State of the Africa Region: Opportunities in a Turbulent Time
Watch the Replay
State of the Africa Region: Opportunities in a Turbulent Time
Ver o evento em português >
In a global context marked by slowing economic growth, high inflation, and rising interest rates, what is the outlook for the Africa region? How will African countries rebuild robust economic growth, create jobs, and reclaim the development gains lost during the COVID-19 pandemic? What opportunities can African leaders find in this particularly turbulent time?
The State of the Africa Region event took stock of global headwinds affecting the region and provided a timely overview of macro-economic trends, given the slowing GDP, high debt, and historically high food and energy prices. The discussion specifically focused on measures that delivered big wins for food security on the continent, such as better targeted public spending, investments in food transformation and resilient food systems, and stronger intra-regional trade.
The event featured remarks from the World Bank’s Senior Management in the Africa region and discussions with a distinguished panel of African policymakers, leaders, entrepreneurs, civil society organizations, and youth.
And let me welcome you warmly to the first in person State of the Africa region here at the World Bank headquarters in Washington, D.C. It's truly a momentous occasion because of the virtual distance that we've all been subject to. And if anything, just to see this room full is truly a marvel, an honor and a joy. And I think we can begin with an applause and gratitude. The famous Dutch painter Vincent Van Gogh, I wondered, if he was to paint a picture of the world today, what would he do? Would he use those vivid blues for a bright sky and that piercing yellow for the sunflowers? Or would the image be bleak? If we were to ask the same of the Nigerian sculptor Ben Enwonwu, and say, build a statue that depicts humanity today. Would it be happy faces? Or would it be faces of fear? As a journalist speaking to ordinary people every day on the talk show I host, I get a sense that the world has many angry faces, many anxious hearts, fearful eyes. I think these great artists would be able to depict that. And the reason I'm using art as a metaphor is because they say art is a mirror of society. Artists are the most honest and bravest people among us who hold up a mirror to our conscience and show us what we're afraid to acknowledge. So, if I was to ask them, what does the world look like today?
My suspicion is they would say, it's bleak, it's dark. There's anxiety. Anxiety is brought on by imported inflation, rising food prices, rising fuel prices, shortages and electricity, war and conflict, money being too tight to mention for the average person, the kind of feeling that's hard to synthesize in economic data and statistics. And yet, in that economic data that we rely on to make policies, we have to see the faces of human beings. We have to hear the voices of women. We have to tap into the aspirations of young Africans who want better. In this State of the Africa Region session today, as we talk about opportunities in turbulent times, that's what we're doing. We're giving a face and a name, a personality, to the statistics. We're also going to tell you that when you drive down the streets of Accra or Dakar or Johannesburg, even with this cloud hanging over us, you see something different. You see young people harnessing their talent to engender a new creative industry. It's not an accident that Connell Thompson is playing beats from Africa today. The creative economy is now a 1-billion-dollar economy generated by young Africans through their music, their artistry and fashion, exported to the world. It's coming out of this Africa today, despite the metrics. When you walk into the fields, you see young entrepreneurs trying to do something in agriculture to stimulate some kind of a revolution in the agroprocessing space using hydroponics and technology to farm, you get a sense that Africa is on the precipice of something. When you read the Financial Times and many others like the New African, you hear of this new digital ecosystem that's burgeoning particularly in Lagos, where there's no less than 20 thousand tech startups in Lagos alone, not to mention the so-called Silicon Savannah in Nairobi. Big tech scouting for developers, scouting for the next big idea that is likely to come out of the African continent. And so, in the heaviness of the world, there are those rays of sunshine.
For us, in our conversation today, we'd like to focus on the sunshine in the way in which Van Gogh did. We'd like to tell you about the yellow sunflowers, we'd like to tell you about the joy. We'd like to tell you about the hope. Because on the African continent, there is hope. Despite what's happening in the world today, I still live in Africa. It is a much better continent today than it's ever been. And those are the opportunities in a turbulent time that we're going to focus on in our conversation today. And so, with those words, allow me to welcome you one more time to the State of the Africa region, a forum where we're paying attention to the opportunities in a turbulent time brought to you by the Africa region of the World Bank. That was an opportunity for an applause. [Applause]
There're no missed opportunities today, just a few housekeeping notes because we've got many of our colleagues who are watching via livestream. We appreciate all of you who have taken the time to be here with us this Saturday morning. But we also appreciate all of you who've logged on online using World Bank Live, LinkedIn, Facebook and Twitter. You are warmly welcomed to today's session. Because we live in a world that's multilingual, multicultural, and we like it that way, just be aware that you've been catered for. If you speak English, French or Portuguese, there is translation during the broadcast and all of you should have access to headsets. And if not, please put up your hand so that they can bring you a headset if you're going to be looking for translation either into English or French or Portuguese. We also have experts who are going to be facilitating the chat that's taking place on the livestream, and they're now ready to interact with all of you who've logged on virtually to answer any of the questions you may have. We don't want the conversation to end this morning. We'd like the themes that are brought up this morning to continue in social media and in other fora. So please, for all of you who are vivid social media aficionados, the hashtag is #AfricaSOR, as in Africa SOR hashtag Africa SOR, so that you can get the conversation going as well. And let's get the online audience interacting as well in the various chat rooms. We've also launched a poll which is up and running. When you look at the page, you'll find it on the World Bank Live page and on your Twitter channels. And the poll question, which we will find the answers to later on, is “which sector will most likely spur regional economic growth in the coming years?” On the African continent “which sector is most likely going to spur regional economic growth in the years to come?” Will it be technology? Will it be agriculture? Will it be financial services? Finance? Will it be education? Or will it be energy? So please, make sure to bring your answer into the poll and then we'll be able to gauge at the end what people believe is going to be the game-changer for Africa: technology, agriculture, finance, education, or energy. We look forward to hearing from all of you online and from all of you in the room. May I just ask that when it is time for us to have a short Q&A session, if you can keep your questions succinct and if you can, speak clearly, because, as I said, we're in a livestream so that people can see you. Without further ado, it's now time for us to get a perspective of Africa and the world from the World Bank. As we get a picture of where Africa fits in the geopolitical puzzle. [Applause]
Allow me to introduce to you Ousmane Diagana, the regional vice president for Western and Central Africa at the World Bank, who is going to share with us a perspective from the work that he and his team are doing in that part of the African continent [Applause]. Also, let me introduce to you Madame Victoria Kwakwa, who is the regional vice president for Eastern and Southern Africa for the World Bank, who will be sharing with us her perspective of the work that she and her team are doing in that part of Africa [Applause]. And then, please, just because he's new and he needs to feel the love, [Laughter] can we give a really warm welcome to the newest chief economist for the Africa region, [Applause] Andrew Dabalen. So, Andrew, you got a lot of love. Your stats got to match the love.
All right, so there are a lot of issues to consider. There's mounting debt that we referred to. There's slower growth. There's imported inflation. And we're told that on average, the incomes of the ordinary person have gone down by 0.7%. I've even heard murmurs that with the interest rates going up more and more, we're most definitely going to see some kind of a recession in late 2023. All of that is really worrying, Andrew. And I wonder if we should be worried or if there's a way to mitigate now before these headwinds come and find us.
Thank you, Lerato. This is my first day of the Africa region in this capacity, so I'm delighted to be here. Thank you for joining us this morning and a warm welcome to all of you. Let me summarize the state of the region in pre-takeaway messages. One is that growth is, in fact, going to slow down and it's because of four things that have happened in recent times. One is that the global growth itself has slowed down from 5% to about 2.9% and that is going to depress the demand for African exports and flows of investments into Africa. Two, inflation is high and it's rising because of the war in Ukraine, because of extreme climate and conflict. And that alone is going to depress consumption and investments. Three, interest rates, as you mentioned, Lerato, are rising and that is raising costs of borrowing and also cost of surfacing debt. African countries are now spending 16% of their revenues on surfacing debt and moreover, the dollar is rising. It's putting a lot of pressure on the currencies which is increasing the import bills and that is also foiling inflation. And then finally, African countries because of the fight during the pandemic have accumulated very high levels of debt. A lot of them are in debt distress. Almost 20 countries, 22 countries are in either debt distress or high debt distress. They've run out of fiscal space and cannot really mount an effective fight against these challenges. So, the second takeaway point is that these interlinked crises are foiling some of the highest levels of food insecurity we haven't seen in decades that are having devastating consequences in African people's lives. About 20 million of Africans have been added to the ranks of acute food insecurity this year alone. It's also putting a stop to progress in poverty reduction, which itself, as you remember, has had a setback during the pandemic. The third point I want to take away, which is the positive part of this is that the most urgent policy action right now is to protect the gains that the African countries have made in the last 20 plus years. There are three critical, urgent actions. One, it's really important to restore price stability because high levels of inflation that are uncontrolled are very destabilizing to social and economic life and they will certainly lead to rising poverty levels. That is really urgent and it has to be brought under control. The second is that it's really urgent to protect the poor and the vulnerable to funding adequately the programs that they rely on such as safety nets, food distribution programs and certainly basic services like education and health. Then finally, at this time when things are really difficult, it's really important to pay attention to the quality of spending and really the efficiency of spending. That is a policy action that is available to policymakers and in particular it's important to reprioritize your spending to high-value public goods such as infrastructure, energy and human capital. Finally, in particular, we've identified one area where pre-prioritizing can be extremely important in actually securing African food, ending hunger in Africa for real and ensuring food security, and that is in agriculture, by spending on water storage and management, research and development, and doing it into African free trade. None of this is going to be easy. It's going to require discipline and policy coordination, particularly between the fiscal and monetary policymakers. But these sets of action can give African countries the chance to restore growth in the long run. Pick up a piece of the files and read.
All right, so you've given us the macro-view. I'd like to get to the nitty-gritty, what's happening on the ground because, Victoria, you travel extensively across the continent with your teams and you see it in real life, what the needs are. Can you paint for us that picture of what you see and what those opportunities are in the midst of these challenges? I suspect your microphone is just on.
Yeah, Thank you, Lerato. And let me begin by saying a very good morning, honorable ministers, esteemed panelists and all of you here. Lerato, thank you so much for starting us off in such an upbeat manner with the music and the message about hope and sunshine in Africa. So, look, what are we seeing on the ground? Perhaps I'll start with some of the things that are the most worrisome and then come to some of the good points later. But in terms of the things that are really on my mind, Andrew has started us off with the harsh external environment that is causing so much challenge on the macroeconomic front. He's talked about it, so I won't go into it, but I just want to highlight the implications for poverty reduction, implications for really consolidating the growth recovery that had begun after COVID-19. Oh, well, post-COVID-19. Also, the poverty that is rising. The estimate suggested about 40 million more poor people in Africa. So that is one of the issues of concern. I think a second issue of concern is really a silent crisis around human capital because even before COVID-19, we, in Africa were challenged.
If you look at the number of years that the average child goes to school, it's about 8.2 years. But if you look at years in which they're really learning, given the poor quality of education systems, they're only learning five years. That's something to be worried about. Then if you look at enrollment rates, particularly of teenage girls, about a third of them who should be in secondary school are not, and they are vulnerable to gender-based violence. On the health side, if you look at maternal mortality rates, about 365 per 100 thousand births, that's really high. So, on a range of things there are major issues. You said the COVID-19 set us back, because what we're seeing now is that learning outcomes have deteriorated. What we're seeing is that even basic health services, immunization, prenatal, postnatal services have been rolled back and we're also seeing more children out of school that might probably never come back, particularly girls. And so, this is troubling. And these are areas that we're working on a lot in Africa, in the region.
The other area of concern is really about energy access, we’re in the 21st century. But it's just shocking that in some rural areas in Africa, access to energy is just 1%. We have about 568 million Africans that don't have access to energy, and without energy, you're not going to be able to do productive activity, go to school, run hospitals, etcetera. So, this is also a major concern. Again, COVID-19 has set us back. We've seen that after declining for about six years, in terms of the number of people that don't have access to electricity, it rose in 2020. About 100 million people didn't have access to energy, partly because of affordability issues, but also partly because of access issues. That's another thing that should worry us. I would say a big elephant in the room is youth unemployment. Over the continent, sub-Saharan Africa, we have a demographic dividend. We have a lot of young people. They're not finding jobs after school. We have about 10 million jobs to 12 million jobs needed annually. The estimates are that we're generating just about 3 million. Where are we going to be able to put our youth and tap the demographic dividend that we have? These are some of the things that are of concern. All the governments are concerned about these challenges, particularly on the youth unemployment.
I'll say a final word on water and sanitation. You think this is a basic right. Again, it's shocking that in some countries, the gap is widening and the movement is in the opposite direction of increase. Some countries are doing well, but generally, across the board, rates are very low. We need to work on these issues some more. Let me stop here. I can come in at some point and talk about the positives.
Yeah. But you've still presented for us a glass half full. [Applause]
A glass half full, yes.
In that crisis, there is an opportunity to solve the problem.
All right, Ousmane, let me ask you to come in and give us a sense of what you think the challenges, the opportunities are and what the development priorities ought to be.
I would have hoped to invent a language that could be called Frank-English-Spanish to reflect the linguistic and cultural diversity on our continent. But my colleagues told me, you need to be disciplined and you need to choose a language. I chose to speak French. That way, I believe some of our friends among the public will feel comfortable speaking French as well. This is the first session on the State of the Region that I take part in with my colleague, my friend and my sister, Victoria Kwakwa. I'm delighted that we work together on the continent. And congratulate, of course, Andrew and his new role, and with him the whole office of the economist for having established this tradition that during each meeting, spring meeting or annual meeting, we are gathered to think about the challenges facing our continent and discuss together things on which we could work. I also wish to congratulate the communications teams of the region for their extraordinary work that allowed us to be in this room. It's the first time that we find ourselves in this kind of room during the meetings. The African continent is a single continent. We don't have two continents.
I fully agree with what Victoria just said. If I had something to add, it would be maybe to repeat things, but I don't want to repeat. Nonetheless, let me highlight some of the issues that were raised by Victoria. The African countries, the African country as a whole is particularly struck by the issue of global public goods, be it pandemics, be it climate, be it conflicts. These consequences are visible, are felt, and are additional factors that add on to our woes and translate themselves, in particular, by making our individuals, our families, poorer, it even puts their lives in danger. It leads to migration, be it internal or external migration. Migration with all these young people who are leaving to find a better life, sometimes putting their lives in danger in the process. There are conflicts among farmers and ranchers, the social tensions that translate to coups. In the two most recent years, there have been six coups in Africa. This is a direct consequence of these factors, climate change and all the other end elements that I mentioned. Victoria said it.
There are also other factors or other manifestations of those issues. Among those, the most serious of them is the lack of learning. Kids can't learn enough in school to acquire the minimum required to be able to read and do basic mathematics. Even if they have those skills, they don't have the fundamentals that allow them to fit in life and become productive citizens who can contribute to the economy of their country. We're lacking basics, water, electricity, etc. When you combine all of this, I can only agree with Andrew's recommendations and the report that was presented.
It's important to act and to act quickly. This is based on three pillars. The first pillar is to protect lives, to save lives by maintaining social networks, social protection programs. We're not talking about humanitarian assistance here. There are other partners that play an important role, and that's a very important thing to do, but institutions such as the World Bank need to act in a sustainable manner and really affect the greater number, because this is the role of an institution such as the World Bank. So social networks, there is war on the continent. We forget it often. That, of course, also affects the production capacity in some sectors, but also the war in the world and our strong dependency, the dependency of African countries on the outside world is such that we need to create conditions for access of the population to food as soon as possible. We find ourselves already in a period at the end of our agricultural season, where production and yields will be low on the one side because of the lack of fertilizers, once again because of conflicts, but also due to this problem of a displaced population. It's important to see how we can prepare for the next rainy season so that food insecurity, which is already serious this year, will not become worse next year. Those are also very urgent measures and I need to go quickly. I believe I'm being told that my time is up. But we need to create the conditions for our economies to start again. We see, because of the combined effect of these crisis, that the growth rates that started to come back in 2021 will decrease next year. We need to be prepared, therefore, to reduce the negative effects of a downturn in growth. And therefore, we need to invest on reforms. Even in a period of crisis, reforms are required and are urgent. I won't go over the menu of reforms mentioned by Andrew. They all are important. The third element is also very important. We need to continue to invest towards development and among the priority sectors, Victoria mentioned electricity, that's very important, agriculture I discussed human development, education in all its components, professional learning, university. Let's not forget technology, which offers great opportunities to reduce gaps in certain areas. We have had the opportunity during these meetings to have discussions, in-depth conversations with the various delegations. For us what is important is after the meetings to see how we can strengthen cooperation and partnership with the countries, all countries and each and every one of the countries, by using the various instruments that exist at the World Bank level, but also through a more effective use of the resources that were mobilized. We had a record for the IDA20 replenishment. The heads of states have challenged both of us to the need to be very selective and focusing on certain sectors, but also to be very swift in making the procedures more amenable, so that the money can arrive quicker and be used effectively, following principles of transparency, traceability and integrity. [Applause]
Just because you're the woman on the panel, I'm going to give you the last word. The word is we understand the problems, they've been crystallized perfectly for us, but where is that one opportunity or two?
Sure. Thanks, Lerato. Let me say I agree fully with all that Ousmane has said, very pertinent. Look, you started off by saying “where is the sunshine?” There is sunshine. So let me show you some of the spots of sunshine. I would say, even on the macro, which is really challenged. There are spots of sunlight and sunshine. First, there are some countries that have a windfall opportunity, either because they're oil producers or primary commodity producers. Those countries have an opportunity to manage well, to really navigate this difficult time. I think that's one thing. There is sunshine. I see the minister of Angola, Nigeria, DRC, several countries have some possibilities. So that's one. And then I would say on the energy side, which is a major issue, as far as I go, we're seeing the potential of off-grid solutions. Off-grid does not mean necessarily second-class power, but off-grid solutions that create quality access to electricity for productive users, for health, for education, bringing in the private sector.
We're seeing good progress in countries like DRC. We're also seeing in Tanzania and Mozambique rapid acceleration in electrification rates. In Mozambique, the National Energy Strategy, which has a focus on energy for all, has done an amazing job, increasing by 15.5% points over four years access. That's not a mean feat while also preserving the financial sustainability of the utility. This has meant providing access to about 300 thousand Mozambican annually to electricity. We see in Tanzania, their rural access program over the last decade has really made rapid advances. Since 2017, they've provided access to electricity to 4.5 million people. Now, these are rays of sunshine. I would say the public and the private grid/off-grid solutions coming together has been fantastic.
I would finally also say, even with the difficult issue of youth unemployment, you're seeing youth entrepreneurship. I was in Thembisa Township in South Africa. I was in Lusaka. I saw Bongo Hive. You see people, young people, really innovative, creative taking the charge and really putting something together to help them themselves and to be employers of others. These are rays of sunshine that I think we can scale up, that we can build on to grow and to make sure that Africa really comes into its promise and delivers to its people. Thank you.
And I think at that point we can leave the conversation. [Applause] Thank you very much to you Ousmane Diagana, Victoria Kwakwa, Andrew Dabalen. Andrew, for a first story, you've done really good. Congratulations. [Laughter] [Applause] All right, so may I ask you to take your leave as we transition to our first panel discussion, and we'll be hearing again from Ousmane Diagana and Victoria Kwakwa later on, in the session today. Thank you, lady and gentlemen. [Applause]
From what's being said, it's abundantly clear that the physical infrastructure needs to also support the social infrastructure, the things that are going to change people's lives, put children in school and harness some kind of environment for entrepreneurship to create jobs is very important. But also, I heard about the importance of people, planet and shared prosperity, that nothing is going to happen unless we pursue a sustainability agenda. But for now, let us introduce to you the policymakers. And let me also recognize all of you who are watching online. Let me say hello to all of you from Tanzania, Canada, Cameroon, Togo, Pakistan, Paraguay, India, Nigeria, Kenya, Turkey, Gambia, South Africa, [Inaudible], Angola, Sri Lanka, Ghana, Welcome [Akwaaba] and Mauritius. Welcome, everyone [Bienvenue a tous].
Thank you very much for tuning in [Applauses]. Thank you, lady and gentlemen. OK, so right now, we want to get a view from the policymakers, a view from Africa as we look at the prospects for economic recovery. And again, as was reminded earlier on, not to lose sight of the all-important universal goal of ending poverty. Let me introduce to you, His Excellency Mamadou Moustapha Bâ, the minister of finance and budget in Senegal. Let me also introduce to you, Uzziel Ndagijimana, the minister of finance and economic planning from Rwanda. Let me also introduce to you, Ahmat Jidoud, the minister of finance from Niger. Let me introduce to you, the Honorable Vera Daves De Sousa, minister of finance from Angola. [Applause]
Let's start with you, your Excellency, Mamadou Moustapha Bâ from Senegal. We've spoken about the macros, the high inflation, the imported inflation. It's hitting everyone from Shanghai to New York to Daka, everyone's feeling it, depreciating dollars, sluggish growth. For Senegal, what does resilience mean in an environment like this?
[Mamadou Moustapha Bâ]
Thank you very much. I believe that Senegal has started recovery, timid recovery. But after the COVID-19 crisis, this recovery has started slowly. As you said yourself, we are faced with multiple challenges, about six altogether. You talked about the increase in prices and the increased cost of electricity. We have high rates of inflation, about 11% in Senegal just for food products alone. Inflation is around 18.1% for food products. Then, there is the fall and the value of the CFA franc compared to the dollar. Of course, this has an effect on our balance of payments and deteriorates the terms of exchange. Another very important factor that we need to take into account is the tightening of the conditions for finding financing on the international markets. It's difficult to cover the financing needs of our countries. Political and socioeconomic instability as well have come into play. We also have the pressures on government budgets with regard to social spending, which represents about 20% of government budget. So, faced with all these difficulties, what has Senegal done?
Senegal has identified some of the most vulnerable aspects of our economy and we've tried to put in place measures to tackle these. Some of them have already been mentioned, but we have a series of measures for them, altogether. We've extended the social safety in networks and under the auspices of our president, Macky Sall, we've set up a national program for families. This year, exceptionally, transfers of about 43 billion CFA were able to be sent to families to help them face the rising cost of living. The second series of measures is to strengthen pharmaceutical and health sovereignty as much as possible. We tried to manage the situation with regard to COVID-19. Today, in West Africa, Senegal hosts a plant for producing COVID-19 vaccines as well as vaccines against other diseases such as yellow fever. The third series of measures, which has been very important, has been to increase investments in the agricultural sector in order to enhance food security and food self-sufficiency. The budget of the ministry of agriculture between 2020 and 2022 has been increased by more than 20%. Finally, which is just as important, is that gradually we've tried to cover the infrastructure gap. We've started using an express regional train service, an extended highways network. We've now put in place 189 highways compared to 30 previously. These are some of the challenges and some of the opportunities that Senegal is developing. [Applauses]
Also, lots of innovation on the COVID-19 front, as well, coming up with the testing centers and the vaccines as well. Minister Ahmat Jidoud from Niger, we heard earlier on the importance of sticking to the macroeconomic fundamentals, doing the basics right. Your country has faced multiple challenges, arguably, and yet as well you've managed to build some kind of resilience by just doing the right things at that fiscal budgetary level. Could you tell us a little bit about your interventions?
Thank you. I'll speak French, if I may. Thank you for having invited us here to have this discussion, not only about the vulnerabilities, but also the opportunities in the responses set up by our countries faced with these challenges. I'm not going to repeat some of the common challenges. They've been mentioned on the first panel and also by my friend and colleague Moustapha just now. Let me say that for Niger we can talk about three levels with regard to these challenges.
First of all, we have a challenge for our very existence that is insecurity. Since 2011 and the breakdown of the state of Libya and with the activities of the group called Boko Haram at the border between Niger and Nigeria, we are in the constant state of insecurity and security threats. This phenomenon has spread to other neighboring countries, Mali, Burkina Faso and now this threat could extend to many more countries in West Africa. Of course, security has a very serious impact on the government capacities to mobilize resources and the war effort that is required to equip the military, to recruit the personnel for the military, but also has an effect on the way that we have to deal with displaced populations within the country, but also populations that are coming into the country from Mali, Nigeria and other countries. This has an impact on our productive systems because it disrupts economic activity and, of course, this affects macroeconomic variables and in particular growth.
Second challenge, which has also been mentioned, but which I can refer to because for some it's something theoretical, but for us it is the reality, and that is climate change. Climate change in the Sahel is something that we live with on a day-to-day basis. In the Sahel, our populations are mainly agricultural populations. We raise livestock, Ahmat talked about it. These are people who live or get their living from agriculture and livestock breeding. If you take the drought in 2010, this drought decimated about 5 million heads of livestock in Niger that represented 25% of our livestock. When a person loses their livestock, it's not just their capacity to produce, but it's also their capital that they lose, so this becomes a permanent shock for these farmers. Now, we see that there is a link between the phenomenon of insecurity and climate change, because the zones that are most affected, the populations that have lost their livestock and their means of existence, are those who are most enrolled in these terrorist groups that function in the region.
Third challenge is the challenge of infrastructure. This is something that has been mentioned as well, not just road infrastructure, because our country is vast, it has more than 1.2 million square kilometers, we have to have links within the different regions, open up the remote areas. It's just not just road infrastructure, but infrastructure related to the human capital, health, health centers, and education. We have now established a very ambitious program to build schools throughout the country, because in addition to all this, we have a fast-growing population, about 4% each year. The population doubles every 20 years, practically, so this puts greater pressure on the public resources. The challenge is such that president Bazoum has put in place a specific program to build schools and classrooms and provide education opportunities for young girls, in particular. Education is a challenge, and this is where we can provide equal opportunities for boys and girls, for men and women, and also deal with the issue of the growing population.
But as you said, in spite of all these challenges, Niger is resilient. If you look at the macroeconomic indicators, you will see that in the past few years, we've had very high growth rates, around 5%. It was COVID-19 that really disrupted growth rates. In 2021, we had a growth rate of 1.5%. If you compare to other areas, you will see that COVID-19 did not affect us as much as climate change does, because our 2021 growth rate is due, in fact, to rainfall shortage. The agriculture sector, which contributes most to growth, had a reduction of about 40% of its production. This is what explains the slow growth rate. 40% which is an unprecedented rate compared to the past ten years. What we feel most keenly is the impact of climate change and the policies that we have implemented have nevertheless enabled us to ensure the viability of our public finances. In 2021, we were able to provide assistance to the farming population. Through our support and emergency program, we were able to purchase food and distribute this free to the most affected populations, or else sell them at very affordable prices, subsidized prices. This cost 500 billion CFA in 2021. Thanks to that, we were able to limit inflation, today it's around just 6%, without this program, we would have double figure inflation.
Making it affordable to live and to eat. Let's bring you in Your Excellency, minister Vera Daves De Sousa from Angola. It was mentioned earlier on that countries that are resource rich are experiencing a little bit of a boom because of the commodity price increases. That allows countries like Angola to tap in to that boom, build up your reserves or deploy capital towards social causes. Could you tell us how you're taking advantage of the markets that are in your favor, even if just for a while?
[Vera Esperança dos Santos Daves De Sousa]
Thank you, Lerato. Good morning. Thank you for the opportunity of being here, aligning our awareness about challenges, but also sharing the light of opportunities and hope. About challenges, we all know where we are coming from. A lot of pressure coming from debt. We were doubled it by the drop on the oil price and after that COVID-19. We are coming from more than 100% of the GDP ratio, 130 in 2020, 5 years of recession, a pegged regime in exchange rate. But even under those circumstances, we didn't quite quit from the reforms that we had to make. We moved to a free-float regime. We prioritize expenditures, we focus on the non-oil sector and we adopt a more conservative approach regarding new lines of financing. After that, after all these years of challenges and of implementing reforms, that was hard in terms of social impact, we are now collecting the benefits of it. It's a happy coincidence that the first signs of those benefits came also with a bigger oil price. It's a happy coincidence. Even before that, we were already seeing the benefits. We started growing in 2021, a small growth, 0.7% only, but we have started seeing that fiscal surplus for the first time. We also saw 3.8% of the GDP and we are seeing now a more stable forex market.
How do we plan to use the windfall wisely? [Laughter] We don't want to become too excited because we need to keep managing well our sustainability that still has some fragility. We are using it to clear our arrears because we understand that this will give to the companies' liquidity to grow and to create jobs. We heard about the issue of the employment through you. We desperately need to create jobs for clearing arrears. We understand it's a way to contribute for that we are also refinancing us less internally. We had an expectation of issuing bonds internally in a certain amount and we are doing less, taking advantage of that liquidity to also allow the private sector to finance the commercial banks, to finance the private sector and with that to see more activity happening in the private sector and. once again, more jobs being created and we are rebuilding our treasury buffers just to prepare ourselves for 2023 budget and to keep pushing hard on social.
In the last five years we put a lot of money and energy on health, education, yes, but mainly health. We will build more than 100 hospitals, 173 to be precise because we were experiencing a massive problem of public health, people lying down on corridors without being able to have access to our doctors we also hired lots of doctors and nurses, so we spent a lot of money on health. Now, for the time being, we will look at the primary line in terms of health, the small centers and the municipalities because we already have a lot of large hospitals. We will look at the base, but we will change our focus on education because we understand that we already did it a lot for health, of course we will continue doing, but we will put a lot of energy and resources on education because we understand that we want the Angolan people to be part of the process of creating value, of making the economy growing even faster on an inclusive manner so we need to address the capacity building, high school is good, but also technical courses to have the population being part of this.
Regarding the infrastructure, of course we need also to put resources on that and because we have a huge country, a lot of needs to address. We want to pick them considering which one will be conductive to growth. We cannot do everything at the same time. It's impossible because of our limited fiscal space, so we want to look to electricity provision, water and sanitation issues, roads and bridges just to make the parts of the country that we want the private sector to step in, to have the proper conditions to invite the private sector to build that with us. Also, regarding some infrastructures, we want also to get technical assistance to help us to structure PPPs and for some projects that we found them viable, move together with the private sector also to optimize the fiscal space that we will have. Those are the ideas and we really want to move on with that and to give extra hope for our citizens that we are concerned about the unemployment rates and we want to deliver in real terms the hope that we are saying that are there. [Applause]
I think you've just said something very important that is often missed. In public relations people understand that if a country's reputation is in tatters, if a country's credit ratings are in tatters, it has a direct impact on the ability of the private sector in that country to be able to earn some debt or borrow internationally and so when you settle your arrears, you're actually doing it in an intangible way for the private sector. Thank you for that, and by the way, I've been to Rwanda and Benguela, stunning, beautiful Angola. Minister Uzziel Ndagijimana from Rwanda. Some South Africans said to me the other day, “why don't you just move to Rwanda? Every time you use an example, South Africa is not and you say Rwanda is, just go there”. [Laughter] So I hope you'll have me in Rwanda. The South Africans have already kicked me out. But here's the thing about Rwanda, small country landlocked and yet you've been able to create trade corridors in the North and in the South to move goods through regionally. That's the first thing. Secondly, president Kagame always says “we've got nothing except our people and this is our main resource”. And we're seeing this cohort of young Rwandans coming out of universities across the world to come home to build. Just give us a sense of how you do what you do, and how you've increased your own self-reliance, especially with trade. Rwanda has been a big proponent of the African Continental Free Trade Area.
Thank you. As we all confront current emergent situations, we need to continue to build key fundamentals of governance, policies and strategies. These fundamentals are not valid only for Rwanda, but probably for many African countries. In governance, we need to continue to build strong, efficient and accountable institutions. We need to continue to develop sound public finance management, integrated planning and monitoring systems, and a strong statistical system to provide reliable and timely data to guide decision-making. In terms of policies and strategies, we need to continue to ensure sound, democratic policies. We need to continue to create a more conducive environment for private sector development. We need to focus our public investment to key priorities such as infrastructure, transport, energy, water, digital infrastructure. We need also to continuously invest in the human capital development. These are fundamentals. Rwanda has made progress on all of this, but it is a journey. We need to continue to do more and to adapt to the changing environment.
I want to come now direct to your questions about Rwanda's self-reliance and the trade within the region, with our neighbors. Rwanda is in the process of positioning itself as a manufacturing hub, as a service hub and logistics hub, to increase our trade with our neighbors, but also to tap into opportunities of the new Continental Free Trade Area, which is a huge opportunity, a big market. In manufacturing we are developing industrial parks not only in Kigali, but in the secondary cities. We have attracted major investments in sectors such as textile, construction materials, electronics, smartphones, computers, food processing plants, pharmaceuticals and vaccines, soon starting a vaccines plant, fertilizers, mineral processing, automobile and many others. We are targeting regional market. We are targeting the African market. In the area of services, we are expanding our air transport capability to connect Africa, to connect Rwanda to the world. We are building a new airport, international airport, which has a big component of cargo capability to distribute goods across the continent. We are focusing on financial services. We are creating Kigali International Financial Center to attract funds, to invest in Africa, to invest in Rwanda and in Africa. We are progressively creating a medical service hub. We are expanding our tourism, but also, we're establishing world class training institutions to attract young Africans, young talents to be trained in Rwanda. We have already two, three institutions that already have started. And we see young Africans coming to be trained in the country. We are ready to trade with Africa. We are ready to promote the Continental Free Trade area. We are ready to cooperate. We are ready to host different solutions. Many are coming to Rwanda. So, small country, no access to ocean, but connected in different ways. We're ready to move, and we encourage African countries to support this trade liberalization within our continent. We should target African self-reliance. We have suffered from dependence on imports of almost everything, but now we have learned a lot of lessons from these different crises. All the countries are really ready to promote mass production, but also to remove trade barriers, to allow movement of goods of people and also of labor. Thank you.
I think the metrics speak for themselves, sir. [Applause] They say that since the horrible genocide, Rwanda has been able to grow its economy by ten times, tenfold through a series of reforms in this 28-year period. I have a final question, but what I need from you is to do it TV style. It's a sound bite, that means an answer in less than 30 seconds. Should we try? Will you help me? All right. For the reforms that you've introduced, for the programs that you've got moving into the next fiscal year, what kind of support would you like from an organization like the World Bank or any other multilaterals? Senegal.
[Mamadou Moustapha Bâ]
Type of support? The type of support that we wish to have is greater access to concessional resources from the Bank and from the multilateral institutions. I could develop further the various funds that exist. the Resiliency Fund, the Fund for Food Insecurity and the reallocation of the SDA are targeted for 100 million dollars. But we're only at 45. This is my plea.
Yes. We have the second portfolio after Nigeria in sub-Saharan Africa. I would just ask to accelerate the implementation of the projects, including in terms of processes, so that these resources can be used. We can optimize the use of these resources in order to move our economy forward. Thank you.
Everybody's. Doing it in less than 30 seconds. Vera, Angola.
[Vera Esperança dos Santos Daves De Sousa]
We should expect from the World Bank Group, capacity building to make the Angolan people in the Angola institutions stronger, helping us to make good decisions and make good choices through our national development program to help us to unlock the development and to create jobs and address the poverty and cheap money. Thank you. [Laughter]
Thank you. Given the rising debt levels, fiscal spaces are no longer there. We need to attract private investment. Investors are ready, but they need to de-risk investment. The request to Word Bank Group would be for me to consider expanding the mandate of MIGA to not only provide political guarantees, but also to provide commercial guarantees. A strong system like MIGA with a commercial guarantee, many investors will be ready to invest in Africa. This is a reform we are advocating for. Thank you.
Thank you. [Applause] If all the World Bank executives in the room heard it, you can really clap louder, then we know it's landed. [Applauses] All right. Thank you very much to you, Your Excellency Mamadou Moustapha Bâ from Senegal, minister Ahmat Jidoud from Niger, minister Vera Daves De Sousa from Angola, and minister Uzziel Ndagijimana from Rwanda. We appreciate your time. [Applauses]
So much has been said about food security and building resilience in farming systems and production systems. And so, let's see what levels of innovation there are. In some African countries, particularly, Côte d'Ivoire [Ivory Coast].
Ivory Coast is the largest producer of cashew nuts in the world. Cashews represent an important source of income to smallholders and processors. In this big plantation located outside the capital, Yamoussoukro, Ndri Nadège owns a cashew planting nursery. She helps renovate and rehabilitate cashew orchards.
In Ivory Coast, we currently have three popular clones with high yields, and which are resistant to diseases.
Ndri Nadège helps distribute clones of high yielding cashew varieties and make them available to farmers in the area. Nearby, the Cashew Innovation and Technology Center - CITA is a modern processing facility and training center where workers and investors learn about new technologies, hygiene protocols, storing and processing standards. It also serves as a factory where the cashew nut is sorted, cut and packed based on its quality for sale and domestic markets. This World Bank financed cashew value chain project is helping to open markets to small-scale farmers, improve workers’ skills and create jobs. Over 500 plus young women are being employed in this center, gaining financial independence, helping local communities for sustainable growth. This is what creating jobs and promoting inclusive and climate resilient cashew value chain looks like. It’s about stimulating economic transformation by promoting climate smart, agricultural practices, fostering local businesses and leveraging expertise, technology solutions and private investments.
I would like to thank CITA for helping me improve my life condition.
[People First, #AfricaACTs on food security]
[World Bank Group]
I do like the mantra “People First” because I think that's the essence of what we've been hearing here today it’s that whether we're talking food security, an affordable standard of living, economic growth at the macro level, even understanding climate resilience, it's all about how people's lives are impacted day to day. And so, let's speak to those who are very much on the front lines, dealing with the human talent that we talked about, particularly in creating those resilient food systems and the policies they're in. Let's welcome warmly to our conversation now: Jeanine Cooper, the minister of agriculture in Liberia, Harifidy Janset Ramilison, the minister of agriculture and livestock in Madagascar, Monica Musonda, the CEO of Java Foods Limited in Zambia and Eric Yirenkyi Danquah, the founding director of the West Africa Center of Excellence for Crop Improvement, known as WACCI in Ghana. Please, welcome them warmly. [Applause]
As we talk about transforming food systems for a prosperous Africa, Monica, let's start with you because perhaps what you don't know about Monica is she's a lawyer who woke up one day and said, “I want to be part of the agricultural economy”. Nobody looking at you would have guessed it, Monica, but you made that decision for a reason and perhaps you can tap into that reason now. One of the reasons that Africa is said to be so sensitive to world food prices and exchange rates is that the continent imports a lot of its food and yet there's two thirds arable land uncultivated. How can we get that right? Change that dynamic?
Thank you very much and thank you for allowing me to add a private sector voice to this conversation. Let me give you some context. The last three years for Africa, for food prices have been quite horrendous. The prices we've seen is shocking, to say the least. You're right, it's because the bulk of the food we see in the continent is imported, even staples. This has meant, particularly with the COVID-19 pandemic where we saw lockdowns, supply chain issues, freight issues, that we didn't only just have a public health disaster, we almost had a food crisis. But there's always a silver lining in a crisis and they say never waste a good crisis because it made us, African countries and African companies, see an opportunity, really, should we not be much more self-reliant? Could we not see where we are doing very well? Obviously, there are some countries who are very fairly self-sufficient in some crops such as wheat, maize. How can we do better not only just for ourselves on the continent, but also for ourselves in our own country, but for the continent. I think this is where the opportunity lies.
I mean, the discussion around food insecurity is so real now, given now of course, the Ukraine-Russia crisis and what has done for many staples, for things like refined oils, but we have the capacity to grow a lot of this food very well. I think the issue is we still have to address things like yields, seeds, the soil issues, distribution as well. But I want to talk today, particularly, about local production. I'm not a farmer. We have to have a full conversation around the value chain. It can no longer be just about the farmer because we're still in the same position. There has been a lot of support and please bear with me, ministers about agriculture. The support is very good and very necessary to support primary agriculture. But we can't stop there and we see that's why we're in this crisis today.
We are not producing enough in our countries to feed ourselves. What can we do about this? I think the first thing is we have to really now look around technical assistance and approach for local producers. How can we, as local producers produce safe, nutritious and affordable foods? What foods can we produce well in this country? Which can be used in a different country? What else can we do around access to affordable financing so that these companies can actually grow to scale? The big issue is around how do we really prop up these businesses in order for them to produce safe food? And the third one is about distribution. I love the discussion about trade because this is actually really true. The fact is we are now forced to look around at each other and say actually we can trade much better with each other, but understand the problems. Food is particularly interesting because every country has their own standards. How can we really look at those issues to make sure we reduce the standard, reduce the cost so that local foods can easily compete with a lot of the imports? I think there's a lot of interesting discussion now and I challenge all the governments here today. This is the time for action.
I want to just to add to what you're saying, Monica, by way of when people talk about an enabling environment that the public sector could create for the private sector in the context of agroprocessing, where you are invested, where you are growing a business: What does that enabling environment look like?
I think a lot of countries have really worked a lot about creating this enabling environment, particularly for some industries. I think a little bit more work needs to be done in the agroprocessing sector. For instance, I'm talking about creating safe food means you have to have laboratories to test them. We have seen in many countries there's limitations in that and also there's limitation on cost. When you engage governments and say how can we reduce the costs around creating safe food? The first thing they say is there are not enough producers so it's costing us a lot. But also, there's another way to think about it. Could we not reduce the cost so we allow more compliance? For instance, could we scale the fees so the larger players are able to pay full price? Our smaller SMEs can pay a reduced price. But the issue is that we have to look holistically at things like licensing environments. It is a very different type of environment to work in, but that's so important. We want to make sure that we're able to put on the plate or on a shelf safe and affordable food. Affordable food is really important and also has to be accessible. I think it’s a great first step, but I think let's go much more sector-specific and see what we need to do to really make an environment which allows for growth of private sector and agroprocessing. Thank you.
Let's refer to Jeanine Cooper, the minister of agriculture in Liberia. We hear what the private sector has to say, yes, certainly from a Zambian perspective. But in your view, what is the role of a policy-maker such as yourself, the public sector, in boosting private entrepreneurship in this field?
Thank you so much, Lerato. I must say that I came to this portfolio as agriculture minister from being a Monica Musonda in Liberia in rice, which is our staple food and is not produced commercially at any appreciable level. Everything she says is what I was saying, and that landed me in this job. [Laughter] Our food security approach in Liberia was always to stabilize the price and availability of imported food and support smallholder farmers. What Monica said about farming, that's where we stopped. But Ebola was the first shock that told us, borders are closed, you can't get food in, you’re import-dependent, what do you do? We were not surprised when the COVID-19 started. We had seen it before, just a few years before, actually. But turbulence is now the norm around the world. We're looking at the opportunities that we have as a nation to leapfrog over all of these challenges that we have been stagnating at that level. I must commend the World Bank for putting in place the first real attempt at blending commercial production with public sector smallholder production in the StAR Project, it’s an acronym. We have a Liberia agricultural commercialization fund for the first time, and it's operating and it's making a difference in our country.
But I see four opportunities, maybe five, because all of this turbulence gives us an opportunity to reframe and move beyond defining and admiring and restudying challenges. Consider our assets and opportunities. What's working that needs to be scaled up? Four main opportunities I'm looking at. One is to apply partnerships in ways that help us to catalyze the sustainable development that we're talking about. Triple yield solutions like having solar energy, providing water for drinking and for irrigation, and food production at village level. Second one is an opportunity to intensify our efforts along our food systems’ pathways, which are empowering women, employing youth and mechanizing our agricultural farming and processing. We have to look beyond just the farming, as Monica just said. When you look at agri-food production, it's a whole value chain, all the way to plates. And women play, in Liberia, 90% of the role of food production. So how can we empower them? Not just to give them high yielding seeds, and there's still that one woman with a baby on her back, sometimes one in her belly, having to bend over backwards to deal with more yield. She still has 24 hours in the day and everything else that comes with agri-food. How can we ease some of those burdens further along the value chain? The processing burdens, the water provision burden, the cooking burden, storage, etcetera, make it easier. We have the technologies, and they are low-cost, low scale. We can apply those. A third opportunity, we want to mechanize our farming. What do the youth like? They like machines. They like the digital, all of these things. It's the youth that are going to do it, not the old farmers like myself who will get out there and operate the machinery. There’re win-win possibilities that we have. A third opportunity that we have right now in Liberia is to revisit the balancing of imports versus local production of food. Monica is saying many of these. Like I said, she's me, I'm her. Public focus can work at smallholder level. Let's see how we can empower them. Again, the same things look all along the value chain. How we can help them with pest control and weed management, how we can help them with storage and drying solutions that exist. If we're going to give seeds, are we going to give tools? Not those holes, not those shovels and rakes, but actual tools that mean something. There are storage bags that can help against rodents and pests and against disease and mold. Keep that public-private focus, and then look at the MSMEs, which dominate our agri-food small businesses. See how we can help them with digitalized solutions and other innovations. In fact, they're doing it. We need to help them scale up. Blended financing approaches will work very well. Then, we also need commercial production to scale. Our last opportunity is my big one, and I hope you asked me that question from the World Bank. It's an opportunity, today, with climate change dominating the airways, with our very high debt burden that we have in Liberia. It's an opportunity for us to value our wealth and our tremendous ecosystem services as West Africa's most important carbon sink and biodiversity hotspot. Monetize our impeccable climate credentials. We shouldn't need to take on debt to develop when we have almost 50% of the Upper Guinea forests in our country. We shouldn't need to take on debt to survive. Counting on this momentum to make our development sustainable once and for all. That's what I have to say. Thank you very much.
Thank you so much for your intervention. [Applause] You know, they say there's a statistic that says that for every one dollar spent on climate solutions, eighty cents of that one dollar comes from international agencies and 14 cents from the private sector and banks, and then 4% from the national. Those numbers need to change in order to truly accelerate the solutions you're talking about. Minister Ramilison from Madagascar, we've made reference, obviously, to climate change. As Minister Cooper says, it's very thematic ahead of COP27 in Sharm El Sheikh. Everybody's talking climate change, but let's understand climate change. When it really hits that small scale farmer with extreme weather patterns on an island-like Madagascar, tell us what kind of solutions you would like to see that make farmers resilient to the everchanging weather patterns around them, and what your strategy is in helping farmers to manage the weather as best they can, to acquire food security.
[Harifidy Janset Ramilison]
Thank you very much for those very interesting questions. Indeed, Madagascar has suffered keenly from the effects of climate change. If you've followed the news recently, you've heard about drought in Madagascar. About 1.5 million people are affected by this. But then we also have annual cyclones in the North and the Eastern parts of Madagascar. We are really immediately affected by climate change and its effects and extreme weather phenomena. In addition to that, we are also affected by all the other crises, COVID-19 and the impact of the Russia-Ukraine war. But these crises compel us to adapt to the situation, to adapt to the effects of climate change, and thus to develop the ways and means of being more resilient. They also compel us to better develop our potential. Madagascar has a surface area of 540 thousand square kilometers. We have more than 30 million arable lands. In the area of the Indian Ocean, we represent about 80% of the arable land of the region, the Indian Ocean region. So how do we reverse the trend of seeing all of these as constraints and rather seeing them as opportunities?
There are enormous needs, not just for our population, but for the other populations in the Indian Ocean area. What we want to do is enhance the value of this land and transform it into capital. We want to do this by adopting methods that do preserve our natural resources, not just the land, but also water resources as well. In Madagascar, we could probably produce all of the crops that are required. We have a very diversified climate and we can grow just about any crop, including cash crops. But we have to define our priorities based on the needs of the national population and the needs of the region as a whole. To do this, we must continue to enhance productivity because we must acknowledge that our productivity levels are quite low. We want to enhance agricultural productivity through the implementation of a green revolution, similar to what was done in Asia, which was very effective. But we want a green revolution that will preserve the environment and preserve biodiversity. We want to produce more and diversify the crops that we produce. But we also want to involve the private sector more, because the private sector does have a fundamental role to play as a catalyst in developing agriculture. To do this, we are enhancing the development of agribusiness promotion of young entrepreneurs. Our president has launched what we've called the green securities title deeds to help young people have access to land ownership, and help to create employment as well. We want to use this natural resource in a rational manner to develop it. We've talked earlier about the soil fertility. We've talked about agroecology. The current crisis related to the difficulty in importing food and the increase in the price of fertilizers has forced us to use more organic fertilizers and to enhance organic production. We're able to do this in our country with the resources we have available to us. Now, we've had shortages of flour because in Madagascar we do use a lot of flour, although rice is also one of our basic commodities. But with this shortage, we decided to develop wheat production or find alternatives to wheat flour using cassava flour, sogum flour. This has helped us to further diversify our food crops in this period as we face these changes. Thank you.
Which is the extent to which science can be part of the solution? We know we need to rely on data, but here, when we're talking crop yields, improving the quality of production, what can science do?
[Eric Yirenkyi Danquah]
About eight years ago, the World Bank established the African Centers of Excellence. What I present to you this morning is that without the African Centers of Excellence, maybe Africa would not have found a great opportunity to move forward. Let me say, it is good science that will put farmer preferred varieties which are resilient, nutritious and productive in the hands of farmers for markets. I give an example of the West Africa Center for Crop Improvement, which was established seven years ahead of the African Center of Excellence. At the time, what we had envisioned in Ghana was a center for plant breeding that can stand its own anywhere in the world. What we did was to partner with Cornell University to establish that center, which today is one of the preeminent centers for plant breeding education in the entire wide world. If you think about training Africans on African crops in Africa, what we have done is that in 15 years we have delivered 105 PhD students who are working in 15 countries in Africa. These students have released over 200 varieties, which currently are at different stages of commercialization in farmers’ fields. I can say by instruction that our students have attracted over 57 million dollars into their research institutions. For me, this is proof of concept of quality plant breeding education in Africa, for Africa,
Remember? I want to laud the World Bank for the audacity of hope in quality plant-breed education. You recall what has happened in Africa over 50 years. We turned our back to quality education. For me, that is what has haunted us. You look at all the nations which have moved forward in their agriculture, and I would say it's all about quality education. If the USA had not enacted the Land Grant Act, I don't think America will be where it is today. You look at Brazil, they have to bring their students to Iowa State University to equip them with the knowledge and skills which allow them to move back to Brazil to where they have been around, and that is what we are doing at the West Africa Center for Crop Improvement today. In Ghana, for example, we have, through painstaking research, released three hybrid maize varieties which yield between nine to eleven tonnes per hectare. Even if you cultivated these varieties in harsh environments in the Northern part of Ghana, you don't get below six tonnes per hectare. Farmers are not getting 1.5 tonnes per hectare anyway, because they are using some varieties that they should throw away. In 1986, when I was doing my Masters, I said “the varieties that farmers are using today perhaps must be thrown away” and that “we should put in farmers hands new varieties that allow them to get what is expected in their fields”. This is what we are doing.
I would say that COVID-19, perhaps an instance in time which is not going to be existential. It is not going to be existential. Nonetheless, there could be other pandemics which we must prepare for. The lesson we learned from COVID-19 is that we don't have to look outside Africa for the seeds we cultivate in Africa. It is ridiculous that today we don't have the capacity to use our own seeds when we have institutions that can stand their own anywhere in the world. When you talk about climate change and conflict, I would say they are going to be there forever. It's high time that we're prepared to confront climate change head on. And it's about plant breeding. What do you do? You look for the kind of varieties that you need to cultivate. You design them and develop them and put them in the hands of farmers. This is what quality research is all about, painstaking research, so we can do that, and that is what we're doing today.
Okay, in the interest of time, I want to thank you for your submission, simply because we're on a live stream which will cut off when we run over time. So let me say thank you very much to all of you for your submissions and we do appreciate what has been said. To you, minister Ramilison, thank you. To you, Mr. Danquah, thank you. To you, Monica Musonda, thank you. And to you, minister Jeanine Cooper, thank you very much.
As they take their leave, let me just reveal the poll results. Obviously, the question is, which sector will most likely spur regional economic growth? Is it technology? 30% of you said so. Will it be agriculture? 45% of you said so. Will it be finance? This is an interesting result, 4.6% of you said, yeah, you think financial services will do it. Education, almost 10% of you. Energy, definitely 10%. Everybody believes the real game changer for Africa will be agriculture. So say the poll results. Thank you very much for your time. [Applause]
And so, as you take your leave, let me please invite our hosts, the vice presidents of the World Bank for Western Central Africa and Eastern Southern Africa, just to give their reflections on the conversation we've had here today.
Thank you. Remember, the conversation is #AfricaSOR and you can continue to have this conversation online even after we've concluded. Let me defer to you, Victoria and Ousmane, just to give us your reflections on the conversations that have been had about people, the planet sustainability and fiscal responsibility.
I will be very, very quick. I will start by really thanking honorable ministers and all the eminent panelists for their insight. [Applause] It has been a great conversation, but we will not limit this only to conversation. I think action will follow and you can count on us. Five takeaways. First, I think it will be extremely important that we consolidate our support to the population and so as to make them even more resilient. We heard from the minister of finance of Niger that despite the fragility and the vulnerability, population have showed resilience. This is extremely important. Second, Victoria has mentioned this, we see across the continent as the creativity of our youth, their capacity to innovate, I think it's very important to leverage on that moving forward. Third, we need in this time of crisis, continue the reform, so as not only to secure gains that have been made, create more fiscal space, but also contribute in putting place in environment which is conducive for private sector to invest more. Fourth, I think it would be also very important to operationalize actually the strategies that exist, the knowledge products that have been prepared recently in some countries and that will continue to develop, like CCDR and educational strategies, health strategies, water strategies, etcetera. And finally, it will be very important to concretize vision and ambition set by American leaders. The minister of Rwanda has referred to Africa Free Continental Trade Agreement. It's an excellent framework. Giving its content and reality will allow the country to move forward and not only to cope with this rising crisis, but really to create the condition for development and stability.
Thanks. Thank you.
Thank you very much. Let me also say thank you so much to the ministers and to our panelists for such a rich sharing of your experience. Look, I agree with all that Ousmane has said. Let me add a few. I think one main takeaway from this is Africa can and needs to be more self-reliant. Whether it's regarding domestic food production, whether it's fertilizer production, whether it's pharmaceuticals in response to the COVID-19, whether it's on research and seeds. We can do a lot more for ourselves. It doesn't have to all come from outside. I think that's a very important takeaway from this, and I see we're doing it whether it's in the Center of Excellence, whether it's in what the private sector is doing, whether it's in what the minister of Rwanda mentioned, the joint venture with BioNTech to set up the first mRNA vaccine production outfit in Rwanda. We can do much more and we don't have to be so dependent on external support.
The fight against inflation is supreme and countries must work hard on it with support from us and others. Of course, in that fiscal management is really important, good management of windfalls. Here I want to cite the example of Botswana that has a long-standing experience in that and has done it well with their diamonds and it's really paid off for them, so I think we can all learn lessons from how Botswana has managed its windfalls over time. [Applauses] The prioritization that is needed, and the monitoring of how public finances are being managed and what outcomes they're providing. Then, we also heard a few points around trade. Trade is part of the solution; it has to be part of the solution. We can be more self-reliant, but that doesn't mean we don't trade. We trade internally as well as externally. In this regard also an entire value chain approach at looking at the challenges in agriculture as opposed to just looking at one side, whether it's production, it's storage, it's marketing, it's the entire sequence of production. Then finally, as my colleague has said, the private sector, we've heard from the private sector. The private sector is also an important part of the solution.
This is not going to be carried by government alone. Lerato, you started us off with sunshine messages. I think there's a lot of sunshine that we've seen this morning. I’ve just seen my minister from Rwanda who has just reminded me that Rwanda, on the digital front, has also started, it’s scaling up its digital ambassadors’ program, which is a nationwide program to train, to take youth, to train everybody to be more digitally literate. That's so important for making more progress on the digital agenda. But thank you all. I think we've said we can do it with ourselves and with help from others. Thank you. [Applauses]
Let me thank you for hosting us and for allowing so many experts to share their expertise and to reiterate what there is to play for on the African continent. It seems to me we know what the problems are, and it seems to me we also know what the solutions ought to be. So as Nike says it, let's just do it.
[Ousmane Diagana] [Victoria Kwakwa]
And so, without further ado, let me leave you with the words of John C. Maxwell. He said: “A leader doesn't first touch the hand of a follower. He touches the heart”. So, whatever it is you're going to do out there for the African continent, make sure you touch the hearts of the people. I think you can. I think you have the will to do it and we want to thank you for your time. Thank you. Connell Thompson.
Reports and Data
Read the Q&A
Kimberly Bumgarner (Moderator, World Bank):
Greetings and welcome to our State of the Africa Region event!
My name is Kimberly Bumgarner and joining me today is César Calderón, Lead Economist with the World Bank Africa Region. We will be answering your questions during this live event. We will begin shortly!
In the meantime, please continue to submit your questions and comments to us. You can also follow the discussion on Twitter, Facebook, and LinkedIn using #AfricaSOR.
Kimberly Bumgarner (Moderator, World Bank):
Welcome all! We are now listening to our special musical guest, the renowned saxophonist, Connell Thomas.
Our moderator today is international broadcaster, Lerato Mbele
Enjoying Nigeria’s Wizkid’s music being played on sax to open. Brilliant
Khondker Zakiur Rahman:
Good evening from UNFPA Bangladesh!
Kimberly Bumgarner (Moderator, World Bank):
For our first panel, The View from Africa, distinguished guests will share the challenges that their countries are facing, opportunities they see, and needs for economic recovery and poverty reduction. Joining us are panelists:
- Vera Daves de Sousa, Minister of Finance, Angola
- Ahmat Jidoud, Minister of Finance, Niger
- Uzziel Ndagijimana, Minister of Finance and Economic Planning, Rwanda
How is climate change affecting the economy?
Must Africa import finished goods when they are exporting raw materials?
César Calderón / World Bank:
@Kenneth Mbeja International trade provides African countries a series of opportunities. In the current uncertain trade environment, Africa can step into opportunities to be suppliers of goods that are in high demand (minerals for green technologies and transition energy such as gas, among others). For instance, trading partner diversification is particularly important for agriculture in Sub-Saharan Africa. The region remains a net importer of basic foodstuffs (including cereals, dairy products, edible oils and fats, and meat and meat products) despite its great agricultural potential. Most food imports come from trading partners outside the region. This offers a unique opportunity to strengthen the capacity of Sub-Saharan Africa’s farmers to ramp up food production and facilitate international trade—especially within the region. Optimizing food safety measures and removing other nontariff barriers (NTBs) can help foster trade. Addressing regulatory barriers and poor compliance will reduce the trade costs of agricultural services and increase competitiveness. Additionally, the African Continental Free Trade Area can be leveraged to coordinate and scale up regional investment in infrastructure, technological generation and diffusion, and innovation dissemination—thus, fostering participation in regional value chains. Finally, food demand in Sub-Saharan Africa will continue to grow at a fast pace as the trends in population growth and urbanization persist. This offers a unique opportunity for farmers in the continent to step up efforts to meet this growing demand. In turn, meeting such demand requires the reorientation and/or implementation of policies and investments that transform agriculture and food systems along the value chain—with important implications for strengthening urban-rural linkages.
César Calderón / World Bank:
@Olaoluwa Osho The evidence suggests that climate change—as measured by temperature anomalies over a two-decade period—better captures the impact on economic growth of African countries than the average temperature (over a 20-year period). The adverse impact of climate change on growth in Africa is negative with a 93 percent probability. The regression estimates show that a 1°C increase in temperature reduces GDP growth by 0.67 percentage point. Additionally, the impacts of temperature anomalies vary widely across countries in the region—with the highest impacts on the Democratic Republic of Congo, Zimbabwe, the Central African Republic, and Madagascar and the smallest effects on Nigeria, Botswana, and Eswatini. Recent empirical analysis uses novel provincial-level panel data on climate and economic activity across Sub-Saharan African countries. The evidence for Sub-Saharan Africa shows that a 0.5°C increase in temperature in a given month (from its 30-year average) reduces satellite-recorded nightlights by 2.1 percent. This translates into a 1 percent decline in monthly real GDP for a province (Burke and Tanutama 2019). The estimated growth effect in Sub-Saharan Africa is double that of the world and 1.6 times the average of emerging markets and low-income developing countries. However, these effects may not be persistent throughout the year and would likely be offset by other factors.
Africa needs education and training to use its resource efficiently ....educated farmers using technology
Are GMOS a solution to the food crisis in Africa?
César Calderón / World Bank:
@Erick Kitheka Genetically Modified (GM) crops as being touted as the solution to ensuring food security. Supporters of crop biotechnology argue that transgenic crops will aid farmers in reducing the burden of pests, drought and improve yields and quality with limited cost and effort. The number of countries planting biotech crops has grown from 3 in 2016 to over 10 in 2022—South Africa, Sudan, Egypt, and Burkina Faso lead in the commercialization of GM crops. Even more countries are trialing various strains of GM seeds. Countries are mostly planting staples such as maize, sorghum, and cowpea, but also cash crops such as cotton and soybean. But concerns about trade and safety stand in the way. Skeptics have voiced concerns for the environment and human safety. Countries also worry that GM crops will hurt trade with the EU, Africa's largest export market.
How will Africa overcome the crises developed after COVID? How will World Bank support them through different programs to save the lives of the poor of the Africa?
How can we minimize challenges of climate change?
César Calderón / World Bank:
@dinkachotlr16 Adaptation policies are key to minimize the effects from climate change. For instance, look at the case of agriculture. Financing climate change adaptation in agriculture and food systems will be more cost-effective than financing increasingly frequent and severe crisis response, disaster relief, and recovery pathways. Estimates suggest that the future cost of climate inaction may be as high as US$201 billion, while the cost of adaptation (for example, public investment in research and development, water, infrastructure, sustainable land management, and climate information) is only US$15.5 billion. Scaling up climate-smart agriculture is a key lever for sustainable growth and fostering resilience. The leading adaptation policies for food systems are well defined on technical grounds, build on evidence, and are cost-effective. They comprise public policy solutions, food value chain and livelihood solutions, and on-farm and productive landscapes solutions.
Are there global crises that are more urgent than the others?
César Calderón / World Bank:
@Babuoth Current crises (food and energy, food security, inflation) are driven by shocks that are correlated. Governments need to use the different instruments in their policy toolkit to protect the most vulnerable and fight inflation while setting the stage for sustainable growth.
Is there a policy shift to reduce/remove the interest rates on loans given to African countries given their compromised economies?
César Calderón / World Bank:
@Moses Mncwabe From a liquidity perspective, the G20 established the Debt Service Suspension Initiative (DSSI) to suspend the interest payments of IDA-eligible countries from May 2020 to December 2021. This was just a suspension of interest payments. Having said that, changing the profile of interest payments may require a debt restructuring that seeks to extend maturities so as to smooth debt service payments over a longer period of time.
Why Africa is behind?
Why are developed countries not supporting developing countries in real sense, that is to have sustainable development, and also to use the available resources in real and visible sense?
are developed countries willing and interested to support developing countries?
César Calderón / World Bank:
@aye2011was The growth recovery of Africa has been fragile and incomplete. The region had limited space to mount an effective response to the series of multiple and correlated shocks that it has experienced. Economic activity in Africa decelerate due to the slow growth in the global economy (and particularly US, EU and China), global and domestic inflationary pressures, and tightening financial conditions. Other domestic problems affect the region such as conflict, climate shocks, and high levels of debt.
César Calderón / World Bank:
@aye2011was The international community--and particularly, IFIs-- provided financing to countries in the region to protect their population from the economic effects of the pandemic and currently from food security crisis. The international community also put together mechanisms to provide a solution to liquidity and solvency problems such as the DSSI and the Common Framework, respectively. They have not work as fast and efficiency as expected. Hence, the international community needs to find more adequate ways to resolve the issue of debt restructuring. The current resolution mechanisms need to be strengthened to effectively address a potential debt crisis, and additional instruments may need to be set in motion.
Kimberly Bumgarner (Moderator, World Bank):
Speakers at this second panel are discussing transforming Africa into a bigger player in food production, and transformation and trade to improve regional food security and create inclusive growth. Panelists:
- Jeanine Cooper, Minister of Agriculture, Liberia
- Harifidy Janset Ramilison, Minister of Agriculture and Livestock, Madagascar
- Monica Musonda, CEO of Java Foods Limited, Zambia
- Eric Yirenkyi Danquah, Founding Director of the West Africa Center of Excellence for Crop Improvement (WACCI), Ghana
ABEL GISBETH MATENGA:
Why is Africa producing less in agriculture despite having large uncultivated land?
César Calderón / World Bank:
@ABEL GISBETH MATENGA Poor performance of agriculture in Africa is associated with low agricultural productivity, lack of infrastructure (transportation, water, and energy), and food waste. Policy distortions also contribute to the insufficient supply response to growing food consumption needs. Agricultural growth in the region has mainly come from expansion of farmland. Technology and efficiency gains have made small contributions. For instance, total factor productivity grew at an average annual rate of 0.2 percent in Sub-Saharan Africa over 2000–19. The lack of basic infrastructure services, such as energy, irrigation provision, or roads and transportation, contributes to the vulnerability of African countries to hunger. Poor roads make it difficult to get food from farms to the people who need it the most. Unreliable energy provision hinders irrigation. Inefficient processing and drying, poor storage, and insufficient infrastructure can lead to food waste in Africa. Policy distortions have also contributed to a poor food supply response. A significant share of the scarce public resources allocated to agriculture goes to poorly targeted input subsidies. Public investments to transform food systems and adapt to climate change are extensively underfunded.
Agriculture contributes significantly to the non-oil GDP of most African countries. However, there seems to be diminishing interest and investment in improving the sector across board. What steps can stakeholders take in ensuring that Agriculture, from raw materials through the value chain, is adequately supported and capacity built towards making it a potential area for economic growth, not just for the region, but for its people?
César Calderón / World Bank:
@Sam_Lartey The lesson from regions that have transformed their agricultural and food systems is that enhancing the quality of spending and the efficiency of resource use is even more important than addressing the level of spending (which stands at 6 percent of the government budget on average in the region). Raising the efficiency and effectiveness of public spending will be critical to unlock agricultural growth and job creation while meeting the challenges arising from climate change. A large share of spending on agriculture is currently allocated to subsidies for a narrow set of inputs or crops. Agricultural subsidies in Sub-Saharan Africa amount to 25 percent of agricultural spending. Yet, the benefits of such spending have not yielded lasting improvements in productivity. Repurposing public support to agriculture toward high-value investment (technology generation and diffusion, soil conservation and irrigation infrastructure, climate change adaptation, and market connectivity) will yield massive benefits. Promoting the development of (whole) agri-food value chains is also critical for the transformation of agricultural and food systems. Whole value chains have a large job multiplier effect—thus, offering options for productive inclusion and the incorporation of additional rural youth. The transformation of agri-food value chains—and, particularly, their midstream segments (processing, storage, transport, wholesale, retail, and food services)—enables small farms and firms to add value (through canning, milling, packaging, and other services) and attract investments, as well as increase dietary diversity and nutritional outcomes.
As wheat prices soar, whether Africa now pivots to cheaper alternatives?
César Calderón / World Bank:
@MEDINI BARUAH As wheat prices soar, individuals will try to acquire cheaper alternatives. However, the higher demand will put some pressure on that price. for instance, the price of cassava escalated in Ghana
Darlington F Doe:
Hello, I am Darlington F Doe I am joining from Liberia
How can government private businesses and partner work to ensure more sustainable and nutritious food system in the face of rising climate conflict and economic risks?
César Calderón / World Bank:
@Allavo prosper The lesson from regions that have transformed their agricultural and food systems is that enhancing the quality of spending and the efficiency of resource use is even more important than addressing the level of spending (which stands at 6 percent of the government budget on average in the region). Raising the efficiency and effectiveness of public spending will be critical to unlock agricultural growth and job creation while meeting the challenges arising from climate change. A large share of spending on agriculture is currently allocated to subsidies for a narrow set of inputs or crops. Yet, the benefits of such spending have not yielded lasting improvements in productivity. Repurposing public
support to agriculture toward high-value investment (technology generation and diffusion, soil conservation and irrigation infrastructure, climate change adaptation, and market connectivity) will yield massive benefits. At the same time, it is key to promote competitiveness and contestability to encourage greater private sector participation.
I want to stress the importance of agricultural availing inputs such as fertilizer and improved seeds to improve food security and reduce poverty in Africa. To this end there a need to pursue the recommendations of the 2006 Abuja Heads of States and Government to the effect of setting up mechanisms for effective procurement and distribution among African countries through easing tariffs and harmonizing policies to allow free movement of goods.
Havilah Rescue Foundation:
Hello from Kenya
Kimberly Bumgarner (Moderator, World Bank):
Joining us now from the World Bank are Ousmane Diagana the Regional Vice President for Western and Central Africa, Victoria Kwakwa the Regional Vice President, Eastern and Southern Africa, and Andrew Dabalen the Chief Economist for Africa.
Can you comment on the current role of regional organizations especially in health and trade?
Kimberly Bumgarner (Moderator, World Bank):
@rita On trade, some countries in the region have started export and importing under the tariff levels of the African Continental Free Trade Area (AfCFTA). The AfCFTA secretariat has launched a guided trade initiative for seven member countries. These seven countries which have signaled their readiness to start trading under AfCFTA were Tanzania, Mauritania, Kenya, Egypt, Cameroon, Rwanda, and Ghana. Secretary-General of the AfCFTA Wamkele Mene said at least 96 different products from the 7 countries could be freely traded under the rules of AfCFTA. The AfCFTA can be leveraged to coordinate and scale up regional investment in infrastructure, technological generation and diffusion, and innovation dissemination—thus, fostering participation in regional value chains.
What needs to be done to accelerate implementation of projects - especially those financed by MDBs?
César Calderón / World Bank:
@RAM Government spending supports the delivery of critical public services (such as education, health, public transportation, and water and waste management), connects households and firms to economic opportunities, and can be an important engine of growth. The economic and social impact of public investment, however, depends critically on its efficiency. Evidence shows that improvements in public investment management systems—more specifically, institutions and procedures shaping the planning, allocation, and implementation of public investments—have large economic dividends. If a government improves the quality of its spending from the lowest efficiency quartile to the highest one, its output multiplier will double.
Kimberly Bumgarner (Moderator, World Bank):
Thank you so much for your participation, questions, and interest! You can see what the World Bank is doing in Africa by following us on Twitter @WorldBankAfrica @BM_Afrique and visiting our website https://www.worldbank.org/en/region/afr
Kimberly Bumgarner (Moderator, World Bank):
For more information, please see our recent report - Africa’s Pulse - containing our latest analysis of issues shaping Africa’s economic future https://www.worldbank.org/en/publication/africa-pulse
Join us for a series of live events on today’s pressing development challenges.
Oct. 10: Curtain Raiser
Oct. 11: Civil Society Townhall
Oct. 11: Inclusive Growth
Oct. 11: Food and Energy
Oct. 12: Ukraine Ministerial Roundtable
Oct. 12: Investing in Education
Oct. 13: Press Conference
Oct. 13: People and Planet
Oct. 14: Annual Meetings Plenary
Oct. 15: State of Africa Region
Oct. 15: Human Capital Conclave