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Path to prosperity: African Development Bank pushes for regional integration

Path to prosperity: African Development Bank pushes for regional integration
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The African Development Bank is stepping up its support for regional infrastructure projects, believing they are key to greater integration and economic prosperity on the continent.

More than 2,000 people took part in the Bank's 54th Assembly in Equatorial Guinea this month, presenting an opportunity for all parties to share their views on regional integration and the major development challenges in Africa.

The Bank is investing more than 13 billion Euros to finance regional integration infrastructure.

Its President, Akinwumi Adesina, has established five strategic priorities, with the strengthening of integration between countries the focal point.

The Senegambia bridge, inaugurated in January 2019, is one such example.

It links the two banks of the Gambia River, which not only makes it possible to boost trade, but also to promote sub-regional integration via the Dakar, Banjul, Bissau, Cotonou, Abidjan and Lagos corridor.

The bridge was mainly financed by the African Development Bank at a cost of 83 million Euros. It has already facilitated the interconnection of road networks and has significantly reduced travel time.

Mr Adesina told delegates there was "great excitement" about economic opportunities in Africa.

"Those opportunities are boundless," he said. "The newly established African Continental Free Trade Area will make Africa the largest free trade zone in the world. The combined GDP of more than 3.3 trillion dollars will, single-handedly, reduce tariffs for small business by about 53 per cent and, with the elimination of non-tariff barriers, trade could easily double."

In Central Africa, one of the least integrated regions on the continent, the pan-African financial institution has allocated 3.9 billion Euros over seven years - an amount available for investment projects that can strengthen links between countries.

This sub-region covers an area equivalent to three-quarters the size of Russia and has a population of some 130 million - a potential market that remains extremely divided due to the many national borders.

AfDB Director-General Ousmane Dore said in order to encourage sub-regional integration, the bank is committed to building not only quality infrastructure, but also to developing inter-regional trade and cross-border investment.

He said the Central African region was "endowed with huge potential of natural and human resources" but was lagging behind all the other regions in Africa in terms of integration.

AGRICULTURE

Agriculture is one sector that should benefit more from greater integration of African economies.

With 60 per cent of the world's available arable land, the continent holds the key to global food security. The challenge now for African farmers is to integrate with regional and global markets.

This is precisely the ambition of the "Feed Africa" programme launched in Malabo by the AfDB in partnership with South Korea.

Oyebanji Oyelaran Oyeyinka, AfDB special adviser on industrialisation, said the Bank was keen to encourage farmers to work together.

"Alone they are very weak and vulnerable because one farmer, if he is devastated by some problem disease, he is wiped out. But if he is part of an association, a cooperative, thousands of them, they are able to leverage that power."

Economic growth in Africa is expected to increase from 4 per cent in 2019, to 4.1 per cent in 2020, but that is still not enough to reduce unemployment and poverty.

For this growth to reach a larger portion of the population, it’s necessary to not only develop infrastructure, but also to achieve greater financial inclusion.

PERSONAL BANKING

The rate of banking in Africa remains extremely low, with only 43 per cent of adults having a bank account.

Experts believe that digital finance on the continent should promote access to banking services for as many people as possible.

With this in mind, the African Development Bank and its partners launched the African Digital Financial Inclusion Mechanism to strengthen the security and development of digital financial transactions.

The fund, which has received a grant from the Bill and Melinda Gates Foundation, aims to promote access to digital financial services for some 332 million Africans, 60 per cent of whom are women.

The long-term objective is to draw on 88 million Euros in grants and another 266 million in debt from the Bank's regular capital resources by 2030.

Vanessa Moungar, AfDB Director for Women, said she hoped it would accelerate financial inclusion.

"It will certainly not be possible to have a branch or commercial bank in every village in Africa," she said. "On the other hand, with digital, we open up another area of possibilities and we can also divert or bypass the obstacles that are posed by the traditional system."

INVESTMENT

During this annual general meeting, the African Development Bank also signed several bilateral agreements.

One of them is the "Boost Africa/E-Lab" initiative, a joint project of the AfDB and the European Investment Bank. It aims to boost youth employment through entrepreneurship.

Raymund Furrer, the Swiss representative on the Board of Governors, said it was a way of helping start-up companies, "to bring them up to market and then to see how they can invest in good ideas, create jobs, innovations and bring their respective sectors forward".

The African Development Bank also wants to play a major role in the fight against poverty and the improvement of living conditions on the continent, through the promotion of public and private capital investments in projects and programmes that can contribute to the continent's economic and social development.