African Development Bank President's View About Ethiopia

Desta Kahsay /ENA/

Interview with President of African Development Fund (AfDB), Akinwumi Adesina. Formerly Nigeria’s Minister of Agriculture and Rural Development, Akinwumi Adesina, is serving as the 8th President of the Bank since May 2015. He shared with us his view about Ethiopia.

ENA: How committed is the AfDB in Supporting the Ethiopian economy and what are the demonstrative cooperation so far and the future plans as well?

Adesian : Well you know the Africa Development Bank is a great partner with the government of Ethiopia and we have always been. I am a great admirer of Ethiopia because Ethiopia's economic growth has been fascinating to me for over the years. This is the country that has experienced economic growth rate over 10 percent for over a decade and even last year has 7.7 percent GDP growth rate which is amusing against the context of the global  growth rate of about 3 percent. And so that is a phenomenal performance that you have with Ethiopia.

The second thing that I think makes me quite excited about Ethiopia is the investments that we have been doing in Ethiopia. We have been investing heavily in energy sector for Ethiopia. Ethiopian government service is doing very well in hydro.

I think the big hydro renaissance dam that you have is a major accomplishment. The bank has invested not only in hydro but also invested heavily in transmission lines. Transmission lines to link almost a thousand kilometers to link Ethiopia to Nairobi, Kenya in terms of power evacuation from here.

We are also delighted to have funded the road that actually links Ethiopia all the way to Mombasa, from Addis Ababa to Moyale all the way to Mombasa.

And that road alone has allowed trade between Ethiopia and Kenya to rise by 400 percent and that has also provided Ethiopia with an access at way port

We are currently financing infrastructure to link Ethiopia to the port of Djibouti and so that it allows us to …we invested in Hawassa zone all the way to Djibouti port

And the other areas we have been investing right here has to do with agriculture. You know Ethiopia has tremendous amount of capacity in agriculture and we are currently working with the Prime Minister to invest in helping to create new agro-industrial parks with in the country and that is going ahead

And thirdly is when I had a fantastic discussion with the Prime Minister, by the way I am a great fun of the Prime Minister, I think what he has done for Ethiopia is fantastic. He has brought fresh air, new hope and freshness for economic opportunities to entire horn of Africa

We were talking with him about some of the areas that we can invest more in and those areas are job creation; to help Ethiopia create a lot more jobs for its young people

He is much concerned about regional distribution of infrastructure and other investments so we are going to be working with him to see how we can support irrigation. Obviously Ethiopia goes through drought from time to time and so we have told him that we are going to be helping him, in fact we have a plan I came here in October and already we have put a plan to invest 126 million dollars in irrigation to support his agenda

The prime Minister told me to go and look at an area within the city slam area that he wants to upgrade and I told him that we will strongly support over an infrastructure upgrade right here for Addis

All in all, we are great partners with Ethiopia but most importantly that Ethiopians by themselves are doing great all by themselves we can only help to support what they are doing

ENA: How stable is Ethiopia's trend of GDP to debt and what do you think should be done to minimize risks related to that?

Adesina: You have got to give it to the country because Ethiopia has done very well in terms of its export, diversifying its economy. The only thing that has happened is that the amount of export revenue to be able to finance debt. It is the only thing. I have never seen any other African country invest more in infrastructure than this country

So, when people talk of debt the question that I always raise is if I take my credit card and walk into MacDonald and use my credit card to buy hamburger that is one way to take that the other way to take that is to invest it in infrastructure, in housing, in upgrading your open infrastructure which is Ethiopia has been doing remarkably well.

It costs a lot of money to do infrastructure but sometimes there is a gap in between your ability to generate the amount of resources enough to service very quickly but do not forget the same infrastructure you are investing in is going to be a growth multiplier overtime because it is like trying to have a house that is a skyscraper but you do not have the foundations and so you can collect on a lot of rent letter but you have got to build the foundation first.

I think that Ethiopia is using debt very well, the quality of debt is very well we do not have any problems with that so what we have got to do is help Ethiopia to diversify more its economy, add value to the things that it is exporting

As a bank we invested heavily in Ethiopian airways for them to acquire new airbuses, which of course I am proud of Ethiopian airways and I flied many times, that is really good. We also invested in your cement company, Derba 

We just have to expand and diversify the economy more but I will tell you one thing that never makes me nervous about Ethiopia, if you ever watch Olympics and you see people that run long distances without getting tired, they are Ethiopians right? So I think Ethiopians always know how face over challenges and I am sure that is one you will cope with as well.

ENA: How do you see Ethiopia's recent decision of opening up its economy to the private sector and what are the challenges and opportunities that lie underneath?

Adesina: When I met him for the first time, the thing that really excited me about him was his fresh great ideas, he has energy, he has great clear vision and he want to get things done like ten ago so when you are talking with him he is like in a hurry to get things done which is really very good I think those are the kind of things that I feel about we need to continue to support him a lot more to be able to succeed.

Obviously, given the history of Ethiopia, where a lot of things are done by the public sector clearly the economy will grow even more faster with liberalization of the economy

The telecoms sector has been liberalized event the financial services industry also been liberalized that is really very good and so when I see telecoms company that are all coming here now the government wants to put up 30 percent of its share of the telecoms that is very good

Look the incomes are rising, urbanization is peaking up here, this is a big population you cannot ignore but potential is that but nobody can eat the potential, you have got to unlock the potential

I look at the private sector as, if you are trying to pick up something that is a heavy load you can bend down break you back and carry it by yourself or you can just use a machine that pulls it up for you. That is what a private sector does and I think that is a good move

When you trying to attract Foreign Direct Investment, one must ask what kind of FDI? If you are attracting FDI that is hot money, that just simply comes in and goes out that is never good for your economy.

But what you really want to have is people who really want to invest for the long haul, who see the potential and their patience cut through they can invest in the economy for a long-term

So when I look at here, what you have in terms of resources that you have you need those kind of private sector to be there. I do not think one should be afraid for private sector, what you need is a good environment for the private sector but also you got to be able to have the right business and investment regulatory environment to make that work.

ENA: What do think the coming of the 4th industrial revolution economic prospect has in store for Africa?

Adesina: The theory is in every challenge there always lies opportunities and smarter people always look for……….this things are very difficult particularly our globe today in terms of the fourth industrial revolution

Quiet a number of people are quiet afraid of it, they think people are going to lose jobs, they think robots are going to take over, they think that the digital economy it is going to really make them service industry people that actually will lose jobs

Yes, some of that will happen but there will be a lot more jobs that are created. Remember in Africa in those days not too long ago, we used to have landlines all these wires that are connected to each other and then we have mobile phones and people were thinking Oh G we are going to lose so much money.

But no, we did not lose money we created more all that times of business came out of that. So, I think innovation is very important and I think an investment in particular, in young people to support them to be able to develop commuter applications.

As the African Development Bank I know about infrastructure for us to become competitive in the world that we are living in just the one ahead of us is not going to be roads it is going to be digital infrastructure, it is going to be data centers, it is going to be digital entrepreneurs, techno-preneurs that actually understand how to use data, robotics, artificial intelligence and big data computing that is in the world.

That is why we are very proud as the Africa Development Bank to be putting Africa ahead on this particular area. We just got into a major partnership with facebook and Microsoft.

What we are trying to do is to set up twenty (20) computer coding centers in Africa. Those twenty computer coding centers are going to allow us to target 234,000 young Africans that are going to be computer coders. They can code business anywhere in the world and because of that they will be able to create 9 million jobs you know that is how fast this is.

In addition to that, we are also investing heavily in creating new financial instruments to make those young people strive. I believe that the future Bill Gates, Zukerburgs of this world do not always have to come out of Silicon Valley they are going to come out of Africa. We have got very large population of young people and they are very smart we just have to turn those numbers into a comparative advantage by actually taping to their minds. I am putting the capital, the finance at risk for them. If somebody did not believe in Bill Gates, if somebody did not believe in financing Mark Zukerberg, how will they be who they are today?

About Ethiopia I watched something on CNN, very young and dynamic Ethiopians that are working on the issue of robotics I was impressed that is the future and that is why I really think that we really need to continue to invest in digital infrastructure, make it easier the cost of data, to go down the speed of data and voice to go up.

The African Development Bank is investing a lot in that today to connect all parts of Africa with fiber optics and all of that, so that we can actually take advantage of that 4th industrial revolution.

ENA: When will you start to set up the 20 computer coding centers and is Ethiopia one of the countries?

Adesina: We have started them already in five, six countries. We have started in Senegal, Cote D'ivoire, Kenya, Rwanda. In Rwanda they even have the first Rwanda innovation that will support these techno entrepreneurs to emerge.

To your point about Ethiopia, speaking with Abiy about this we will obviously be investing here in this particular area. Look at what Ethiopia has done with investment in special economic zones. Ethiopia today right from those Hawassa area is exporting value added textile and leather all over and when I spoke to my friend the Prime Minister I told him we want to help build what we call staple crop processing zones vast areas and rural areas that are enabled with power, water, roads and ICT that will allow you open up your rural economy completely and actually turn those rural areas into zones of economic prosperity.

I think at the end of the day, the most powerful thing you can do for a young person is to have confidence in them and putting your money behind them that is very important to do and I want thank them and really salute the effort of the government because they put up almost 40 million dollars to support young people and staff like that, so we will do more with them.