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Economic prosperity in Africa through regional integration

Economic growth

At the just concluded African Development Bank (AFDB) 54th Assembly meetings held in Sipopo, Malabo Eqiutoria Guinea, more than 2,000 participants attended the meetings.

The meetings were an opportunity for experts, governments, businesses, civil-society representatives, think tanks and academics to share their views on the efforts needed to foster regional integration and to exchange views on the major developmental challenges in Africa.

Regional integration through the abolition of borders and the improvement and construction of transport links. To achieve this, the African Development Bank is investing more than $15 billion to finance regional integration infrastructure.

AFDB’s President, Akinwumi Adesina said the bank has established five strategic priorities to accelerate Africa’s development.

The strengthening of integration between countries is the focal point of these priorities.

The Senegambia Bridge, inaugurated in January 2019 and linking the two banks of the Gambia River, not only makes it possible to boost trade but also to promote sub-regional integration via the Dakar, Banjul, Bissau, Cotonou, Abidjan and Lagos corridors.

The bridge was mainly financed by the African Development Bank (AfDB) for $93.8 million. It has already facilitated the interconnection of road networks and has significantly reduced travel time.

“Our investments have helped to construct the central Africa fibre optic network by connecting the population with faster and less expensive access to the internet and in the process boosting regional integration,” Adesina said.

In Central Africa, one of the least integrated regions on the continent, the pan-African financial institution has allocated €3.9 billion over seven years. An amount available for investment projects that can strengthen links between countries.

A potential market that remains extremely segmented due to the multiplication of national borders. In order to encourage sub-regional integration, the AfDB is committed to building not only quality infrastructure but also to developing inter-regional trade and cross-border investment.

Central African region that is handled by the huge potential of natural and human resources today is lagging behind all the region in Africa in terms of integration. Just measuring by the volume of intra-regional trade, this region by measurement has only 6 percent as an index of integration compared to say 15 percent or an average of 17 percent in Africa,” said Ousmane Dore, AFDB’s Director General for Central Africa.

With 60% of the world’s available arable land, the continent holds the key to global food security. The challenge now for African farmers is to integrate regional and global value chains.

This is precisely the ambition of the “Feed Africa” programme launched in Malabo by the AFDB in partnership with South Korea.

“The government of Korea has agreed to start to help Africa. last year Africa foundation funded the project to help Africa So this meeting an also representative from our country came here to present drone system for agriculture sector for Africa,” said Hwangroh Lee, South Korea Ambassador to Equatorial Guinea.

“People do backbreaking work, small farmers, every day, but they get very little from their land, so productivity enhancement is a big issue and that comes only with innovation and technology,” said Prof Oyebanji Oyelaran Oyeyinka, AFDB’s Special Advisor to the President on Industrialization.

According to the African Development Bank, the global need for agro-industry is about $8 trillion and far exceeds the information technology sector and even the automotive industry.

In 2019, African growth is expected to increase from 4% to 4.1% in 2020, but it remains insufficient to reduce unemployment and poverty. For this growth to reach a larger segment of the population, it is necessary not only to develop infrastructure but also to achieve greater financial inclusion.

The rate of banking in Africa remains extremely low, with only 43% of adults with a bank account. Experts believe that digital finance on the continent should promote access to banking services for as many people as possible.

With this in mind, the African Development Bank and its partners launched the African Digital Financial Inclusion Mechanism (ADFI) in Malabo to strengthen the security and development of digital financial transactions in Africa.

The fund aims to promote access to digital financial services for some 332 million Africans, 60% of which are women.

The long-term objective is to mobilize US$100 million in grants and another US$300 million in debt from the Bank’s regular capital resources by 2030.

“So what’s great about the digital aspect is that we think it will allow us to accelerate financial inclusion. Financial inclusion through traditional infrastructure has its limits in the sense that it will certainly not be possible to have a branch or commercial bank in every village in Africa or it will take an enormous amount of time and also a huge infrastructure cost,” said Vanessa Moungar, Director of Gender Department, Women and Civil Society, AFDB.

These funds are be used to develop electronic financial services for low-income communities.

“It’s the official launch of the Africa Digital Finance Initiative. We work with a number of partners, first and foremost, the Bill and Belinda Gates Foundation but also the governments of Luxembourg and France and hopefully soon many other partners,” said Pierre Guislain, AfDB Vice-President, in charge of the private sector, infrastructure and industrialization.

Digital technologies are expanding access to financial services for millions of people, including women. This is an incredibly attractive prospect and the AfDB is relying heavily on these new tools to integrate millions of Africans currently unbanked into the formal and regulated financial system.

During these annual general meetings, the African Development Bank also signed several bilateral agreements.

One of them is the “Boost Africa/E-Lab” initiative. A joint initiative of the AfDB and the European Investment Bank for youth employment in Africa. It aims to make the most of the continent’s potential and to multiply opportunities on the ground. The agreement provides for a grant of some two and a half million euros.

“We took advantage yesterday of signing with the African Development Bank a part of the boost Africa project that we are co-financing. This is a very good initiative between the EU and the African Development Bank and we have one component to help to make it fly in the best way possible, Ramund Furrer, Switzerland Governor said.

The African Development Bank wants to play a major role in the fight against poverty and the improvement of living conditions on the continent, through the promotion of public and private capital investments in projects and programmes that can contribute to the continent’s economic and social development.

To achieve these objectives, shareholders approved an increase in the AfDB’s equity capital.

In 2018, the AfDB contributed to the installation or rehabilitation of 2,430 km of power lines and the installation of 447 MW of power generation units.

19 million people had access to improved agricultural technologies while another 14 million people had access to improved transport services.