There is a compelling case for accelerating Africa’s industrialisation in order to create jobs, reduce poverty and promote inclusive economic growth. This is according to African Development Bank president Akinwumi Adesina, citing data from the bank’s 2018 African Economic Outlook.
He says that infrastructure projects are among the most profitable investments any society can make as they “significantly contribute to, propel, and sustain a country’s economic growth. Infrastructure, when well managed, provides the financial resources to do everything else”.
Noting that economic diversification is key to resolving many of the continent’s difficulties, he urged African governments to encourage a shift toward labour-intensive industries, especially in rural areas where 70% of the continent’s population resides.
“Agriculture must be at the forefront of Africa’s industrialization,” he says, adding that integrated power and adequate transport infrastructure would facilitate economic integration, support agricultural value chain development and economies of scale which drive industrialisation. Adesina says that economic diversification via industrialisation with tangible investment in human capital will enable the continent’s rapidly growing youth population to successfully transition to productive technology-based sectors.
He also highlighted the relatively unknown win-win situation that Africa’s industrialisation can generate within the developed world, citing data from the report, which notes that “increasing the share of manufacturing in GDP in Africa (and other less developing countries) could boost investment in the G20 by about $485-billion and household consumption by about $1,4-trillion.”
Adesina says there are various innovative ways in which African countries can generate capital for infrastructure development.
The Africa Investment Forum, to be held in Johannesburg in November, will mobilise funds for infrastructure development, to bridge an estimated funding gap of $130-billion to $170-billion a year, up from previous estimates of $100-billion per year.
New infrastructure financing gap estimates and innovative ways through which African countries can raise funds for infrastructure development are among the highlights of the 2018 edition of the report.