Development financier advises Africa to diversify energy sources

Development financier advises Africa to diversify energy sources

The African Development Bank, which begins its annual meetings this morning in Busan, Korea advises African countries to diversify their energy sources in order to sustain their industrialization efforts.

This is indicated by the President of the Bank Dr. Akinwumi Adesina who made opening remark at the meeting. Africa needs to promote green growth. At the African Development Bank, we are extremely conscious of our climate and environmental responsibilities and leadership role. Consequently, we are tripling our climate finance to 40% of our portfolio by 2020,” he said.

The African Development Bank is leading on renewable energy. When I was elected as its President two years ago, the share of renewable energy in our total power portfolio was just 14%. However, we increased it to 74% in 2016. And in 2017, we got to a record-breaking 100% of our new lending in renewable energy. However, we also recognize that for many African countries, they need to diversify their energy mix to support industrial development, just like the rest of the world.”

“One of the downsides of the industrial approach of developed countries has been reliance on polluting technologies that may be good for growth but bad for the environment and bad for human health. Industrialization should be done with careful attention to energy pathways that are less polluting,” Dr. Adesina said.

Being held in one of the fastest industrialized countries in the world, this year’s focus of the annual meeting is the development of manufacturing industries in Africa.

“That is why the African Development Bank plans to invest $35 billion over the next ten years towards its focus on industrialization. The Bank’s industrialization strategy hopes to help Africa to raise its industrial GDP from a little over $700 billion today to over $1.72 trillion by 2030. This will allow Africa’s GDP to rise to over $5.6 trillion, while moving GDP per capita to over $3,350,” he said.

He further stated that the formula for the wealth of nations is clear: “rich nations add value to all they produce; poor nations simply export raw materials. Africa needs to industrialize and add value to everything that it produces – from agriculture, to minerals, oil, gas and metals. Africa needs to move away from the bottom to the top of the global value chains.”

“…African farmers work hard every year to deliver 75% of global cocoa production but Africa reaps less than 5% of the profits from the $120 billion annual market for chocolate. Africa accounts for 50% of the world’s gold production but only receives 4% of the $300 billion revenues in global gold earnings,” Dr. Adesina said, stressing the urgency to change the current situation by heavily investing in value addition and development of the manufacturing capacity of Africa.

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