AfDB Governors from Rwanda and Nigeria paint realistic and optimistic picture of Africa
OREANDA-NEWS. April 18, 2016. The 'High 5s' - the African Development Bank's top five priorities for Africa - came through loud and clear when two of the Bank's Governors discussed the economic state of the continent at the World Bank-IMF Meetings in Washington, DC on Friday. Lighting and powering Africa, feeding Africa, industrializing Africa, integrating Africa and improving the quality of life for the people of Africa were all cited by Claver Gatete, Finance Minister for Rwanda, and Kemi Adeosun, Finance Minister for Nigeria, either as current or future priorities for their countries.
None of the panelists on the IMF panel on 'Sub-Saharan Africa - just a rough patch?' shared the gloomy view of the event title, derived largely from the fact that Africa has suffered from a global fall in commodity prices and a global reversal in financial good health. "I am optimistic", said IMF Deputy Managing Director Mitsuhiru Furusawa, pointing to 13 out of 45 Sub-Saharan African stories achieving growth of over 5% in 2015.
"It is not as gloomy as you imagine", said Minister Adeosun, as she set out her country's oil conundrum. Oil generates only 13% of Nigeria's GDP, but as much as 70% of Government revenue. "Our question is: why does 87% of our economy yield so little?"
Minister Gatete revealed some of the secrets of Rwanda's success, in its macroeconomic stability and its private-sector driven growth. That growth is inclusive and modern to the extent that 90% of Rwandans are banked and within the financial system.
Arvind Subramian, a Fellow at the Center for Global Development, stressed that there is no long-term correlation between economic growth and commodity prices, and that "the fundamental dynamic in Africa is clearly positive, based on growth led by public investment".
Ministers Gatete and Adeosun were sanguine about what has worked in their economies, and what still needs to work.
"When oil prices are low", said Adeosun, "it brings a dose of reality, sobriety and discipline. It brings the imperative to get things right, and make reforms. ... But the best fiscal buffer is not from having savings or even the policies - you have to grow yourself out of problems." Echoing the first, second and fifth of the Bank's High 5s, she went on to identify three immediate priorities for Nigeria: turning agriculture into agribusiness and ending food imports; securing the power supply; and creating jobs for young people.
Gatete picked up the fourth High 5, by stressing the importance of regional integration, and the work that Rwanda and its neighbours have done to reduce the cost of their borders. They have addressed the needs of hard infrastructure, and the soft infrastructure of improving customs procedures and using local currency. He glanced at the third High 5 - industrializing Africa - by pinpointing the importance of economic diversification. Asked why his country was so clean, he alluded to the fifth High 5, of improving the quality of life. "After the genocide, we resolved to give our people dignity", he said. "A key part of this is collective responsibility, and by establishing a country-wide system we call Umuganda, then everyone - from the President down - pledges to do something for their community on the last Saturday of the month. We are responsible for our development and our own society."
A final word to the 'rough patch' believers? "In Africa we're growing, we're young, we're late adopters, and we're a place of opportunity", said Minister Adeosun. "To all investors, I would say make your medium-term plans with us."
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