75% of the world’s poorest countries are located in Africa. By 2030 it is estimated that 90% of the world’s destitute children will be living in Africa.
The Managing Director, Bank of Industry, Olukayode Pitan disclosed this on Thursday that
Pitan disclosed this at the 2017 Chief Executive Officers Forum of African Association of Development Finance Institutions with the theme, ‘Strengthening African Development Finance Institutions’ in Abuja, stating that poverty and regional underdevelopment still persists due to political upheavals, civil conflicts, terrorism and general economic challenges.
He said, “With a current population of 1.21 billion, Africa is projected to experience the largest continental population growth by 2050, with an estimated addition of about 1.3 billion people within the period. Therefore all of us have the responsibility to ensure that we improve the quality of life of our people. Although there have been marked economic improvements in some African countries through the adoption of science and technology.
“As we all know, Development Financial Institutions (DFIs) play a very significant role in ensuring sustainable economic and social development. This is evidenced by the roles that they have played in the economic development of Asian, European and South American economies. We have also seen strides made by these institutions in Africa, albeit more developmental impact need to be achieved.
“Poverty and regional underdevelopment still pervade due to political upheavals, civil conflicts, terrorism and general economic challenges. Research says 75% of the world’s poorest countries are located in Africa. And by 2030, it is estimated that 90% of the world’s destitute children will be living in Africa.
“The African DFIs have the potential to address these issues working in synergy amongst ourselves and our respective governments. Individually, we can bring about some development in our countries, however only our collective effort can deliver the level of sustainable social development that we desire.
“Our actions will determine whether the inexorable growth of the continent’s population will promote prosperity and improve the livelihood of African people or become a source of fragility, social tension, and increased economic hardships.
“The African continent presents a unique context for the developmental mandate of DFIs. Currently, there are over 140 DFIs in Africa that are charged with financing various developmental programs. Results have been mixed with some DFIs making significant strides in fulfilling their mandate, while for some others, it is a struggle for various reasons.
Some of the limitations that affect the impact made by African DFIs include, amongst others: adverse economic climates which affects funding, unstable political landscape which causes economic policy somersaults, inability of some DFIs to operate independently of government bureaucratic structures, he said.
“On the back of this, it is important that African DFIs develop a framework that functions effectively in this environment and enables them to meet their objectives of providing support (both financial and advisory) for social development projects, whilst also ensuring their economic sustainability. One way that has been touted to ensure this outcome, is the application of good corporate governance and an appropriate regulations framework.
“Key findings in the Africa Competitiveness Report 2017, a biennial publication jointly produced by the World Economic Forum, the African Development Bank, and the World Bank Group, state that failure to strengthen government institutions, improve infrastructure, and promote near- and long-term job creation will lead to a widening gap between the rising population and available employment.
The report projects that Africa’s working age population should grow by 450 million people, but that without significant policy reform, the continent’s economies, will likely produce only 100 million new jobs. Urgent action is needed to address low levels of competitiveness, otherwise Africa’s economies will not create enough jobs for the young people entering the job market. If current policies remain unchanged, less than a quarter of the requisite 450 million new jobs needed in Africa within the next 20 years will be created.
The Managing director said, In the face of these monumental developmental needs of our dear continent, Africa, there are strong reasons for various arms of government, especially the executives and the legislature to continue to strengthen DFIs. It is also vital that managers of African DFIs integrate and imbibe a strong corporate governance culture in their various institutions.
Speaking, the Chief Executive Officer Forum of African Development Finance Institution Ebrima Faal said it is essential to continue mobilizing financial resources to support key economic sectors such as infrastructure and agriculture.
It is estimated that the continent needs $400 billion of agricultural investment over the next 10 year. The infrastructural needs of Africa are estimated at $48 billion per annum. There is great urgency to bridge this gap, if the much heralded demographic dividend for the continent is to be realized.