How one man helped raise $180 billion for Africa in six years

Transcription from the original interview: https://edition.cnn.com/2024/06/25/world/video/marketplace-africa-african-development-bank-akinwumi-adesina-spc

Dr. Akinwumi Adesina

The young people we have in Africa are brilliant. They are smart, they are dedicated. We need to make sure they have the financing to turn their ideas into great businesses, because we need to create youth-based wealth in Africa.

Eleni Giokos

You’re busy with so many different things, but I want to start talking about AI, technology, innovation, and how that’s playing into some of the projects that you’ve been busy with at the bank.

Dr. Akinwumi Adesina

Artificial intelligence is a big thing in the world today. There was an analysis done by Bloomberg that shows that just AI alone will add roughly about $16 trillion to the global economy by 2030. In Africa, that will add about $1.2 trillion to the economy. We invest quite a lot in the energy sector. And so, what AI would tell you is the performance of your entire transmission infrastructure. It will tell you quite a lot about where that is going and what needs to be done to fix it. So, AI plays a big role.

But take also the case of water. Artificial intelligence with remote sensing data, you know, allows you to be able to do things like smart metering. And so, whichever way you look at it, whether it’s in energy, whether it’s, in fact, even in manufacturing, artificial intelligence helps you quite a lot.

Eleni Giokos

For the continent alone—and this is end of 2021 figure—the debt burden is sitting at $824 billion, and the debt burden in Africa is growing. Is that worrying you?

Dr. Akinwumi Adesina

It’s extremely worrying. Of course, when you take a look at the debt situation, $824 billion a year, and you have the debt to GDP ratio of 65%. Well, what has actually happened, Eleni, is the structure of the debt itself, right? In 2000, about 52% of the total debt was concessional debt. Now, today that has gone down to 25%. If you look at commercial debt, private creditor debts and Eurobond debt, in 2000, that was roughly about 14%–17% actually, to be precise. Today it’s 44%. So, you’ve seen a shift in terms of where the debt burden is, to a lot of short-term debt, high interest rates.

The second thing that has actually changed as well is that you find natural resource-backed loans being used a lot more today than they used to be. And that actually jeopardizes the long-term interest of the countries because they are non-transparent. It’s a bad deal because the relationship is asymmetrical. You’re desperate for money, so they will not price your assets properly. Secondly, you have to sign non-disclosure agreements so nobody can really see it. So, it complicates the debt resolution for everybody else.

Eleni Giokos

I’ve been covering industrialization of the continent for many years, and I know that it needs to happen. It must happen fast. Does the rest of the world that has been benefiting from the importation of raw materials and refining those raw materials actually want to see Africa industrialize?

Dr. Akinwumi Adesina

When it comes to globalization and your participation in export-led industrial manufacturing, you don’t need anybody’s permission to do that. The key is we have today the African Continental Free Trade Area. And we say the total GDP of that is $3.4 trillion. The African Continental Free Trade Area has to be an industrial manufacturing zone.

Take an example, the green metals. Africa has today 90% of the platinum in the world, 50% of the cobalt, 40% of the manganese. These are the things you need for windmills and all of that, for the electric vehicles. The size of that market, electric vehicles, today, is $7 trillion. By 2050, that’s going to become $57 trillion.

Now, the question is, are we going to be stuck again selling lithium and all that, when we know that if you were to produce lithium-ion batteries, precursor batteries, in Africa, you know what—it costs three times less than producing that in China, in the United States, or in Poland.

And that is why, at the African Development Bank, one of our strategies is to industrialize Africa. And so, Africa has to process and add value to every single thing that it has. Because, you see, the export of raw materials is the door to poverty. And the export of value-added manufactured products is a highway to wealth.

Eleni Giokos

Why should people and investors bet on Africa?

Dr. Akinwumi Adesina

If you’re not investing in Africa, I have to ask, where are you investing?

Take a look at where the world is. The New York Times just published not too long ago that the world is basically becoming more African. The population of Africa, look at it, is going to be the same population of China and India taken together.

Look, you’re talking about the future of electric cars in the world. That future depends on what Africa does with its platinum, with lithium, with its copper, with its manganese.

And when it’s about feeding the world, you know, 65% of the uncultivated arable land left to feed the world, is not in any [other] part of the world—it’s in Africa. So, what Africa does is going to determine the future of food.

So basically, what we have to do is to promote Africa as the investment destination of choice. Our job is to constantly make sure that we can market Africa, and so we still have a lot of work to do to make sure that we can develop bankable projects; that we can de-risk those projects; we can make sure that investors can always get their money out, and that we also make sure that the policy and regulatory environment is very much robust and supports greater private sector, in Africa.

You’ve been to the Africa Investment Forum that we have started in 2018; it brings together investors from around the world for Africa. With our partners, we’ve been able to mobilize $180 billion of investment interest in about six years. That just tells you that Africa is bankable.