Inclusive growth and sustainable development in Africa: an important task for regional development banks | African Development Bank

According to data from the African Development Bank, the average annual growth rate of GDP (gross domestic product) in Africa between 2010 and 2021 was 3.4%. This is well below the target annual average growth of 7%. In combination with population growth, GDP per inhabitant has barely changed.

At the same time, average purchasing power in Africa has deteriorated due to inflation, which has accelerated over the past 10 years. Beyond the governance challenges, the reality of African economies means that periods of optimism are often disrupted by external shocks such as Covid-19 and the Russian war in Ukraine, which have led to lower GDP growth rates in recent years.

The issue raises questions in the region. The African Union Commission, the African Development Bank and the African Union Development Agency – New Partnership for Africa’s Development (AUDA-NEPAD) have jointly conducted a study to identify key actions needed to get each African country on track. to a steady growth of 7 to 10% over the next 40 years.

The preliminary report of the study will be discussed at the annual meetings of the African Development Bank Group from May 22 to 26, 2023 in Sharm el-Sheikh, Egypt. The event will bring together global experts in inclusive growth and sustainable development, some of whom worked on the report.

Multiple issues

Apart from the main theme of the meeting, the issues raised directly touch on the role of multilateral and regional development banks in promoting inclusive growth in African countries.

Today, such an objective has multiple pillars for promoting economic growth in line with the role of multilateral development banks to boost growth and support sustainable development in Africa. To achieve this, they can finance infrastructure projects (roads, energy and telecommunications, among others) and economic initiatives that stimulate job creation and increase revenues.

Next comes the issue of poverty reduction: multilateral development banks can help reduce poverty by financing projects that improve the living conditions of the population. They can also support African governments in implementing inclusive and effective economic and social policies.

Finally, the promotion of sustainable development must continue: multilateral development banks can help promote sustainable development in Africa by financing projects that protect the environment and support green economies. They can also help African countries adapt to climate change by funding their mitigation and adaptation initiatives.

The African Development Bank understands the magnitude of the problems

The African Development Bank has a clear mandate to help African countries achieve their socio-economic development goals. The bank is involved in financing projects in infrastructure, agriculture, energy, education, health and governance and other sectors relevant to economic growth and poverty reduction.

It works closely with African governments, civil society organizations and the private sector to implement inclusive and effective socio-economic policies. The bank also promotes international collaboration and public-private partnerships to maximize the impact of its projects and initiatives.

More importantly, it promotes green economic growth and climate change mitigation, while supporting the shift to renewable energy sources, energy efficiency, sustainable management of natural resources and resilience to climate change.