NAIROBI — The economic repercussions of the COVID-19 pandemic are expected to put Africa into its first recession in 25 years and could push 49.2 million people on the continent into extreme poverty by next year.
During a press conference Thursday, Akinwumi Adesina, president of the African Development Bank, laid out the top four priority areas that African countries should focus on to help economies across the continent rebound.
Investing in infrastructure needs to remain at the top of the agenda, Adesina said. Each year, there is an infrastructure funding gap of between $68 billion and $108 billion across the continent. This remains a key impediment to Africa’s growth and is driving the continent into debt, he argued. More needs to be done to foster an environment in which the private sector can carry a heavier burden in infrastructure investments, with a need to create more public-private partnerships.
In particular, the COVID-19 crisis has highlighted the need to build up health care infrastructure across Africa to prepare for shocks, including future pandemics.
“I don't see the future of Africa’s youth in Europe ... or anywhere else. It must be in an Africa that is growing well, equitably, and able to create wealth and opportunities.”— Akinwumi Adesina, president, African Development Bank
Closing the energy gap
There is no development of any kind without electricity, Adesina said, adding that this energy needs to be renewable.
“We're not investing in coal. Coal is gone,” he said.
For example, AfDB has the $20 billion Desert to Power initiative in the Sahel region that is aimed at creating 10,000 megawatts of solar energy, which would make it the world’s largest solar power zone.
The African continent has committed to universal access to electricity by 2025.
The African Development Bank revised its economic outlook for the continent, saying that up to 50 million more Africans could enter extreme poverty by next year because of the COVID-19 pandemic.
There is a need to mobilize capital on the continent, according to Adesina. There are sovereign wealth and pension funds that invest in money market instruments outside of Africa. That money should be invested locally, he said.
“Even if you earn money, even if you have a good rate of return, then you're gonna pay people an annuity for the rest of their lives. And guess what? They are in places without water, without sanitation. … That is a miserable retirement,” Adesina said.
AfDB is working to mobilize institutional investors in Africa to invest in the continent and optimize capital coming from diaspora communities, he added.
Any investments, such as those made in infrastructure, must be done with the aim of creating sustainable jobs, Adesina said. This year, between 24.6 million and 30 million jobs are expected to be lost as a result of the pandemic.
“I don't see the future of Africa’s youth in Europe at all. I don't see it in the United States or anywhere else. It must be in an Africa that is growing well, equitably, and able to create wealth and opportunities for these young people,” he said.
Vince Chadwick contributed reporting from Brussels.