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Africa’s rising debt and development issues tar Adesina’s optimism on continent’s future

After reading the address presented by the President of African Development Bank, Dr. Akinwunmi Adesina, on January 30, 2020 at the launch of the Africa Development Outlook 2020, I did not know whether to emotionally connect to the attempt by this brilliant Nigerian export for optimism or wallow in fear and hopeless.

As a leader, Dr. Adesina attempted to raise hopes; hopes of a possibility of Africa’s prosperity being as it is, according to him, the world’s biggest growth frontier. I am not usually a pessimist, but the numbers presented in this very important address paled in significance when placed against the sad realities of the continent’s embarrassingly intractable leadership and sundry other challenges.

If you are linear in your appreciation of issues, you are very likely to break into a dance of a hope soon to berth, especially when you read Adesina’s testaments of optimism that I reproduce below”

“Africa is where the focus of the world is right now as the growth and investment frontier. Just last week, I was in London for the UK-Africa Summit. There has been China-Africa Summit, Japan-Africa Summit, India-Africa Summit, Korea-Africa Summit, Russia-Africa Summit, US-Africa Summit and several others. What do all these countries see? They see opportunities that Africa offers. With a population of 1.2 billion people that is expected to rise to 2.5 billion by 2050, a rising middle class, rapid urbanization – and a labor work force that will rise from 705 million today to well over 1 billion in the next 10 years – Africa offers huge market and investment opportunities. The Africa Continental Free Trade Area makes Africa a market worth $3.3 trillion. Africa can no longer be ignored. African economies are growing well, higher than the global average. Our African Economic Outlook estimates show that growth is projected to rise from 3.4% in 2019 to 3.9% in 2020 and 4.1% in 2021. This aggregate growth rate masks highly diversified and resilient growth patterns. Indeed, 20 countries are projected this year to grow at 3-5%, while 20 countries are projected to achieve growth rates of 5% and above. That’s impressive! Even more impressive is that 6 of the 10 fastest growing economies in the world are now in Africa: Rwanda (8.7%), Cote d’Ivoire (7.4%), Ethiopia (7.4%), Ghana (7.1%), Tanzania (6.8%) and Benin (6.7%). Some regions are growing faster than others. East Africa is the fastest growing region with growth rate of 5% in 2019, followed by North Africa (4.1%), West Africa (3.7%), Central Africa (3.2%) and Southern Africa (0.7%).”

Everything looks good, doesn’t it? We all are supposed to be thrilled because the entire world’s attention is riveted on our dear continent. We have the numbers to work the fields; 705 million-strong labour force that will become 1 billion in 10 years. The economic outlook looks great also.

Akinwunmi Adeshina

But sadly, this is where everything ends – in potentials.

Since I became an adult with interest on Africa’s political economy, our reality has not been different from what Adesina presented in his address. There has always been this hope that the continent was going to burst forth into a thriving continent where everyone will have everything. The narrative has always bordered on our capacity to draw the world to us.

But our lots and fortunes have remained in the illusive realm of the “potential.” Africa has neither prospered so showed any measurable signs it was going to prosper beyond these dreams of a future we seem to never arrive at.

Adesina sounded hopeful in his address. But this quickly withered as the banking chief that made a name for himself by the initiatives he introduced as Nigeria’s Agriculture Minister, warned against a number of factors that could perish the progress he so excitedly projected.

The debt burden was one of them. Adesina pointed out that total debt stock (external and domestic) currently stands at $500 billion. In percentage terms, median Debt to GDP has risen from 38% in 2008 to 54% in 2018.

Even as he advised on the need to not press the panic button, every indication points in the direction of sustained fear and pessimism. Of the total debts owed by African nations, Nigeria alone carries a burden of $68.74 billion as at first quarter 2019. This is quite heavy, especially considering that the President Obasanjo administration as recently as 2007 clearly almost all of the country’s external debts.

Another source of the fear oozes from the state governments of Nigeria that, according to the Nigerian Extractive Industries Transparency Initiative (NEITI) are wing a staggering N3.342 trillion ($9.2 billion).

The sad reality, as far as facts and suspicions go, is that these loans so taken are not invested in the economy. Most of them find their ways into the private pockets of political leaders. For instance, the Economic and Financial Crimes Commission recently accused former Abia State governor and serving senator, Theodore Orji, of diverting a whopping sum of N16.5 billion, being loans obtained on behalf of the State Government to private pockets.

…of the six fastest growing economies of the world said to be in Africa (Rwanda, Cote d’Ivoire, Ethiopia, Ghana, Tanzania and Benin), Nigeria is not mentioned. Meanwhile we are the continent’s runaway leader when it comes to number of people.

Pitched against this frighteningly humongous numbers, who in his right senses would rather buy the optimism that Adesina is selling?

The case of Nigeria is even more horrible. Of the six fastest (out f 10) growing economies of the world said to be in Africa (Rwanda, Cote d’Ivoire, Ethiopia, Ghana, Tanzania and Benin), Nigeria is not mentioned. Meanwhile we are the continent’s runaway leader when it comes to number of people.

The most debasing form of infrastructure want and decay finds home in Nigeria. Critical economic enablers like roads, rail, functional transportation systems, electricity, public education and water supply appear to have become impossible to achieve in the country. And if you add the insane corruption in most public and, increasingly, private sector institutions, you cannot but wonder where Adesina’s optimism is anchored.

The ADB chief also pointed the challenge of insecurity. This has been a major disincentive to productivity and foreign direct investment. Fulani clashes with herders appear o be n the rise in north central and southern Nigeria, dashing hopes for increased agricultural productivity. In the north east, Boko Haram appears to have defied every strategy for containment while north west has become the hotbed of kidnap gangs and cattle rustlers.

A country so encumbered cannot inspire genuine and realistic optimism, except we want to rig our aspirations on motivational speaking.

The truth is that the world is optimistic about Africa. But could this not be because they want to inspire us to do better so as to guarantee high yields for their investments, especially since Africa remains the continent with promise of the biggest returns?

While trolling US President, Donald Trump on America’s CNN, Fareed Zacharia, during his programme, GPS, did say Nigeria was a lot more diversified than the world would willingly give it credit for. According to him, Services now accounts for 50 percent of our GDP while IT and related opportunities represent 10 percent. He also said diaspora remittances stood at $14 billion in 2018.

On their own, these are numbers that should support Mr. Adesina’s “hope rising” speech. But the truth is that nothing much would come out of these rays of hope with governments that are weak in economic creativity and suspect on social justice.

Nigerians are getting used to not waiting for government. Homes provide their own water and power supply. Even real estate developers cobble their own access roads and that is why urban renewal and planning has been impossible. Businesses are also resiliently innovating how to survive with little or no government support. That is essentially why our movie and music industries are thriving, a number of them on themes and lyrics that are anti-state.

There is a desperate need to reinvent our continent. As a Nigerian, I think I need to focus more on the need to recreate a more politically responsible and economically responsive country. We cannot continue on this delusional highway to nowhere. Our leaders make have often latched onto announcements of GDP growth for the easy wins that provide resources for political media content. But even Adesina warned that growth in GDP does not matter.

“At the end of the day, it is not GDP growth that matters. Nobody eats GDP,” he did admit.

Growth, he stressed, must be visible, equitable and must be felt in the lives of people.


Ikem Okuhu is a journalist, a Public Relations professional, brand strategist and teacher. With a career that traversed Print Media, Oil & Gas, Banking and entrepreneurship, Ikem is the author of wave-making book; PITCH: Debunking Marketing’s Strongest Myths, a dispassionate exposition of the dos and don’ts of successful engagement in the marketplace, especially the Nigerian marketplace. He is the founder/publisher of BRANDish, Nigeria’s first nationally circulating Brands and Marketing magazine. He has also handled the PR and reputation management consultancies for a number of brands, businesses and public figures.

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