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I Don’t Believe In Youth Empowerment (PART III) – Adesina

October 28, 2019

In this interview with Nigerian journalists on the sidelines of the
World Bank/International Monetary Fund annual meetings in the United
States of America, the President of the African Development Bank, Dr.
Akinwumi Adesina, talks about how women and youths to excel in their



In this interview with Nigerian journalists on the sidelines of the
World Bank/International Monetary Fund annual meetings in the United
States of America, the President of the African Development Bank, Dr.
Akinwumi Adesina, talks about how women and youths to excel in their
enterprises. Excerpts:

How will Jobs for Youths in Africa programme work and will it create
the ambitious 25 million jobs?

As ambitious as it is, the 25 million jobs are not enough because 11
to 12 million young people enter the labour market every year, but
only three million of them can get jobs. So, we are only doing the
maximum we can. Even at that, it is not enough. We are doing that in
three ways: first is within our project as a bank, we do roughly over
10 billion dollars of lending every year. We set up all of our
projects, we want them to be mainstreamed to create jobs for young
people, and women, by the way. In the case of women, we have something
that we call a Gender Marker System where every single one of our
projects is tagged. What is it going to deliver for women? That is one
side. So, a lot of our projects are dedicated to making sure that they
do that. [story_link align="left"]75454[/story_link]

Second, we set up a fund together with the European Union Commission
that is called Boost Africa. It is a 200 million dollar fund; a
private equity fund to support early stage growth of businesses of
young people on the continent. I just talked to you about the TLcom
Tide Fund in Nigeria that is supposed to support digital entrepreneurs
as well in Nigeria. But with all of these, at the end of the day,
there needs to be a more systemic approach in which the financing
sector supports the youth. That is why I believe that helping to
stimulate, and we are going to do that, stimulate the establishment of
the Youth Entrepreneurship and Investment Bank. It is crucial,
otherwise, we are just dancing around the edges of the issue.

But because you asked me that question, let me turn in to the issue of
women which I said before you cut in. Women run Africa, but they don’t
get access to finance. I was so delighted that President Macron did a
great job of really helping us to launch this during the G7 meeting in
Biarritz. It is $3 billion dollars specifically for women businesses,
and one thing that we are also doing is that we are establishing what
is called the Women Financing Index for Africa, that will allow us to
rate and rank all financial institutions based on their volume of
lending to women, in terms of their lending volume and the
developmental impact of their lending. [story_link align="left"]75455[/story_link]

What does that mean? It means that if you come to us soon, we are
going to ask the banks: what have you done for women lately? We’d be
looking at lines of credit; we’d be looking at trade financing. We
want you to be lending more to women because no bird can fly with one
wing. Africa has to fly with two.

Are you worried that IMF projected growth for Africa for 2020 at 3.5
percent? If you are, are there strategic measures AfDB is taking to
address that?

Well, our own projection for this year for the growth of Africa is
four percent. Next year, we project 4.1 percent. But, of course, you
know that we are in an environment in which we have a number of global
shocks, headwind issues. You have the Brexit issue and you have the
continued trade tensions between China and the United States. Of
course, it could and is already affecting opportunities for export
markets for African countries. So, a number of issues that we want to
really do to support countries is first and foremost, to make sure
that we stimulate domestic demand. The way to grow is to make sure
that Africa builds its own domestic demand. Second is public
expenditure for infrastructure because infrastructure enables growth,
and growth drives a lot of jobs and a lot of revenues. I think that’s
particularly important. Thirdly is the importance of regional
integration. Expanding that regional market is very important.

But I will make two other points related to that, which is how to
mobilize capital for Africa’s accelerated growth. Africa today has in
its pension funds, in its sovereign wealth funds, and insurance pool
of funds, mutual funds, $1.8 trillion of assets under management.
Those sovereign wealth funds, those pension funds are being invested
outside of Africa in money market instruments that are generating a
negative real yield of returns.

Now, that’s my concern. If you are a pension fund and you are
investing your money outside the continent and in such a negative real
yield of return, let’s even assume you have a good real yield of
returns and you make annuity payments for people for the rest of their
retired lives of what good is that? If they retire with very good
annuity payments to live in societies, places without electricity,
without water, without good hospitals; that is a well-paid miserable
retirement. So, what we are working on at the African Development Bank
is how we get the pension funds, the sovereign wealth funds to
actually invest in Africa. Africa sovereign funds, I mean invested in
other sovereigns, it should be invested in its own to create a better
wealth, better environment and quality of life for its people. For me,
that is very important.

The second thing is, in terms of stimulating growth is the role of
capital markets. The African Development Bank is supporting strongly
the development of capital markets to be able to mobilize domestic
savings and to drive investments in the economy. The last thing that I
may say is that when we talk about growth, nobody eats GDP. It’s just
simply Gross Domestic Products, it’s just the value of goods and
services produced in an economy.

But how you know that you are doing well is when you look at the
quality of life of the people. So, the question that we continue to
ask is growth at what cost? What kind of growth? What is the inequity
in that growth process? Who are the ones that are benefitting from
that growth process? So, at the end of the day, I am not just worried
about the growth rate, you can grow at five percent, you can grow at
six percent, but if you look at Africa today, for this year, we
project four percent growth.

That doesn’t tell you the story. Look at Tanzania, 7.2 percent;
Senegal, 6.7 percent, Cote d'Ivoire, 6.5 percent. There are economies
actually growing faster than the global average of 3.3 percent. Take a
look at Africa’s growth and look at the rate of growth in Europe, 5.4
percent; Latin America, 1.3 percent. So, Africa is actually doing
well. Today, 20 African countries are growing at five percent and
above. Twenty-one countries growing at three to five percent. So, I am
very optimistic about Africa. I think we just need to drive a lot more
investments into the continent.