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Speech Delivered by Dr. Akinwumi A. Adesina President, African Development Bank Group - President’s Diplomatic Luncheon for Ambassadors - 29 February 2024
Dean of the Diplomatic Corps,
Your Excellencies, Ambassadors and Heads of diplomatic missions,
Honorable Ministers,
Executive Directors of the African Development Bank,
Senior Management, Advisors to Executive Directors, and Staff of the African Development Bank,
Ladies and gentlemen of the media,
Ladies and gentlemen,
It is a great pleasure and honor for me, as President of the African Development Bank Group, to host Your Excellencies, Ambassadors and Heads of diplomatic missions and representatives of international organizations, to this Annual Luncheon event.
It has been such a long time that we had this luncheon. It used to be on the regular calendar of the African Development Bank Group, as it gives me the opportunity as President of the Bank to present to you, as representatives of our shareholders and partners, the work and progress of the Bank, and how we can collectively work together to improve strategic partnerships.
But the world all changed in 2020, with the Covid-19 pandemic, which precluded our being able to gather physically. Then working models changed as institutions moved to working in hybrid mode. Thankfully, with the success of the global efforts to tackle the pandemic, things have largely returned to normal.
So, I very much appreciate this opportunity for us to be together again.
And of course, we are getting together just after Cote d’Ivoire, our host country, won the African Cup of Nations. Yes, they played with my country Nigeria in the final, and I was there together with my dear big brother, H.E. President Ouattara, as we watched the game with other dignitaries.
I wish to congratulate President Ouattara and all the people of Cote d’Ivoire for their success and for an excellently organized event, which is commonly agreed to be the best African Cup Finals ever. (Applause)
I also wish to congratulate CAF and all the governments in Africa for a great job done by their respective teams.
One lesson from the win of Cote d’Ivoire in the tournament is resilience. They faced many hurdles and challenges, but they surmounted them.
The same applies to the global environment and Africa.
As we gather today, the world is facing several challenges, especially from global climate change, geopolitical tensions, rising inflation, food insecurity, all layered on rising fiscal challenges and debt of countries. More than ever, we must build resilience.
I am pleased to note that African countries are showing resilience in the face of all these challenges. Last week at the African Union Summit, the African Development Bank launched its African Macroeconomic Performance and Outlook Report for 2024.
Despite the challenging global and regional economic environment, 15 African countries have posted output expansions of more than 5%. The report shows that Africa is projected to remain the fastest growing region in the world, after Asia, exceeding the global average of 3% in 2023. It is forecasted that Africa will account for 11 out of the 20 fastest growing economies in the world in 2024.
At the African Development Bank, all our work is to support the countries to build resilience, whether it be to external economic shocks, climate shocks, or changes in global interest rates that have continued to put pressure on debt service capacities and depreciation of currencies driving up inflation.
As an institution, the African Development Bank is resilient. Since we last met physically as one group, I was re-elected as President of the African Development Bank Group by 100% of all the shareholders, African and non-African—a first since the establishment of the Bank in 1964.
The African Development Bank Group and I, as its president, enjoy and are enormously grateful for the extraordinary support from you, our shareholders.
The shareholders of the Bank showed their extraordinary support in all aspects of our financing, work and operations.
The shareholders collectively agreed, right here in Abidjan, in November, 2019, just few months before Covid set in in 2020, to an historic increase of the capital of the African Development Bank by 150%, moving it from $93 billion to $208 billion—the largest capital increase in the history of the Bank since 1964.
I am also pleased to inform you that the 16th replenishment of the African Development Fund—the concessionary financing window of the African Development Bank Group—which supports 37 low-income countries, was a great success. The African Development Fund donor countries provided a record $8.9 billion for the 16th replenishment in December of 2022, the largest ever replenishment in the history of the Fund since its establishment in 1973.
We saw the shareholders’ extraordinary support again in action, when the Governors of the African Development Bank Group approved for the African Development Fund to use its equity to go to the capital markets to raise more financing. This landmark decision, taken by our Governors during the 2023 Annual Meetings held in Sharm El Sheikh, Egypt, will allow the African Development Fund to raise an additional $27 billion to scale up support for the economic development of the 37 low-income countries.
I wish to take this opportunity to thank H.E. President El Sisi and the government of the Arab Republic of Egypt for hosting us with incredible hospitality at the 2023 Annual Meetings.
I would like to use this occasion to give a special thanks to all the Governors and Executive Directors of the African Development Bank for their incredible support. Our Executive Directors provide great oversight, with support from their Advisors to Management to execute the work and programs of the Bank.
Last year the Boards of Directors approved 159 operations, worth $10 billion for countries, the second-highest level of financing in the Bank’s history.
You can see the result of this right here in Abidjan with the construction of the 4th bridge, which was financed by the African Development Bank. Indeed, our support to our host country Cote d’Ivoire has increased by more than 5 folds, since 2015 when I was elected President, rising from $460 million in 2015 to $3.1 billion in 2023.
Across Africa, the impact of our High5s is being felt. In the past 7 years, the operations of the Bank have impacted directly on the lives of 400 million people.
In that period, the African Development Bank Group has provided financing of over $44 billion in support of infrastructure, making the Bank the largest multilateral financier of infrastructure in Africa.
I was delighted to be in The Gambia last month to see the impressive and historic Senegambia bridge which now links Gambia and Senegal, rapidly cutting travel times and expanding trade and the movement of people.
The Bank will be supporting with $500 million the development of the Lobito Corridor that will link Angola, Zambia and the Democratic Republic of Congo, in close partnership with the United States Development Finance Corporation and the Africa Finance Corporation.
Together, in partnership with Africa50, the African Development Bank is supporting the construction of the road and rail project to link the Republic of Congo and the Democratic Republic of Congo.
The Bank provided two months ago $696 million in partial credit guarantee to unlock $3.9 billion for the construction of the Central Corridor standard gauge railway to connect Tanzania, Burundi and the Democratic Republic of Congo.
Investing in these and other critical infrastructure is vital to promoting regional integration, connectivity and intra-regional trade, especially with the African Continental Free Trade Area.
The Russian war in Ukraine posed significant risks to food insecurity in Africa, due to the continent’s high dependence on imports of wheat and maize from both countries.
The African Development Bank, however, moved swiftly, and its Boards of Directors approved $1.5 billion for an Africa Emergency Food Production Facility, to support 20 million farmers to produce 38 million metric tons of food, worth $12 billion.
To move beyond the emergency operation and assure long-term food security, the African Development Bank worked with the Government of Senegal and the African Union to convene the Feed Africa Summit, held in Dakar in January 2023. The Summit, which brought together 34 African Heads of State and Government, the President of Ireland, Ministers and leaders from around the world, mapped out very clear food and agriculture delivery compacts for African countries to achieve food security within five years.
Thanks to the effectiveness of the global partnerships used by the African Development Bank, the Summit was able to raise $72 billion towards the implementation of the outcomes. This is unprecedented in Africa.
I am delighted with and thank all our shareholder countries and partners from around the world.
We have every reason to be confident that Africa can feed itself.
Through one of our initiatives, Technologies for African Agricultural Transformation (TAAT), the Bank has supported the access of 12 million farmers to climate resilient agricultural technologies, including wheat, rice and maize.
Our support to Ethiopia with heat-tolerant wheat varieties has allowed the country to become self-sufficient in wheat in less than four years. Thanks to the support, Ethiopia is now a net exporter of wheat.
Africa can feed itself.
This came to focus again when I had the honor of receiving US Secretary of State, Anthony Blinken in January when he visited the African Development Bank-supported work on rice with Africa Rice. So impressed was he with the work of the Bank and our support to food security that he said, “The African Development Bank is making the necessary investments in sustainable production in smart effective way. I applaud the Bank and your leadership for the powerful and inspiring impact of your initiatives. You are setting the example for others about how a bank should be run.”
We are tackling head on the challenge of electricity in Africa.
The Bank is especially leading on the ramping up of renewable energy, and currently devotes 87% of its financing in energy for renewables. Our biggest flagship is the Desert to Power initiative, a $20 billion program to develop 10,000 megawatts of solar across eleven countries of the Sahel zone. When completed it will provide access to electricity for 250 million people; and become the largest solar zone in the world.
To tackle climate change, we are playing our leadership role to support climate resilience for the continent. I am equally delighted that the donors to the African Development Fund took another bold decision: they opened a Climate Action Window with $429 million to support these most vulnerable countries to build climate resilience in the face of climate change.
The African Development Fund is the first multilateral development fund to open a climate action window globally—another show of leadership by the African Development Bank Group.
I wish to particularly thank the Governments of UK, Germany, Switzerland and Netherlands for their support towards the opening of this critical climate window for the ADF countries. Our goal is to expand the size of this fund to $4–13 billion.
The African Development Bank Group and the Global Center on Adaptation are mobilizing $25 billion to implement the African Adaptation Acceleration Program (AAA-P), which is the largest climate adaptation program in the world.
One of the challenges facing many countries on the continent is insecurity. Unfortunately, over 85% of Africans either live in or are surrounded by countries with insecurity. In several countries, military expenditures far exceed expenditures on health, education and other social sectors.
This is why the African Development Bank is working on a new instrument—the Security Indexed Investment Bonds. They will be used to tackle the intersection between peace, security and development, through the rebuilding of damaged infrastructure in areas of insecurity, rebuilding social infrastructure, and building institutional capacities to manage drivers of insecurity.
The Security Indexed Investment Bonds initiative was approved for development by the African Union Heads of State and Government, and we are working with the African Union Commission to design and implement this important work.
Youth unemployment and poverty are among the factors that drive insecurity as well as migration.
The African Development Bank is tackling this issue through its Jobs for Youth in Africa strategy.
I do not believe that the future of Africa’s youth lies in Europe, USA, Latin America, Asia or anywhere else in the world. Their future must lie in an Africa that is growing well, with inclusive growth, and able to deliver quality jobs and livelihoods for its youth. Africa’s demographic asset, with 477 million youths under the age of 35, should not become a global externality.
The Bank’s Jobs for Youth in Africa strategy set out a goal to create 25 million jobs and provide skills for 50 million young people. I am delighted that the Independent Development Evaluation Department of the Bank found that the work of the Bank has helped to create 12 million jobs already, 3 million directly and 9 million indirectly.
The Bank is implementing several initiatives to expand economic opportunities and skills enhancement for the youths, including Technical and Vocational Training, Computer Coding for Employment, as well as Enable Youth program in agriculture, to develop entrepreneurs in food and agriculture.
Our Enable Youth program, with financing of $490 million, has already developed 41,000 youth entrepreneurs in agriculture and created over 63,000 direct jobs. Our coding for employment program now operates in four countries and is establishing 130 coding centers of excellence across the continent to expand digital skills for the youth.
Our Affirmative Finance Action for Women (AFAWA), with the goal of mobilizing $5 billion for women businesses, is showing huge success. By the end of last year $1.5 billion in loans had been approved to women entrepreneurs.
One of the key areas of our work is to improve the lives and livelihoods of the people of Africa. To address the health infrastructure deficits on the continent, the Boards of Directors of the African Development Bank approved the Bank’s strategy for quality health infrastructure. The Bank will provide $3 billion to finance health infrastructure over the next ten years.
To ensure that Africa can manufacture its own medicines and vaccines, the Boards of Directors approved our Pharmaceutical Action plan. We will provide $3 billion in support of revamping Africa’s pharmaceutical industry. Towards this goal, the African Development Bank established the Africa Pharmaceutical Technology Foundation last year, based in Kigali. The Foundation will help to build pharmaceutical research and development ecosystem, pharmaceutical manufacturing capacity, negotiate intellectual property rights on access to technologies, innovations and manufacturing processes.
I am delighted to inform you that just few days ago, the Africa Pharmaceutical Technology Foundation was profiled by Devex as one of the 24 development organizations to watch in 2024.
We give great value for money to our shareholders.
With calls for the reform of the global financial institutions, the African Development Bank has been at the forefront of financial innovations. Just few weeks ago the Bank launched the first-ever hybrid capital on the capital market, the first multilateral development bank to do so globally. The $750 million hybrid capital issuance, oversubscribed at $6 billion, is a landmark globally.
The African Development Bank has also been at the forefront globally on how to better optimize the use of the Special Drawing Rights (SDRs). The framework that we developed together with the Inter-American Development Bank for the rechannelling of Special Drawing Rights from SDR-rich countries to the African Development Bank is a global game changer. It received resounding global support at the COP 28.
SDR-rechanneling to the African Development Bank will be leveraged by 3–4 times. Thus, a $5 billion allocation to the African Development Bank will automatically deliver up to $20 billion of new financing for African countries. We are working closely with the IMF on this, and we hope that together we can make this work for Africa, and the rest of the world.
The African Development Bank has continued to work closely with the private sector to mobilize greater financing for Africa. The Africa Investment Forum (AIF) continues to deliver impressive results.
The 2023 Africa Investment Forum held in Marrakesh, Morocco, mobilized investment interest of over $34 billion. I am delighted that since the Bank started the Africa Investment Forum four years ago, it has helped to mobilize $180 billion of investment interest to Africa.
As shareholders, you can be very proud of the African Development Bank.
The African Development Bank was ranked as the best multilateral development bank in the world in 2022 by Global Finance.
The African Development Bank was also ranked as the most transparent financial institution in the world by Publish What You Fund.
There’s lots to do, lots to still improve on, and lots to celebrate.
This year marks a significant milestone for the African Development Bank, as we celebrate 60-year anniversary of our establishment. We will have the opportunity of beginning that celebration from the Bank’s Annual Meetings to be held in Nairobi, Kenya in May of 2024.
60 years of partnerships.
60 years of transforming Africa.
60 years of making a difference for Africa.
Together, let’s keep working for Africa’s bright future.
With your support, the African Development Bank Group, will continue to inspire hope, innovate, lead and use its position as Africa’s premier financial institution to accelerate Africa’s development.
I know we can count on you all.
Thank you all very much.
