This year’s theme of the annual meetings of the African development bank focuses on accelerating Africa’s industrialisation. CNBC Africa’s Kenneth Igbomor caught up with Akinwumi Adesina, the President of the African Development Bank to discuss this and more.
The 2018 annual meeting of the African Development Bank where we were look at ways to chaRt a new course for industrialisation in Africa.
It’s great to be here in South Korea, if you look at the history of the Korean development it’s actually quite amazing. This a country that is smaller than Liberia, smaller than Benin, it’s actually smaller than Mali. It’s is one third of the size of a country like Algeria and in fact, 32 countries are bigger than Korea. In the 1960s, per capita GDP was about $200, today if you take a look at them, per capita GDP is $26,000 and so how did they do it? They call it the miracle of the Han river, it wasn’t really a miracle, it was the fact that they decided to industrialise. To industrialise, they started off with heavy industries, then they went to light manufacturing and then moved up into more high tech value-added industries and today you have the Samsungs of the world; everybody carries a samsung, look at the LG televisions which are all made here, you look at Hyundai; all the cars made here. So what did they do and how did it do it? I think first and foremost is the importance of long term planning, the second thing I think is very important is to have very clear industrial policies that are implemented in a sustainable way, it’s not start today and tomorrow you don’t know what you’re doing. The third is heavy investment in science, technology and innovations and finally I think for me the most important thing for them is the mindset; it matters. When you’re really tired of being poor, when you say it’s time for me to really develop and give myself wealth, then you’re going to start industrialising. No single nation in the world has ever gotten out of poverty into wealth without industrialising. The Koreans decided they were going to do it and they got it done, so the mindset and commitment are very critical.
On that last point, lets go deeper on it. We’re talking about a new thinking for African government and for policy makers. How is the African Development Bank acting as a catalyst to drive this new thinking?
If you take for example Africa as a continent and as president of the African Development bank my mind always works through this all the time, Africa is not a poor continent at all but Africa just happens to have a lot of poor people. God has blessed this continent with a lot of natural resources, we have great sunshine, great agricultural land in fact, 65% of the available arable land to feed nine billion people in the world by 2050 is not in Asia it’s not in Latin America or Europe it’s actually in Africa. We have a lot of oil, we have gas, we have minerals, we have metals so we don’t have any excuse to be poor. What we have to do is to manage those resources well, is to industrialise that and that’s why the bank has actually launched a major strategy called Industrialised Africa; it’s one of our high five priorities and the key of that is we want to support countries to have very good industrial policies helping them to actually invest a lot more in infrastructure that can enable industrial clusters and special economic zones to emerge. Third is also to make sure that we are supporting the development of capital markets that you can mobilise savings for and that can drive private sector investment. Most importantly is that as a bank, what’s most important to us is not just the money, the knowledge matters. So African countries can be exposed; why did it work, how did they do it in China, how did they do it in South Korea, how did they do it in Japan, how did they do it in Latin America so that we can have the right knowledge and learn from the best; make sure you do what the best did but don’t make the mistakes of others. That’s what we are doing so we are going to be investing in the area of Industrialising Africa. A total of $35 billion over the next ten years which is roughly $3.5 billion a year. Our goal is very clear, we want to help this continent to raise it’s industrial GDP. Right now it’s roughly about $700 billion and we want to raise that to about $1.7 trillion by 2030 and with that, will see a lot of jobs being created and so on. So it’s not just about industries, it’s about the fact that when you have industrial development you not just create a lot of jobs, but a lot of quality decent well paying jobs.That’s what you find all these countries that have been able to do it and that’s what Africa must do.
Knowledge economy is really important to the of driving this. Looking at friendly environment for investment, it’s very critical and needs to be done but when you look at the knowledge economy and all the other aspects you know how do we protect people’s intellectual property? For example you mentioned Samsung, they are able to do what they do because someone’s intellectual property was protected. How does this sitting help the industrialisation strategy for the AFDB?
One of the things that you find is if you are going to create clusters of innovation, you have to make sure that those that are actually developing the innovations can have their patents and they can have intellectual property rights protection and those are areas that are very important to drive creativity, innovation and entrepreneurship on the continent. So one of the big areas for us is how do we improve the business investment regulatory environment that allows private sector to thrive. The second thing that’s going to be very critical in trying to do this is what do we invest in because you cannot industrialise if you don’t have a right productive capacity and if you don’t have the right human capital; in particular the skills that are necessary for industrialisation. Take a look at the world we live in today, you live in a world where artificial intelligence is going to rule, robotics is going to rule. If you take a look at biotechnology, nanotechnology, quantum, computing, these are all the things that are going to dominate the world. So I want us from the African Development Bank to start investing in our young people not for the jobs of the past but for these jobs of the future and that’s why the bank is going to be investing heavily in helping to create about 230 computer coding centres that would allow young people to be able to get into the coding market globally. The bank has also invested quite a lot in helping to create industrial parks for example we put $200 million into helping to create industrial parks; digital parks for example ICT parks in Cape Verde, Senegal and we’re also doing that Kenya and Rwanda. These are very important areas, and you not just need the knowledge, but also need the enabling environment for that to thrive but then you must have the supportive infrastructure for the entrepreneurs to be able to take off.