The African Development Bank President, Akinwunmi Adesina has outlined several recommendations for the international community to support the economic growth of African nations.
He emphasized the importance of increasing investments in infrastructure, promoting trade partnerships, and enhancing access to financing.
Adesina also highlighted the need for technology transfer and capacity building to empower local industries and improve productivity.
His insights were shared in a video posted on his X page on Sunday.
At the UN General Assembly, Adesina stressed that creating a wealthier Africa demands more than just reforming the global financial architecture.
He called for the establishment of new institutional support systems to foster a more solid and resilient economic future for the continent.
He emphasised need for innovative strategies and partnerships to drive sustainable growth in Africa.
Adesina argued that these institutional systems are foundational for Africa’s growth.
He highlighted the need for stakeholders to address biases in the existing global credit rating systems, which result in higher capital access costs for African nations compared to other regions.
This reform is crucial for enhancing financial accessibility and fostering economic development across the continent.
“The establishment of the Africa Credit Rating Agency, called for by the African Union, is critical to achieving this,” he added.
Adesina emphasized that the global financial system fails to shield Africa from the impacts of global financial shocks.
He advocated for the establishment of an African financial stability mechanism to serve as a safety net, ensuring that the continent is better equipped to withstand such crises and promote economic resilience.
“Africa is the only region of the world without a financial safety net,” he said.
Adesina urged stakeholders to confront the risks associated with increasing private-sector financing in Africa.
He noted that the African Development Bank is consolidating its guarantee instruments into an African insurance and guarantee agency to scale up risk mitigation and attract more investments.
Additionally, he called on the UN Assembly to address the growing insecurity in Africa, highlighting how rising security expenditures are diverting essential funds away from development initiatives.
He said actions are underway to establish security index investment bonds that will be used to tackle the reconstruction of areas damaged by conflicts in Africa, seizing the moment to call for further support. Lastly, he submitted it is time to properly value the green assets of Africa and include them in the Gross Domestic Product of Africa.
“Africa must move from being green and cash poor to being green rich through proper valuation of its natural capital in its GDP.
“Africa’s vast forests, biodiversity, and carbon sinks are the key to saving the world,” he said.
The AfDB’s advocacy comes in response to the pressing financial challenges facing Africa.
On June 16, 2024, the bank launched the African Debt Managers Initiative Network (ADMIN) to develop home-grown solutions to the continent’s debt issues. Currently, 13 African countries are at high risk of debt distress, while six are already in distress.
The AfDB emphasized the need for this initiative to tackle the growing debt problem effectively.
