African Development Bank (AfDB) President Akinwumi Adesina unveiled the elements of an African industrialisation strategy at an international meeting of African Heads of State and Government and their Japanese counterparts, and called for the linking of stock markets to enlarge Africa's domestic markets.
"AfDB's Industrialisation Strategy for Africa, developed jointly with the African Union, the UN Economic Commission for Africa (ECA) and the UN Industrial Development Organization (UNIDO) targets rapid industrialisation by doubling Africa's Gross Domestic Product within 10 years," Adesina said.
Addressing a session on "Promoting Structural Economic Transformation Through Economic Diversification and Industrialization" at the Sixth Tokyo International Conference on African Development (TICAD VI) in Nairobi on Saturday, President Adesina said African countries needed to change economic policies to survive.
There are several African countries which have depended on the output of oil, minerals and the export of unprocessed raw materials to the world commodity markets. However, most of the commodities such as tea and coffee, have recorded an over-supply, leading to a deep decline in prices.
In the case of crude oil and other petroleum products, an oversupply and weak demand for the product has seen the price of crude drop drastically, forcing most countries which had depended on the sale of oil to experience difficulties in servicing foreign loans and reporting huge currency depreciation.
President Adesina said the AfDB worked with its continental partners to develop the industrialisation strategy, which depends on rapid economic growth in Africa, to empower the industrialisation.
"Africa has to diversify its economy in order to achieve rapid economic growth," President Adesina said.
One of the major initiatives of the industrialisation strategy would be to work towards linking the stock markets within Africa and creating a bigger bond market, Adesina said. This would enable entrepreneurs across Africa to raise affordable finance for rapid economic development.
"We must get it right. We must end the African energy crisis. That is the reason the AfDB is implementing a new plan to invest US $12 billion over the next five years on energy and power generation and distribution. This we hope will leverage another US $45 billion worth of private sector investments on power. The high cost of electric power is one of the impediments to investors."
The AfDB President told the African leaders it was also important for countries to tap the locally available resources, including US $334 billion held by African pension funds, to enable investors to access affordable funding for long-term investments.
"We must have a strong domestic bond market in Africa. We must work towards integrating the stock exchanges from Johannesburg to Cairo. This will create a bigger market for bonds. It would also allow African companies to cross-list in different areas," President Adesina said.
The session was addressed by eminent personalities in international development, including Yoshifumi Matsumura, Japanese State Minister for Economy and Trade and Industry; Li Yong, Director General of UNIDO; and Helen Clark, UN Development Programme Administrator.
President Adesina asked the African leaders and policy-makers to get agriculture right.
He said agriculture was one of the key avenues of generating economic growth, empowering the youth and addressing the crisis posed by fragile economic policies, which have seen a rise in joblessness.