Manifesto for 2017

Dear friends, I was keen to send you, today itself, my very best wishes for 2017. May this year be rich, full of promise and may all your projects be met with success.

This is a pivotal year for our continent, indeed, it will be marked by a change of leadership at the head of the African Union. Heads of African States and Governments will have the task of choosing a new President for the African Union commission during the 28th Summit at Addis Ababa in January. This summit follows on from Kigali where we count a number of success stories, especially the launch of the African passport, decisions taken on the financing of the African Union as well as the free-exchange continental zone. President Kagame has been designated on this occasion to lead reform at the African Union, reform that is indispensable if the African Union is to respond fully to the aspirations of Africans and execute Agenda 2063 in an efficient and poignant manner.

On this basis, I am very pleased that the exchanges among the different contenders have been democratic and transparent. This first televised debate has, in my opinion, reinforced even more the legitimacy of the African Union in the eyes of our citizens by allowing them to hear the perspectives of the different candidates and to form their own opinion. This flows in the spirit of good governance and it is one we can only be very pleased about.

Furthermore, I wish to offer my thanks and congratulations to Mrs Nkosazana Dlamini-Zuma for her leadership and her determination which have enabled a number of matters to evolve very positively. I am thinking, in particular, of the widening of the African Union with the reintegration of a great African country in the midst of Pan-African bodies. This is an event of great importance because, on one hand, Africa needs the input of countries like Morocco to support democratic transitions, promote Human Rights and, in particular, women’s rights on the continent. On the other hand, the input of the sharifian Kingdom will be indispensable to the realisation of the goals fixed in the context of the 2063 Agenda. Let us rejoice, therefore, in this restored unity and let us be confident that this reunion will bear numerous successes.

We must indeed maintain and keep improving on what we have started: I am thinking, in particular, of the Programme for Infrastructure Development in Africa (PIDA) which targets 16 cross-border projects. Today 3 of these projects are at an extremely advanced stage, the two hydroelectric projects in East and West Africa (Ruzizi III and the Sambagalou dam respectively) and also the Gas Pipeline project between Nigeria and Algeria. This is a very positive development and represents an important milestone in reaching NEPAD’s goals. This is, in fact, NEPAD’s very raison d’être: to orientate and render projects viable and define the rules which bring visibility to the investors. NEPAD is the ‘one-stop-shop’ of development.

I would like to remind us all that NEPAD is the first manifestation of the collective will of African countries to take their destiny into their own hands and to bring on development on the continent. Here is an initiative with incredible potential, the more reason to continue to drive and nurture this organisation and to ensure that we no longer allow ideas from without to be imposed upon us.

This is what I wish, therefore, for our continent for 2017 : increasingly ambitious goals for our common future, a future whose script belongs to us and one we will write by our values of unity and probity.

Fighting inequalities in Africa : the role of the State is crucial !

Today, we need to struggle against the biggest disease on our continent: inequality. Indeed, of the 10 most unequal countries in the world, 7 are in Africa. We cannot ignore that anymore: inequality leads to lower and less sustainable growth and thus less poverty reduction (Berg, Ostry and Zettelmeyer 2012). We definitely need to act on these barriers that prevent all people to benefit from the economic growth. As I heard in Côte d’Ivoire: “La croissance ne se mange pas!” (We can’t eat growth!). Let us change that shocking sentence!

The 2015 World Bank Report “Poverty in rising Africa” emphasized the fact that the share of the African population in extreme poverty did decline from 57% in 1990 to 43% in 2012. Nevertheless, the fact that Africa’s population continued to expand rapidly resulted in an increase by more than 100 million of people living in extreme poverty. That demographic expansion is indeed a cause, but we should not forget that inequality in Africa is the product of many forces.

First there are spatial inequalities (differences between urban and rural areas and across regions). They are reinforced by public infrastructures such as schools or hospitals which do not cover efficiently the territories: it can result in huge gaps within a country. Besides, the place where you were born directly affects your future. This is all the more true for people who were born in a rural area, to uneducated parents…and this is unacceptable.

Second, we need to act on concrete things such as corruption and illicit financial flows. Research by the Global Financial Integrity (GFI) revealed that these two scourges have cost African countries as much as $854bn between 1970 and 2008. It is twice the amount that Africa received as official development aid over the same period. Corruption costs to Africa in an economic but also in a social way: how can Africans trust their institutions if each day they can experiment corruption? This is absolutely horrific: such a plague kills Africa day after day !

Today, more than ever, we need to bring back the State inside the debate. I believe the main solution for overcoming inequalities relies on State institutions that operate in the general interest. It is the State which is (or has to be) effective in addressing risk, vulnerability, social exclusion, health and education. This is why we should not reduce public effort and strengthen good governance. It will definitely improve the accountability and capacity of the institutions. Thanks to the State we will be able to “redistribute development”, ensuring that all sectors of the population are socially and politically integrated, that roads and other infrastructure are extended to geographically remote areas and that economic policies emphasize activities that stimulate the creation of jobs. Let’s encourage the African states to take on their responsibilities !

Urbanization should not be a byword for chaos

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Back in 1972, Fela Kuti struck the exact right note when he described the already awful crawl of Lagos’s perpetual traffic jams in his epic “Go Slow” track. The song meaning has never been truer than today and could be even sung in every corner of Africa. Our continent is the world’s fastest urbanizing continent and it is not always a force for good. Nairobi is expanding at rates of more than 4% per year. Lagos, on its own, is the seventh largest economy in Africa. Urbanization is an essential element of a prosperous continent. The gathering of economic and human resources in one place is stimulating innovation, development, technology and industry in an unprecedented way in Africa. Our cities are opening up access to education, health, social services not readily available in rural areas.

We must, however, admit that our growing cities are not always the accessible, connected spaces of equally shared opportunities and benefits that we would have liked. To start with, our cities are unable to accommodate the influx of migrants subject to the pull of the city and the push of rural areas. Lagos alone is injected with 1200 people a day. This migration results in slum and squatter settlements, causing extra stress on the resources of the city. The increase in urban demand for food combined with the loss of agricultural land also puts pressure on a dwindling rural population to produce food. To top it all, those left behind in the rural areas are often the elderly, women and children.

Urbanization has not led to wide poverty reduction and is not the result of industrialization. That means that there is little investment in the infrastructure and governance that would make African cities liveable and productive. The lack of building safety, homeless children, refuse disposal, power deficits, rare formal jobs are just a few of a long list of problems we have yet to solve. Let alone connectivity. In Nairobi, a 5 hour commute is not unheard of. So far only South Africa and Addis Ababa have a light-rail system in place. Dirty second hand cars from Europe and Japan exacerbate the situation, causing air pollution.

 
Source: The Economist

Every historical leapfrog requires that we break through established patterns and invest in innovative approaches. Clearly, there are a number of infrastructural and policy frameworks we must work on. Alternative energy, solar panels, tidal turbines, water harvesting are vital. We will need innovative, safe, affordable housing made from low-cost but durable building materials. We will need financial institutions to help urban dwellers make their way up the property ladder and policies in place to secure property ownership of the citizens. Above all, we will need to provide training to our urban decision makers.

Empowering our people with information is another key to building the cities that we dream of. A five-hour commute to work in Nairobi is neither acceptable nor sustainable. Urbanization management needs to produce open data which will play a crucial role in creating effective solutions to ease commuter pain. The access to centralized transport data will allows users to plan the speediest and most cost-efficient journey to work. Solving the transport issue, in turn, enables many other services and products to succeed.

We have set off on an exciting promising journey and building resilience in African cities will require a holistic approach. It will involve the efforts of Governments, the private sector, NGOs which support the most vulnerable groups. Location management and the management of the interdependent dynamics between town and country are essential. To build resilient African cities, we will need to stay alert, receptive to the needs of our people, and evolve in a spirit of constant renewal and innovation. For this last bit we can at least relax and be inspired by the great Fela.

 

The Future of Africa: Our Youth

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By 2050, Africa will have reached a population of 2.5 billion inhabitants, representing a quarter of the world population. And more significantly, with an average age of 24 years, Africa will be the youngest continent representing the biggest workforce pool in the world. This will represent a huge demographic advantage as much as a challenge that we need to heed to and plan for from now. Within 15 years, 440 million young Africans will seek to enter the job market and under current provisions, only 10% of the young population will be able to find work in the formal economy before the age of 30.

Low levels of education and training, the increasing gap between the rich and the poor, threats to peace and stability are valid preoccupations to our youth but the economic opportunities remain their biggest aspiration and challenge. We are already aware of the trend in parts of Africa whereby those youth who are left behind in rural areas with little prospect of adequate employment are lured by the false promises of clandestine emigration to Europe and terrorism. We cannot afford to lose more of our youth and we must also acknowledge in their acts of desperation a failure of national systems. It is the responsibility of governments to rise to the challenge.

Where do we start? The agricultural sector remains the main employer in Africa (60-70%) but the two main hurdles are the lack of infrastructure and modernization. Investment and renewed effort in a spirit of regional integration will be transformational. This is already starting to happen in the field of Education and Entrepreneurship.

The African Leadership Academy (ALA), tailor-made for the future Africa, on a model that taps into the best that the world can offer while catering to African specificities, needs and ambitions, heralds hope. The ALA aims to create 3 million African leaders through a pan-African suite of 20 universities over a period of 50 years. The first university was open in Mauritius in 2015 and a second is on its way in Rwanda. The emphasis is on developing the entrepreneurship spirit and skills of the students. Social entrepreneurship is not to be neglected, especially with the rising consciousness of the collective impact of entrepreneurship.

As Africa rises to its destiny, we are seeing in our youth a drive to build at home in their immediate and wider communities. There is a spirit of political commitment and innovation in their determination to push through actions which impact positively onto people’s immediate lives. We should provide our young entrepreneurs with a supportive ecosystem that allows their work to be sustainable by connecting them with Impact Investors from within and without Africa, by providing capacity-building, advocacy, and providing them with access to new technologies.

We cannot miss this boat as a continent. Political leadership at country level and the political will to create the right conditions for our young Africans will be all determining.  Planning political succession in a spirit of renewal and evolution, grooming our youth for decision-making roles and demonstrating that there is a place for them in the political arena are further positive signs we will be sending to anchor their energy and creativity here on the continent.

Entrepreneurship in Africa is not a magic recipe !

Today, Africa is showing more than ever that it is a continent of growth and opportunity. However, this should not hide the many challenges the continent is coping with: job creation is one of them, and not the least. This is why entrepreneurship is central to Africa’s future prosperity: the entrepreneur is supposed to identify business opportunities and to bring together the factors of production (such as labour and capital) to create the goods or services and to run the company profitably.

This is why entrepreneurs are really crucial in the process of socio-economic development. Long term investments that create a lasting benefit for communities are critical as they bring vitality, new opportunities, business-oriented problem solving, all of which can help Africa deal with some of its development problems. I truly believe that huge opportunities in the coming decade will come from Africans who start businesses, generate jobs and wealth, and capture growth opportunities.

That state of fact should not hide the reality of entrepreneurship in Africa: this is nothing new. Across the continent, necessity is the mother of invention: it has been the case for a long time as traditional circuits always had difficulties to absorb the unemployed. Reusing and recombining is a way of life and, in many cases, the lack of infrastructure gives these inventive young people a “clean slate” for new solutions, that they have to find by themselves. This is why Africa’s entrepreneurs are creating almost every day cutting-edge products and services, enabling them to leap forward in such fields as mobile and information technology, and to develop innovations in agriculture, transportation, healthcare and other vital fields. We must definitely encourage that creativity which is a fantastic thing for our continent, as it is indeed extremely promising.

However, I should insist on the part governments and public institutions need to play : today, entrepreneurs continue to face significant challenges that impede their efforts, including a lack of access to funding, support services, skills training and infrastructure, as well as administrative barriers. This is the first thing and governments and institutions have to engage themselves to find solutions. But what is also important is the fact that no one should consider entrepreneurship as a magic recipe for Africa’s development. It is a part of it but it will absolutely not replace public investment in education, research and infrastructure. It would be a lie and a mistake to assert that. If we obviously need to help entrepreneurs to make their business grow (as they are creating growth, wealth, and jobs), we should not underestimate the important role of public sector. However, so as to make that role efficient and proactive, the notion of good governance must be applied everywhere, at every level. I firlmy believe that it is the only way we can make it.

Thus, Africa’s development must be based on a combination of all interest, either being private or public. Neither of these two sectors can succeed properly without the other, and it is a condition to Africa’s sustainable growth.

Trading up : African Integration

The first Africa Trade Week opened two days ago in Addis Ababa, urging us to come up with solutions to unanswered questions about the Continental Free Trade Area (CFTA). That initiative aims to bring together 54 African countries with a combined population of more than one billion people and a combined gross domestic product of more than U.S. $3.4 trillion. The objective is to create a single continental market for goods and services, free movement of business persons and investments and expand intra-African trade, among other things. The CFTA is also expected to enhance competitiveness at the industry and enterprise levels on the continent.

It is ambitious but necessary : today, “only 14% of African countries’ exports go to other African countries; in the European Union, by contrast, the figure is 62%”. Thus we can see that trade integration is an important component if we want to develop and integrate Africa. It is an issue that I am quite passionate about as I am certain that it might change the face of our continent.

I encourage you reading that excellent article from the Economist here that synthesizes issues tackled by the Trade Week. And last but not least, I wish you a great day.

Africa’s new partnerships allowed it to achieve true independence. We must now go a step further.

Each year, Africa is gathering in New York on the occasion of the Africa Week. Each year, the NEPAD presents its various achievements for the past 12 months to its numerous partners from all over the world. It is then timely that this year Africa Week will celebrate new partnerships. One inevitably thinks of the new partners Africa has found in what is called the South — even if most of these countries don’t own any square mile of land in the Southern hemisphere.

To be fair, partnerships with countries outside the West have existed for a very long time. But it is a fact that in the modern period, let’s say the 20th century, the colonial era has prevented any other nation’s influence or relationship to Africa. We Africans had to wait for the decolonization to observe a real change in our relationship to the world.

Some countries were quick at this time to affirm their friendship. Among them, China was one of the newer players. The newly found interest in Africa translated in what has been called “stadium diplomacy”, mainly designed at gaining diplomatic support for its recognition at the UN. I don’t think it unfair to say it did not translate into a truly mutually beneficial relationship.

Sadly, at the time, Africa was little more than a strategic playground for foreign powers absorbed in the cold war. Non-aligned countries found it hard promoting a third way. This was then extremely good news for Africa that this whole system finally fell apart in the early 90’s. But Africa as a continent was not close to achieve its real independence.

This is because one needs to diversify their commercial partners and talk in one voice to gain true political independence. The creation of the African Union in 2001 allowed Africa to talk in one voice and find a more solid place in the concert of nations. At the same period it embarked on a path to prosperity, even if tortuous at times. Then Chinese interest in Africa translated in much more useful infrastructure thanks to a very palatable $200 billion bilateral trade per year.

New partners include India, with whom Africa trades at an all time high of $72 billion, Brazil, the Gulf countries, Turkey… In other words, we managed to build business and political relationships on an equal footing with countries from all over the world. Older partners such as Europe, the United-States or Japan have adjusted to this new context. Foreign direct investment and corporate relationships today dwarf aid channels. I believe it is a good sign of Africa’s credibility on the world stage.

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These new partnerships have also had the expected and desirable side effect of allowing the savviest African countries to foster competition and extract better deals for its resources as well as choosing its partners in, say, the building of infrastructures. Today, Brazilian and French construction companies compete for mega projects. This can only benefit Africa and its people.

What is next for Africa in this multi polar world? First, we need to ensure we talk in one voice to other giant countries. Don’t forget that India and China are each as populous as Africa. Brazil is 200 million strong, more than any African country on its own. Hence the necessity for the continent to function more and more as one entity, at least at the economic level, for instance by offering outside powers access to a single market with unified norms, or by talking in one voice to its bigger partners.

One other huge topic that cannot be overlooked is how this situation will help to foster a true African entrepreneurial spirit. It is a good thing that foreign investment is pouring into Africa and that the risk perception is improving. It would be better still if a wave of African champions could emerge from this economic trend and that these companies could benefit from the investment needs of the continent. For this the states must step in with better education, better rules for doing business, better infrastructure. This requires a change of mindset.

Because for all the much-hyped economic growth there has been in Africa during the past 20 years, our continent is still home to 400 million people living below the poverty line. And its share in the global trade is no more than 3%. Globalization is not a choice; it is a force that we have to control in the best of our ability. The world is going through turbulent times and the next ten years are going to decide who benefits from the next ascending winds from the globalization. If Africa is to be among the winners, it must learn from its partners and cultivate its own industrialization by taking advantage of its regional markets.

Toward reinventing our relationship with Asia

Not very long ago, trade between China and Africa would keep surging to new high records. The situation has now changed. A slump in commodity and oil prices is taking its toll on Africa’s export-reliant economies, prompting fears of a new and devastating debt crisis. Chinese trade and investment in Africa are also slowing as the People’s Republic of China undergoes a deep economic transformation from being a manufacturing-led economy to one driven by services and consumption.

For African countries, this leads to numerous concerns: for those who raised US-dollar denominated debt in the past years, it might have direct consequences on their fiscal health due to substantial increase of the reimbursements in dollars. Another issue is about the potential drying up of trade flows from China to Africa. As an example, China is financing more projects in Africa than the World Bank : between 2001 and 2010, China Exim Bank loaned an estimated $67.2 billion to Africa when it was $55 billion from the World Bank on the same period. If these Chinese levels were to drop down, it might become worrying.

While none of this sounds encouraging, it might actually be a very important next step in the China-Africa relationship where better, smarter policies emerge from these adversities. Rebalancing the Chinese model towards more consumption also means more imports in the long run from other emerging countries. Already, some Chinese companies are starting to shift production to Africa, as it is the case in Ethiopia. Africa might become one day the workshop of the world.

Besides, it could help to rebalance the relationships of the continent with other regions of Asia. For instance, there is a growing interest among Southeast Asian companies to explore opportunities in Africa. That investment has two main objectives : to develop new sources for an increasing demand for natural resources (crude oil and palm oil); and to find new markets for their products (mainly industrial manufactures). Southeast Asian countries’ rapprochement with Africa has a strong potential to underpin the continent’s development through less asymmetric bilateral links in comparison with those maintained with Western European countries, the United States, and China.

It is the same thing for Japan : last August, Japanese Prime Minister Shinzo Abe told African leaders that his country will commit $30 billion in public and private support for infrastructure development, education and healthcare expansion in the continent. A tranche of Japan’s new package will go towards various power projects to increase production capacity by 2,200 megawatts across the continent. Money will also be spent on training 20,000 mathematics and science teachers throughout Africa, as well as 20,000 experts on how to handle infectious diseases.

All these facts show us one thing : inspite of difficult circumstances, Africa still generates interest. And what makes it interesting is that it comes from various parts of the world. This is an opportunity of diversification and this is a great thing for Africa’s development !

African debt should be put to good use !

Today, I would like to write about the debt challenge facing Africa: as the region copes with its worst economic slump in more than a decade, leveraging funds becomes a real issue.

Indeed, during the commodities boom, Africa was home to many of the world’s fast growing economies. With the slump in commodity prices and the slowdown in China, Africa should be thinking on real and long-term solutions. Many nations are struggling with dwindling revenues, rising debt and widening budget deficits: Zambia, Ghana and Mozambique were among those African states that took advantage of low interest rates and high commodity prices to issue billions of dollars of debt. In September, Ghana went ahead to issue the fourth Eurobond of its history: West Africa’s second-largest economy raised $750 million at a yield of 9.25 percent in an auction that was more than five times oversubscribed. Ghanean authorities have presented it as a success, and it is obviously one, as the yield is more favourable than in its last sale.

However, this should not make forget that 9.25 percent is still really high and thus risky. This is why debt should be a solution if and only if it is used on long-term development projects. African Head of States have a moral duty of thinking about the future: the NEPAD Agency is here to help them by presenting them with bankable projects that actually help regional integration and transnational development. Let’s take an example. The Abidjan-Lagos road that goes through Ghana. This road is absolutely crucial for the Africa we want. Debt should be put to good use, for instance to support long-term projects such as infrastructures, education, or else. Otherwise, it can only extend to a disastrous vicious circle of loans, debts and new loans.

Moreover, the potential of local currency debt markets should not be ignored. Along with Akinwumi Adesina, I think that African states need to expand the tax base and improve the efficiency of tax administration: this is the best way to boost public finances. Actually it should even be the beginning of each government’s funding efforts. This is why I couldn’t agree more with Adesina when he says, “there’s huge amounts of capital available more locally that we must tap for Africa’s development”. Domestic resource mobilisation – tax collection – needs to be maximised, particularly in countries with high budget deficits. Unless domestic savings rates are boosted, Africa will remain substantially dependent on international capital to finance infrastructure and current account deficits.

This will be my conclusion: besides sovereign financing needs, African companies also need to be able to leverage funds more easily than what happens todays. When a company needs financing, it takes too much time until a final decision can be made, due to the process. It is far too complex and it is a brake on investment. Today, our continent needs to find ways to provide capital and debt to companies. We must welcome innovative financing tools from banks. This is how we’ll build Africa’s future: not only with the public sector and their willingness to invest in the future, but also with the help of private companies that are the true engine of the development.

Zero Hunger in Africa by 2025 possible !

Today in Africa, one in five people is hungry. This is why the NEPAD Agency and the Pardee Center for International Futures launched last week a report that helps to put in perspective the magnitude of the task ‘to zero hunger by 2025,’ while highlighting the major levers in policies, investments, technologies as well as human and institutional capacities necessary to sustain desired levels of supply and demand-access to food.

Indeed, African countries should increase cultivated land, crop yields and livestock head size if hunger is to be eliminated on the continent in nine years. I believe that success in Africa will therefore be through regional integration, be it in ending hunger, agriculture or infrastructure.

Besides, although the goal of eliminating hunger by 2025 might seem really ambitious, it is not impossible. We need to do whatever it takes to ensure the success of this report.

Please feel free to read more about it here.