It was exactly 16 hours (GMT) on Friday, and the main hall of Accra International Conference Centre exprienced momentary pin-drop silence. It was time to draw a curtain on the five-day yearly general meeting of the African Development Bank (AfDB) Group after a series of public meetings, knowledge events, closed-door negotiations and media sessions on Africa’s emerging challenges, and prospects that could turn out to be cutting-edge solutions.
Of course, after five days, most participants were completely bone-weary, but not too bad to want to listen to Dr. Akinwumi Adesina, the president of the AfDB.
After protocol observation and a few speeches, the ex-Nigerian agriculture minister mounted the rostrum with the zest of ‘the African development evangelist’, a new title some regional leaders lavishly conferred on him in the course of the week.
The AfDB President had paused to appreciate his team, Board of Governors and other participants for their commitment to the cause of African economic development. For a couple of minutes, he stole the hearts of many, regaling the audience with Johnny Nash’s ‘I Can See Clearly Now’. The participants could not help but stand in ovation for that genre of Adesina – a philosopher, inspirational speaker and a prophet rolled into one.
For Africans who converged on the ancient city of Accra, the “bad feelings” of the region being a cesspit of endless agony and helplessness had gone. But that was not because the sky was completely blue or will it be anytime soon – that will be wishful thinking.
The dark clouds could remain for many decades (in any case, every region is battling with economic dark clouds) but there was a rare hope that Africa had enormous innate resources it could explore to feed itself, power itself and industrialise itself.
But to borrow the words of Adesina, there is no market in the world where potential is traded. That means Africa must do something urgently to begin to add value and earn a dignified place in the global economy rather than merely brandishing its natural resources.
These are the central themes of the Adesina symbolism – that Africa stops going about with bowls on its hands, takes full responsibility for its destiny and creates an economy where everybody has a fair chance to succeed – since he took over the reins of the bank seven years ago. Also, it is an ideological pursuit that does not exclude the economic and geopolitical realities of the region as well as financing constraints. He often points at the challenges while building faith in the process of finding solutions to them.
The twin focus of the Accra meeting – ‘Achieving Climate Resilience and a Just Energy Transition for Africa’ – is symbolic of the pains of the region today. Nine of the top 10 most vulnerable countries to climate change are in Africa, a continent that contributes less than four per cent to global emissions. The United States’ per capita metric ton of emissions is 16 while that of Mali is about 0.1.
Climate change poses systemic risks to African economies, infrastructure investments, water and food systems, public health, agriculture and livelihoods, threatening to undermine its modest development gains and push the region into a higher extreme level of poverty. Already, about 300,000 African women and an equal number of children are said to have been lost yearly to harmful cooking practices.
Yet, the region receives the shorter end of the stick in terms of funding. A report says less than four per cent of global climate change research funding in the past three decades was channeled to the continent. Also, of every $5 spent on global climate adaptation, only one dollar flows to Africa, an imbalance President Nana Akufo-Addo of Ghana said must be addressed to give Africa a fair chance to adapt.
Africa suffers an estimated $7 to 15 billion per year in losses to climate change, and Adesina said these could rise to $40 billion per year by 2030. Besides, the United Nations Environment Programme has projected that between 75 million and 250 million African people would be affected by climate-induced water stress while financing COP26 compliance could potentially strand Africa’s natural resources including natural gas.
While Africa appears increasingly left out of the climate adaptation and mitigation equation, AfDB is not engaging in navel-gazing. The bank, in partnership with the Global Centre on Adaptation and former United Nations Secretary-General, Ban Ki-moon, is implementing the Africa Adaptation Acceleration Program (AAA-P), which aims to mobilise $25 billion in funding by 2025 to support African countries.
The share of AfDB’s climate finance dedicated to adaptation is 67 per cent, the highest among all multilateral development institutions globally. Also, the bank is supporting countries to insure themselves against extreme weather conditions, through its Africa Disaster Risk Insurance Facility. Already, the facility is reaching out to nine countries to pay for insurance premiums to protect themselves against climate change disasters.
Madagascar, for instance, gets a lifeline of $4 million for full insurance premium, helping it to get $ 12 million to compensate over 600,000 farmers when the cyclones hit the country.
The climate adaptation strategy of the institution aso aligns with its Feed Africa Strategy and Africa-wide agro-economy aspiration. Indeed, the Africa strategy of the Bank was launched six years ago to deliver climate-resilient agricultural technologies to millions of farmers. Already, over 76 million farmers have accessed improved agricultural technologies through the programme.
The flagship component, Technologies for African Agricultural Transformation (TAAT), is reported to have delivered climate-smart seeds to 12 million farmers in 27 countries in about two years. It delivered water-efficient maize to 5.6 million households in East Africa, a region hit by severe droughts three years ago making it extremely difficult to guarantee food supply. In Sudan, TAAT financed the cultivation of 65,000 metric tons of heat-tolerant wheat varieties. That helped the farmers to grow the varieties on 187,000 hectares, leading to a 50 per cent drop in Sudanese wheat importation.
The success story of TAAT in Ethiopia is becoming a practical case study on how Africa can emerge as a solution to the global food crisis. It supplied 45,000 metric tons of seeds of heat-tolerant wheat varieties to farmers in Ethiopia in 2018. From 5,000 hectares of the heat-tolerant wheat varieties cultivated in 2018, the farmers expanded to 167,000 hectares two years later and doubled down capacity to 650,000 hectares this year, making the country 100 per cent self-sufficient in production with a plan to start exporting the commodity next year.
And its plan is very clear: The Ethiopian Prime Minister, Abiy Ahmed, reportedly said it will cultivate two million hectares next year and export a minimum of 1.5 to two million metric tons to Kenya and Djibouti, which hitherto depended on war-torn Eastern Europe.
As Russia’s invasion of Ukraine exposes Africa to the worst food crisis in recent memory, the regional bank has also developed what it terms the Africa Emergency Food Production Plan with a target of 38 million metric tons of wheat, maize, rice and soybeans. The total value of the emergency food production plan is $12 billion.
While some balk at the feasibility of the plan and dismiss it as ambitious, Adesina said the bank needs only $1.5 billion (which has been approved by the board). The money will be leveraged at a factor of eight to deliver on grand plans to make Africa a food basket of the global community.
Interestingly, this is not the only leveraging plan AfDB has taken up to break the jinx of financial constraints. Africa Development Fund (ADF), a 50-year-old concessional lending institution of the Group that has provided over $45 billion in support of poor and vulnerable countries in the region since inception, has become the bastion of hope in the financially-starved continent. But with only $25 billion in equity, there is a limit to how much credit its balance sheet can accommodate.
AfDB would want to leverage the equity to $33 billion at the capital market but the bank management is statutorily constrained and it is seeking other stakeholders’ support to make it happen. Akufo-Addo said relevant articles must be amended as a matter of urgency to make AfDB more relevant and central to Africa’s developmental agenda.
But ADF equity is not the only resource AfDB is looking at leveraging. Some of the advanced economies and multilateral agencies are considering channeling Special Drawing Rights (SDRs) to African countries through the bank.
Last week, for instance, the UK Minister for Africa, Latin America and the Caribbean, Vicky Ford, said her country would be willing to channel the funds through the regional bank.
Adesina has said that SDRs, when leveraged, would reduce the exposure of African countries to debt burdens as they would serve as sources of cheap funds. Currently, over 40 per cent of African debts are said to be held by private sources, which are typically non-concessionary and, thus, expensive.
Ghana, which hosted the 2022 AGM, is symbolic of the infrastructure financing possibility of AfDB. In 2015, the Board of Directors of AfDB approved a $120-million corporate loan to support Ghana Airports Company Limited’s (GACL) capital investment programme. Kotoka International Airport is one of the outcomes of that funding. It has earned Accra West African aviation hub with The Airports Council International designating it ‘the Best Airport in Africa’ for three consecutive years (2019 to 2012). At its peak before the COVID-19 shutdown, it surpassed yearly passenger traffic of three million.
The Pokuase Interchange – a four-bridge facility in the heart of Accra – has become a tourist centre. The sustainability project, which is merely situated in Ghana but takes up traffic of people from different parts of the sub-region, is a model in West Africa and the second of its type in Africa. It was also funded by AfDB.
