Speech Delivered by Dr. Akinwumi A. Adesina President, African Development Bank - 59th Ordinary Session of the ECOWAS Authority of Heads of State and Government

21-Jun-2021

• Your Excellency, President Nana Akufo-Addo, President of Ghana, and Chairman of ECOWAS Authority of Heads of State and Government,
• Your Excellencies, Heads of State and Government,
• Your Excellency, my dear brother Jean-Claude Brou, President of the ECOWAS Commission,
• Honorable Ministers,
• Excellencies, Ambassadors and heads of diplomatic missions,
• Distinguished ladies and gentlemen,

I wish to start by thanking you, very much, President Nana Akufo-Addo, for your outstanding leadership of the ECOWAS region.

I am deeply honored to have been invited to address this Summit. It was on December 22, 2019 in Abuja that I last had the opportunity to address the ECOWAS Heads of State and Government.

I wish to use this occasion to collectively thank you, Your Excellencies Heads of State and Government, for your huge confidence in me as President of the African Development Bank.

With your individual and collective support (and those of your Ministers of Finance and Foreign Affairs), I was re-elected as President of the African Development Bank, with 100% of the votes of all regional and non-regional member countries - the first time in the history of the Bank since its establishment in 1964. Thank you very much!

I wish to say a special thank you to my President, Muhammadu Buhari, for nominating me and standing solidly behind me through the thick and thin. I am equally grateful to my host President and big brother, President Alassane Ouattara, President of the Republic of Côte d'Ivoire, whose wise counsel, unflinching support and kindness helped at all times. Many thanks, Your Excellencies!

Your Excellencies, you can be proud of the African Development Bank - your Bank!

The African Development Bank was rated the Best Multilateral Financial Institution in the World for 2021 by the prestigious US Financial Magazine, Global Finance, and this a first since the establishment of the African Development Bank.

And just two weeks ago, the African Development Fund (the Bank's concessional financing institution) was ranked the 2^nd best in the world among the 49 largest global multilateral institutions and bilateral agencies that deliver official development assistance.

Your Excellencies, these achievements of your Bank deserve to be celebrated. Well done! Bravo! Ayekoo!

The African Development Bank is investing massively in West Africa. We are delighted with our excellent partnership with the ECOWAS Commission.

The total active portfolio of the Bank in West Africa currently stands at $16 billion, the second largest for the Bank. The Bank's support for infrastructure in the ECOWAS region has doubled over the past five years, increasing from $2 billion in 2015 (when I was first elected) to $4 billion.

While I can list several projects in every country, let me just mention a few critical regional infrastructure.

The Senegambia Bridge is rapidly facilitating trade between Senegal and The Gambia. Our financing helped to double the capacity of the Lome container port, in Togo, which is critical for regional transport and logistics.

The Bamako to San Pedro corridor has helped to expand trade between Côte d'Ivoire and Mali by 34%, while reducing transit time at the border from 24 hours to just 2.5 hours.

The 303 kilometer road linking Ouagadougou and Lome has reduced travel time from 6 days to just 2.5 days.

Our $650 million financing for the transport corridors linking Sierra Leone, Guinea and Liberia will impact on economic opportunities for 51 million people.

The $430 million highway linking Enugu in Nigeria to Bamenda in Cameroon will be completed this year, and will transform trade opportunities between the two countries.

I am pleased that this year, the Bank will provide $105 million financing for the road linking Guinea-Bissau and Senegal.

Your Excellencies, on energy, the $20 billion Desert-to-Power program will develop 10,000 MW of solar power to light up the Sahel and provide access to electricity for 250 million people. This project will make the Sahel the largest solar zone in the world.

And right here in Ghana, the Bank's financing of $120 million for the new terminal at Kokota International airport is having huge impacts on regional transport and freight movements. With the new terminal, freight handling has expanded by 30%.

And we are working hard, together with the ECOWAS Commission, to finalize the feasibility studies for the landmark Abidjan-Lagos corridor by the end of this year. We expect construction for the corridor to commence within 24 months.

This highway will link 85% of the trade volume in ECOWAS through the corridor. To further support regional trade, the Bank provided $4.5 million, for the establishment of the African Continental Free Trade Area secretariat in Accra.

That's who we are: Africa's solutions bank!

And Africa needs solutions to help it navigate through the very challenging times posed by the Covid-19 pandemic.

I commend Your Excellencies for your leadership in addressing the effects of the pandemic.

The African Development Bank moved quickly to launch a $10 billion facility to support countries. We also launched a $3 billion fight Covid-19 social bond on the global capital markets, which was the largest social bond in world history.

Things are looking up again. The African Development Bank projects that Africa's GDP growth will rebound to 3.4% for this year. In West Africa, GDP growth is projected to recover from -1.5% in 2020 to 2.8% in 2021 and 3.9% in 2022.

But the rebound will depend on access to vaccines.

Africa should not be begging for vaccines. Africa should be producing vaccines.

The African Development Bank will support Africa to produce vaccines, as part of the vaccines plan of the African Union. The Bank will also commit $3 billion to developing the pharmaceutical industry in Africa.

Your Excellencies, it is now time to rapidly build a healthcare defense system for Africa, to tackle this and future pandemics. The African Development Bank plans to invest in building quality healthcare infrastructure for Africa.

Your Excellencies, we must also tackle the debt challenge facing the sub-region, and indeed all of Africa.

Africa will need significant financial support. Low-income Sub-Saharan African countries will need $245 billion by 2030 in additional gross financing, while the whole of Sub-Saharan Africa will need $425 billion over the same time period.

Your Excellencies, we now have a real opportunity to tackle Africa's debt challenges, more decisively, with the recent decision by the IMF to issue Special Drawing Rights (SDRs).

The G7 leaders' summit last week gave the green light for allocating $100 billion of SDRs to Africa. This will open the way for much-needed relief for Africa.

As agreed in Paris, during the Financing for Africa Summit, the Heads of State called for the African Development Bank to receive SDRs on behalf of African countries, and to use them to on-lend to public development banks.

It will also be important that some of the SDRs for Africa be used to buy down some of the very expensive debt owed to private creditors. This will help avert a looming crisis of payments to private bondholders due in 2023/24, which, if not addressed, could lead to massive credit downgrades across Africa.

Your Excellencies, we must now put in place an African Financial Stability Mechanism to protect the continent against external shocks. This mechanism is critical. It will require that we mutualize our resources, avoid regional spillover effects, regionalize fiscal policy rules, develop homegrown reforms and debt-resolution approaches, and provide a regional safety net that will complement the global safety net of the International Monetary Fund.

Your Excellencies, when we resolve Africa's debt challenges, I can rest, if just a little. But one thing will still keep me awake at night: Africa's rising insecurity.

As you well know, the situation is most precarious in the Sahel and the Lake Chad Basin. And I am sure it keeps you also awake at night.

The trend is disturbing, as expenditures on defense are rising fast, displacing financing for development.

Your Excellencies, the investible space in Africa is rapidly shrinking due to insecurity. Take the case of Mozambique, where the African Development Bank helped to structure a $24 billion deal for its Liquefied Natural Gas project. This transaction won the Global Project Deal of the Year 2020 Award. This would have made Mozambique the 3rd largest producer of Liquefied Natural Gas in the world, with projected revenues of $66 billion.

Alas, terrorists have now invaded the location. TOTAL, the major project sponsor, has just declared force majeure and has pulled out.

These insecurity situations and insurgencies now pose the biggest risks to Africa's development.

Yet, countries lack adequate resources to effectively tackle these challenges. If unaddressed quickly, insecurity will become a huge risk to our dream of an African Continental Free Trade Area.

It is time to adapt our approach.

Your Excellencies, we must now link security to investment, growth and development.

That's why the African Development Bank calls for the development of Security-Indexed Investment Bonds. Taking advantage of low long-term interest rates, these security-indexed investment bonds will allow Africa to leverage resources on the global capital markets to reinforce its security.

The revenue streams from the security-indexed investment bonds can be used to (1) reinforce the security architecture of African countries and support dual-purpose infrastructure to enhance national and regional peacekeeping and security capabilities; (2) rebuild destroyed or damaged infrastructure in conflict-affected areas, and finance new investment projects to relaunch economic activities and create jobs in areas prone to security challenges; (3) build social infrastructure for the populations, especially water, sanitation, schools, health, roads, ICT and agricultural infrastructure, to improve access to basic services to support community livelihoods in fragile environments; and (4) protect strategic investments within countries or regions.

The security-indexed investment bonds can be delivered through Special Purpose Vehicles, established on behalf of a pool of regional member countries. The bonds can be credit-enhanced by the African Development Bank and other donors. The administration of the bond proceeds can be managed under the auspices of the African Union's Peace and Security Council and regional economic communities.

Then, Your Excellencies, we all can sleep, with our eyes closed, to wake up the next morning, ready, again, to work relentlessly for Africa's assured destiny of prosperity.

So, Excellencies,

Together, let us assure economic growth and prosperity for the ECOWAS region.

Together, let us build greater resilience; financial and economic resilience; climate resilience; and health resilience.

Together, let us give the region a well-financed security architecture that will secure the lives of people and enhance the attractiveness of the region as a prime investment destination.

Let us plant the flag of ECOWAS on a higher mountain.

Let's rise higher!

Thank you very much.

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