Development lenders in Africa can seize the current global crises as an impetus to help the continent to significantly increase food production. This was a common conclusion from panelists at this year’s Finance in Common summit in Abidjan on Wednesday.
Participants agreed that development partners should work with governments and other policy makers to strengthen the resilience of private businesses, especially those led by women.
The panelists included Beth Dunford, Vice President of Agriculture, Human and Social Development at the African Development Bank; Ijeoma Ozulumba, Executive Director and Chief Financial Officer of the Development Bank of Nigeria; James Mwangi, Group Managing Director and CEO of Kenyan pan-African Equity Group Holdings; and Admassu Tadesse, CEO of the Trade and Development Bank.
The panel discussion, unlocking a smart and inclusive recovery in Africa through the private sectorwas one of many at the three-day summit that looked at how multilateral development banks can bring tangible solutions to Africa’s development challenges.
The African Development Bank and the European Investment Bank jointly organized the summit under the theme; Green and Just Transition for Sustainable Recovery to highlight the role of public development banks in Africa’s recovery as the continent faces impacts from the Covid-19 pandemic, climate change, and Russia’s war in Ukraine. The meetings are being held less than a month before the United Nations climate conference, COP27, begins in Sharm el Sheikh, Egypt.
Dunford highlighted various initiatives by the African Development Bank to improve financial inclusion, especially by empowering women through digitization and building capacity to make their activities bankable.
She said many women in business in sub-Saharan Africa find it difficult to get affordable credit because of a misconception that their gender makes them high-risk borrowers. Dunford said the African Development Bank is working to change the mindset that categorizes women as not worthy of credit.
“At the African Development Bank and in our gender strategy, we look into women’s economic empowerment across everything we do,” stressed Dunford. She added: “With every operation in the bank, there is recognition that empowering women is the key to achieving growth. The strategy is bearing fruit by reducing poverty among families.”
Dunford said the bank’s Affirmative Action Finance for Women in Africa (AFAWA) program had maintained its goal of bridging the $42 billion funding gap for women.
He said the African Development Bank is also ensuring there is room for the private sector as governments turn to the domestic market to stimulate credit amid tightening global conditions.
Tadesse said Africa must use climate action to spur climate-resilient agriculture and infrastructure to rapidly boost food production.
He said: “What really needs to be done now is to refocus on supply-side measures because climate change, the Covid-19 pandemic and the new shocks from the war in Ukraine have left serious supply problems behind. That is what drives inflation, food insecurity, and energy insecurity and all directions.”.
The CEO of the Trade and Development Bank said that current food losses represent 8% of greenhouse emissions and that tackling them would be climate action. “If we want to invest in agriculture, storage, and cold chains only, just to stop the losses, that will contribute significantly to tackling climate change.”
Tadesse repeated the call for channeling more International Monetary Fund Special Drawing Rights to Africa. “We want to see more SDRs flowing through Africa, and if it doesn’t flow, then it will be a missed opportunity.”
Mwangi called for stronger cooperation between countries and development partners for speedy recovery. “I see us moving more and more to scenario planning, and as the situation evolves very quickly, working together and learning together will see us grow,” he said.
The panelists also discussed the current volatility of the exchange rate, the rising costs of credit, and good governance in managing the development of financial institutions. Drawing on the experience of the Development Bank of Nigeria, Ozulumba said: “Governance is central to building a development bank, and Nigeria is a good role model with efficiency in operations.”
European Investment Bank Vice President Thomas Östros moderated the panel.