African Development Bank: Partner of choice for the Eastern Africa we want

08/10/2014
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In a newly released report prepared in 2014 by the African Development Bank’s (AfDB) East Africa Regional Resource Center in Nairobi, Kenya, on the occasion of the Bank’s 50th anniversary, the AfDB describes how it is fulfilling its mandate in Eastern Africa as Africa’s own development bank. The report takes stock of the socio-economic situation today; highlights the Bank’s successes; describes new strategies and instruments; and identifies key challenges the region is likely to face in the next decades.

The report explores each of these themes from both a country and regional perspective, providing a picture of each of the region's countries (Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Rwanda, Seychelles, Somalia, South Sudan, Sudan, Tanzania and Uganda), setting out their strengths and challenges to be met, and the trends for their future prospects.

Key findings

Structural transformation is at the core of the challenges which need to be addressed. Most African countries are now “factor-driven” and they must seek to become “efficiency-driven” to better compete in the world economy. Ultimately, countries should aim to become “innovation-driven” if they wish to become among the most competitive in the world. Seychelles is leading by example on this front.

Since natural resources are the region’s primary source of comparative advantage, the region should base its structural transformation on that foundation, establishing strong and diversified and transparently-governed resource-based economies. Government systems that ensure effective and transparent management of resources will be key to inclusive development.

Most Eastern and Southern African countries have a vision of an integrated region, driven by the Tripartite Agreement between the Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC) and the East African Community (EAC). A large number of cross-border infrastructure projects (profiled in the report) will be realized in the coming decades, radically altering the face of Eastern Africa and introducing a step-change improvement in the business climate. At the same time, there is a need to streamline and rationalize the region’s many existing trade agreements, and overcome non-tariff barriers which continue to hamper regional trade and growth.

Addressing inequality is becoming a more urgent policy issue. The emerging challenge of climate change is another challenge the region must address. A third issue underlying growth prospects is the increasing role the private sector needs to play in supporting growth. While government programs and policies remain crucial to growth, the substantial investment needs of Eastern Africa will require larger and more competitive private sectors. Finally, there is a clear link between stability and rapid economic growth. More effective efforts at managing risks arising from fragile situations has become a real priority in Eastern Africa.

Action to be taken by the Bank

Africa’s premier financial institution, the AfDB plays a central role in the socio-economic development and regional integration of Eastern Africa. The long-term vision of a sub-region where goods, capital and people can move freely across borders to create a larger market is crucial and the AfDB’s continued focus on this priority will be essential to secure the economies of scale necessary to make Eastern Africa a more efficient participant in world markets.

The African Development Bank will continue to support regional integration, and will sustain its role as a leading financier of infrastructure. The Bank will maintain a focus on education and training, in order to make growth in Eastern Africa more inclusive. The rapid expansion of programmes to address climate change will be an urgent priority. The Bank expects to expand substantially its work with the private sector. The AfDB will leverage its long and close relations at the country level to promote stability.