AfDB plans $500m investment in Nigeria financed by partners
By Jeph Ajobaju, Chief Copy Editor
Up to 25 million jobs are to be created in Africa between now and 2025, according to plans being laid out by the African Development Bank (AfDB), 3.8 million of which could be created through the African Continental Free Trade Area (AfCFTA).
AfDB President Akinwunmi Adesina said the bank is investing heavily in quality infrastructure to transform the backbone of Africa’s technological revolution.
He made the point when he delivered a lecture on “Social Media, National Security and Social Change: Bridging the Gap for Development in Africa’’ in Lagos.
Adesina underscored the enormous potential Nigeria has for attracting global digital commerce and financial services.
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“To support Nigeria, the AfDB is preparing investments in the country’s Digital and Creative Enterprises (i-DICE), a $500 million investment programme to be co-financed with several partners,” Adesina said, per reporting by the News Agency of Nigeria (NAN).
“i-Dice will promote entrepreneurship and innovation in the digital technology and creative spaces. It will help create sustainable jobs and make Nigeria a global powerhouse in these industries.
“This programme will boost innovation, especially in the tech-enabled business and e-commerce space, where new and successful ventures are being inaugurated in Nigeria.”
Adesina said Nigeria could be a key player in developing Africa’s technological enterprises.
“Startups run by young Africans are already attracting millions of dollars in investment capital.
“Expensya, Gro Intelligence, Tyme Bank, and Flutterwave, to name a few, are well on their way to becoming billion-dollar companies.
“Today, Yabacon Valley has emerged as one of the leading tech hubs in Africa with between 400 and 700 active startups worth more than $2 billion, second only to Cape Town.
“Andela, a global technology startup based in Yabacon Valley, recently attracted $24 million in funding from Facebook founder Mark Zuckerberg.
“Already, Nigeria is home to three unicorns – tech and tech-enabling companies with valuations exceeding one billion dollars – Paystack, Flutterwave and Interswitch.
“The $200 million investment by Stripe (a Silicon Valley firm) in the local payments company, Paystack, and $400 million in three Fintech companies in just one week in 2019, signal the enormous potential that Nigeria has for attracting global digital commerce and financial services.”
Adesina stressed the need for every Nigerian to have reliable and affordable internet access to ensure expansion of digital financial inclusion.
AfDB warns of likely debt default by Nigeria, others
Nigeria, Kenya, Cote d’Ivoire and other African countries had raised more than $17 billion from bond issuances by early 2019, according to the World Bank.
These countries must pay back the debts, even as most loans are obtained to be wasted or stolen outright.
And AfDB has expressed concern that Nigeria and other African countries run the risk of defaulting on loan payments such that things will get worse.
Rising debt, declining economic output
AfDB disclosed in its Strategy for Economic Governance in Africa document that the risk of debt defaults is increasing among African countries due to decline in economic output compounded by measures to curtail coronavirus.
“Declining economic output as a result of containment measures against COVID-19 and policy measures to stimulate the economies have heightened debt vulnerabilities,” AfDB said, per Nairametrics.
“Public debt now exceeds 50 per cent of GDP in nearly half of its regional member countries. Over the last decade, Africa increased its debt at a faster rate than any other region.
“The risk of defaults on debt, much of which is now non-concessional, has increased. At least 24 African countries have applied for the Paris Club–led Debt Service Suspension Initiative, which would free up resources to fight the pandemic.”
AfDB urged African countries to develop capacity for effective debt management and strengthen growth, financing instruments, and effective governance, which are highly beneficial towards avoiding a debt crisis.
“Building the capacity for debt management becomes important, but there is also a need to revamp the nexus between growth, financing instruments, and effective governance.
“Doing so would ensure that reforms adopted in the context of debt suspension or restructuring are properly timed and tailored towards giving credibility back to governments on their policy actions.
“In other words, the fiscal space that ensues from debt suspension can be put to use towards public investment in strategic sectors and growth-enhancing governance reforms through fiscal consolidation are critical in this context.
“The level of debt in Africa has soared, rising from 38 per cent of GDP in 2011 to 61 per cent in 2019.”
