Putting Africa on the Path to Prosperity

Mohamed Ould Ghazouani and Ajay Banga
Friday 14 Jun 2024

The task is immense, because Africa’s challenges are great. Nearly 500 million Africans live in poverty, while conflict, climate change, unsustainable debt burdens, and other crises cast a shadow over the continent’s economic outlook.

 

Across the Global South, young people are yearning for opportunity and a better life. But while 1.2 billion people in developing countries are projected to reach working age over the next decade, only an estimated 420 million jobs will be available to them, leaving nearly 800 million people without a clear path to employment. Even though some of this cohort will continue their education, that would only delay, and possibly prolong, the crisis.

The challenge of insufficient job opportunities will be felt acutely in Africa, where nearly one-third of this generation lives. But forecasts are not destiny. That is why the continent’s future will be a central topic at this week’s G7 summit in Apulia, Italy.

The need to focus on Africa’s future is obvious, because a world free of poverty on a livable planet will remain an elusive target if the continent cannot harness its abundant potential and create sufficient employment and economic growth. And it is equally clear that a successful strategy for Africa must include the International Development Association (IDA), which wields a powerful development tool: affordable financing.

The task is immense, because Africa’s challenges are great. Nearly 500 million Africans live in poverty, while conflict, climate change, unsustainable debt burdens, and other crises cast a shadow over the continent’s economic outlook.

But the good news is that there is a path to progress, as evidenced by other countries that have prospered by using IDA’s grants and low-interest loans, embracing good governance, investing in their people, and fostering a business-friendly investment climate. Africa could take a similar path, but it will need the help of organizations like the G7 and others.

We believe a focused strategy that generates jobs while providing the foundational ingredients for development is essential to that journey. In our view, this plan should be anchored in five pillars.

First, we must improve access to electricity, which is a fundamental human right and essential to development. The World Bank Group is working with the African Development Bank to provide electricity to half of the 600 million Africans lacking access to power by 2030, an effort that will require the support of development partners, governments, and private-sector investors to succeed. Fortunately, we are well on our way to building that coalition.

Second, building efficient, high-quality infrastructure is crucial for trade. Moving goods between African countries can be a lengthy and expensive process, because road and rail networks are insufficient, maritime transport is modest, and border wait times are prohibitively long. In a region where 470 million people don’t have reliable year-round transport, investing in physical and digital infrastructure – including cross-border payment systems – will create job opportunities by increasing trade, integration, and financial inclusion.

Third, investment in agribusiness must increase. Only 6% of Africa’s farmland is irrigated, compared to 37% in Asia, and the continent has one of the lowest rates of fertilizer use in the world, leading to yields that are one-third of the global average. With the right fertilizer for the right soil and improved irrigation, Africa’s farmers could boost production, labor demand, and incomes, which could then be used for food, school supplies, and medicine. For example, an IDA-financed initiative in Mauritania and its neighboring Sahel countries is helping 390,000 farmers – almost half of them women – irrigate their farmland using affordable technologies.

Fourth, health-care systems must be strengthened. The World Bank Group aims to help low- and middle-income countries provide health-care services to 1.5 billion people by 2030 – which will create countless high-skilled jobs. But we must think even bigger, because strengthening health infrastructure and pandemic preparedness is essential to development.

Lastly, promoting tourism would create jobs for women, who make up the majority of the sector’s workforce, and accelerate economic growth. But this will depend on improved infrastructure and access to electricity and health care. Moreover, like the other four areas, it also requires a commitment to education and skills development to succeed, built with a digital foundation.

IDA is an essential partner and knowledge source in advancing this agenda. It is the largest provider of financing and the main source of liquidity for many African countries. Last year alone, 75% of IDA’s commitments – more than $25 billion – were to Africa, a 24% increase over five years. Its financial model turns every donor dollar into nearly four dollars in new resources. And, if successful, proposed measures to simplify IDA would improve access and help countries focus more on developing real solutions for their people. Simply put, IDA is the best deal in development, as 19 African heads of state recently recognized.

It’s also a reminder of what we can accomplish when we join together as partners in progress. With IDA’s support, we can target jobs- and growth-producing sectors, engage the private sector, and help Africa secure the prosperous future it deserves.

 

Mohamed Ould Ghazouani is President of Mauritania and Chairperson of the African Union. Ajay Banga is President of the World Bank Group.

Copyright: Project Syndicate, 2024.

Search Keywords:
Short link: