Private sector, green growth key to the new AfDB strategy

Investing in private sector partnerships and accelerating inclusive green growth is central to the newly unveiled ten-year strategy of the African Development Bank (AfDB).

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The new strategy (2024-2033), announced at the AfDB’s annual meeting in Nairobi, has key priorities including promoting gender equality, investing in young people, responding to climate change and investing in climate action, supporting fragile states and promoting good governance and stability economic.

It was developed in the context of increased food insecurity and debt crisis in Africa as a result of the Covid-19 pandemic, the worsening effects of climate change and an increase in conflict and political instability, compounded by young demographics outnumbering jobs.

Akinwumi Adesina, President of AfDB, said the strategy is a response to the current complex obstacles facing the continent, which require the bank to become operationally more efficient and larger to pursue and urgently deliver sustainable investments on a larger scale.

He noted that this places emphasis on strengthening regional integration, increasing pharmaceutical and health capacity, sustainable use of vast natural resources, developing infrastructure, advancing digitalization and harnessing Africa’s enormous clean energy potential to boost green economic growth.

“Over the next decade, Africa can deliver sustainable growth, drive transformation and contribute to key global solutions,” he said.

Co-creation with the private sector

The fact that African businesses and entrepreneurs provide 90 percent of jobs, 70 percent of GDP and 70 percent of investment, according to AfDB leaders, means there is a need to create an enabling environment for private investment in reducing financing gaps and promoting inclusive green economic growth social.

“Over the next decade, the bank will significantly scale up and deploy its operations across the public and private sectors in a complementary manner. Its aim is to support entrepreneurs to invest in economic growth and job creation, including in the informal sector, where so much of Africa’s entrepreneurial energy lies,” the strategy statement reads in part.

Investing in women and youth

The new strategy was also developed on the premise that Africa’s population, which is the youngest and fastest growing in the world, creates an unparalleled demographic window of opportunity for the continent.

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Under the new strategy, the bank will address disparities and promote social inclusion, empowering women and young people, enabling them to make a significant contribution to sustainable economic growth and prosperous societies.

In 2023, the AfDB launched youth investment funds in three countries and announced that more countries have applied. Affirmative Finance Action for Women (AFAWA) has approved $1.7 billion to date and funded over 18,300 women-owned businesses.

The bank also stressed the importance of economic governance, including the mobilization of domestic resources, transparent financial management and anti-corruption measures.

Additionally, sustainable debt management practices will be prioritized to ensure long-term economic stability.

Recognizing Africa’s vulnerability to climate change, the bank seeks to promote low-carbon development pathways in line with the Paris Agreement, while protecting biodiversity and nature over the next decade.

By emphasizing sustainable development, it says it will strive to balance environmental issues, equality and economic progress.

He said that in the face of increasing conflict, instability and political instability in Africa, the bank would intensify its efforts to assist fragile countries, with a particular focus on addressing cross-border challenges and reducing the isolation of landlocked and remote areas.