— The narrative of a rising Africa is being challenged.
About 10 years ago, I spoke about an Africa, an Africa of hope and opportunity, an Africa of entrepreneurs, an Africa very different from the Africa that you normally hear about of death, poverty and disease. And that what I spoke about, became part of what is known now as the narrative of the rising Africa.
I want to tell you two stories about this rising Africa. The first has to do with Rwanda, a country that has gone through many trials and tribulations. And Rwanda has decided to become the technology hub, or a technology hub on the continent. It's a country with mountainous and hilly terrain, a little bit like here, so it's very difficult to deliver services to people. So what has Rwanda said? In order to save lives, it's going to try using drones to deliver lifesaving drugs, vaccines and blood to people in hard-to-reach places in partnership with a company called Zipline, with UPS, and also with the Gavi, a global vaccine alliance. In doing this, it will save lives. This is part of the type of innovation we want to see in the rising Africa.
The second story has to do with something that I'm sure most of you have seen or will remember. Very often, countries in Africa suffer drought and floods, and it's getting more frequent because of climate change effects. When this happens, they normally wait for international appeals to raise money. You see pictures of children with flies on their faces,carcasses of dead animals and so on. Now these countries, 32 countries, came togetherunder the auspices of the African Union and decided to form an organization called the African Risk Capacity. What does it do? It's a weather-based insurance agency, and what these countries do is to pay insurance each year, about 3 million dollars a year of their own resources, so that in the event they have a difficult drought situation or flood, this money will be paid out to them, which they can then use to take care of their populations,instead of waiting for aid to come. The African Risk Capacity last year paid 26 million dollars to Mauritania, Senegal and Niger. This enabled them to take care of 1.3 million people affected by drought. They were able to restore livelihoods, buy fodder for cattle, feed children in school and in short keep the populations home instead of migrating out of the area.
So these are the kinds of stories of an Africa ready to take responsibility for itself, and to look for solutions for its own problems. But that narrative is being challenged nowbecause the continent has not been doing well in the last two years. It had been growing at five percent per annum for the last one and a half decades, but this year's forecast was three percent. Why? In an uncertain global environment, commodity prices have fallen.Many of the economies are still commodity driven, and therefore their performance has slipped. And now the issue of Brexit doesn't make it any easier. I never knew that the Brexit could happen and that it could be one of the things that would cause global uncertainty such as we have.
So now we've got this situation, and I think it's time to take stock and to say what were the things that the African countries did right? What did they do wrong? How do we build on all of this and learn lessons so that we can keep Africa rising?
So let me talk about six things that I think we did right. The first is managing our economies better. The '80s and '90s were the lost decades, when Africa was not doing well, and some of you will remember an "Economist" cover that said, "The Lost Continent." But in the 2000s, policymakers learned that they needed to manage the macroeconomic environment better, to ensure stability, keep inflation low in single digits,keep their fiscal deficits low, below three percent of GDP, give investors, both domestic and foreign, some stability so they'll have confidence to invest in these economies. So that was number one.
Two, debt. In 1994, the debt-to-GDP ratio of African countries was 130 percent, and they didn't have fiscal space. They couldn't use their resources to invest in their developmentbecause they were paying debt. There may be some of you in this room who worked to support African countries to get debt relief. So private creditors, multilaterals and bilaterals came together and decided to do the Highly Indebted Poor Countries Initiativeand give debt relief. So this debt relief in 2005 made the debt-to-GDP ratio fall down to about 30 percent, and there was enough resources to try and reinvest.
The third thing was loss-making enterprises. Governments were involved in businesswhich they had no business being in. And they were running businesses, they were making losses. So some of these enterprises were restructured, commercialized, privatized or closed, and they became less of a burden on government.
The fourth thing was a very interesting thing. The telecoms revolution came, and African countries jumped on it. In 2000, we had 11 million phone lines. Today, we have about 687 million mobile lines on the continent. And this has enabled us to go, move forward with some mobile technology where Africa is actually leading. In Kenya, the development of mobile money — M-Pesa, which all of you have heard about — it took some time for the world to notice that Africa was ahead in this particular technology. And this mobile money is also providing a platform for access to alternative energy. You know, people who can now pay for solar the same way they pay for cards for their telephone. So this was a very good development, something that went right.
We also invested more in education and health, not enough, but there were some improvements. 250 million children were immunized in the last one and a half decades.
The other thing was that conflicts decreased. There were many conflicts on the continent.Many of you are aware of that. But they came down, and our leaders even managed to dampen some coups. New types of conflicts have emerged, and I'll refer to those later.
So based on all this, there's also some differentiation on the continent that I want you to know about, because even as the doom and gloom is here, there are some countries — Côte d'Ivoire, Kenya, Ethiopia, Tanzania and Senegal are performing relatively well at the moment.
7:14But what did we do wrong? Let me mention eight things. You have to have more things wrong than right.
(Laughter)
So there are eight things we did wrong. The first was that even though we grew, we didn't create enough jobs. We didn't create jobs for our youth. Youth unemployment on the continent is about 15 percent, and underemployment is a serious problem.
The second thing that we did is that the quality of growth was not good enough. Even those jobs we created were low-productivity jobs, so we moved people from low-productivity agriculture to low-productivity commerce and working in the informal sectorin the urban areas.
The third thing is that inequality increased. So we created more billionaires. 50 billionaires worth 96 billion dollars own more wealth than the bottom 75 million people on the continent.
Poverty, the proportion of people in poverty — that's the fourth thing — did decrease, but the absolute numbers did not because of population growth. And population growth is something that we don't have enough of a dialogue about on the continent. And I think we will need to get a handle on it, particularly how we educate girls. That is the road to really working on this particular issue.
The fifth thing is that we didn't invest enough in infrastructure. We had investment from the Chinese. That helped some countries, but it's not enough. The consumption of electricity in Africa on the continent in Sub-Saharan Africa is equivalent to Spain. The total consumption is equivalent to that of Spain. So many people are living in the dark,and as the President of the African Development Bank said recently, Africa cannot develop in the dark.
The other thing we have not done is that our economies retain the same structure that we've had for decades. So even though we've been growing, the structure of the economies has not changed very much. We are still exporting commodities, and exporting commodities is what? It's exporting jobs. Our manufacturing value-added is only 11 percent. We are not creating enough decent manufacturing jobs for our youth,and trade among ourselves is low. Only about 12 percent of our trade is among ourselves. So that's another serious problem.
Then governance. Governance is a serious issue. We have weak institutions, and sometimes nonexistent institutions, and I think this gives way for corruption. Corruption is an issue that we have not yet gotten a good enough handle on, and we have to fight tooth and nail, that and increased transparency in the way we manage our economiesand the way we manage our finances.
We also need to be wary of new conflicts, new types of conflicts, such as we have with Boko Haram in my country, Nigeria, and with Al-Shabaab in Kenya. We need to partner with international partners, developed countries, to fight this together. Otherwise, we create a new reality which is not the type we want for a rising Africa.
And finally, the issue of education. Our education systems in many countries are broken.We are not creating the types of skills needed for the future. So we have to find a way to educate better. So those are the things that we are not doing right.
Now, where do we go from there? I believe that the way forward is to learn to manage success. Very often, when people succeed or countries succeed, they forget what made them succeed. Learning what you're successful at, managing it and keeping it is vital for us. So all those things I said we did right, we have to learn to do it right again, keep doing it right. Managing the economy while creating stability is vital, getting prices right, and policy consistency. Very often, we are not consistent. One regime goes out, another comes in and they throw away even the functioning policies that were there before. What does this do? It creates uncertainty for people, for households, uncertainties for business.They don't know whether and how to invest.
Debt: we must manage the success we had in reducing our debt, but now countries are back to borrowing again, and we see our debt-to-GDP ratio beginning to creep up, and in certain countries, debt is becoming a problem, so we have to avoid that. So managing success.
The next thing is focusing with a laser beam on those things we did not do well. First and foremost is infrastructure. Yes, most countries now recognize they have to invest in this,and they are trying to do the best they can to do that. We must. The most important thing is power. You cannot develop in the dark.
And then governance and corruption: we have to fight. We have to make our countries transparent. And above all, we have to engage our young people. We have genius in our young people. I see it every day. It's what makes me wake up in the morning and feel ready to go. We have to unleash the genius of our young people, get out of their way, support them to create and innovate and lead the way. And I know that they will lead us in the right direction.
And our women, and our girls: we have to recognize that girls and women are a gift. They have strength, and we have to unleash that strength so that they can contribute to the continent.
I strongly believe that when we do all of these things, we find that the rising Africa narrative is not a fluke. It's a trend. It's a trend, and if we continue, if we unleash our youth, if we unleash our women, we may step backwards sometimes, we may even step sideways, but the trend is clear. Africa will continue to rise.
And I tell you businesspeople in the audience, investment in Africa is not for today, is not for tomorrow, it's not a short-term thing, it's a longer term thing. But if you are not invested in Africa, then you will be missing one of the most important emerging opportunities in the world.
Thank you.
(Applause)
— Rated Inspiring, Informative
About 10 years ago, I spoke about an Africa, an Africa of hope and opportunity, an Africa of entrepreneurs, an Africa very different from the Africa that you normally hear about of death, poverty and disease. And that what I spoke about, became part of what is known now as the narrative of the rising Africa.
I want to tell you two stories about this rising Africa. The first has to do with Rwanda, a country that has gone through many trials and tribulations. And Rwanda has decided to become the technology hub, or a technology hub on the continent. It's a country with mountainous and hilly terrain, a little bit like here, so it's very difficult to deliver services to people. So what has Rwanda said? In order to save lives, it's going to try using drones to deliver lifesaving drugs, vaccines and blood to people in hard-to-reach places in partnership with a company called Zipline, with UPS, and also with the Gavi, a global vaccine alliance. In doing this, it will save lives. This is part of the type of innovation we want to see in the rising Africa.
The second story has to do with something that I'm sure most of you have seen or will remember. Very often, countries in Africa suffer drought and floods, and it's getting more frequent because of climate change effects. When this happens, they normally wait for international appeals to raise money. You see pictures of children with flies on their faces,carcasses of dead animals and so on. Now these countries, 32 countries, came togetherunder the auspices of the African Union and decided to form an organization called the African Risk Capacity. What does it do? It's a weather-based insurance agency, and what these countries do is to pay insurance each year, about 3 million dollars a year of their own resources, so that in the event they have a difficult drought situation or flood, this money will be paid out to them, which they can then use to take care of their populations,instead of waiting for aid to come. The African Risk Capacity last year paid 26 million dollars to Mauritania, Senegal and Niger. This enabled them to take care of 1.3 million people affected by drought. They were able to restore livelihoods, buy fodder for cattle, feed children in school and in short keep the populations home instead of migrating out of the area.
So these are the kinds of stories of an Africa ready to take responsibility for itself, and to look for solutions for its own problems. But that narrative is being challenged nowbecause the continent has not been doing well in the last two years. It had been growing at five percent per annum for the last one and a half decades, but this year's forecast was three percent. Why? In an uncertain global environment, commodity prices have fallen.Many of the economies are still commodity driven, and therefore their performance has slipped. And now the issue of Brexit doesn't make it any easier. I never knew that the Brexit could happen and that it could be one of the things that would cause global uncertainty such as we have.
So now we've got this situation, and I think it's time to take stock and to say what were the things that the African countries did right? What did they do wrong? How do we build on all of this and learn lessons so that we can keep Africa rising?
So let me talk about six things that I think we did right. The first is managing our economies better. The '80s and '90s were the lost decades, when Africa was not doing well, and some of you will remember an "Economist" cover that said, "The Lost Continent." But in the 2000s, policymakers learned that they needed to manage the macroeconomic environment better, to ensure stability, keep inflation low in single digits,keep their fiscal deficits low, below three percent of GDP, give investors, both domestic and foreign, some stability so they'll have confidence to invest in these economies. So that was number one.
Two, debt. In 1994, the debt-to-GDP ratio of African countries was 130 percent, and they didn't have fiscal space. They couldn't use their resources to invest in their developmentbecause they were paying debt. There may be some of you in this room who worked to support African countries to get debt relief. So private creditors, multilaterals and bilaterals came together and decided to do the Highly Indebted Poor Countries Initiativeand give debt relief. So this debt relief in 2005 made the debt-to-GDP ratio fall down to about 30 percent, and there was enough resources to try and reinvest.
The third thing was loss-making enterprises. Governments were involved in businesswhich they had no business being in. And they were running businesses, they were making losses. So some of these enterprises were restructured, commercialized, privatized or closed, and they became less of a burden on government.
The fourth thing was a very interesting thing. The telecoms revolution came, and African countries jumped on it. In 2000, we had 11 million phone lines. Today, we have about 687 million mobile lines on the continent. And this has enabled us to go, move forward with some mobile technology where Africa is actually leading. In Kenya, the development of mobile money — M-Pesa, which all of you have heard about — it took some time for the world to notice that Africa was ahead in this particular technology. And this mobile money is also providing a platform for access to alternative energy. You know, people who can now pay for solar the same way they pay for cards for their telephone. So this was a very good development, something that went right.
We also invested more in education and health, not enough, but there were some improvements. 250 million children were immunized in the last one and a half decades.
The other thing was that conflicts decreased. There were many conflicts on the continent.Many of you are aware of that. But they came down, and our leaders even managed to dampen some coups. New types of conflicts have emerged, and I'll refer to those later.
So based on all this, there's also some differentiation on the continent that I want you to know about, because even as the doom and gloom is here, there are some countries — Côte d'Ivoire, Kenya, Ethiopia, Tanzania and Senegal are performing relatively well at the moment.
7:14But what did we do wrong? Let me mention eight things. You have to have more things wrong than right.
(Laughter)
So there are eight things we did wrong. The first was that even though we grew, we didn't create enough jobs. We didn't create jobs for our youth. Youth unemployment on the continent is about 15 percent, and underemployment is a serious problem.
The second thing that we did is that the quality of growth was not good enough. Even those jobs we created were low-productivity jobs, so we moved people from low-productivity agriculture to low-productivity commerce and working in the informal sectorin the urban areas.
The third thing is that inequality increased. So we created more billionaires. 50 billionaires worth 96 billion dollars own more wealth than the bottom 75 million people on the continent.
Poverty, the proportion of people in poverty — that's the fourth thing — did decrease, but the absolute numbers did not because of population growth. And population growth is something that we don't have enough of a dialogue about on the continent. And I think we will need to get a handle on it, particularly how we educate girls. That is the road to really working on this particular issue.
The fifth thing is that we didn't invest enough in infrastructure. We had investment from the Chinese. That helped some countries, but it's not enough. The consumption of electricity in Africa on the continent in Sub-Saharan Africa is equivalent to Spain. The total consumption is equivalent to that of Spain. So many people are living in the dark,and as the President of the African Development Bank said recently, Africa cannot develop in the dark.
The other thing we have not done is that our economies retain the same structure that we've had for decades. So even though we've been growing, the structure of the economies has not changed very much. We are still exporting commodities, and exporting commodities is what? It's exporting jobs. Our manufacturing value-added is only 11 percent. We are not creating enough decent manufacturing jobs for our youth,and trade among ourselves is low. Only about 12 percent of our trade is among ourselves. So that's another serious problem.
Then governance. Governance is a serious issue. We have weak institutions, and sometimes nonexistent institutions, and I think this gives way for corruption. Corruption is an issue that we have not yet gotten a good enough handle on, and we have to fight tooth and nail, that and increased transparency in the way we manage our economiesand the way we manage our finances.
We also need to be wary of new conflicts, new types of conflicts, such as we have with Boko Haram in my country, Nigeria, and with Al-Shabaab in Kenya. We need to partner with international partners, developed countries, to fight this together. Otherwise, we create a new reality which is not the type we want for a rising Africa.
And finally, the issue of education. Our education systems in many countries are broken.We are not creating the types of skills needed for the future. So we have to find a way to educate better. So those are the things that we are not doing right.
Now, where do we go from there? I believe that the way forward is to learn to manage success. Very often, when people succeed or countries succeed, they forget what made them succeed. Learning what you're successful at, managing it and keeping it is vital for us. So all those things I said we did right, we have to learn to do it right again, keep doing it right. Managing the economy while creating stability is vital, getting prices right, and policy consistency. Very often, we are not consistent. One regime goes out, another comes in and they throw away even the functioning policies that were there before. What does this do? It creates uncertainty for people, for households, uncertainties for business.They don't know whether and how to invest.
Debt: we must manage the success we had in reducing our debt, but now countries are back to borrowing again, and we see our debt-to-GDP ratio beginning to creep up, and in certain countries, debt is becoming a problem, so we have to avoid that. So managing success.
The next thing is focusing with a laser beam on those things we did not do well. First and foremost is infrastructure. Yes, most countries now recognize they have to invest in this,and they are trying to do the best they can to do that. We must. The most important thing is power. You cannot develop in the dark.
And then governance and corruption: we have to fight. We have to make our countries transparent. And above all, we have to engage our young people. We have genius in our young people. I see it every day. It's what makes me wake up in the morning and feel ready to go. We have to unleash the genius of our young people, get out of their way, support them to create and innovate and lead the way. And I know that they will lead us in the right direction.
And our women, and our girls: we have to recognize that girls and women are a gift. They have strength, and we have to unleash that strength so that they can contribute to the continent.
I strongly believe that when we do all of these things, we find that the rising Africa narrative is not a fluke. It's a trend. It's a trend, and if we continue, if we unleash our youth, if we unleash our women, we may step backwards sometimes, we may even step sideways, but the trend is clear. Africa will continue to rise.
And I tell you businesspeople in the audience, investment in Africa is not for today, is not for tomorrow, it's not a short-term thing, it's a longer term thing. But if you are not invested in Africa, then you will be missing one of the most important emerging opportunities in the world.
Thank you.
(Applause)
— Rated Inspiring, Informative