africa

Africa at a Fork in the Road: Taking Off or Disappointment Once Again?
Political instability still stalks the continent, with the return of autocratic governance
in several states. The absence of inclusive growth—in the face of increasing prosperity
for some groups and regions—is leading to dissatisfaction in many countries.
And corruption remains one of the main impediments to investments into Africa.
Yet, there are also tremendous opportunities that Africa can take advantage of.
African economies rank among the most resilient in the world, due in part to their
low level of integration with global financial markets. Africa boasts a large and
youthful consumption base and high domestic demand, providing a huge market
for goods and services. African financial assets also offer high risk-adjusted returns
and other forms of investments. Lastly, for investors the financial crisis exposed the
potential of making Africa the destination of choice, because it can provide assets
whose values have low correlation with the volatile traditional investment markets
in developed countries.
2.3 Three essentials for transformation
To achieve transformation, Africa must focus on three main things. First there is an
urgent need for Africa to develop her infrastructure. This is not a new message for
us at the African Development Bank. Second, Africa must focus more on economic
integration, going beyond political integration. Trade among the East African countries,
for instance, constitutes 25 percent of their total trade. Africans can and should take
advantage of the large markets that economic integration offers. Third, Africa must
move up the value chains. For example, the minibus is commonly used in most
African countries and has different names in each country: dala dala in Tanzania,
matatu in Kenya, etc. Why can’t Africa start producing this good that is in demand
in most African countries, with each country producing a part of the whole?
The African Development Bank is already leading innovative ways of funding Africa’s
infrastructure gap. Already, 60 percent of the Bank’s portfolio is in infrastructure
with energy development taking the lion’s share. We have also recently launched
Africa50, a dedicated infrastructure fund. African governments must put in place
deliberate policies to improve infrastructure. The Bank has emphasized in its tenyear
strategy the need to focus on governance and accountability, with a particular
attention to fragile states. All efforts must be put in place to make Africa peaceful
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