Africa has what it takes to transform and grow its economy but faces rigid barriers, including a sometimes unfriendly global financial architecture, say leaders who gathered in Nairobi this week for the African Development Bank’s annual summit.
While the continent’s average GDP growth is estimated to have slowed in 2023, African economies remain resilient, Africa Development Bank President Akinwumi Adesina said at the meeting.
"The African Development Bank projects that Africa's real GDP growth will rise from 3.1 percent in 2023 to 3.7 percent in 2024 and 4.3 percent in 2025. Importantly, more than half — that is 31 countries — achieved higher GDP growth rates in 2023 than in 2022," Adesina said.
GDP, or gross domestic product, is used to measure the economic health of a country.
As Africa’s bank, the AFDB — which turns 60 this year — has the responsibility to mobilize financing to develop the continent, said Adesina, the former Nigerian agriculture minister.
That work is done, he added, against the backdrop of major global challenges including “heightened geopolitical tensions, the disruption of global value chains, rising food and energy crisis, increasing debt service payments and, of course, the devastating effects of climate change … from droughts to floods, cyclones to unpredictable weather patterns, the loss of lives and poverty. And enormous fiscal cost to countries."
Heavy rains and flash floods recently killed hundreds and displaced thousands across East Africa, where the U.N. estimates that 1.6 million people were affected.
In Kenya, the rains killed more than 280 people, displaced about 53,000, and destroyed thousands of crops.
Kenya’s President William Ruto was among those who attended the summit, along with leaders and officials from Zimbabwe, Somalia, Namibia, Rwanda, Congo-Brazzaville, Libya and others.
Ruto said with the world’s 10 fastest growing economies being in Africa, the continent has what it takes to succeed, but it faces the rigid barrier of the global financial architecture that is misaligned with the continent's aspirations.
"We routinely borrow from international markets at rates far above those paid by the rest of the world, often up to 8 or 10 times more,” he said.
Ruto, Adesina and other leaders called for a reform of the global financial architecture to mobilize even more financial resources they say are needed to accelerate Africa's growth and development.
"The debt problem faced by many countries, which consume the largest share of national resources and starve [the] development agenda, we are a direct result of [this] unjust financial architecture,” Ruto said. “This situation not only makes debt unsustainable but also undermines growth, prevents countries from investing in resilience."
That sentiment was echoed by African Union Commission Chairperson Moussa Faki Mahamat, who said the impact of the COVID-19 pandemic, which tested economies worldwide and especially in Africa, is still being felt.
He said that all of the African Union’s member states have been caught in the spiral of an ever-pernicious debt which keeps them under the control of lenders with suffocating demands, despite numerous promises to alleviate this burden.
An economic outlook published during the summit by the bank lays out a mixture of policies that are needed to address some of the continent's challenges. These include promoting local production and diversifying import sources to address rising food prices, and helping reform the current global financial architecture to help with debt restructuring.
