International Day for the Eradication of Poverty: Agriculture and energy key to Africa’s growth, says AfDB President

16/10/2015
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African Development Bank Group President Akinwumi Adesina paid a courtesy call to President John Dramani Mahama of Ghana on October 16, 2015 in the country’s capital, Accra.

The two discussed the Bank’s cooperation with Ghana in the context of the changing global economic landscape, and how the Bank can further support development initiatives in the West African nation. President Adesina commended Ghana for its efforts in significantly reducing poverty over the years, but noted the variability in the level of poverty and inequality in the country. The poverty rate is four percent in the Greater Accra region, while it reaches as high as 80 percent in the northern region, according to official statistics.

“I am particularly concerned about northern Ghana. We need to look at how to address poverty where it is highly concentrated,” President Adesina said.

The two cited agriculture as the game-changer, with the ability to create jobs for young people while at the same time ensuring food security. “But not just agriculture for food production,” Adesina said. “We need to look at it from a different perspective – value addition. We need to begin looking at agriculture as a business.”

President Mahama observed that the region had 11 million hectares of arable land with potential for development. “We have not leveraged it fully,” he acknowledged. The two leaders explored how the land resources could be utilised for rice production, transforming the region into a huge producer of the staple. President Adesina reaffirmed the Bank’s commitment to support this initiative, in addition to giving continued support to the energy sector.

The Bank’s portfolio in Ghana currently stands at USD 760 million, of which 52 percent is in the infrastructure sector – chiefly transport and energy. Agriculture accounts for 20 percent, and the social sector 14 percent.

While in Accra, President Adesina also participated in the marking of End Poverty Day, and the launch of the World Bank report Poverty in a Rising Africa, ahead of the International Day for the Eradication of Poverty on October 17. The report highlights growing poverty levels despite economic growth on the continent, charting the parallel course of poverty-reduction and population increase. It also makes particular mention of the gender face of poverty, and the mechanisms in place to address it. 

President Adesina at the launch of the World Bank report, Poverty in a Rising Africa in Accra. With him are (from left) DRC Prime Minister, Augustin Matata Ponyo, Ghanaian President John Dramani Mahama, and World Bank President Jim Yong Kim.

At the report launch, Adesina announce the establishment of a fund, together with other partners, that will help women to access financing. The USD 300 million facility, called Affirmative Finance Action for Women, is expected to reduce the risk of lending by commercial banks across Africa, and leverage USD 3 billion in financing for women and women-owned businesses, within the next five years. “Poverty in Africa has a gender face,” Adesina said. “A majority of the poor are women. They lack access to finance or property rights, especially land. We must change this.”

Adesina also reiterated the importance of fixing Africa’s energy challenges in order to spur economic growth. “Energy poverty in Africa drives up poverty rates. Without energy, micro, small and medium-sized enterprises – which account for over 90 percent of businesses on the continent – operate below capacity. Industrialization is stalled, and Africa loses two to four percent of GDP,” he said.

“If we get power right, we will get everything right in Africa,” Adesina stressed.

World Bank President Jim Yong Kim noted that only 24 percent of Sub-Saharan Africa’s population has access to energy, and when available, it can be unreliable and unaffordable. He emphasized the implications this has on business investments. “In most countries, the lack of infrastructure is a major constraint for doing business. It has been found to depress business productivity by around 40 percent in some places,” he said.

President Mahama said his country had embarked on strategies to produce more power within the next five years. He observed that this would help in accelerating efforts towards the achievement of the Sustainable Development Goals that seek to end poverty.

Adesina also participated in a “Shared Prosperity Forum” at the University of Ghana, alongside Kim, Nigerian businessman and philanthropist Tony Elumelu, and Ghana’s Education Minister, Jane Naana Opoku-Agyemang. They debated the theme of ending extreme poverty by 2030, and boosting shared prosperity among the poorest 40 percent of the population in developing countries.

The forum focused largely on undertaking reforms in the education sector, so as to empower students not to become job hunters but job creators. It also addressed building health-care systems with the ability to tackle threats of epidemics, as well as private sector participation, and transforming agriculture into a business- and wealth-creating sector.