I have been asked to share with you my thoughts on Africa’s quest for development with special reference to the recent high 5s of the African Development Bank. The development Bank, under its current leadership, has identified five high priority areas that it believes Africa must address in order to reach its development potentials. Those high 5s include Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the Quality of Life for the People of Africa.
Any serious observer of Africa’s development challenges will readily agree that these are indeed critical areas that need urgent and sustained attention by Africa’s governments, development partners and the private sector. They speak to the challenges of infrastructure deficit; agricultural stagnation and food insecurity; lack of meaningful industrialization and value-added production; the poor integration of Africa’s economies, partly resulting from weak regional infrastructure and the legacy of colonial trade patterns; and Africa’s dismal ranking in the indices of human development, including life expectancy, infant and maternal mortality, poor sanitation, high levels of illiteracy and poor access to education and skills training.
The current situation
Despite enormous potentials for energy generation, including renewables, energy generation in Africa has been rather dismal. As the AfDB note, only about 40% of Africans have access to electricity, the lowest access rate in the world. On per capita basis Africans (outside of South Africa) consume 180 kWh of electricity. Compared to 13,000 kWh in the U.S. and 6,500 kWh in Europe, that is really dismal.
The inadequacy of power is emblematic of the broader infrastructure deficit in Africa, including transportation, health and educational infrastructure. This inadequacy has had a huge impact on Africa’s development as it discourages investment, raises the cost of doing business, worsens health conditions of citizens and impedes access to education, among other effects.
The AfDB has set a goal of universal access to electricity for the continent by 2015 and has mapped out clear principles and strategies for achieving that, including greater investment, improving policy environment, improving sector regulation, transforming the energy companies and encouraging regional projects to drive integration.
Feed Africa through agricultural transformation is the second high 5. Despite having 60% of the world’s unused arable land, a quarter of Africa’s population is under-nourished, making Africa the most food insecure in the world. This is notwithstanding that agriculture employs 60% of Africa’s workforce.
The Bank plans to transform Africa’s agriculture in order to unlock its potential and improve job creation to help diversify Africa’s economies. It plans to do this by developing an inclusive and competitive African agribusiness sector with the goal of helping to end poverty, hunger and malnutrition, turning African to a net exporter of food, and moving Africa to the top of export-oriented value chains where it has comparative advantage.
On industrialization and economic diversification the AfDB notes that Africa is at the bottom of the global values chain with Africa’s share of manufacturing at less than 2%. The continent continues to rely excessively on raw commodities export. Thus the share of manufactured goods in Africa’s imports is three quarters while the share of manufactured goods in its exports is less than one-fifth.
The Bank calls for a bold agenda of industrialization to be led by the private sector, with its support.
Integrate Africa is the Bank’s fourth high 5: Here the Bank notes that weak integration of African economies evidenced by the paltry intra-African trade. In a paper she published in 1993 Faezeh Faroutan noted that Sub-Saharan Africa’s GDP was equivalent to Belgium’s and wondered what it would look like if Belgium is divided into forty something countries, each with a separate and independent economy trying to relate with the rest of the world. That’s what, she pointed out, Africa looks like in its fragmentation into several tiny economies. Yet as the AfDB notes intra-African trade is the lowest in the world, roughly 15%. The comparable figure for the North American Free Trade Area was 54% and the European Union 70% and Asia 60%. Boosting African integration, it argues, will involve building regional infrastructure, boosting intra-African trade and investment, and facilitating the movement of people across borders. These will help Africa develop a truly regional market.
Improve the Quality of Life for the People of Africa is the fifth high priority area for Africa, according to the Bank. This is to be accomplished through the provision of access to social and economic opportunities. Goals include creating jobs, building critical skills, improving access to water and sanitation, and strengthening health systems. The Bank notes that despite the improved economic climate in Africa in the past decade, many African countries are still bedeviled by widespread poverty and inequality, poor health and education outcomes and inadequate access to sanitation and safe drinking water.
The AfDB’s choice of priority areas and Plan to assist in addressing them will surely make a huge positive difference. And, fortunately, Africa’s leaders also recognize these challenges and the urgent need to address them. They are making concerted efforts, including seeking out new development partners such as China to help with infrastructure improvement. New railway systems, roads, bridges, ports and gleaming new office buildings are springing up across Africa as a result. But the current efforts are not adequate. Indeed progress has been made in all five areas. Yet much more needs to be done.
These inadequacies are real. As a businessman I can tell you about my personal experience. A little more than decade ago, I founded the American University of Nigeria located in Yola, my hometown, in Nigeria’s North East, one of the poorest regions of the country. Before then I had created and been supporting a first-rate boarding school – kindergarten through high school – also in Yola.
Like other Africans who have achieved modest success, I had been engaged in different aspects of philanthropy. But education, I thought, would be my best gift to society. To some people trying to build a world-class university in Yola might seem irrational. To run the university we had to provide access roads, provide our own water though boreholes, build and run our own power plant, provide our own telephone and internet infrastructure, pay for a private security force, and so on.
You might wonder whether it wouldn’t be more cost effective, to just use that money to provide scholarship funds for students to study elsewhere, such as Nottingham. With the money now being used to run our AUN power plant, construct our buildings, and pay our security force and the like, a great many more students could be sent here to study.
But I wanted to help develop my country in deeper and more holistic ways. It would be counter-productive to facilitate the brain drain out of Africa. We need these bright young people in Africa. We need them to understand the problems in Africa. We need them to contribute towards Africa’s development. And we need them to be able to tell the stories of their accomplishments in the face of enormous odds.
But the cost is huge and it is what typically confronts the typical investors. The huge infrastructure gap means that as an investor you often have to provide your own electricity, your own water, and you even fix roads to your business locations. That discourages investors. Thus small businesses that would provide ancillary services to a major establishment are often absent. For instance, in the same town, Yola, where we have our school system, we established a printing press, built our own hotel to carter to those who visit, established a beverage plant to, among other things, manufacture still drinking water and fruit juices. We established petrol and diesel filling stations to help serve our businesses and the general public. We also established a radio and television station to help publicize what we do, in addition to providing distance learning. And we have a logistics company to help provide logistics for these various entities. Because we have businesses with healthy revenue streams, we are able to access financing with greater ease than many others can. Currently the AUN contributes nearly $400 million dollars annually to the Yola economy.
But while we have some capacity to treat some of the infrastructure gaps as important investment opportunities, many small businesses lack the resources to engage in the kind of ‘self-help’ that we have engaged in regarding infrastructure provisioning. Thus small businesses, the real engine of job creation and employment, are most affected by the infrastructure and other inadequacies.
It is cheaper and more socially valuable for the state to provide much of the needed infrastructure, including doing so in partnership with the private sector. Infrastructure provisioning and a supportive regulatory environment will encourage more private sector investment and employment generation.
What’s missing from the High 5s?
Let me say, however, that while security does not feature among the Bank’s top five priorities, it is a top priority for African countries. Security is a huge challenge and if not addressed may impede the implementation of the Bank’s plans, especially for fragile states. Africa’s public security challenges include terrorism, piracy, kidnappings, armed robbery, and banditry, herders and farmers’ clashes, and inter-ethnic and sectarian conflicts. And these are present to varying degrees in all of Africa’s sub-regions. It is understandable that the Bank would select areas that are easily bankable. It is also the case role of the private sector in ameliorating the major security threats facing Africa, especially with respect to security policy has not been clearly delineated. African states and development partners must deepen their cooperation in the area of security, including security sector reforms to instill democratic norms and respect for human rights.
I also believe that Education should get more attention than the Bank’s high 5s seem to allow. Education should indeed be one of the top priorities for Africa. While education should be the primary responsibility of governments, it also clear that Africa’s educational challenges, in the context of competing demands and available resources, are beyond the capacity of many African states. Thus the private sector should be encouraged to do more in providing high quality education under clear standards maintained by the governments. The AfDB and other development banks can identify some public and private educational initiatives for support through, for instance, improving educational infrastructure including libraries, ICT, laboratories and technical workshops, and support for transitioning to renewable energy such as solar and wind.
Let me also say that Africa must get its politics right in order to accelerate its development. This will include improvements in electoral systems, deepening of democracy and accountability, and reduction in corruption. Let’s not forget that these priorities have to be adopted by and implemented by governments, by the political leadership. Therefore, Africa needs mechanisms for producing leaders who privilege their countries and the continent over personal or sectional gains and interests.
Thus Africa’s civil society and Africa’s development partners have important roles in pressuring African governments on important political reforms to help provide the democratic spaces for policy dialogues and democratic interventions in Africa’s development.
I thank the organizers of this summit for inviting me to be part of this dialogue. Thank you for your attention.
. Being remarks by Atiku Abubakar, former Vice President of the Federal Republic of Nigeria, at the maiden Africa Summit of the University of Nottingham, University of Nottingham Great Hall, University Park, Nottingham, England on June 16, 2017.