AfDB Woos Asian Investors with Attractive Economic Prospects

By Adedapo Adesanya

The African Development Bank (AfDB) has called on Asian investors and governments with the appropriate incentives for their private sectors to look at the vast investment opportunities Africa offers.

This call was made by Mr Kevin Urama, Chief Economist and vice president of the bank during a webinar to discuss the 2023 edition of the African Economic Outlook report which was jointly organised with the Korea Institute for International Economic Policy (KIEP) in Sejong-Si, Korea.

“I invite investors and governments in Asia to see Africa not as a distant land, but a continent full of opportunities,” said Mr Urama, Vice President for Economic Governance and Knowledge Management said.

He based his recommendations on the data in the latest edition of the African Economic Outlook, a flagship annual publication of the Bank Group that reviews the economies of the 54 African countries and provides detailed forecasts.

The report shows that Africa has remained broadly resilient despite experiencing significant shocks, particularly from the COVID-19 pandemic, climate change, and the Russian invasion of Ukraine.

From an economic growth of 3.8 per cent in 2022, the continent is set to climb to 4.1 per cent in 2023 and 2024. This exceeds the global average by 2.9 per cent and the European average by 1.1 per cent, according to the report, which estimates that growth in Asia would be higher, at 4.3 per cent.

Mr Urama said, “Africa must play a key role in the green transition, given that it is home to 60 per cent of the world’s unexploited arable land and the minerals needed for green growth.”

He said these resources could stimulate sustainable development and investments. “This is virgin land, which can be easily used to build low-carbon infrastructure without large-scale expenditure.”

On his part, Mr Edmond Wega, the Bank Group’s Executive Director for Canada, China, South Korea, Kuwait and Turkey, said Asian investors must look beyond unfavourable depictions of Africa to seize investment opportunities in Africa.

“Asia needs to use its technologies and knowledge to build a win-win relationship with Africa and work with its regions, countries and the African Development Bank to achieve a convergence and turn dreams into a reality,” he stated.

Mr Sung-Chun Jung, vice president of KIEP, highlighted Africa’s vast potential for green growth, considering its fast-growing population and abundant renewable energy and natural resources.

“The international community must provide strong support for the efforts by African countries to combat climate change, particularly through funding, technology transfers and capacity building,” he said, adding that the private sector must play a more significant role in covering the funding gap to tackle climate change.

During a round table, Mr Sungbae An, Director of the Department of Macroeconomics and International Finance at the KIEP pointed to the KIEP’s economic forecasts, assuming 3.7 per cent growth in sub-Saharan Africa in 2023 and expressed some worries.

“One of the key problems we have identified is inflation, driven by the increase in food prices and staple goods, the pressure associated with rising exchange rates and political unrest,” he said.