solid growth, “but it has been uneven and without a sufficiently firm foundation, and it is not – by any estimation – complete.”2
It is also worth noting that this ten-year Strategy focuses on the two objectives – inclusive growth and the path towards green growth – to improve the quality growth in Africa. When it comes to inclusive growth, this will “bring prosperity by expanding the economic base across the barriers of age, gender and geography” and as such, the AfDB will “invest in infrastructure that unlocks the potential of the private sector, championing gender equality and community participation.” Concerning green growth, this will improve water, energy and food security, protect livelihoods and “spur innovation, job creation and economic development”, for example.3
Regional economic integration – an operational priority
The Strategy details five main areas for the AfDB to focus on in terms of improving the quality of growth in Africa:
- Infrastructure development.
- Regional economic integration.
- Private sector development.
- Governance and accountability.
- Skills and technology.4
Let’s focus on just one of these areas for this article, regional economic integration. We read that integration is crucial for Africa to “realise its full growth potential, to participate in the global economy and to share the benefits of an increasingly connected global marketplace.” While the 54 individual countries in Africa often lack the economic and physical machinery to act in tandem, this is said to limit possibility. However, the AfDB fosters economic integration in Africa “to create larger, more attractive markets, to link landlocked countries, including fragile states, to international markets and to support intra-African trade.”5
The economic outlook for Africa
Despite the COVID-19 pandemic, an AfDB webinar for Asian audiences found that Africa still a prime investment destination. The African Economic Outlook Supplement6 recommends policy responses to accelerate growth recovery and safely reopen economies in Africa during 2020 and 2021. Tetsushi Sonobe, the Dean of the Asian Development Bank Institute (ADBI), says “Despite the COVID-19 pandemic, investment opportunities still abound in Africa. “Global markets are shifting to South Asia and Africa. In a sense, Africa is not very far for Asian investors who might be interested in the investment opportunities on the continent.”
Sonobe notes that Africa’s GDP growth is projected to quickly rebound next year after steady growth prior to COVID-19. Sonobe identifies potential opportunities underlined in the Supplement: “A large market with a very talented youthful population; a three-trillion-dollar market opportunity through the African Continental Free Trade Area (AfCFTA) agreements; greater manufacturing potential as low-cost manufacturing opportunities continue to move to Africa; improved business environment; and improving macroeconomic governance.”
While the pandemic impacts all African economies, its significance varies from country to country notes Khaled Sherif, the AfDB’s Vice President for Regional Development, Integration and Business Delivery. “This urges us to avoid the one-size-fits-all solution to address the effects of COVID-19 in Africa. For that, the AEO Supplement notes that the continent will need the support and expertise of all. This is an opportunity to enrich the debate on what appropriate measures are needed to support African countries to recover from the pandemic, drawing particularly from Asian experience,” Sherif says.
The Supplement underscores the urgent need to “build the resilience of Africa’s healthcare systems and economies to improve countries’ preparedness for future shocks”, which means that African countries must “rethink their current development strategies and priorities”. Chuku Chuku, Officer in Charge of the Bank’s Macroeconomic Policy, Debt Sustainability and Forecasting Division, comments: “The pandemic notwithstanding, Africa is open to business and we look forward to working with our Asian partners.”7
Growth in Africa: The road ahead
Looking ahead, it is interesting to note that the AfDB chief, President Akinwumi Adesina recently said that while COVID-19 pandemic has changed everything on a global scale, “it has thrown Africa’s growth back,” he says, “Now, we must help Africa build back boldly, but smartly, paying greater attention to quality growth: especially in the areas of health, climate and the environment.”8
References
1 https://www.afdb.org/en/about/mission-strategy
2 https://www.afdb.org/en/about-us/mission-strategy/afdbs-strategy
3 https://www.afdb.org/en/about-us/mission-strategy/objectives
4 https://www.afdb.org/en/about-us/mission-strategy/afdbs-strategy
5 https://www.afdb.org/en/about-us/mission-strategy/operational-priorities
