In September 2015, world leaders agreed to an ambitious set of Sustainable Development Goals, with the objective of eliminating extreme poverty from the planet by 2030, and tasked the multilateral development banks to significantly scale up their activities by leveraging and crowding in financial resources and moving from “billions to trillions”.
The SDGs will only be realized if they can be achieved in Africa. In response, the Bank is scaling-up financing in five priority areas: we call them the High 5s — Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the Quality of Life for Africans.
Africa has the lowest access to electricity in the world, with over half of the population without electricity, compared to 34 percent in South Asia and only 2 percent in Latin America. In sub-Saharan Africa, the average access rate is around 25%, and the average citizen consumes less than 200 kilowatt hours annually per capita compared to 12,954 in USA. Under the Light up and Power Africa initiative, the Bank’s resources will be used to develop projects and crowd in resources from bilateral, multilateral and private sector partners that will help generate the 160 gigawatts of new capacity by 2025 to provide universal access to electricity.
Agriculture accounts for over 60 percent of jobs across the continent and yet contributes only about a quarter of the continent’s income due to low levels of productivity, which explains the high levels of rural poverty in Africa. Despite its wealth of arable land and water resources, Africa is a net food importer, with net food imports amounting to USD 35 billion in 2015. To respond to this challenge, the Bank has developed a Feed Africa strategy, whose objective is to help eliminate food imports and make the continent self-sufficient in key agriculture value chains by 2025.
Africa’s share of global manufactured value added is approximately 1.5 percent, a number that has remained constant over the past decade. Of the continent’s USD 590 billion in exports during 2011–2013, 72 percent consisted of commodities. This makes Africa particularly vulnerable to fluctuations in international commodity prices. The Bank has developed an Industrialize Africa strategy, through which it intends to address a diversity of challenges encountered by the private sector and support value addition, resulting in increased regional trade, improved balance of payments, increased formal employment and an increase in manufactured value added by 130% by 2025.
Intra-African trade is limited — approximately 15 percent compared to 54 percent in North America, 70 percent within the European Union and 51 percent in Asia. It is estimated that the lack of integration costs Africa between 1 to 1.5 percent in GDP annually. The Integrate Africa strategy will focus on addressing the barriers separating African countries, creating regional value chains and leveraging complementarities in order to exploit the continent’s huge market potential.
Despite relatively high economic growth rates over the past decade, the continent presently only generates 3 million jobs annually leaving an annual employment gap of about 8 million. To improve the quality of life for the people of Africa, the Bank has developed a Jobs for Youth in Africa strategy which aims to create 25 million jobs across the continent by 2025 by promoting entrepreneurship, strengthening know-how and skills, and creating durable labour market linkages.
This is an exciting time for the continent and a rapid process of transformation is underway. The African Development Bank is at the centre of that transformation process and is deepening its strategic role by scaling up investment in the High 5 priority areas.