A view from Gambia

Earlier this month I had the privilege to address a Ministerial Cabinet retreat of The Gambia. Some of you might recall that The Gambia was embroiled in a serious political impass between December 2016 and January 2017, and as you may remember the then president conceded defeat then changed his mind. Such an action if left unchecked could have culminated into a massive civil and political unrest in The Gambia with a potential spill-over into the neighbouring countries of Senegal and Guinea Bissau.

Certainly some level of divine intervention together with a well-coordinated approach by ECOWAS and the United Nations- potential disastrous ramifications of the former president’s actions was totally averted, and now The Gambia has set out an agenda to unify its people and re-ignite the economy and so on.

My address to President Adam Barrow of The Gambia and his cabinet, highlighted the principles of governance amongst others. But more specifically, I underscored the need for the president and his team of cabinet ministers to serve the people of The Gambia by providing and guaranteeing their security, protecting their welfare, meeting their basic needs, increasing their wellbeing and protecting the weak and vulnerable. Governments must do those things that give the people confidence, contentment, happiness and hope. My advice to them was that they must respond to the needs of their people for education and skills development, health, employment and social protection.

A responsible government must create the space to allow people to participate freely in the processes of governance. I emphasised to President Barrow that he and his team must build and maintain strong institutions of democracy and ensure that they strictly observe the separation of powers between the executive, the legislature and the judiciary. Furthermore, I sited the Singapore experience and also noted the significant strides that Rwanda is undertaking with regards to economic transformation and attracting private investments.

I concluded my address to the Gambian Cabinet by encouraging them to have a regional approach to doing things and I asked them to reflect deeply on where does The Gambia want to fit in Africa’s transformative agenda. And how quickly is the political leadership ready to establish a road map to achieving such a vision.

 

The future of investment in Africa

The Annual AVCA Conference, held between the 3rd and the 7th of April in Abidjan, provided the private equity and venture capital industry with an important platform to discuss the most pertinent investment opportunities and issues in Africa. For the continents’ biggest investors, investment into infrastructure remained a priority. This makes senses as Africa remains underserved in this area. The UN’s Economic Commission for Africa reports that although governments are keen to build new infrastructure, they still lack the ability to develop proposals needed to attract institutional investors.

The report stipulates that of the total $2 trillion raised globally for infrastructure projects, only $59 billion was received in Africa. This sum represents just 3%. In the promotion of investment into projects and specific sectors, many States still suffer from the poor quality of their ‘signature’ due to the lack of substantial financial resources.

There is some reason to remain positive, investments went well in 2016. Private equity players invested $3.8 billion in 145 deals across Africa last year with a range of businesses from agriculture and energy to healthcare and financial sectors. But over and above gaining support from foreign and multilateral partners, African countries will also need to develop domestic financial capital market instruments for infrastructure. It has become imperative for Africa to bridge the gap between individuals with very high liquidity on one hand, and a private sector and States that struggle to finance themselves, on the other. A doubling of domestic saving available on the continent would bring Africa into line with other emerging regions and would provide at least 250 billion dollars (about 180 billion euros).

Is it not time then to move away from relying on taxes and uneven commodity revenue to look into pension funds to back infrastructure projects? Even in countries where there has been pension reform there is a still a dearth of financial instruments which limits the ability to use pension funds to back infrastructure projects in the first place. The role of the State is fundamental in inventing the necessary instruments to reinject the funds mobilized into the real economy.

Channeling remittances to create diaspora bonds can help play an important role in plugging the development gap. Nigeria is the world’s fifth biggest destination for international remittances with 5 million Nigerians living abroad and sending money back to relatives, according to Western Union. Nigeria plans to raise 300 dollars by selling diaspora bonds, issued in June 2017, targeting Nigerians living abroad.

The challenge is to make each citizen a full-fledged investor contributing to the development of his country. Success stories already thrive in the area of collective management with the recent launch of initiatives promoted by private actors (Amethis West Africa, for example, is the first investment fund registered in Côte d’Ivoire) or public actors (in Rwanda, Agaciro Development Fund aims to capture the saving of migrants).

We must not underestimate the place of innovation in contributing to the prosperity of the financial industry. It is not unusual for state projects to serve as “guinea pigs” before reaching the local private sector. After all, the Renaissance Dam, the most important in Africa, kick-started with the funding provided by the Ethiopians.

How African trade and migration are shaping globalization

Globalization is not simply a process that started in the last two decades or even the last two centuries. It has a history that stretches thousands of years and Africa has been at the heart of international trade for far longer than we imagine. From the trans-Saharan caravans and the triangular trade, from the colonial counters to the Coltan of the Kivu, the continent has lived at the pace of the different periods of globalization, without always being in a position to influence or control, let alone take advantage of, global transactions.

Whether one thinks globalization is a “good thing” or not, it is an essential element of the economic history of mankind. According to Amartya Sen, Nobel-Prize winning economist, globalization “has enriched the world scientifically and culturally, and benefited many people economically as well”. Those more skeptical about globalization associate it uniquely with free market policies and an increase in inequality levels. It is true that Africa, particularly sub-Saharan Africa, has lagged behind other regions in the spread of the global economy, and the overwhelming majority of Africans have not benefited from the purported promises of global prosperity.

But globalization also encompasses the exchange of commerce, culture, ideas, information, people. Global networks have created opportunities for nations and communities to operate on a much larger scale worldwide. Previously disparate locations on the globe are now linked into extensive systems of communication, migration, trade and interconnections. This very phenomenon also makes it possible for emerging countries to strengthen their local and independent identities while working to be part of larger transnational alliances.

In this context, what are the questions that Africa needs to ask itself in order to propel itself to a more proactive actor in globalization?

Trade deals need to show that nations are open for business by putting people’s interests, not just corporate interests, at their heart. What must we put in place to resolve the tensions between democracy, the nation state and global economic integration?

A key feature of globalization is connectivity, as illustrated by the expansion of marine and terrestrial fibre optic cables. This offers unprecedented broadband infrastructure and opportunities to master the digital revolution. How will technologies, central to Africa’s economic and social lives, empower African populations?

Africa has the potential to develop a particular model of globalization. This model is the more pertinent in a world context coloured by the British vote to exit the European Union and the result of the recent US presidential election. The latter events are a symptom of popular disenchantment with globalization and a desire for the reactionary raising of national barriers. On the other hand, Africans continue to be outward-looking. In this context, the phenomenon of south-south migration constitutes an important capital for the continent. Can we redefine migration dynamics away from the binary brain drain / brain gain debate into one of holistic continental development?

Globalisation is not a zero-sum game. It is a two-way traffic involving a historical process of border crossings and hybridization and everyone should benefit from it. There is space yet for Africa, through a particular and renewed set of global transactions, to positively influence the direction that globalization will take in the future.

The Inaugural African Economic Platform will strengthen common policies

A new structure to strengthen the South-South economic and political axis was launched in Mauritius last month. The inaugural African Economic Platform (AEP), an Agenda 2063 programme, was attended by the Chairperson of the African Union, several Prime Ministers and high profile personalities of the continent. The AEP is an initiative driven by Africans to provide the policy space for Africans across all key sectors, to set their own agenda, explore realistic continental and global opportunities, and ways of implementing this agenda. Organized by the African Union Foundation, the African Economic Platform is an event to analyze the strengths and weaknesses of African economies and to identify opportunities in various sectors.

The AEP created an avenue for dialogue amongst a range of sectors, including the African political leadership, business leaders in the private sector, universities and intellectuals. All these different stakeholders are critical to driving the economic transformation agenda. The private sector plays a key role in investment, industrialisation and intra-African trade. The higher education sector provides skills development and are the locus for research and innovation. Governments ensure the implementation of fiscal and macro-economic policies and other environments for economic transformation.

The idea for an Africa focused economic platform originated from the need to ensure that annual meetings among African policy makers and regional business leaders do serve the top priorities in Africa’s drive for development and growth. The launch focused on the employment challenges arising from the skills gap witnessed by the disconnect between Africa’s industry requirements for economic growth and the output from academia. The need to develop an integrated African economy to enable the continent to realise its potential for stronger competitiveness in the global economy was also at stake. The outcome of the inaugural AEP, which focused on South-South cooperation, a commitment to Made in Africa and intra-African trade, bodes well for the continent.

At this launch Forum, measurable short to medium term milestones were set in relation to the promotion of intra-Africa trade through the food and agricultural products that the continent produces: livestock, poultry, fish, seafood, among others. Strategies were developed following the conference, including the establishment of a joint standing committee to facilitate trade relations; to remove the obstacles to the movement of goods and services; and to promote joint efforts among African financial centers to facilitate investment. Africa needs USD 200 billion annually over the next four years to reach its targets, while Foreign Direct Investment is USD 60 billion a year. Air connectivity was also reviewed, with the development of a master plan for the African continent in the pipeline.

The AEP launch was a meeting of great minds to discuss how the continent can harness its vast resources to enhance the development of the African people. It is now time to come forward with concrete plans to accelerate investment and competitiveness in Africa. NEPAD has already been active on the front of Human Skills Capital Development through its Skills Initiative for Africa Programme, launched this April. Leveraging the potential of the African Diaspora to participate in and advocate for Africa’s integration and development is a point we will take up next week.

International Day of Reflection on the Genocide in Rwanda 7 April 2017

In making strides towards the goal of transforming our continent into “The Africa We Want” – a peaceful, strong and united Africa, reflection on the 1994 genocide in Rwanda reminds us that we cannot take our peace and security for granted.

Current and past events in African and around the world, as evidenced by the high number of people displaced by war, conflict or persecution, which now stands at almost 60 million, builds a strong case for prevention of conflict to come to the fore in all that we do. Prevention has become an essential aspect of foreign policy due to the nature of today’s conflicts, their growing complexity and the fact that conflicts are more intra-state than inter-state. Moreover, the presence of powerful non-state actors and violent extremisms all make it necessary to strengthen early warning and preventive diplomacy mechanisms.

On the African continent, efforts for peace are on the increase, as demonstrated by an ever growing number of peaceful transitions of power, with recent examples being Nigeria, Ghana, Cape Verde, to mention but a few.  At the beginning of the 1990s, there were approximately thirty ongoing conflicts, but now they have been reduced to about a dozen. In addition, we are also witnessing Africa’s integration through regional and continental efforts, under a direct manifestation of the “ownership principle” that is the cornerstone of an African prevention and development policy embedded in the African Union.

Reflecting on Rwanda today, the words of Wole Soyinka ring true:

“Given the scale of trauma caused by the genocide, Rwanda has indicated that however thin the hope of a community can be, a hero always emerges. Although no one can dare claim that it is now a perfect state, and that no more work is needed, Rwanda has risen from the ashes as a model of truth and reconciliation.”

Together with Africa’s 1.2 billion people, the NEPAD Agency commemorates the International Day of Reflection on the Genocide in Rwanda, in order to eventually see a continent where all guns are silenced, a continent in which its people flourish in a culture of human rights, democracy, gender equality, inclusion and peace.

Ruralisation of the towns and urbanisation of the country: leveraging on the potential of the continuum

The African model of urbanisation is an idiosyncratic model of development. Africa’s urban population is expected to grow at an annual rate of 3.09 between now and 2030, the highest in the world. At this rate, there will be a billion more people living in African cities by 2063.

Urbanization offers opportunities for economic growth, social and cultural development but has also come with its own challenges. But just as our cities require long-term, integrated urban planning and design, sustainable financing frameworks and the cooperation of all levels of government for an urban paradigm shift, so rural Africa requires a rethinking in terms of an extension of its potential and facilities. Town and country are part of a continuum where different economic activities take place. The success of these activities is linked to access to markets and proximity to urban centres. We need more inclusive development policies for both urban and rural inhabitants as well as a healthy flow of people and goods through linkages. This continuum must be nurtured especially because it has the potential to drive agro-industrial transformation.

Agro-industrial transformation remains the most sustainable and stable path of development for the continent. Being the sector that employs the majority of Africans and accounting for a third of Africa’s GDP, it is 11 times more effective at reducing poverty than growth in any other sector. The impetus of a properly framed and financed agricultural economy is not to be underestimated. Smallholder farmers need financial support to stop piloting and go to scale with what works and to treat agriculture as a business. African women constitute close to 70% of the agricultural workforce and mainstreaming their participation and empowerment in Africa’s agricultural revolution is therefore critical.

Over and above agricultural production, other jobs can be created in the rural areas, from hairdressers to medical doctors, mechanics, notaries, agronomists. Many rural areas also have tourist industries that are fundamentally changing employment structures. The reinforcement of agro-industry, urban traits and facilities in the rural areas can decrease the differences between villages and cities, and this without spoiling the rural cachet if we ensure that environmental pressures are minimized.

Our attention also needs to be on the urban corridors, the areas near the city which facilitate the movement of people in and out of the city and demand an extension of facilities. Many of these areas have a multiplicity of non-farm enterprises and a considerable proportion of the economically active population.

Rural-urban linkages allow the flow of people, goods, money, technology, knowledge, information. Agricultural products flow to urban areas, and goods from urban manufacturing areas to more rural areas. If well managed, the interactions between towns and countryside are the basis for a balanced regional development which is economically, socially and environmentally sustainable. It is time to rethink the town-country continuum by leveraging on solidarities, complementarities, governance, better livelihoods and environments for all.

Investing in regional solutions to national problems

Today’s international climate is, in large part, marked by the inward orientation of some of the world’ biggest economies as they raise political and economic walls.

As we seek to find African solutions to African problems, on the other hand, we need to think across national boundaries. If we are to solve our most pressing challenges relating to: food security, talent production, infrastructure and political stability, then a paradigm shift is called. It is greater regional integration that will allow us to ride the Fourth Industrial Revolution successfully and build stronger, fairer, more prosperous societies.

Food security in the challenging context of climate change is a pressing issue. We cannot plan for sustainable economic development and long-term prosperity without establishing food security for millions of people facing hunger in Africa. Can Africa get ahead of climate change impacts on food security? I believe it can. Climate change and the impact on food production is not restricted by man-imposed national borders. Countries within the same regions share both ecosystems and natural resources. It, therefore, makes sense for us to build resilience to adverse weather effects through regional collaboration. We can thus ensure that limited resources are prioritized and targeted towards the most effective solutions.

The AU recognises that regional governance institutions need to be strengthened for the purposes of more integrated responses to Africa’s development challenges. Our policy makers should be encouraged to think in terms of a continental industrialisation plan, identifying viable future industries which different African countries specialise in. This would mean that the country-level industrial plan of each African country would be integrated within the regional and continental plan. Smart regional integration will allow us to play to ours strengths by clustering countries around what they specialize. Cross-border coordination will reduce overall adaptation costs, bring economy of scale while addressing our infrastructure needs more effectively.

Here are two of the regional integration models that are making the difference.

Sub-Saharan Africa, the Eastern and Southern Africa region are struggling to find the skilled labour required for the further growth of the region. Current education and training at the tertiary level provide poor standards in subject matters not immediately relevant to the challenges that the region faces.  In this context, the World Bank’s project, Africa Centers of Excellence (ACE), adopts a regional approach in areas of science and technology higher education. ACE strengthens selected existing African higher education institutions to produce world-class training to address priority economic sectors.  The ACE II is expected to enroll more than 3,500 graduate students in their specialized areas within 5 years.

The political element to regional integration cannot be dismissed. Strengthening trust among leaders and populations and ensuring political stability across African nations are also keys to effective collaboration. We have just seen a common approach to peace and security at play through the military intervention of ECOWAS in Gambia on the 19th of January. ECOWAS demonstrated that, in crisis situations, stability will be made to prevail by regional forces.

 

 

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.