Africa’s GDP falls by $165bn, 30m lose jobs, 26m drop into extreme poverty ― Adesina

The President of the African Development Bank (AfDB), Dr Akinwunmi Adesina, has lamented that Africa has been hit by dwindling economic fortunes which saw a decline in its Gross Domestic Product (GDP) by $165 billion in 2020.

He said over 30 million jobs were lost while 26 million persons fell into extreme poverty within the period.

Akinwunmi made the assertions in a speech titled, “Mobilizing Financing for Africa’s Accelerated Economic Recovery, Development and Integration,” he delivered at the 25th Ordinary Session of the Assembly of the African Union Addis Ababa, attended by President Muhammadu Buhari.

He however praised the efforts of African leaders in tackling the COVID-19 pandemic.

The AfDB boss warned against outsourcing Africa’s security to foreigners as he stressed the need for Africa to protect African lives by building healthcare infrastructure and vaccine manufacturing.

He said: “It has been a global economic cyclone. Africa witnessed a decline in GDP growth of 2.1 per cent in 2020, its lowest in twenty years. Africa’s GDP fell by $165 billion. Over 30 million jobs were lost and over 26 million people fell into extreme poverty.

“I wish to commend the leadership efforts of the African Union, and our Heads of State and Government, for the critical roles you have played in dealing with the pandemic and the socio-economic challenges in its wake. Today, thanks to these efforts 11 per cent of the population have been fully vaccinated, and another 16 per cent has been partially vaccinated.

“However, while developed countries have moved to booster shots, Africa is still struggling with basic shots.

“Your Excellencies, we must learn from this experience. Africa can no longer outsource the security of the lives of its 1.4 billion people to the benevolence of others. We must secure African lives!

“It is time your Excellencies, to build Africa’s healthcare defence system. This must be based on three strategic priorities. First, building Africa’s quality healthcare infrastructure. Second, building Africa’s pharmaceutical industry and third, building Africa’s vaccine manufacturing capacity.

“Africa needs $600 million to $1.3 billion to meet its goal of attaining 60 per cent vaccine production by 2040. Investing in health is investing in national security. The African Development Bank plans to invest $3 billion to support pharmaceutical and vaccines manufacturing capacity for Africa.

“To address the socio-economic impacts of the pandemic and support economic recovery, Africa will need some $484 billion over the next 3 years. To eliminate extreme poverty by 2030, the continent will need $414 – $784 billion per year. Africa will need $7-$15 billion a year to deal with climate change. The continent will also need between $68 – $108 billion per year to fix the infrastructure financing gap.”

Akinwunmi noted that Africa must drastically mobilize a lot more resources, saying that with the help of the leaders, the AfDB’s general capital of the bank was increased in 2019 by 125 per cent, rising from $93 billion to $208 billion, the highest since its establishment in 1964.

According to him, these resources have allowed the bank to scale up support to African economies to tackle the pandemic.

He added: “The Board of Directors of the Bank approved a Crisis Response Facility of up to $10 Billion. The Bank also launched a $3 Billion Fight COVID-19, Social Bond, on the international capital markets, which was the largest ever US-dollar denominated social bond in world history. The Bank provided $ 27 million as grants to the African Centers for Disease Control.

“Your Excellencies, over the past six years, the African Development Bank has provided about $39 billion in financing to the continent in support of its High5 priorities to light up and power Africa; feed Africa; integrate Africa; industrialize Africa, and improve the quality of life of the people of Africa. These High5s are the accelerators for achieving Agenda 2063.”

Akinwunmi assured that with its $25 billion in equity, the African Development Fund can leverage up to $33billion of additional financing for low-income countries.

He noted to achieve this, the bank requires the support of the leaders to change the article in the charter of the African Development Fund that does not allow it to go to the market to leverage resources. This is a top priority.

The AfDB chief said the bank is also leveraging private investments into Africa, in innovative ways, saying: “The Africa Investment Forum, established by the African Development Bank and its partners, has helped to secure investment interests worth more than $78 billion.

“This spectacular level of interest includes a $24 billion transaction for the liquefied natural gas project in Mozambique. We are proud that this project will make Mozambique the third-largest producer of liquified natural gas in the world.:

Akinwunmi urged the Heads of State to link security, investment, growth, and development closer together, adding: “To enhance the security of Africa, the African Development Bank is currently developing Security Indexed Investment Bonds. Proceeds from these bonds, when developed, will support countries and regional economic communities to do four things.

“First, to upgrade security architecture. Second, to repair damaged infrastructure in conflict-affected zones. Third, to rebuild social infrastructure. And fourth, to protect zones with strategic investments.

“Your Excellencies, we must build a better future for our youth. It is time to create youth-based wealth all across Africa. To boost financial support for the businesses of our youth, the African Development Bank Group is exploring with countries the establishment of Youth Entrepreneurship Investment Banks. They will be first-rate financial institutions run by the youth for the youth.”

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