The President of the African Development Bank (AfDB), Dr. Akinwunmi Adesina has called for more transparency, accountability and efficiency in the management of public loan in Africa, saying the bank does not encourage countries using their natural resources to back up infrastructure loans.
He also stated that all public infrastructure financing should be competitive, while pricing should be done in such a way that it gives value for money to those countries, adding that there must be transparency and efficiency in the use of public resources for infrastructure.
Adesina, who made the call yesterday at the ongoing African Investment Forum, with the theme: ‘Economic Resilience Through Sustainable Investments’ at Abidjan, Cote D’ Ivoire, expressed concern that rising public debts due to unsustainable public infrastructure financing plans would mortgage the future of some countries in the continent.
“All public infrastructure financing should be transparent and competitive pricing should be done in such a way that it gives value for money to those countries. There must be transparency and efficiency in the use of public resources for infrastructure,” he stated.
He noted that public financial efficiency and financing were important, adding that the focus should not be on financial commitments deployed into infrastructure, but the efficiency of the expenditure.
The AfDB president further explained that the bank and its partners have embarked on three major areas of priority which he said would promote the economic transformation of the continent. These he listed to include agriculture, electric car manufacturing and renewable energy.
Adesina disclosed that in the area of agriculture, the bank would work collectively with its partners to support the various Special Agro-industrial Processing Zones (SAPZs) across Africa, adding that they are doing a lot in that regards.
According to him, “Everywhere we are, we want to turn around agriculture into a wealth sector. We will change the face of rural agriculture and we have committed ourselves to that.
“We will put our technical resources together to make electric cars in Africa a reality. On the issue of renewable energy, the bank and its partners would be making $20 billion investments to generate to 10,000 megawatts of solar power across 11 countries that would provide electricity for 250 million people in Africa.
“Presently, we have already started that. We will manufacture our own solar panels in Africa and this is a different way of working together.”
Earlier in his remarks, the President and Chairman of Board of Directors, African Export-Import Bank, (Afreximbank), Prof. Benedict Oramah, said the recurrent global shocks, currently unleashed by the lingering effects of the Covid-19 pandemic, the ongoing Ukraine crisis and the intensification of geo-political tensions were reshaping the world in a way not previously imagined.
He also stated that although shocks have adverse ramifications for African economies, they could also serve as a springboard and present enormous opportunities for Africa to rethink, reimagine and re-write their stories in a positive manner that would endure.
Oramah, who spoke on the theme: ‘Trade and Investment – How can Africa be More Competitive in a Global Context,’ said at the height of the pandemic in 2020, the continent’s average Gross Domestic Product (GDP) contracted by only 1.6 per cent against world average of 3.3 per cent, with several of its economies recording positive growth.
He further explained that notwithstanding the observed resilience and robustness of its economies, it was sad to note that over 56 per cent of African countries rated by at least one of the major global rating agencies, were downgraded, compared to 9.2 per cent in Europe and 28 percent in Asia.
The Afreximbank president remarked that the effect of the inexplicable mass downgrade was to precipitate far-reaching economic crises as African bond prices crashed and made it difficult for most, if not all, to access the international debt capital markets, pointing out that most ended up at the doors of International Monetary Fund (IMF), with their heads bowed and unsure of how to manage mass anger at home.
Continuing, he added: “It appears that Africa is once again on the path to the dark days of the lost decade of the 1980s, only that this time, it appears to be a victim of excessive trust on what it neither understands or controls. “As we work at pro viding an authentic narrative of the continent, trade and investment are important elements of Africa’s growth story. Despite Africa’s trade reaching about US$1 trillion from low levels of less than $300 billion in the 1990s, the continent continues to account for less than three per cent of global trade,” he added.