Akinwumi Ayodeji Adesina is the 8th President of the African Development Bank Group. He was elected for the position on May 28, 2015 by the Bank’s Board of Governors at its Annual Meeting in Abidjan, Côte d’Ivoire.
Adesina is a distinguished economist and thought leader in agriculture with nearly three decades of experience gained though research, development interventions and policy making. He served as Nigeria’s Minister of Agriculture and Rural Development from 2011 to 2015, during which time he implemented bold policy reforms in the fertilizer sector and pursued innovative agricultural investment programmes to expand opportunities for the private sector. He is credited for ending Nigeria’s 40 years of corruption in the fertilizer sector by developing and implementing an innovative electronic wallet system. He also led financing initiatives to support youth engagement in agriculture as well as small and medium enterprises.
Before assuming his Ministerial position, Adesina was the Vice President (policy and partnerships) of the Alliance for a Green Revolution in Africa. He also served as Associate Director and Regional Director for the Southern Africa Office at the Rockefeller Foundation, for over a decade until 2008. He had also served as the President of the African Association of Agricultural Economists, and a member of the editorial board of several academic journals.
Adesina got a PhD in agricultural economics from Purdue University in 1988, USA, where he won the outstanding thesis award for that year.
EBR’s Amanyehun R. SiSAY caught the President who was attending the 29th Ordinary Session of the Assembly of Heads of State and Government of the African Union in Addis Ababa on July 3rd to discuss about his bold initiative of lighting Africa. The following is an excerpt:
Tell me about the signature ceremony you have had with the Japanese delegations today [July 03, 2017].
We signed a partnership agreement with the Japanese government to launch the Japan-Africa Energy Initiative. This is part of our own effort to accelerate access to universal electricity in the continent, within the next ten years. We want to help 645 million Africans who have no access to electricity. As part of that, we are looking at the grid, off grid and mini grid systems. Our target for the grid system is to connect 135 million people within the next ten years. For that we need the base load power. What we are talking about now is how to generate that. And Japan has the best technologies in the world, in terms of base load power generation, which also includes the most efficient ultra supper critical technologies, the most efficient green coal power technologies in the world.
African heads of state and government made a request to PM Shinzō Abe during the sixth Tokyo International Conference of on African Development (TICAD) in Nairobi last year, for Japan to extend its support to the continent in some of the best technologies for base load power generations. Prime Minister Abe took it on board and I went to Japan and I spoke with him representing the African leaders. I am delighted that PM Abe responded to that very fast with the establishment of a financial facility with the Japan-Africa Energy Initiative.
How much funding will the East Asian country pour into the Initiative?
Japan will provide a financial facility of USD6 billion.
How much of that will go to Ethiopia?
One of the leaders who were there in the meeting when the request to PM Abe was made in Nairobi was PM Hailemariam Desalegn. I spoke with him today. I told him about this outcome and he was delighted.
So the issue will be based on the preparation of good energy projects. If [Ethiopia] has a good energy project, we do not have financial problems. We now have a huge amount of financial facility that complements what the AfDB has been doing, on our own. We are putting USD12 billion into the power sector over the next five years to leverage a total of USD45 billion to USD50 billion investment in the sector. The USD6 billion from Japan will help us accelerate part of our agenda to increase access to base load power. The Japanese supercritical & ultra-supercritical green coal technologies will also boost a significant mix of the energy Africa needs to industrialize.
Are you taking similar development initiatives with countries such as China, India, and Brazil?
We are delighted about the level of dedication that the government of Japan has put into this. We have also big collaboration and partnership with China, with which we have been implementing an infrastructure co-financing fund – the Africa Growing Together Fund with the People’s Bank of China (“PBOC”). This is a USD2 billion initiative to be implemented over a period of 10 years alongside the AfDB’s own resources to finance eligible sovereign and non-sovereign guaranteed development projects in the continent. Some of that infrastructure co-financing goes to the energy sector.
We recently concluded the AfDB’s annual meeting in India and I also spoke with PM Narendra Modi, about how India can help Africa on solar technologies.
We are also working with Germany on similar renewable power projects in Africa. Africa has so much sunshine, water and good wind. So we shouldn’t be in a situation where there is no electricity. We are going to support African countries to use all of what they have. Africa is tired of darkness, we want to see a lot of light and make sure that quality of life on this continent improve. There is no dignity in walking in darkness.
In 2013 President Barack Obama launched Power Africa Initiative which pours a significant resources to power generation in the continent. Now there is a new president in America who is threatening to cut aid even to climate change. Do you think that the Trump administration will continue financing the initiative?
I do believe that the American government will continue to support Africa. At the US-Africa business summit [last June], I made the case that the way United States looks at Africa shouldn’t be just in terms of aid or development as we need more financing for development. We want the US to look at Africa as the new investment growth frontier. Africa offers the United States the deal of the century. If you are looking the issue of power generation, distribution and access to power, Africa’s potential is limitless.
The household expenditures in Africa will be USD1.4 trillion in the next three years. And business to business investment will rise to USD4 trillion, in the next eight years. So you can see this is the continent to be in. I hope the US will continue supporting Power Africa, because it is a partner of AfDB.
The AfDB has stated that the infrastructure investment requirement in Africa will be USD100 billion in the next ten years. How much of that are you planning to finance?
We know infrastructure is Africa’s biggest challenge, and the number one challenge is power. That is why the AfDB is committed to invest USD12 billion in the sector over the next five years to help 135 million people get access to electricity through the grid system, and connect another 75 million people through the off grid system.
In addition, we are also investing in other infrastructure projects: roads, transnational highways, railways, ports, and airways. We co-financed the construction of a 1000km highway linking Ethiopia and Kenya. That alone is going to allow Ethiopia to access the port in Mombasa and improve the trade between the two countries by up to 400Pct. We will also co-finance high voltage transmission lines enabling Ethiopia to provide electricity to Sudan from the Renaissance Dam.
The key issue is how to mobilize a lot more financing for such infrastructure investments in the continent. The AfDB is doing that in two ways. The first thing we do is to reduce the risk of the private sector to invest in the infrastructure projects. Private investors look at project, market and political risks to invest in infrastructure in the continent.
We believe that Africa is a viable investment destination. So we put our money in the line to risk the investment by the private sector. Take for instance what AfDB is doing in Morocco, where the Noor I power plant, the largest solar power plant in the World, will produce up to 160 megawatts of power in 2018. We did risk that. There is also the 310 megawatts project on Lake Turkana in Kenya. In addition to arranging the investment, the AfDB provided EURO20 million to risk the investment, so the investors can put in it a lot more money.
Our money is not enough. So we need to use it intelligently. For instance in South Africa, we did a syndication with [nine commercial banks, which include: Bank of China, Bank of Tokyo-Mitsubishi, Caixa Bank, Citibank, HSBC, JP Morgan Chase, KfW IPEX Bank, Siemens Bank, and Standard Chartered] to finance new generation, plant refurbishment, transmission lines, and capacity building project worth USD965 million to Eskom, a utility company in South Africa. That is the largest in Africa’s history in terms of syndications. The project will help Eskom to rehabilitate 8,000 MW and also be able to produce additional 11,000 MW.
We also do co-financing with others. We do resource pooling. For instance, we had the government of Japan, through the initiative we signed today, to provide additional USD6 billion towards the energy sector. We also have other facilities with the governments of Korea, China, India and others to mobilize resources.
But at the end of the day, Africa must develop by mobilizing a lot of its own domestic resources. When you look at the USD334 billion pension funds that Africa has, the possibilities of financing the continent’s development with its own resource is high. There is also USD164 billion sovereign wealth funds. We have to put quite a bit of that in infrastructure. We are working to launch a big initiative, which is called the Africa Investment Forum, which will help to leverage the global and African pension and sovereign funds into infrastructure.
Usually AfDB involves in bridging infrastructure investment gaps in Africa. Let us talk about your investment in private sector development.
We believe supporting the African private sector is the most important thing for the AfDB. The sector needs to access capital to grow; and AfDB is doing that in many ways. The first thing we do is to support small and medium scale enterprises. We have several instruments that allow these enterprises access finance, which is their most critical problem.
The second thing we do is develop the domestic bond market in the continent. We are working to integrate the stock exchanges across Africa, all the way from Johannesburg to Nairobi, Lagos and Casablanca to deepen their acts together and offer more capital to facilitate their leverage on the continent. We also reduce the risk of their investment.
It’s been a while since you took office at the AfDB, let’s discuss about your achievements in terms of reforming the organization and launching new projects.
We launched our strategies based on my vision of where Africa needs to be transformed. We launched four strategies on how to transform the energy sector in Africa. We launched strategies on how to reform agriculture and create wealth. We launched various strategies to create jobs for the youth because at this time, job creation is the name of the game for our youth. We also launched strategies on how to improve industrialization. We developed these strategies in less than six months. It normally takes a year or may be 18 months to prepare such strategies.
In the past one year alone, we approved loans worth of USD10.5billions. This is the highest in the history of Africa. But it is not about how much we approve, it’s also important to know how much the bank disburse for things to happen on the ground. Last year we disbursed USD6.5billion of the money approved, which again is the highest in the history of the bank.
The third thing we did was maintain our Triple A rating. As a multilateral development bank, we have to leverage money for the global capital market. We use a lot of this money to support projects.
Let me tell you some of the things that happened on the ground because of our financing. Last year alone, we connected 3.3 million people to access electricity as a result of our investment. We helped 3.7 million people access to improved water, and sanitation. We also have 5.3 million people that benefited from improved access to technologies in agriculture to improve their productivity and their livelihoods. We have 7 million people that accessed improved transport. We also have 9.2 million people who have accessed improved health services.
So, these are the concrete things that have been happening on the ground. What makes me very delighted is the fact that we are reforming the bank and performing better than before. Part of the reform is to make the bank even better, more efficient, more effective, and more impactful than what we have done so far. That is why we ruled five new development and business delivery offices in southern, northern, eastern, western and central Africa so that we get closer to our clients. Because of these reforms, the bank is delivering better and faster.
How about AfDB’s partnership with the AU and ECA; and its contributions to agenda 2063?
I want to particularly congratulate the AU for the theme that they have picked in this summit, which is on the issue of youth. As African Development Bank we have a high five strategies for Africa which is to give light for Africa, to feed Africa, to industrialize Africa, to integrate Africa and to improve the quality of life for the people of Africa.
Why do these matter to agenda 2063? An independent analysis that was done recently by the United Nations Development Programme shows that if Africa achieves these high fives that the AfDB has put forward, then the continent will achieve 90Pct of the agenda 2063, even faster. So that’s what it would bring to the agenda 2063. These high fives are accelerators of development. That is why we are investing a lot in them.
With the ECA, we work a lot together on analytical work of providing better knowledge and building capacity of our countries. One area that we are particularly working so closely together is on the issue of industrialization. Ethiopia has a great success story in that; so I highly recommend the government. I talked to Prime Minister Hailemariam this morning and told him how proud I am of the Hawasa Industry Zone. We need to do more such industry zones across Africa.
So, I would say the AfDB is leading the way with the high fives to accelerate the pace of development in the continent.
What do you think would be your legacy when you leave the AfDB?
I never think in those terms. There are so many [youth] that are waiting to get jobs. I think of the 645 million people that we will help to get access to electricity. There are millions of farmers that will have better access to agricultural technologies. I don’t think about myself, I think about them. That is my job. EBR
5th Year • August 2017 • No. 53