African Development Bank president makes case for Africa’s industrialization
African Development Bank (AfDB) President, Akinwumi Adesina, speaks to delegates during the 53rd edition of the annual bank meetings in Busan, Korea. PHOTO BY EDGAR R. BATTE
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Busan, South Korea - Sixty years ago, Korea was a poor nation. Today, it is the eleventh largest economy in the world. African Development Bank President, Akinwumi Adesina says that the miracle on the Han River did not happen by chance but through industrialization.
“In the 1970s, Korea built heavy industries, investing massively in infrastructure, including rail and ports. By the 1980s, through deliberate policies, it shifted to light industries, and by early 1990s it moved into higher-value added industries. Today, Samsung and LG television and phones dominate globally, while Korean cars are everywhere,” he explains.
Adesina made the remarks while addressing media at a breakfast meeting during the 53rd edition of the bank’s annual meeting that are going on in Busan, South Korea where international media, governors and ministers are in attendance.
He said that Korea was deliberate and consistent in its industrial drive, just like others such as China and Japan, adding that Africa must learn from Korea’s industrialization and the equally remarkable experiences of China, Japan and other parts of the world.
Africa is de-industrializing and the leader of the continental bank hinges this on the fact that between 2012 and 2018, Africa’s industrial value added declined from $ 702 billion to $ 630 billion – a loss of $ 72 billion.
“Among countries with the largest industrial output, industrial value added dropped sharply: by 41 per cent in Nigeria, 26 per cent in South Africa, 64 per cent in Egypt and 67 per cent in Algeria. But some are doing well. Morocco’s industrial output expanded in the period by 16 per cent, as it became the hub for global aeronautical companies.”
Adesina adds, “Ethiopia witnessed a fivefold increase in its industrial value added, driven by its heavy investments in industrial parks, special economic zones, and strategic partnerships with Chinese companies for its leather industry, and with global textile and garment companies.”
To him, the deceleration of industrial output in Africa is at the heart of the massive youth unemployment in Africa. That is why 11 million youth enter the labor market each year and only three million of them get jobs.
To create more jobs – and he means quality, well-paying jobs, he suggests that Africa must fast-track industrialization. To this end, the bank plans to invest $35 billion over the next ten years towards its focus on industrialization.
Accordingly, the Bank’s industrialization strategy hopes to help Africa to raise its industrial GDP from a little over $700 billion today to over $1.72 trillion by 2030. “This will allow Africa’s GDP to rise to over $5.6 trillion, while moving GDP per capita to over $3, 350,” he projects.
What with Africa’s natural blessings of vast and yet untapped agricultural lands, which currently account for 65 per cent of the arable land left in the world, to rich deposits of natural gas, oil, minerals and metals, the continent is brimming with natural resource potential.
Adesina, who was elected into office in 2015, descries the fact that Africa is simply exporting mainly raw and unprocessed commodities which has subjected the continent’s economies to volatilities of global commodity price.
“African farmers work hard every year to deliver 75 per cent of global cocoa production but Africa reaps less than five per cent of the profits from the $120 billion annual market for chocolate. Africa accounts for 50 per cent of the world’s gold production but only receives four per cent of the $300 billion revenues in global gold earnings,” AfDB’s president observes.
He says that the formula for the wealth of nations is clear: rich nations add value to all they produce; poor nations simply export raw materials, adding that Africa needs to industrialize and add value to everything that it produces from agriculture, to minerals, oil, gas and metals.
Further so, Africa needs to move away from the bottom to the top of the global value chains and to drive its industrialization process. Adesina also roots for Africa to quickly build a globally competitive, well-educated, highly skilled workforce for the future.
