Inspired by Korea’s successful, rapid industrialization, the World Bank and the African Development Bank have pledged to increase investments in education, in financing for innovative technologies, in science and technology laboratories, and in providing risk guarantees to support initiatives to propel Africa’s industrialization.
These commitments were made at the High-Level Dialogue on Accelerating African Industrialization Vision, Experiments and Lessons at the 53rd African Development Bank Annual Meetings in Busan, Korea, that brought together political leaders from Africa and Korea.
World Bank President, Jim Yong Kim, and African Development Bank President, Akinwumi Adesina, committed to taking concrete steps and remaining focused on industrialization policies, human skills development, and finance.
Kim pledged to increase the levels of concessional finance available to the education sector so that African countries can effectively address their skills shortage and human development shortfalls.
Adesina stated, “Africa cannot become a museum of poverty. We have to aspire to prosperity for our continent. If we changed our ways, this continent would be different.”
Moroccan Prime Minister Saadeddine Othmani pointed to the need to reform education systems for industrialization to take root. Countries require longer-term education reform plans, running to 15-20 years, to acquire the requisite arsenals to support green economic growth. “With the necessary changes to the economy, we can implement strategies to achieve green economic growth. These policies require the knowledge and the funds.”
Kim recalled that Korea’s first World Bank loan was to build a railway and that the development financier at the time was doubtful of Korea’s capacity to repay it. “This country was written off about 50 years ago,” he said, making a comparison to Africa, whose fate, he said, was equally affected by lack of the knowledge on the part of Western investors who repeatedly overlook opportunities to relocate capital to the continent.
Kim said that reforms were required in Africa’s private sector to ensure that industrial policies led to growth rather than providing subsidies that are essentially incentives to industry that benefit rich middlemen and fail to ignite the growth needed to sustain the industrialization agenda.
Both Banks pledged to work together to create efficient capital markets and to ensure that global capital markets work in favour of everyone requiring long-term capital.
Kim said that African countries should follow in the steps of countries like China, which subjects local companies to international competition while building domestic capacity in the process, rather than relying on inefficient technologies and companies that depend on special and differential treatment. “Access to capital is increasing rapidly and will express the enormous creativity of the African people.”
Adesina said the African Development Bank has invested US $200 million to finance IT parks in Cape Verde, Ethiopia, Kenya and Rwanda, and has helped construct the digital backbones linking Cameroon to Congo and ICT infrastructure connections to Niger to improve Internet availability.
He pointed to mobile money revolution in Africa, where Africa was at the forefront of technology innovation and could continue to show leadership. “Africa is leading in this sector. We need data centres across countries.” Adesina emphasized the need for continuous investments in the capital markets from to finance industrialization efforts.
Rwandan Prime Minister Edouard Ngirente said that industrialization efforts should focus on linking basic infrastructure to basic education and a complete industrial value chain. This would enhance the capacity to produce processed products rather than exporting raw materials. He also called for measures to de-risk some investments in key industrial projects. “The issue of policy, a clear vision and a roadmap towards industrialization is required. Implementation matters a lot.”