African Development Bank president Akinwumi Adesina. Picture: REUTERS
African Development Bank president Akinwumi Adesina. Picture: REUTERS

African countries have a lot to learn from South Korea’s rapid economic transformation, and agriculture is the fastest way for the continent to industrialise, the president of the African Development Bank (AfDB), Akinwumi Adesina, said on Monday.

Among the priority areas of the bank — which has an active portfolio totalling $4.9bn in SA and has funded the Land Bank and Eskom, among others — are infrastructure development, industrialisation and regional integration.

According to Adesina, the AfDB was looking to invest $35bn over the next 10 years to support industrialisation on the continent. This equated to $3.5bn a year. "It's not just the amount that we invest that matters, it’s also the amount that we leverage of this. We plan to leverage about $56bn in support of industrialisation in Africa."

Adesina said the intention was to improve Africa’s industrial GDP per capita from $700 currently — just a third of that of Latin America and a fifth of Southeast Asia’s. The quickest way to do this was through agriculture, he said. "Agricultural industrialisation will particularly help the poor because it will impact on people in the rural areas."

Adesina defended state involvement in the industrialisation process, saying structural adjustment programmes, which in the 1980s had prescribed a limited role for the state in the economy, lay at the core of de-industrialisation in Africa.

"You take a look at Singapore and many of these [Southeast Asian] countries, and the critical thing is the role of the state. The state had a great role to play both in terms of industrial policy, in terms … of support of infrastructure, in terms of generating capital in terms of particular industries that you want to grow — I know people always say don’t pick winners but, hey, who wants to pick losers."

Adesina, at the helm of the AfDB since September 2015, also referred to the need for balance between the state and the private sector, but emphasised that the role of the state was critical if industrialisation were to happen.

Even then, where industrialisation has taken place, such as in China, "you will find that the state was always there, hand-holding the private sector … that’s why I think we need to support the public-private partnerships where the … public sector can reduce the risk of exposure".

He singled out Ethiopia, citing it as an example of a country in which the state was striving to steer industrial progress, having drawn lessons from Southeast Asia. He also praised Morocco for boosting its industrial value-add by skilling its citizens to the extent that the country was now a leader in aeronautics.

Adesina was speaking on the first day of the bank’s annual meetings — a week in which representatives of the multilateral development finance institution’s board of governors, largely finance ministers from African countries, were meeting to discuss and revise strategy. The meeting is taking place in South Korea’s second-largest city, Busan.

A former minister of agriculture and rural development in Nigeria, Adesina was quick to explain why the meeting was taking place outside Africa — a decision that could appear self-defeating as the continent looks to showcase opportunities in Africa to attract investment and create jobs.

The AfDB is based in Abidjan, Ivory Coast and its members include all countries within the African continent and others in Europe, Asia and the Americas.

"The African Development Bank has 80 member countries, and we normally move our annual meetings from Africa to regional member countries so that we can share their participation … they can feel the energy and also feel that they are part of the African Development Bank."

The meeting in 2017 was held in India and previous conferences outside Africa took place in Spain, China and Portugal.

The focus of the 2018 meeting was Africa’s industrialisation, and hence Korea would provide valuable lessons.

"Korea’s example is simply incredible. Korea was as poor as any other African country in the 1960s; you look at their per capita income at that time, it was very, very low, among the lowest in Africa," Adesina said.

"Today, per capita income in Korea is $20,000. That tells you what happens when countries actually industrialise."

Business Day