AfDB Should be Africa’s Premier Development Institution – Panel Report
Tunis, 22 January 2007 – Given the huge development challenges it faces, Africa, more than any other region, needs a premier continental development bank, an Independent High Level Panel on the Bank Group says in a report released on Tuesday in Tunis.
The report, "Investing in Africa’s Future: The ADB in the 21st Century," says while poverty reduction and promoting growth and economic integration will be the overarching objective of the Bank, it should foster economic integration and, particularly, undertake regional investments in which returns are greater than those for any individual country and which may otherwise not be financed.
It says the AfDB of the 21st Century should provide a range of regional public goods, particularly knowledge and advisory services, to transfer experience and best practice, and to be an African voice on development internationally. The report says the Bank should also channel development capital efficiently to all African countries on reasonable and predictable terms.
The report lists four interlocking priorities for the Bank:
- Investing in infrastructure: Africa will never become competitive, or realize its productive potential, without massive improvements in infrastructure, with needs estimated at US$20–30 billion a year. Infrastructure is a precondition for, and an enabler of growth for private sector development. The report notes that the ADB already has solid experience in infrastructure, adding that the Bank has generally performed well on its mandate from the African Union to implement the infrastructure component of the New Partnership for Africa’s Development (NEPAD) as well as lead several multi-donor initiatives. The panel, however, believes that the Bank must be more proactive and take more leadership in defining needs and priorities, designing strategies and action plans, bringing stakeholders together, and coordinating and managing implementation. It should help Africa build infrastructure to effectively mitigate and adapt to climate change through clean energies (hydro and wind power), all-weather transport and irrigation projects. More of the resources available for infrastructure should be channeled through the ADB.
- Building capable states: The report says effective and accountable institutions are essential for sustained economic growth and social progress, explaining that building capable states must be at the heart of the ADB’s work just as engaging in fragile and post-conflict states is an imperative rather than an option. The Bank should have a leading role in issues of governance but intervene selectively, consistent with its other areas of focus. Its assistance must be flexible, fast, and consistent, well coordinated with other players. Additional financial and human resources will have to be directed accordingly.
- Promoting the private sector: The report asserts that that the private sector will drive growth in Africa noting that it behoves the ADB to help it do so by promoting an enabling environment, by facilitating investment and entrepreneurship. This means listening to the private sector, lending directly to private interests, and helping governments reform their legal and regulatory frameworks to strengthen governance and accountability. The ADB must better exploit the advantages of its integrated structure, building up country and regional strategies that encompass both the private and public sectors and foster the synergies between them, the report says, noting that the Bank’s direct private sector operations tripled in the last year and should grow further.
- Developing skills: The advisory panel urged the AfDB to help Africa build the skills it needs to be competitive, noting that in 2030 half of Africans will be under 25. The continent will have transitioned to a primarily urban population. Only economic growth can provide Africans with opportunities. However, to grasp these opportunities, they will need the right skills. The report says that given the heavy involvement of other donors in primary and basic education, the ADB should concentrate on vocational training, higher education, and science and technology. The priorities should be building centers of excellence, providing the necessary infrastructure for education, and developing mutually supportive links with the private sector to promote the use of local skills.
This 13-member Independent High Level Panel on the Bank Group, co-chaired by former Mozambican President Joachim Chissano and former Canadian Prime Minister Paul Martin, and including the Nobel Laureate in economics, Joseph Stiglitz, was established by President Donald Kaberuka as an independent advisory body to provide recommendations on the AfDB’s strategic vision and on the operational strategies needed in the medium to long term.