PART II
BY GIRMACHEW GASHAW
Before I go on with my next question, I would like to congratulate you and your workmate Dr. Akinwumi A. Adesina, President of the African Development Bank for winning an honorary doctorate degree from Addis Ababa University.
Thank you.
How do you express the value of the award in intensifying cooperation between the Bank and Ethiopia?
Yes, it is a very relevant question that the president of the African Development Bank gets an honorary doctorate degree from Addis Ababa University. This is a landmark development. This is really very pleasing and indeed a landmark recognition from the government of Ethiopia, the faculty and the President of Addis Ababa University. Clearly, this will not have come if there is not a very solid recognition of the contribution that we are making to Ethiopia.
But firstly, let me just say that the partnership, the cooperation between Ethiopia and the African Development Bank is not new. Ethiopia is a founding member of the African Development Bank. The bank was founded back in 1964. And by 1975, we had already initiated operations here. And now we currently have an active operation that is more than a billion dollars currently active in various sectors. So, this tells you the level of collaboration that the African Development Bank and this government now is having.
Clearly the award of the honorary doctorate degree is to recognize the president of the African Development Bank and by extension to recognize the work that we do. Now, it cements this relationship to bring us closer to the government and people of Ethiopia. And we are there to continue supporting Ethiopia in all spheres.
So, it is a landmark event that we really appreciate that we look forward to using it as a milestone. Of course, you are aware that the President actually dedicated the honorary doctorate to the people of Ethiopia.
Why do you think this honorary doctorate is bestowed to the AfDB President?
Firstly, I will not be able to tell you the detailed criteria of this particular award. One thing I know is that honorary degrees are usually recognition for special people that have made significant contributions. First of all, to earn a degree from a University, usually, you have to have done some academic work, lectures, and thesis and so on which really earn that degree. But the Senate of the University also has a system whereby they can award honorary degrees for outstanding, professionals, individuals in the world who have contributed in changing the lives of people who contributed to science, innovation and solving problems and make this world a better place.
In the case of President Adesina, as you heard from the Prime Minister, when he was at Accra in the early days of his career, he contributed to science and innovation that really led dramatic revolutions in developing so many crops in the agricultural sector especially in East Africa. That is one point of recognition.
When he was Minister of Agriculture in Nigeria, he contributed significantly in transforming the agriculture of that country. And the particular innovation that he brought was the E-wallet system of bringing farm inputs to farmers, and clearly helping those farmers to raise their productivity to be more efficient. Accordingly, production volumes in Nigeria rose for various crops to record levels. So, that is a second reason for the recognition.
But let me tell you that as recently as 2020, when the COVID-19 hit, the African Development Bank was the first financial institution in the world to launch a 3 billion USD COVID social bond on London and Luxembourg financial markets. This is unprecedented and this is by far the largest US dollar denominated social bond ever to be launched in the world and it was subscribed. This is history.
Through the leadership of President Adesina, we also had a 10 million USD COVID facility for the low income countries like Ethiopia. And of course, we are aware that for Ethiopia in July 2020, we approved a grant of 165 million USD to support the country’s response to COVID-19 to the central bank to inject liquidity in the system including a 47 million USD that went to the Commercial Bank of Ethiopia (CBE) and so on, but also to microfinance institutions, so as to ensure that people don’t lose their jobs.
So let’s ensure that you minimize the impact on ordinary people. And of course, part of those resources would have gone to social protection programs, including the PSAP, productive safety net program of the government. So, these are landmark achievements.
And in the context of all of these for 2020, the African Development Bank was ranked as the number one development bank in the world financial institution engaged in development. And in 2010 to 21, the concessional arm of our bank, which is called the African Development Fund, was ranked as number two among 49 firms in the world by the Global Center for development.
What is the bank’s impact on the lives of ordinary Africans? How do you measure it?
It is actually a very important question, because all of these things that we do and what we have been saying, at the end of the day is the bottom line. What impact does it make on the lives of people and what does it contribute to improving people’s welfare? So, what we do firstly, when we approve any program, we ensure that is implemented as it is imperative. That is number one.
If you approve a 100 million or 200 million operations, you have to implement it according to plan so that you can hit the target set. We also monitor the implementation and eventually we do impact assessment. We call it a post implementation evaluation of the operation which is a very rigorous process.
Every project has a result based logical framework. That is what measures the target, if it’s a road that you are building, you have to assess the high population areas, areas of high agricultural potential, how many farmers it connects. As to our impact evaluation, Mombasa, Nairobi, Addis trade route, for example, will increase trade between the countries by five hundred per cent in the next five to ten years, if all that assumptions are really met. So, and in Ethiopia, for example, our estimates since 2015, to now is that 11 million people have had access to electricity in various forms based on our interventions.
We have similar numbers for water and sanitation, and the education sector as well. So, we do monitor our reporting is also very rigorous. In fact, at the continental level, we have the annual African development effectiveness review which we publish every year. The review shows the results that we achieved but more importantly how we are contributing to the transformation of the continent.
By profession, I read that you are an economist. What do you recommend to African countries in terms of ensuring lasting peace, ending conflict happening here and there and make sure economic development in the continent?
Yeah, I think that is also another very important question. Permanent peace across all the countries has been elusive over the years. In other words, permanent peace has not been able to achieve over the years. In my opinion, the first and foremost important thing is governance because if you don’t have good governance, you have loopholes in the system. And if systems are not working whatever you do with all these resources, you will never and ever achieve the results as planned as you have leakages in the system and so on.
The second thing that I believe women should do to avoid conflicts because development and conflict is like a chicken and egg situation. If you don’t make progress in developing people, in changing people’s lives, in getting people out of poverty, you will get desperation. So that conflict will have candidates that they will recruit, because they don’t have anything to do like leave their normal job, right? So we have to grow the economy. We have to get the policies, we have to build the infrastructure that this country has a basic foundation now that I really say it is very solid. Over the past 20 years, Ethiopia has made significant progress on roads, power, energy, and on improving even the poverty itself. I think by 2011 to 2016, poverty dropped by several percentage points from 29 per cent, to something like 23.5 per cent. That is positive.
Of course, in the case of Ethiopia, we are also challenged by high population growth; youth are graduating, they want jobs and so on. But these are the fundamentals and Ethiopia has actually gotten those rights. That is very important. But we want to ensure that growth is inclusive. That growth is creating jobs, that growth is in sectors that really carry the mass of the population, for example, over close to 70 per cent of Ethiopians are employed directly or indirectly in agriculture. So we have to make sure that the agricultural value added in the economic growth and that is why I putting money into integrated agro industrial parks.
First in all the four parks such as Bulbula, Burree, in Tigray slowed down a little bit, and Yirgalem. I put about $15 million plus to build the basic infrastructure. As I said earlier, the rules of roads, the water treatment plants, the structures themselves and so on attract investment. Because, the industrial parks, if we don’t do the intermediate products at least we have comparative advantage if we don’t do them locally, and we keep importing cotton and other products that are used for textile and garment and agri- food and pharmacies, the value added is not here.
The value added is where those products are coming from. We are only just packaging, basically adding a little bit of value. And this is where we create the jobs. For example, the progress that’s been made now in the wheat value chain, Awash basin, I will put money in that next year, because firstly, I know it’s going to save the government several hundred millions of dollars, $800 million is what the government used to spend on wheat import.
But now we have developed wheat, we call the heat tolerant wheat variety since five, six years ago, that is what is now being used, because the biggest problem has been that which is a temperate crop and Africa where temperatures are relatively high. So, you did a variety that we grow here and now that is done. So next year, how do we develop the value chain, the processes, the type of wheat flour that is good for bread which will meet the local demand and so on and so forth. So, we will do that. And we want to do that for several other crops as well that will fit into the value chain, especially intermediate inputs that will supply the industrial parks that are correctly picking up.
Lastly, if you want to add any points, please welcome.
Well, I think I would just like to add that we are The African Bank. And we are the premier institution for the development of this country whether things are good or not. We are always here because there is no other place to go. Right! So that is why, we are very close to the government, the people and other stakeholders as well. As I said earlier, we ensure that our programs are actually embedded in the government’s own development program to make sure that we do exactly what the government is intended to do to change the continent. I am an optimist; I believe that we will get there very soon.
Thank you very much
It’s my pleasure.
The Ethiopian Herald July 2/2022
