Just In: AfDB Laments Drop Of Africa’s GDP By $165b In 2020

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A $165 billion drop in Africa’s Gross Domestic Product (GDP) pushed 26 million people into poverty in 2020, African Development Bank (AfDP) President Dr. Akinwunmi Adesina has said.

The AfDB chief said the dwindling economic fortunes on the continent pushed 30 million people into unemployment within the period.

Dr. Adesina spoke at the 35th Ordinary Session of the Assembly of the African Union (AU) in Addis Ababa, the Ethiopian capital.

Applauded by African leaders for effectively steering the continent safely from the harsh impacts of the COVID-19 pandemic, Adesina cautioned against outsourcing security of the continent to foreigners.

He stressed the need for leaders to protect lives by building healthcare infrastructure and vaccine producing factories.

Adesina said: “It has been a global economic cyclone. Africa witnessed a decline in GDP growth of 2.1 per cent in 2020, its lowest in 20 years. Africa’s GDP fell by $165 billion. Over 30 million jobs were lost and over 26 million people fell into extreme poverty.

“I wish to commend the leadership efforts of the African Union, and our Heads of State and Government, for the critical roles you have played in dealing with the pandemic and the socio-economic challenges in its wake. Today, thanks to these efforts 11 per cent of the population has been fully vaccinated, and another 16 per cent has been partially vaccinated.

“However, while developed countries have moved to booster shots, Africa is still struggling with basic shots.

“Your excellences, we must learn from this experience. Africa can no longer outsource the security of the lives of its 1.4 billion people to the benevolence of others. We must secure African lives!

“It is time for your excellences to build Africa’s healthcare defence system. This must be based on three strategic priorities. First, building Africa’s quality healthcare infrastructure. Second, building Africa’s pharmaceutical industry and third, building Africa’s vaccine manufacturing capacity.

“Africa needs $600 million to $1.3 billion to meet its goal of attaining 60 per cent vaccine production by 2040. Investing in health is investing in national security. The AfDB plans to invest $3 billion to support pharmaceutical and vaccines manufacturing capacity for Africa.

“To address the socio-economic impacts of the pandemic and support economic recovery, Africa will need some $484 billion over the next three years. To eliminate extreme poverty by 2030, the continent will need $414 – $784 billion per year.

“Africa will need $7-$15 billion a year to deal with climate change. The continent will also need between $68 and $108 billion per year to fix the infrastructure financing gap.”

Adesina noted that Africa must drastically mobilise a lot more resources, saying with the help of the leaders, the AfDB’s general capital of the bank was increased in 2019 by 125 per cent, rising from $93 billion to $208 billion, the highest since its establishment in 1964.

According to him, these resources have allowed the bank to scale up support to African economies to tackle the pandemic.

He added: “The Board of Directors of the bank approved a Crisis Response Facility of up to $10 billion. The bank also launched a $3 billion Fight COVID-19 Social Bond on the international capital markets, which was the largest ever United States-dollar denominated social bond in world history. The Bank provided $27 million as grants to the African Centres for Disease Control.

“Your Excellences, over the past six years, the African Development Bank has provided about $39 billion in financing to the continent in support of its High5 priorities to: light up and power Africa; feed Africa; integrate Africa; industrialise Africa; and improve the quality of life of the people of Africa. These High5s are the accelerators for achieving Agenda 2063.”

Adesina promised that with its $25 billion in equity, the AfDB can leverage up to $33 billion of additional financing for low-income countries.

He said the bank required their support to change the article in the AfDB Charter that does not allow it to go to market to leverage resources, noting “this is top priority”.

The AfDB chief said the bank is also leveraging private investments into Africa, in innovative ways, saying “the Africa Investment Forum, established by AfDB and its partners, has helped to secure investment interests worth more than $78 billion.

“This spectacular level of interest includes a $24 billion transaction for the liquefied natural gas project in Mozambique. We are proud that this project will make Mozambique the third-largest producer of liquified natural gas in the world.”

He urged the heads of state to link security, investment, growth, and development together to enhance security, informing them that the bank was developing Security Indexed Investment Bonds.

Adesina said: “The proceeds from these bonds, when developed, will support countries and regional economic communities to do four things.”

“First, to upgrade security architecture; second, to repair damaged infrastructure in conflict-affected zones; third, to rebuild social infrastructure; and fourth, to protect zones with strategic investments.”

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