JOHANNESBURG, May 25 (Reuters)&nbsp;&#8211;&nbsp;Africa risks sliding into stagflation &#8211; a cycle of slow growth and high inflation &#8211; as it battles the lingering effects of the pandemic and rising fuel and food prices caused by the Ukraine conflict, the African Development Bank (AfDB) said on Wednesday.



Despite experiencing relatively low death rates compared to more developed regions, Africa was dealt a heavy economic blow by the COVID-19 pandemic.



While 2021 saw a continent-wide rebound, with gross domestic product (GDP) growth estimated at 6.9% after a pandemic-induced contraction of 1.6% the previous year, the Bank projects real GDP growth to slow to 4.1% this year.



&#8220;The deceleration in growth highlights the severity of the impact of the Russia–Ukraine conflict on Africa&#8217;s economy,&#8221; the AfDB wrote in its 2022 African Economic Outlook.



&#8220;If the conflict persists, Africa&#8217;s growth is likely to stagnate at around 4 percent in 2023.&#8221;



Inflation is meanwhile expected to accelerate to 13.5% this year, from 13% in 2021, due to a sharp rise in energy and food prices linked to the war in Ukraine.



The AfDB estimates around 30 million Africans were pushed into extreme poverty and 22 million lost their jobs last year alone as a result of the pandemic.



Vulnerable populations, particularly in urban areas, will bear the brunt of rising prices, the report said, adding that economic disruptions stemming from the war could tip nearly 4 million more into extreme poverty this year and next.



&#8220;In the absence of measures to cushion the impact, this could stoke social tension across the continent,&#8221; the report stated. &#8220;But in many African countries, fiscal space remains constrained by the effects of the pandemic.&#8221;



The AfDB forecasts Africa&#8217;s debt-to-GDP ratio to stabilise at around 70%, down slightly from 71.4% in 2020, due to last year&#8217;s growth recovery and debt relief measures, but will remain above pre-pandemic levels.



(Reporting by Joe Bavier, Editing by Louise Heavens)

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Africa risks stagflation due to pandemic, Ukraine war – AfDB￼

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="429" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/03/KSJCTPD32VO5XPXHEGDADKUJW4-820x429.jpg" alt="" class="wp-image-416127" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/03/KSJCTPD32VO5XPXHEGDADKUJW4-820x429.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/03/KSJCTPD32VO5XPXHEGDADKUJW4-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/03/KSJCTPD32VO5XPXHEGDADKUJW4-160x84.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/03/KSJCTPD32VO5XPXHEGDADKUJW4-768x402.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/03/KSJCTPD32VO5XPXHEGDADKUJW4-1536x804.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/03/KSJCTPD32VO5XPXHEGDADKUJW4.jpg 1920w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Akinwumi Adesina, President of African Development Bank (AfDB) Photo: via Reuters</figcaption></figure>



JOHANNESBURG, March 25 (Reuters) – The African Development Bank (AfDB) is aiming to raise $1 billion to rapidly ramp up agricultural production in Africa and stave off a potential food crisis brought on by Russia’s invasion of Ukraine, its president told Reuters on Friday.



But the war, which has sent commodities prices soaring, is also an opportunity for the continent to position itself as a natural gas supplier for Europe and a refuge for investors fleeing Russia.



During the coronavirus pandemic, Africa has not seen infection rates and deaths on the same levels as many more developed regions. Its economies, however, have been battered and its rebound has proven sluggish.



Like much of the world, African nations are staring at rapidly rising consumer prices, with the war in Ukraine endangering global wheat and corn supplies and sending fuel prices soaring.



“Already, coming out of COVID we have 24 million people that are falling further into extreme poverty, and that’s going to worsen the situation,” Akinwumi Adesina said in an interview.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2022/african-development-bank-secures-32-8-bln-for-projects-in-africa/">African Development Bank secures $32.8 bln for projects in Africa</a></h3>



To avoid a food crisis, he said the AfDB was planning to launch an emergency food production plan that would focus on rapidly boosting wheat, maize, rice and soybean output on the continent.



“The plan is to produce roughly 30 million metric tonnes of food and to get technology into the hands of 20 million farmers. So you’re looking at big scale with small-holder farmers,” he said.



The International Monetary Fund (IMF) had already voiced its support to help implement the plan, which will produce food staples worth $12 billion, Adesina said.



The bank plans to raise $1 billion needed to fund the initiative from various emergency support facilities, concessional financing and from the IMF’s proposed $50 billion resilient sustainability fund.



“When COVID struck, we were not ready. But this time, we’re fully ready,” he said.



<h2 class="wp-block-heading" id="h-alternative-to-russia">ALTERNATIVE TO RUSSIA</h2>



While Adesina decried the war’s impact on Ukraine and its people, he recognised that the conflict and the geopolitical shifts it has sparked could play to Africa’s favour in some areas.



“The biggest challenge Europe has is securing its energy supply,” he said. “Europe needs to look, and it’s looking, for alternative supplies of gas. Africa can be that place.”



Africa boasts a host of major oil and gas producers, including Algeria, Nigeria and Angola.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/afdb-head-says-gas-remains-key-for-stable-power-supply-in-africa/">AfDB head says gas remains key for stable power supply in Africa</a></h3>



And new offshore gas discoveries – the viability of which had been questioned due to the global shift to renewables – could now become critical to Europe’s energy security as it weans itself off Russian supplies.



France’s TotalEnergies along with US firm Exxon Mobil and Portugal’s Galp are currently developing projects to exploit Mozambique’s estimated 100 trillion cubic feet of gas reserves and make it a major liquefied natural gas player.



Africa is meanwhile ready to welcome investors currently pulling out of Russia, Adesina said.



“There are a lot of investors that are going to be diversifying out of Russia, of course… That’s a real opportunity, I think, for Africa at this point in time.” 



(Reporting by Joe Bavier)

KSJCTPD32VO5XPXHEGDADKUJW4

Ukraine war creates woes, but also an opportunity for Africa – AfDB Pres

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Opening Ceremony of the African Development Bank’s 2021 Annual Meetings

Abidjan, Côte d’Ivoire, 8 October 2020 – The African Development Bank hosted an online seminar 7 October as part of the fourth annual Global Infrastructure Forum, drawing together representatives of government, the private sector and multilateral development institutions to discuss strengthening infrastructure development in the COVID-19 pandemic era. The Bank’s workshop, titled Infrastructure Project Preparation: Ensuring Sustainability and Resilience Post COVID-19, took the form of a panel discussion on the critical roles that government, multilateral lenders and the private sector can play in building much-needed infrastructure in an economic climate made more challenging by the ongoing pandemic. The COVID-19 pandemic has sharpened Africa’s already urgent need for added infrastructure spending. The African Development Bank estimates Africa’s infrastructure financing needs at up to $170 billion a year by 2025, with an estimated financing gap of as much as $108 billion a year. The webinar panel comprised Lamine Lo, Director, Financing and PPPs in the Ministry of Economic Planning and Cooperation, Senegal; Solomon Quaynor, Bank Vice President, Private Sector, Infrastructure &amp; Industrialization; Jerome Haegeli, Group Chief Economist and Managing Director, Swiss Re, and Dr. Srinivas Sampath, Chief of the PPP Thematic Group, Asian Development Bank. Quaynor noted that African countries typically lack the fiscal space of wealthier ones to cushion the pandemic’s impacts. He also noted that the pandemic posed a challenge also for institutions like the African Development Bank. “We’re going to have to innovate, come up with better project preparation approaches, we’re going to have to design risk mitigation instruments because a lot of private sector would not be willing to take the risk of government obligations without a counter-guarantee.” The follow-up question and answer session led to a wide-ranging discussion that offered the panelists an opportunity to showcase some of the innovations that are being rolled out and share their projections. Topics included climate change, infrastructure recycling and leveraging pension funds and sovereign wealth funds to develop infrastructure. In response to a question about government’s role in creating an enabling environment, Lamine Lo laid out Senegal’s priorities post COVID-19, listing the health sector, agriculture, education and pharmaceutical sector. “Why these sectors? It is driven by lessons learned from COVID-19 but it is also driven by the need to build an economy which is sustainable.” Underscoring the longer-term nature of climate change impacts, Haegeli observed that “COVID-19 is a human tragedy, it’s the deepest recession of our lifetimes, but it has an expiry date, climate change and biodiversity don’t, that’s why I think there’s even more upside to act.” There was consensus among the panelists that MDIs, including the African Development Bank and Asian Development Bank, have a critical role to play in preparing projects for investment, tapping new sources of financing and supporting the recycling of assets. “There is enough project preparation support available in the multilateral community. There is ADB’s project preparation facility, EBRD’s facility, the World Bank, GIF, and clients should use them,” said ADB’s Sampath. In their closing remarks, panelists blended realism with optimism while reaffirming the need for change and collaboration. “We need to refuel the global economy’s tank. While we refuel, let’s exchange the engine, let’s put in new batteries. And that’s why we need sustainable infrastructure. That’s at the core of the global recovery,” Haegeli said.



“There are many building blocks we can put in place, both in terms of managing the crisis, as well as medium to long-term infrastructure, quality preparation of infrastructure projects, and making sure they are structured and attractive for the private sector to come in and invest because this is not something MDBs and the government alone can do,” said Sampath. “Never waste a crisis, advised VP Quaynor. “One of the potential positive impacts of this crisis is it’s pushing all of us to really focus priorities. And also make sure that we build quality infrastructure that maximizes the positive impacts to the economy and we also build it to withstand natural disasters, pandemics and epidemics going forward.” The Global Infrastructure Forum 2020, themed Building a resilient future post COVID-19, runs from 6-8 October across multiple time zones.

COVID-19 crisis is pushing us to refocus priorities, says Bank Vice President Quaynor in Global Infrastructure Forum event on infrastructure project preparation

The flamboyant head of the African Development Bank, with his trademark bow tie and yen for economic progress across the continent, is back at the helm with another five term.



Akinwumi Adesina, the president of the AfBD, secured at second term at the at the body&#8217;s annual meeting in Abidjan after months of uncertainty. He garnered all of the votes from the regional and non-regional members of the bank and will carry on in the job until September 2025 along with his famous bow tie.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="960" height="540" src="https://www.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs.jpg" alt="African Development Bank President denies allegations of ill-governance" class="wp-image-350957" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs.jpg 960w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-696x392.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-747x420.jpg 747w" sizes="(max-width: 960px) 100vw, 960px" /><figcaption>African Development Bank President denies allegations of ill-governance</figcaption></figure>



 “I wear it because it is sexy and cool to be in the agriculture business. You mustn’t forget that by 2030 65% of the world’s arable land will be in Africa,” quipped Adesina at the launch of his brainchild, the Africa Investment Forum, in Johannesburg, in May 2017. Those words, in some way, sum up the man and his attitude to the continent.



Adesina, the former agriculture minister of Nigeria, has been a passionate proponent of economic development since he took the job five years ago and has been seen by many on the continent as a breath of fresh air in often musty world of development finance. He grew up, the son of a farmer, near Ibadan 128 km north east of Lagos in Oyo State. 



As a young man studied as an agricultural economist at Purdue University in Indiana, United States even though an academic back in Nigeria told him his maths was not good enough for him to get in. This was the prestigious college that educated the first man on the moon Neil Armstrong; in fact, one in every three NASA manned space missions had a Purdue graduate on board. 



In his first five year term , Adesina connected 18 million Africans to electricity and another 15 million the chance finance and private investment. Under his stewardship the AfDB has also maintained its AAA-rating among the global ratings agencies.



The certainty of the re-election is a sharp contrast the uncertainty of the last few months for Adesina. A group of whistle blowers accused Adesina of giving contracts to friends and appointing relatives to the bank. The man himself denied the accusations saying they were a mere attempt to tarnish his reputation.



The bank&#8217;s ethics committee cleared Adesina. In July, a panel of three international experts: former Irish premier Mary Robinson; Gambian chief justice Hassan Jallow and the former World Bank integrity vice-president Leonard McCarthy cleared Adesina of any wrong doing.

PRST Adesina

The bow tie is back – Adesina keeps the helm of the African Development Bank.

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="960" height="540" src="https://www.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs.jpg" alt="African Development Bank President denies allegations of ill-governance" class="wp-image-350957" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs.jpg 960w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-696x392.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2019/11/1571595826001_6109105526001_6109104149001-vs-747x420.jpg 747w" sizes="(max-width: 960px) 100vw, 960px" /><figcaption>African Development Bank President denies allegations of ill-governance</figcaption></figure>



A speech by Akinwumi Adesina as he stood for a second term as President of the African Development Bank:



&#8220;As we meet today, the world has changed. A global COVID-19 health pandemic has upended all plans including travels. Health and safety have become primary for all decision making. That’s why the Governors of the Bank took the extraordinary decision to hold the Annual Meetings virtually for the first time in the history of the Bank.



Extraordinary times require extraordinary measures. I applaud the Governors of the Bank for your wisdom, sensitivity and leadership.



The COVID-19 pandemic is spreading fast and causing much havoc and untold hardships. Lives lost too many. Jobs lost unimaginable. Economic losses too deep and vast to fathom.



Our collective humanity has never been so challenged so tested, so vulnerable. Yet our interdependency, our need for pulling together, uniting and staying focused together,has never been more important.



For in unity we build strength. Strength to overcome, even the most challenging of obstacles.



Pulling together has always been the strength of the African Development Bank.



We pulled together right here in Abidjan, where you the shareholders approved the largest capital increase in the history of the Bank &#8211; raising the capital of the Bank by $115 billion.



We pulled together, yet again, in Pretoria, South Africa, and gave the African Development Fund 35% increase in financing &#8211; financing so crucial to low income countries and fragile states.



Fragility is transient, resilience is enduring.



Today as you look at Côte d’Ivoire, you would not remember it also was a fragile state. Yet, today, based on visionary leadership, sound macroeconomic policies and people centered policies, it has changed dramatically.



Today, like beauty from ashes, the country ranked among the top 10 fastest growing economies in the world, before the COVID-19 pandemic. 



With the pandemic, Africa has lost over a decade of gains of economic growth. Africa’s recovery will be long and difficult. Now we must help Africa to build back, boldly, but smartly, paying greater attention to quality growth: health, climate and the environment.



Yet even in these challenging times, the Board of Directors of the African Development Bank pulled together to support Africa. The Bank launched a $10 billion COVID-19 Response Facility to support African countries. We launched a $3 billion social bond on the global market &#8211; the largest US dollar denominated social bond ever in world history.



These actions reflect our ambition, our unshaken commitment and unyielding responsibility to support, stabilize and strengthen African economies.



As we stabilize nations, so also must we stabilize the Bank — our institution.



The past several months no doubt have been challenging for the Bank. Yet, we pulled together. I would like to sincerely thank you all, our esteemed Governors, under the excellent leadership and wisdom of the Chairperson, Minister Niale Kaba, for joining hands to steady the Bank.



I am proud of the African Development Bank and the strength of our governance systems.



I am proud of each and every shareholder of the Bank who challenged and made us all better.



Our experience has made us better and stronger. Our challenges, though difficult, have become our gain.



But it’s not been easy… I will reach out… I will engage…



We will HEAL…



Africa needs a strong and stable African Development Bank to support it through this pandemic and help its economies rebound for better, healthier lives and livelihoods for its people. And the African Development Bank needs you — our shareholders — as you always have been: united and strong. 



Five years ago, right here in Abidjan, you elected me as President of the African Development Bank. It was such a great honor and a responsibility placed on my shoulders. I promised to work hard, to accelerate Africa’s development. My vision for the High5s was my bond — my oath of office, my compass!



Time has gone so fast. Fast also has been our impacts in those five years for Africa’s progress: 18 million people now have access to electricity. 141 million people have benefitted from improved agricultural technologies for food security. 15 million people have access to finance. 101 million people have access to improved transport. And 60 million people have gained access to water and sanitation.



I thank the Board of Directors and my extraordinary staff at the Bank for working so hard and for strongly supporting us to get this done.



But we will have no rest. The price of good work is more work. We have our work cut out for us —now more than ever — to help Africa rebound; and to get back on a stronger pathway of economic growth and resilience.



Today, I stand before you with gratefulness for your strong and collective support over the past five years.



We succeeded – together!



And together, we must also go forward, reaching for what lies before us to help fast track Africa’s development — building on our collective achievements, strengthening weaknesses and deepening our impacts.



At this Annual Meetings, I offer myself to you, our Governors, for your consideration for election for a second term, as President.



I do so, with humility.



I do so with a strong sense of duty and commitment and a call to serve Africa and our Bank, selflessly, to the very best of my God-given abilities. I do so with confidence in the power of our mission, the primacy of our vision — and the strength of our togetherness. 



Together — we are stronger Together — we achieve more Together — we become resilient Together — we build a better Bank Together — we win for Africa Thank you very much



This speech was adapted for online, the Editor.

PRST Adesina (1)

“Africa has lost a decade of growth” – Akinwumi Adesina on COVID-19

The COVID-19 pandemic and its health and economic impacts has forced a global rethink of the current multilateral framework and what it means for the future. For Africa, COVID-19 has served as a wake-up call in many ways. The mitigation measures that were put in place by most countries, globally, to contain the spread of the pandemic, and particularly border closures and lockdowns, resulted in reduced economic activity and supply chain disruptions across the whole world, Africa included. Reduced economic activity has meant demand contraction in Africa’s key markets, who were worse affected by the pandemic, thus depressing export revenues as commodity prices have continued to plummet.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="800" height="600" src="https://www.cnbcafrica.com/wp-content/uploads/2020/02/shutterstock_110973782.jpg" alt="International travel for South Africans is now allowed, this is how it will work" class="wp-image-360865" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/02/shutterstock_110973782.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2020/02/shutterstock_110973782-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/02/shutterstock_110973782-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/02/shutterstock_110973782-80x60.jpg 80w, https://cms.cnbcafrica.com/wp-content/uploads/2020/02/shutterstock_110973782-265x198.jpg 265w, https://cms.cnbcafrica.com/wp-content/uploads/2020/02/shutterstock_110973782-696x522.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/02/shutterstock_110973782-560x420.jpg 560w" sizes="(max-width: 800px) 100vw, 800px" /><figcaption>International travel for South Africans is now allowed, this is how it will work</figcaption></figure>



 Several African manufacturers have successfully reoriented operations to begin production of Protective Personal Equipment (PPE) and ventilators to meet local demand. However, for the most part, pandemic-related disruptions have exposed African economies’ overdependence on high commodity prices and exports of raw materials to fund basic government services. Together, disrupted international supply chains and domestic lockdowns created a perfect storm in which income, goods or services stopped circulating as economies came to a standstill. No money, no movement, and a realization that most African countries lack economic diversity and resilience.



 So, what is to be done? Simply put, there is a need to focus on fundamentals: producing more of what Africa consumes, and consuming more of what Africa produces. This does not mean cutting Africa off from the outside world. However, it does mean focusing first and foremost on the African market, and other markets secondarily. It means the need to think about Africa more as a single common market to facilitate scaling up. Producing and consuming locally will facilitate the development of supply chains that will offer small companies, and countries, opportunities to leverage their strengths and specializations and feed into large value chain networks that create more value through production, processing and distribution. And it means raising the standards within African supply chains to enable African firms to produce world class industrial products.



 To achieve this, there needs to be a concerted effort to shore up manufacturing in Africa. The demand for manufactured goods is already there, as evidenced by the figures on the import of manufactures. Key to enhancing manufacturing in Africa is improving intra-African trade through the effective operationalization of the Africa Continental Free Trade Area (AfCFTA), which would spur industrialization. The COVID-19 crisis has shown that enhanced industrial production in Africa is entirely achievable, especially as countries have struggled to source inputs and products from overseas. African industries do have the potential to respond to demand and in fact, there is potential to leap-frog into advanced manufacturing and create the required capacity to produce quality world class goods. 



By extension, the pandemic has also exposed the vital importance of economic capacity not only for socioeconomic development and industrialization but to enhance resilience against crises and exogenous shocks that often occur without warning. Building on existing regional strategies for disaster risk reduction, there is also a need to factor in how pandemics present a multidimensional set of risks that require integrated responses to mitigate systemic risks. 



The capacity to locally manufacture the basics that are critical during emergencies—foodstuffs,clothing, shelter—and building the markets and supply chains needed to ensure a good supply of these, would contribute significantly to GDP, income and job creation. The question becomes how to build the markets and supply chains needed to ensure Africa can provide for itself, including during emergencies. For example, Africa has several agricultural commodities on which regional value chains can be constructed. These alone would contribute significantly to GDP, incomes and job creation while also paving a shift into the manufacture of light intermediate goods (e.g., wood products, textiles and leather) adds to the range of possibilities. As Africa builds more critical mass, the continent would increasingly move investment into distribution, data transmission and services to ensure these goods make it to market. Financing and insurance are needed across the spectrum, as are all the skills of the youth and specialists who can help manage the IT and logistics that leverage digital capabilities. This will create high paying, skilled jobs for Africa’s youth. In other words, there is a need to take a horizontal view of value creation and maximize opportunities to generate these in Africa, for African economies, African businesses, African workers and African consumers.



 So how can this be achieved? Fulfilling the African Development Bank’s High 5s priorities: Light Up and Power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and, Improve the Qualityof Life for the People of Africa, would address these challenges on multiple fronts andinstrumentalize a tightly interconnected African market. The High 5s address the continent’s demonstrated need for power generation to electrify households and industries; enhanced transport links to connect African countries by land, sea and air; ICT for communication and digital management of logistics; financial markets to integrate for more and better financial flows for business enterprises to flourish and to meet household needs; and agribusinesses that rely on the latest seed and other technology to produce the crop yields needed to sustain Africa’s fast growing populations.



 By producing what it consumes and consuming what it produces as its countries and businesses progress up the value chain, Africa can build wealth, opportunity and resilience and ensure the successful realisation of Agenda 2063.



Khaled Sherif is the Vice-President, Regional Development, Integration and Business Delivery at the African Development Bank

VP Sherif Khaled (1)

OPINION: Regional Integration as a Tool for Wealth Creation in Africa

JOHANNESBURG (Reuters) &#8211; The African Development Bank (AfDB) has approved a roughly 5 billion rand ($300 million) loan to the South African government to help it fight the COVID-19 pandemic and support its budget, the bank said on Wednesday.



Africa’s most industrialised economy was in recession even before COVID-19 started ravaging its economy. Forecasts are now for gross domestic product to shrink by at least 7% this year, and a budget deficit of around 15% of GDP.



The country has recorded the most coronavirus infections in Africa, with more than 380,000 cases.



The AfDB said in a statement that the loan was to protect lives and promote access to essential medical equipment, to protect livelihoods by preserving jobs, and to support companies in the formal and informal economy.



“South Africa’s ability to respond to the pandemic has implications for neighbouring countries as well as the continent as a whole,” the bank said.



South Africa has also approached the International Monetary Fund for financial support in its fight against the coronavirus. The IMF is expected to consider its request next week.



The development bank of the BRICS group of nations approved a $1 billion COVID-19 loan for South Africa earlier this year.



($1 = 16.4914 rand)

African Development Bank approves 5 bln rand loan to South Africa

JOHANNESBURG (Reuters) &#8211; The South African government has not committed to fund a restructuring plan for struggling South African Airways (SAA), Finance Minister Tito Mboweni said in court papers seen by Reuters on Tuesday.tit



Administrators took over SAA in December after almost a decade of financial losses, and last week creditors approved the restructuring plan, which requires at least 10 billion rand ($600 million) of new funds, on the understanding the government would find the necessary cash.



Mboweni said in an affidavit filed in the High Court that funding options the government might explore included approaching institutions for investment of pension funds, private equity or other partners who might want a shareholding in a restructured SAA.



The minister was responding to a court case launched by opposition party the Democratic Alliance, which wants to block Mboweni from using emergency powers to channel more public funds to rescue the airline.



Mboweni and Public Enterprises Minister Pravin Gordhan sent a letter last week to SAA’s administrators committing to “mobilising funding” for the plan.



Mboweni said in his affidavit that no definitive decisions had been taken on how funds would be sourced for SAA. He said he had not used his powers to authorise using funds from the National Revenue Fund, nor was such a move imminent.



The finance ministry has not responded to a Reuters request for comment.



SAA’s administrators need certain conditions to be met by Wednesday for their restructuring plan to work.



One of them is that the government finds money for the plan, which envisages scaling back the airline’s fleet and shedding jobs before gradually ramping up operations as COVID-19 disruption eases.



In a document sent to trade unions over the weekend giving the rationale for the planned job cuts, the administrators said SAA had made a net loss of 5.5 billion rand in the year to end-March, with further losses incurred since.



The administrators plan to have terminated all SAA’s aircraft leases by the end of July, leaving it with nine Airbus A340 planes which are on sale, Louise Brugman, spokeswoman for the administrators told Reuters.

PRETORIA, SOUTH AFRICA - MARCH 16: Finance minister, Tito Mboweni briefs the media on the details of government interventions in various sectors of the departmental portfolios on COVID-19 at DIRCO Media Centre.

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South Africa has not committed to fund SAA rescue plan, finance minister says

Five years into the African Development Bank’s ambitious New Deal on Energy for Africa (NDEA), the Bank’s investments are set to provide electricity access to around 13 million people and deliver about 55,000 km of distribution lines, and 6,700 km of transmission lines, of which 3,200 km are for regional interconnections.



The NDEA called for a substantial increase in investments to realize the Bank’s High 5 priority to “Light Up and Power Africa,” which aims to mobilize finance and expertise to expand access to reliable, sustainable energy for more than 200 million Africans through investments in power generation, inter-connections, transmission and distribution. This effort is critical to unlocking Africa’s vast economic potential, enabling the growth of value-adding industries and services, and, most importantly, unleashing the ingenuity of the continent’s 1.3 billion people.



The strategy was grounded in the recognition that partnerships are central to its success. In collaboration with African countries, the Bank’s interventions have ranged from setting up the right enabling policy environment, supporting utilities, to increasing the number of bankable energy projects. Additionally, the Bank is accelerating major regional projects and driving integration through the Program for Infrastructure Development in Africa, whilst also supporting bottom-of-the-pyramid energy access programs.



Priority was given to investments in low-carbon technologies, set to contribute to over 2 GW of additional generation capacity by harnessing the large, hydro, solar, geothermal and wind resources of the continent. Yet this is only the beginning, as much of the work to date has been centered on setting up the right frameworks to mobilize different partners and alternative forms of capital to tackle the various challenges in the sector at country, sub-regional and regional levels.



Indeed, mobilizing partnerships and rolling out countrywide energy transformation are continuous works in progress. In 2019, as testament to the Bank’s efforts in enhancing dialogue and consensus, the G5 Heads of State endorsed the Bank’s Desert to Power initiative, intended to build the world’s largest solar zone across the Sahel by adding up to 10 GW of solar generation capacity through public and private interventions. The Yeleen Solar Program in Burkina Faso – the first of dozens of similar projects expected to flourish across the Sahel region – will provide energy to 150,000 households in rural areas through solar mini-grids and solar home systems, and an additional 52 MW of grid-connected solar generation, enough to power 30,000 new households.



Achieving the objectives of the New Deal on Energy for Africa will require a significant increase in private sector investments. The Bank catalyzes more private investments into independent power producers and off-grid projects through partnerships with project developers, commercial banks, private equity funds, institutional investors and other development finance institutions. Over the past five years, the Bank’s interventions reached $1.5 billion in private sector operations, corresponding to 1.7 GW additional generation capacity through independent power producers.



In addition to mobilizing concessional resources through bilateral and multilateral sources – notably from the European Union, Green Climate Fund and Climate Investment Funds – the Bank hosts the Sustainable Energy Fund for Africa (SEFA), one of the largest multi-donor technical assistance and concessional capital funds in the continent, designed to catalyze private sector participation in renewable energy.



In 2019, the Bank converted SEFA into a special trust fund to widen its interventions into green mini-grids to accelerate energy access to underserved populations; green baseload to support clean generation capacity; and energy efficiency to optimize energy systems and reduce energy intensity. SEFA is expected to contribute to the electrification of more than 7 million households by 2030.



The Bank is also actively supporting the mobilization of commercial capital through blended finance solutions. The Facility for Energy Inclusion, which was operationalized in 2019, is a $500 million investment platform organized around two funds – off-grid and on-grid – to provide flexible debt products, including in local currency, to emerging business models in the small-scale renewable energy space. The Facility for Energy Inclusion will contribute to more than 3 million new connections by 2030.



To enhance institutional performance and improve the enabling conditions to attract much needed investments, the Bank has also implemented initiatives such as the Electricity Regulatory Index to monitor and benchmark regulatory performance against best practices, the Sustainable Utilities Transformation Agenda, to build sustainable utilities and energy institutions, and the Africa Energy Portal to provide accurate, up-to-date data on Africa’s energy sector. In 2019, the African Development Bank reported that an additional 96 million African households had gained access to electricity between 2015 and 2019, with countries like Rwanda on track to achieve universal access by 2025. Despite this encouraging progress, close to 600 million Africans still lack electricity access and achieving universal access goals under SDG7 still requires greater and swifter efforts to meet the demands of Africa’s growing population.



Addressing electricity access remains a costly enterprise, with the International Energy Agency placing the price tag at around $120 billion annually through 2040, four times higher than current levels.



While our direct financial contribution is modest by comparison, we are confident that its judicious application to catalytic power projects, innovative financial structures, sector reform processes and acceleration of decentralized solutions will get us far in our mission.



Dr. Kevin Kariuki, Vice President, Power, Energy, Climate Change &amp; Green Growth, African Development Bank

VP Kevin Kanina Kariuki

COMMENT: A New Deal on Energy for Africa

Ratings agency S&amp;P Global on Friday affirmed its &#8216;AAA/A-1+&#8217; long- and short-term issuer credit assessment of the African Development Bank (AfDB) with a stable outlook.



The rating agency positively assessed the Bank’s very strong financial risk profile, very strong capital adequacy, strong funding and liquidity, extraordinary shareholder support and adequacy of its governance and management.



“We are therefore affirming our ‘AAA’ long-term issuer credit rating on the AfDB,” S&amp;P Global stated.



The rating agency noted the Bank’s $115 billion capital increase, approved by shareholders in October 2019, and the replenishment to the African Development Fund, the Bank’s concessional window, in December 2019.



“The stable outlook reflects our expectation that, over the next two years, AfDB will prudently manage its capital while maintaining solid levels of high-quality liquidity assets and robust funding,” S&amp;P Global said in a statement.



S&amp;P expects that “shareholders will remain supportive by providing timely capital payments”; the Bank “will continue benefiting from preferred creditor treatment (PCT); and “prudently manage growth in private-sector lending in a way that’s aligned with its mandate.”



The rating agency’s report further noted that the “AfDB will play a key role supporting the region, particularly in the context of COVID-19. The institution approved an up to $10 billion relief package for 2020, of which $6.9 billion will be financed by AfDB and the remainder through its concessional lending window.”



The President of the Bank, Akinwumi A. Adesina, said: “We are delighted with and welcome S&amp;P Global’s decision to affirm the Bank’s AAA/A-1+ rating. It reflects the Bank’s very strong financial position and risk management, as well as our sound governance. We will continue to maintain these standards, with the strong support of all our shareholders, as we deliver much needed financial, knowledge and policy support to our regional member countries during and after this period of the COVID-19 pandemic.”

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