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Annual Development Effectiveness Reviews 2018

Each year, the Annual Development Effectiveness Review (ADER) reviews development trends in Africa and considers how the African Development Bank (AfDB, or the Bank) has contributed to these changes. In the ADER we show Africa’s progress against key indicators and milestones and set out some of the main opportunities, challenges and risks that lie ahead. We take stock of how well we have delivered against our development targets, and identify where we can do better.

The theme of this year’s ADER is industrialisation. Because Africa needs to create a wide range of dynamic industries to deliver its goals, we explore progress towards industrialisation and examine how our operations are contributing to this progress. In doing so, the ADER also reviews progress on the other four High 5s and our cross-cutting priorities of governance, fragility, gender and climate change, including their critical contribution to our Industrialise Africa objectives.

The ADER assesses progress against our Results Measurement Framework (RMF) for 2016–2025, which links Bank actions to the High 5 objectives and to sustainable development across Africa. It also assesses the implementation of the Bank’s comprehensive organisational reforms to better support our regional member countries, maximise our development outcomes and deliver greater value for money.


Chapter 1: Industrialise Africa

Industrial development is instrumental to creating employment, boosting productivity and sustaining growth. Yet poor transport and energy infrastructure, coupled with limited access to technology and skills, have often limited the level of investment across the continent. Given the right policies, infrastructure and services, industrial development will be better positioned to take hold in Africa over the coming years, creating the economic dynamics needed for inclusive and sustained growth.

However, this chapter shows a mixed picture on industrialisation. While direct investment has risen
rapidly and is increasingly directed towards manufacturing and services, other key indicators of industrial
development—including industrial output, global competitiveness and economic diversification—are not
yet improving. Against this backdrop, the Bank is supporting African business in international value chains, helping governments develop industrial policies and strengthen their business environments, and investing in infrastructure with high economic returns.

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Chapter 2: Light up and power Africa

Access to energy is critical for industrialisation to take hold in Africa, creating jobs and unlocking economic potential. It is also key to improving people’s health, education and quality of life. Yet access to energy remains unacceptably low across the continent. Reliable, affordable power is urgently needed to transform Africa’s economy and achieve the Sustainable Development Goals.

In this chapter we show that Africa is making progress towards addressing its enormous power deficit and meeting the private sector’s growing demand for energy. In 2017, for example, the rate of access to energy outpaced population growth in Africa for the first time. Major investments are under way in power generation and transmission, and Africa is at the forefront in implementing off-grid and clean energy solutions. However, lack of power remains a significant constraint on industrial development, forcing firms to rely on costly back-up generators—estimated to cost Africa 2–4% of GDP each year. The Bank is committed to scaling up its investment in energy, working with a range of public and private sector partners to raise finance.

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Chapter 3: Feed Africa

Africa’s agriculture sector provides 60% of jobs across the continent; thus, modernising the sector is key to Africa’s development. With a more modern agriculture sector, millions of African farmers will be able to become more productive, earning higher incomes and lifting themselves out of poverty. By linking farmers to markets, supply chains and agro-industries, the agriculture sector will help create the jobs
and incomes that Africa needs to develop its economy and feed its citizens.

This chapter shows a mixed picture on progress. For now, growth in agricultural yields and productivity remains disappointing. Stunting rates are falling across Africa, but not quickly enough, and 224 million people are hungry or malnourished. A major push will be required to meet the SDG target of ending malnutrition by 2030. Under its Feed Africa strategy, the Bank is playing a leading role in modernising African agriculture: in 2017 our agriculture projects benefited 8.5 million people.

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Chapter 4: Integrate Africa

Industrialisation in Africa depends on a better integrated continent. Greater integration of African economies provides small-, medium- and large-scale producers and manufacturers access to larger markets and encourages trade and investment. The growth of integrated supply chains across borders adds value to primary commodities, creating more jobs and increasing economic activity.

This chapter shows that at present, however, intra-African trade is just 14.2% of total goods trade, partly
because of the high costs of trading across borders. Africa’s regional economic communities continue to promote integration, but more progress is needed in areas such as visa liberalisation. This is why the Bank is one of the champions of economic integration. We are a major investor in cross-border infrastructure: in 2017, we built or rehabilitated 414 km of cross-border roads and built one-stop border crossings to facilitate trade.

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Chapter 5: Improve the quality of life for the people of Africa

The Bank’s High 5 priority Improve the quality of life for African people is at the core of our work. The Bank believes that people across the continent should have opportunities to work and earn an income. They should be able to develop the skills they need for employment and enterprise. They should also be able to access quality social services, from health and education to water and sanitation, and to live in safe and sustainable environments.

This chapter shows that Africa’s economic growth has not yet translated into progress on poverty reduction: 41% of Africans still live below the poverty line, and inequality is worsening. “Skilling up” young Africans will be key for industrial development. Enrolment in education has steadily increased, but vocational training opportunities remain limited and youth unemployment is high. Therefore, the Bank is investing to create more jobs, especially for young people and women. The Bank is also working with national governments to overcome capacity shortages in science and technology; in 2017 we provided 395 000 people with vocational training.

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Chapter 6: Cross-cutting and strategic issues

Optimising the development impact from the Bank’s High 5 priorities requires concentrated action on cross-cutting and strategic areas. Throughout our portfolio, to ensure sustainable outcomes, we focus on governance and institution building, mitigating fragility, adapting to climate change and striving to ensure gender equality.

This chapter puts the Bank’s work in the context of Africa’s cross-cutting challenges. Overall, Africa has achieved progress on governance, although some countries still face serious governance challenges. The Bank remains involved in fragile situations, adapting our programmes and instruments to promote development outcomes. And many of our projects are designed to increase Africans’ resilience to the effects of climate change and to help women overcome the barriers they face to contributing fully to Africa’s economy.

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Chapter 7: Improving our development impact and efficiency

The Bank continually seeks to improve its performance. We undertake new measures to maximise our development impact, mobilise more investment resources and deliver development outcomes as efficiently as possible.

This chapter shows that, overall, the Bank is improving its operational effectiveness and its organisational efficiency. In 2017, Bank disbursements reached a record level of $7.6 billion. As our operations scale up, our Development Business and Delivery Model is driving forward deep internal reforms, designed to enable us to deliver better value for money for our clients and stakeholders.

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