Africa must invest in its own healthcare and financial security, says AfDB President
Speaker at 35e African Union Assembly in Ethiopia’s capital Addis Ababa, Akinwumi Adesina, President of the African Development Bank (AfDB), said the most important lesson to be learned from the pandemic is that “investing in health is investing in national security”.
“Africa cannot afford to outsource the security of healthcare for its 1.4 billion citizens to the benevolence of others,” he said, addressing the African Union for the first time since his re-election as head of the AfDB in August 2020.
“This must be based on three strategic priorities. First, build quality healthcare infrastructure in Africa. Secondly, to strengthen the African pharmaceutical industry and thirdly, to strengthen vaccine manufacturing capacity in Africa.
The bank’s chief said the continent needed $484 billion over the next three years to address the socio-economic impacts of the Covid-19 pandemic and support economic recovery.
He reminded the audience that Africa needed between $600 billion and $1.3 billion a year to meet its goal of reaching 60% vaccine production by 2040.
To help achieve the goal, Adesina added that the AfDB, one of Africa’s largest development finance institutions (DFIs), plans to invest $3 billion to support pharmaceutical manufacturing capacity. and vaccines in Africa.
Additionally, Africa will need $414 billion to $784 billion a year to eradicate extreme poverty by 2030; 7 to 15 billion dollars a year to deal with climate change; and $68-108 billion a year to close the infrastructure funding gap.
“Excellencies, we need to mobilize much more resources drastically,” he stressed.
The bank’s boss thanked African leaders for continuing to support the AfDB, especially with regard to capital increases.
The bank’s general capital was increased in 2019 by 125%, from $93 billion to $208 billion, the highest since its inception in 1964.
“These resources have enabled the AfDB to scale up its support to African economies to fight the pandemic. The bank’s board has approved a crisis response facility of up to $10 billion. The bank also launched a $3 billion Fight COVID-19 social bond in international capital markets, which was the largest US dollar-denominated social bond in global history. The bank has also provided $27 million in grants to Africa Centers for Disease Control,” he said.
Adesina said the African Development Fund, the bank’s concessional lending arm, had supported low-income countries with $8.5 billion over the past five years.
Calling on AU leaders to strongly support the Fund’s 16th replenishment in 2022, Adesina said a restructuring of the African Development Fund’s financing would allow the Fund to go to market, leverage its $25 billion dollars of equity and raise an additional $33 billion in financing for low-income countries.
In arguably his most important call for immediate action, Adesina reminded African leaders that they had requested that the IMF’s Special Drawing Rights (SDRs) be reallocated through the AfDB, a prescribed holder of DTS.
“The transmission of reallocated SDRs to Africa through the AfDB will serve Africa very well, provide financial leverage and help recapitalize other African financial institutions, which the bank helped to establish for most,” he said. Last August, 33 billion dollars of SDRs were allocated to African countries, but more than 100 billion dollars were allocated to developed countries, which can be reallocated to the AfDB and other multilateral organizations to help developing countries. development in their development plans.
Energy and Nutrition
Adesina continued his remarks by emphasizing that Africa’s energy and nutritional needs also remain a top priority.
He said technologies from the Bank for African Agriculture Transformation (TAAT) have provided drought-tolerant technologies to 12 million farmers across Africa.
The bank is also supporting the establishment of special agribusiness processing zones in 18 countries to help transform agriculture as a major source of wealth and jobs, he added.
This continues to be a top priority, especially as 2022 is the Year of Nutrition in Africa.
“Your Excellencies, the AfDB, the International Fund for Agricultural Development and the African Union Commission launched the African Food Security and Nutrition Facility at the United Nations Food Systems Summit. Now dubbed Mission 1 for 200, this financing facility will help mobilize $1 billion, deliver climate-resilient, nutrition-rich technologies to 40 million farmers, produce 100 million metric tons of food, and feed 200 millions of people. This will help reduce food insecurity in Africa by 80%,” Adesina said.
The President added that Africa continues to face enormous challenges vis-à-vis the green energy transition and climate change.
“Your Excellencies, we need to move beyond a ‘just energy transition’ to a ‘just energy system’. The bank is working to set up an African Just Energy Transition Facility that will support the transition from coal and heavy fuel oil to clean energy. However, Africa will need an energy mix that includes natural gas, to ensure the stability of its energy systems, its electricity industries and ensure its competitiveness,” he said.
Some of the AfDB’s investments in renewable energy include investing in the world’s largest concentrated solar power system in Morocco and the Lake Turkana power project, Africa’s largest wind farm.
It also co-financed, with Africa50, the 3,000 MW Ben Ban solar project in Egypt.
The bank is also implementing a $20 billion Desert-to-Power initiative to develop 10,000 MW of solar power for the Sahelian zone of Africa, to provide electricity to 250 million people.
It will become the largest solar area in the world.
To support Africa’s adaptation to climate change, the AfDB and the Global Adaptation Center have also launched the Africa Adaptation Acceleration Program (AAA-P) with the aim of mobilizing $25 billion for climate adaptation in Africa.
Adesina also stressed that particular attention must be paid to fragile climatic zones that are most at risk of severe climate change impacts on health and safety.
“We must save the Sahel from desertification. We must revive the Lake Chad Basin. We need to complete the Great Green Wall. The AfDB has committed $6.5 billion for the Great Green Wall. I would like to thank the UN Secretary-General, António Guterres, and my dear sister, Amina Mohammed, UN Under-Secretary-General, for their outstanding support for this initiative,” he said.
The President added that as the world moves from COP26 in Glasgow to COP27 in Sharm El-Sheikh, hosted by Egyptian President El-Sisi, developed countries must meet their $100 billion funding pledge to support developing countries.
“It will help Africa. Promises made must be promises kept,” he said.
Women and young people
The AfDB President concluded by saying that more support should be given to women and children in Africa as vulnerable members of society.
“We need to build a better future for our young people. It is time to create youth-based wealth across Africa. To strengthen financial support for our young people’s businesses, the AfDB Group is exploring with countries the creation of investment banks for youth entrepreneurship. They will be premier financial institutions run by young people for young people,” he said.
He added, “To unlock women’s business potential, the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) is mobilizing $5 billion for women’s businesses. AFAWA is now working on a large scale. Over $425 million has been disbursed in 2021 to banks to lend to women’s businesses. This year, we will disburse $500 million for women’s enterprises. Our vision is clear: when women win, Africa wins!