by Sebastien GOULARD
The African Development Bank (AfDB) unveiled its new decade-long strategy for 2024-2033 last May. The development bank aims to best support African states in addressing the challenges they face. Among these, the AfDB has identified issues such as food insecurity, indebtedness, climate change, unemployment, and internal conflicts. For the AfDB, Africa’s development must offer new opportunities to its young and dynamic population.
Headquartered in Abidjan, the AfDB was established in 1964 to support the development of African states following the decolonization process. Today, the AfDB works on implementing and financing transformative projects across Africa. The AfDB’s members include all African states, along with 27 countries from Europe, the Americas, and Asia, making it a major institution for development in Africa. In 2022, the bank approved loans amounting to $6.16 billion.
Challenges to Africa’s Development
In its strategic document, the AfDB highlights the progress made over the past decade. Africa experienced an average annual growth rate of 3.3%, which helped reduce extreme poverty and increase life expectancy by nearly 10 years. Job creation accelerated, although the continent was severely impacted by the COVID-19 pandemic, which significantly affected African economies.
However, the report’s authors note that Africa still faces numerous challenges, especially regarding access to energy. Another challenge is reducing inequalities. Economic development has exacerbated some inequalities, particularly between urban and rural inhabitants. The AfDB also warns about climate change, which poses increased risks of economic and food crises for African societies. Additionally, Africa is directly affected by the risks linked to the Russian invasion of Ukraine, which threatens grain imports.
The AfDB notes that Africa’s debt has increased since 2010, with 24 African states being highly exposed to significant debt risks. Moreover, Africa is plagued by numerous internal conflicts that impact its economy and force millions of Africans into exile.
A Continent of Opportunities
Despite these threats, Africa remains a land of opportunities for the AfDB. Firstly, the continent is a demographic giant in the making. By 2063, Africa’s population will surpass those of China and India combined, becoming the continent with the youngest and most dynamic workforce, provided African economies can adequately educate these young adults and create sufficient jobs. To achieve this, AfDB experts emphasize the role of the private sector and note that the African diaspora could contribute to this development.
Africa is also a key player in global decarbonization. In addition to housing nearly 30% of the world’s mineral deposits, including rare earth elements, Africa has significant potential in renewable energies, particularly solar energy, which is not yet fully exploited. With the rising global demand for green energy, Africa can become a major exporter; although these new energies should also support local digitalization of its economy.
Lastly, Africa is urbanizing rapidly. By 2033, half of Africa’s population will live in cities. The populations of Cairo and Kinshasa are expected to exceed 25 million inhabitants. Therefore, African states must continue investing in urban planning and development to provide the best possible conditions for new city dwellers and create new jobs.
Five Objectives
The AfDB has set five objectives to ensure sustainable development in Africa over the next decade: connecting Africa, feeding Africa, industrializing Africa, integrating Africa, and improving the quality of life for its people.
Connecting Africa
The first priority is to develop the necessary energy facilities for African society to ensure conducive conditions for economic growth. According to the AfDB, nearly $190 billion must be invested annually until 2030 for all Africans to have access to electricity. The bank will support projects based on decarbonized energy.
Feeding Africa
The second priority relates to agriculture and food security. The African continent must drastically reduce its dependence on agricultural imports. Compared to other regions, agricultural production in Africa is limited due to inadequate irrigation and limited use of fertilizers. The AfDB will prioritize financing new agri-food sectors.
Industrializing Africa
In Africa, industrialization is hindered by limited access to energy, underdeveloped transport infrastructure, and the requirement for improved digitalization. One of the AfDB’s priorities will be to finance projects that promote economic diversification and provide expertise to African governments to implement ambitious industrial policies. Five sectors have been identified: agri-food, mining, digital, health, and textiles.
Integrating Africa
African economies are not sufficiently integrated with each other, and intra-African trade remains limited due to a lack of common production chains and continent-wide infrastructure. The AfDB will support cross-border projects to create common dynamics among African states.
Improving the Quality of Life for Africans
Finally, the AfDB aims in its 2024-2033 strategy to improve living conditions for Africans, particularly young people and women. Regarding health, not all African states have developed sufficient infrastructure to meet their populations’ needs. The AfDB will finance new health projects in Africa with private sector actors. To achieve its ambitions, the AfDB commits to supporting private sector-led initiatives to provide opportunities for small and medium-sized enterprises to develop.
Five Priorities
To address the challenges facing Africa and achieve the defined objectives, the AfDB has established five priorities: gender equality, attention to younger generations, climate change response, resilience to shocks and conflicts, and strengthening economic governance. The AfDB will prioritize projects that encompass at least one of these dimensions. It should be noted that in their 2024-2033 strategy, the AfDB indicates it will fund fewer projects, but those supported will be the ones that bring about the most change.
The AfDB’s 2024-2033 strategy was eagerly expected by African states and local and foreign investors to define their goals for the next decade. Africa has all the tools to become a prosperous continent if local actors succeed in addressing the challenges identified by the AfDB.
Author: Dr. Sebastien Goulard is the founder and editor-in-chief of Global Connectivities.
