Biznews (BN): I don’t want to go into specific figures for the African or world economies, as they are constantly changing, but the outlook for 2017 and 2018 is positive. In fact, some African economies such as Nigeria are recovering. However, despite a decade of relative progress, statistics suggest that around 50% of the African population is still living in poverty. So my first question is, what went wrong?

President AfDB: First and foremost, if you take a look at African economic growth trajectory over the last decade, African economy grew a little above 5% average, which led to a significant increase in the its GDP. But growth has slowed, not just in Africa but everywhere; the process is a slow one. An interesting prediction is that African growth is currently projected to grow by 3.4% this year. And next year the prospect is that the GDP will grow by 4.3%. We have to bear in mind that the global economy is growing at a little above 1%, So Africa’s head is above water; the African economy is actually quite resilient.

Generally, when people talk of growth they use average numbers, which doesn’t tell the whole story for Africa. You mentioned the Côte d’Ivoire. Last year, 32 African countries grew by 3 to 5%; and 12 grew by more than 5%, including the Côte d’Ivoire with the highest in the world at 8.2 %, and Tanzania, Rwanda, Ethiopia and Senegal. And as you say, growth slowed in two of the major economies, Nigeria and South Africa. The point I want to make is that African economies are resilient. The other thing to consider is that even though we had this prolonged growth over the last decade, the challenge has been the degree of inequality in the process: there has been growth but it has not necessarily been inclusive growth, consistent enough to lift a lot of people out of poverty. Africa still has one of the highest proportions of inequality in the world. The number of people in extreme poverty has actually gone down, as has the number of people living with food insecurity. Even though in terms of absolute numbers we still have 230 million people in Africa with no food security.

There are other challenges: 645 million people with no access to electricity, and I don’t believe that any community can develop in the dark. We still have millions without access to drinking water and sanitation. So there are areas in which Africa has done well, but there are other structural issues like access to power that are major problems. We still have a huge infrastructure deficit, and when landlocked countries don’t have the infrastructure to connect them to costal countries it affects the cost of many things. Another big challenge, despite this growth, has been the continent’s high level of unemployment among young people. There are currently 12 million young people entering the job market each year, yet only 3 million of them have access to jobs. But Africa’s population is largely young people and that’s why, when I became President of the African Development Bank, I determined that we need to drive prosperity in Africa – but it must be inclusive prosperity, and it must be one that creates hope and opportunities, especially for these young people. Quite honestly, I don’t believe that the future for Africa’s rapidly increasing young population is in Europe. Nor do I believe it is at the bottom of the Mediterranean Ocean or in the Sahara. Their future must lie in an Africa where prosperity is growing and creating many more opportunities for its young people, and that is what our High 5s strategy is about: light up and power Africa, we want to feed Africa, we want to industrialise Africa, we want to integrate Africa, and we want to improve the quality of life in Africa.

An analysis carried out by the United Nations Development Programme on the impact these strategies will have on poverty shows that with a focus on these High 5 and support from the bank, Africa can achieve 90% of its sustainable development goals, and it will also fulfil 90% of its Agenda 2063. Basically, what the AfDB has done and is doing is accelerate the pace of inclusive development.

Biznews (BN): So acceleration seems to be the key word; acceleration is what is needed. Another key statistical projection is that by 2050 Africa will have even more inhabitants and young people looking for jobs. You have given us a picture of the situation now, but we must take into account that these figures will practically double in 20 or 30 years, putting further stress on African institutions, infrastructures, job market and so on. This is already happening, as you pointed out, in the Mediterranean Ocean. You have said that the bank’s current and intended aims are to accelerate the pace of inclusive development, so how are other partners responding to this? And I mean not just the African governments but also foreign counterparts, in the EU and in Germany for example. Are you truly getting the support you need?

President AfDB: Absolutely. I think in Africa lip service is unimportant, what matters is the accelerating pace of development. For example, the bank’s leadership in energy. We launched what is called the New Deal for Energy for Africa, with the aim of connecting 130 million people to an electricity network within ten years, and another 75 million people to a grid system. My point is that Africa needs power above all, because without it we can’t create jobs, enterprise won’t work and we can’t compete in the global market. That objective has galvanised the entire continent; everybody knows the most important thing is electricity. When God created the world, the first thing he said was “Let there be light”. You can’t do anything without light, and we have received a huge amount of global support in this. Also, for food supply, it makes no sense for Africa to be spending 35 billion dollars a year importing food. If we don’t make changes that will grow to 110 billion dollars by 2025. Africa contains 65% of all uncultivated arable land left in the world, so what we do with food and agriculture now will determine the future of food. Globally, and this is one of the important issues I discussed with the German Minister of Economic Cooperation and Development Gerard Müller during the Compact with Africa meetings in Berlin, all eyes are on Africa not only to feed itself, but as a contributor to feeding the world.

There is global acceptance and great support for the bank’s plans to create jobs for young people. The migration crisis to Europe, for example, is happening because young people in Africa today are unable to find jobs. As a bank we have committed to major action and declared that we will support African businesses to create direct employment for 25 million over ten years. That will significantly reduce the migration trend; I don’t believe that military patrols of the coastline are the answer to that problem. So the bank is investing in small and medium size enterprises, in ICT industry and also in agriculture to bring young people into agriculture. I can say that globally there is a massive amount of support for the High 5 strategies that the bank has highlighted, and there is universal acceptance of them across all the African countries. The African Development Bank is a large contributor in driving what we call Africa’s own Marshall Plan.

Biznews (BN):There is an understanding, which is generally accepted by all the people in relevant positions of power, that this vision must be supported by the private sector. You also mentioned that the role of the private sector is essential to achieve long-lasting growth and improvement in people’s lives. Are you seeing the same commitment from these private companies? Do they have faith in the vision and the people in charge? Do they believe that the investment environment is improving, corruption is diminishing, and that things are really changing?

President AfDB: You know, Africa is the new growth frontier for global investments. Let me break that down into three areas. First and foremost, we can look at what is happening in business and investment and the regulatory environment in Africa. Last year, the Doing Business Report by the World Bank showed that Africa accounted for 30% of all improved business and regulatory environments across the globe. Most of those improvements actually happened in Sub-Sahara Africa, maybe 37 out of the 42 countries that the report looked at had carried out at least one major business regulatory reform to achieve investment. We mustn’t forget that in the 90s the total amount of foreign direct investment in Africa was no more than 2 billion dollars. But by 2015 investment had reached 45 billion dollars, and by 2016 it came close to 47 billion dollars. People are seeing Africa as the place to invest, and they are investing because they can see improved political stability, more peace in the continent, a large improvement in business, investment and regulations, as well as improvements in infrastructure.

Biznews (BN): : I’d like to link that with the activity of the bank. I can see initiatives that address regional synergies in infrastructure or energy, by looking at a larger picture in order to join forces. It seems that the AfDB is very involved in initiatives of this type.

President AfDB: Absolutely. Just a final point on making investment easy: part of the reason we are seeing investment in Africa is because we are opening up the continent. Regional trade is playing a big role, and by next year Africa will have approved what is called the Continental Free Trade Area, which will eliminate trade barriers all across the continent. By 2030 consumer spending is forecast to reach 2 trillion dollars in Africa, and B2B expenditure will increase to close to 4 trillion dollars. Moreover, the continental population will be the same as today’s populations of India and China together, reaching 2.5 billion by 2050. With this fast population growth, the rapid rise of the middle class, and the increase in consumer demand for goods and services, Africa is the place to invest. I believe that we must stop seeing the continent from the perspective of development and look at it as a serious investment doorway. And that’s why the bank is making considerable investment in regional infrastructure, to answer your other question. We are investing in marine cables to open up the digital economy, in ports and railways and trans-national roads to facilitate movement of people and goods and services across the continent, and in electricity transmission lines to create regional markets for power, so electricity can be accessed all across the continent. Most importantly we are helping to develop what is called the VISA INDEX: we want everybody to be able to travel around Africa without a visa. When people can travel freely it means the labour force is mobile, and workers can move to where their skills are needed. The bank is at the forefront of opening Africa for business; in fact I believe it is already open and business is happening now in Africa. What we need to do is to do keep increasing it.

Biznews (BN): BN: I would like to bring together two of the issues you mentioned earlier: ICT and Agriculture, two of the essential High 5 strategies, which you have initiated together as Minister of the Nigerian government, as part of the transformation of Nigeria’s agriculture sector. I am sure you remember that well. Do you think it is fair to say that the African growth model could propel the continent to leapfrog over traditional industrial development straight into the new industrial revolution – what’s known as the 4.0? Is that possible?

President AfDB: I think there are two ways to look at that. Firstly, when a frog jumps it doesn’t go far. Africa needs to address fundamental structural infrastructure issues; it needs to provide itself with light and power, because the basis of any industrial revolution, whether 1.0, 2.0 or 20.0, is electricity. That is why the bank is pushing very hard for universal access to electricity, which has to come from grid-based power, because without that we can’t run industries. And without large investment in railways, roads and ports it won’t be easy to build big businesses and be competitive in the global market. We cannot ignore these fundamental issues, and the bank has to maintain its focus there. The deficit of investment in infrastructure is currently about 50 billion dollars, especially in energy and transport. AfDB are investing 12 billion dollars in the next five years, and we aim to help Africa mobilise between 45 and 50 billion dollars solely for energy and electricity. To put Africa in a position where it is able to feed itself requires investment in warehouses, logistics, and commodity-exchange technology. We are investing 24 billion dollars in agriculture to develop this kind of infrastructure over the next ten years. We mustn’t oversimplify things; there are basic things that we have to do first. However, there are some unique opportunities where Africa can fast track better than ever before, such as in the rapid increase in use of mobile phones. The number of people with mobile phones in Africa is going to be well over 650 million within the next few years, and even more interesting is the percentage of that usage from smart-phones. The number of people using smart-phones by 2020 in the continent will be 320 million; we will have 600 million people using the Internet by 2020, so that digital finance is on the cards for the future as well as great opportunities for e-commerce, with wide scope for new technologies such as mobile phones and APPs for things like water sanitation, access to healthcare services, and of course energy. The bank is investing in companies that are helping to establish off-grid energy systems, one of which is the German company Mobisol, based in Berlin (offering solar panels for off-grid household energy systems). There is potential for consumer access to great opportunities, such as using mobile phones to provide farmers with communication networks, something that has been successful in Nigeria. What I am trying to say is that to create a skyscraper, you first have to build the foundations.

Biznews (BN): Another issue is renewable energy. Is that the only model now? You have mentioned two examples, in Morocco and Kenya, of two of the world’s biggest solar and wind power plants. As you know, renewable energy and sustainability is a topical issue in Germany, so perhaps you have a potential source for further capital and knowledge as well as political support. Africa is rich in fossil fuels, but do you think the only efficient and long-term option is renewable energy?

President AfDB: I think we’ve got to be realistic when we talk about the energy sector, even for Germany. Germany uses a combination of energy sources. You must be able to power industries, and you also need energy that allows you to light homes: you’ve got to do both together. In Africa, the AfDB is very involved in helping to drive renewable energies. We helped to fund the largest concentrated solar power plant in the world, the Noor complex in Morocco. We also helped to finance the largest wind power farm in Africa, the Lake Turkana Wind Power (LTWP) in Kenya. We have also made sizeable contributions in geothermal energy in Kenya and in other regions. We are involved in energy from solar, wind, geothermal and hydropower. We have 4 fronts.

The bank has launched what we call the Off-Grid Revolution for the continent, in which we want to connect 75 million people to off-grid systems. This project has set up a new fund called the Facility for Energy Inclusion in Africa, and we are investing 500 million dollars to help small companies that are using off-grid renewable energy systems. We are working with Germany in several ways: firstly, the country is a big contributor to our Africa Renewable Energy Initiative, which is hosted by the African Development Bank. Secondly, we are in discussions with Germany to help us to set up a technical centre for renewable energy, where companies that want to take on renewable energy projects can find the technology for construction, repair and installation. And thirdly, Germany is supporting the establishment of a renewable technical vocational training initiative. While we are at the forefront of renewable energy systems, we believe that there are cases where Africa, like other countries, needs to use fossil fuels, and that it is a matter of balancing a combination of energies. But renewable energies are doubtlessly the future.

Biznews (BN): I was reading about the Africa Investment Forum, which is going to be organised by the AfDB in the future. Can you tell us more?

President AfDB: We launching the Africa Investment Forum next year. And the reason behind it is that the Global Saving Pool today is 5 trillion dollars a year. Africa’s deficit in power and transport infrastructure is just over 15 billion dollars a year. If Africa is able to attract 1% of that pool it would cover the entire deficit. Africa does have institutional investors, sovereign funds, pension funds, sovereign wealth funds and insurances, but they need to invest more in Africa. The Africa Investment Forum is designed to attract these big institutional investors to Africa in the critical areas of infrastructure that I’ve mentioned. The AfDB and its partners will help to reduce the investment risk facing a lot of these developers. We will help to develop a series of pipelines for projects that are bankable, because potential investors need to see projects for their money that are bankable. The Bank will be heading efforts undertaken with its partners to improve Africa’s general business, investment and regulatory environment and make things easier for investors. Of course, we are going to work very closely with Germany on this as part of the G20 Compact with Africa. The forum will essentially be totally transactional, with no speeches. We are aiming to focus completely on business. For our conversations with Germany I am very pleased to have the full engagement of the German-Africa Business Council as well as Minister Gerard Müller and Finance Minister Wolfgang Schäuble. Most importantly, Chancellor Angela Merkel, of whom I am a great admirer, I think her leadership has been crucial for Compact with Africa. The date for the forum will be announced at the end of next year.

Biznews (BN): Last September marked your second year in office as President of the AfDB. What is your financial situation so far?

President AfDB: I am tremendously pleased with our progress after two years in office. We have launched our High 5s, which received lot of global attention; we are promoting them all over Africa, and we are putting them rapidly into action. Last year our total profit was 10.5 billion dollars, which is the highest in its history, and we will surpass that this year. Since I took the post as head of the bank, our financial health has improved: our income from loans has gone up: we started at almost 460 million, and already this year we are at well over 700 million dollars. According to our current trend I don’t see why we can’t reach 1 billion dollars from our loan income. This year the bank has been rated at a financial strength of AAA stable outlook by Standard & Poor, Fitch and Moody. That tells you the bank is managed very well, and it goes beyond money; it reflects how we impact the lives of people too. Let me tell you one more thing that I’m excited about. Last year alone, our work resulted in 3.3 million Africans being connected to electricity, and we provided 3.5 million people with access to water and sanitation. 5.3 million people also saw the befits from improved agricultural technology, and in infrastructure our investment in roads helped 7 million people, providing improved connections between countries and faster travelling times to markets. Over 9 million people also benefited from improved health services as a result of our investments. These are the kind of things that I care about – how our work really has an impact on the lives of people. I am delighted how far we have come, and even more excited about how much we can do in the future.