AfDB to Raise Africa’s Overall GDP to $5.6tr by 2025

By Dipo Olowookere

The African Development Bank (AfDB) has revealed plans to boost the continent’s industrial Gross Domestic Product (GDP) by 130 percent by 2025 and drive its overall GDP from $2.3 trillion to $5.6 trillion.

This was made known in its latest reported titled Industrialise Africa and obtained by Business Post on Sunday.

In the report, the continent’s lender said of the eight African nations profiled, South Africa had the highest industrial GDP with Nigeria the lowest.

South Africa has 44.8 percent, Egypt 30.1 percent, Cote d’Ivoire 29 percent, Kenya 23.3 percent, Ghana 21 percent, Ethiopia 21 percent, Cameroon 17.9 percent and Nigeria 13.1 percent.

AfDB, in the report, said it plans to industrialise Africa by placing a stronger focus on areas where it can best leverage its experience, capacities and its finances to support countries through six ‘Flagship Programs’, which are at the core of the Bank’s Industrialise Africa priority.

It explained that to deliver its contribution to these programs, the Bank will significantly increase its level of funding over the next decade by fostering successful industrial policies, attracting and channelling funding into infrastructure and industry projects, and growing liquid and effective capital markets.

Also, the bank said it plans to promote and drive enterprise development, promote strategic partnerships in Africa, and develop efficient industry clusters cross the continent.

The lender further stated in the report that it hopes to help Africa move from agriculture to agro-industries, from raw natural resource exports to high-value semi-processed or processed exports and, hence, to curb high unemployment rates and lay the groundwork for greater diversification of economies.

It noted that this industrial revolution must be underpinned by technological progress, reallocation of new investments into high-return emerging markets and by offering Africa opportunities to leapfrog over its development gap.

Stakeholders acting on the industrialisation agenda of the continent estimate that structural transformation requires industrial GDP to grow by an average of 11.5% per year (corresponding to a cumulative growth of 130% by 2025), while GDP per capita growth would have to almost double to 4% per annum.

The experience of other industrialising economies would seem to indicate that Africa can realistically achieve these objectives by increasing industrial GDP in the next 10 years from $751 billion to $1.72 trillion within the next decade. This would raise continental GDP to $5.62 trillion and African GDP per capita to $3 368 by 2025.

“For this to happen, there is a need for a comprehensive and resolute continental industrial policy that is country-adjustable to local contexts and that can be aligned with the country’s development goals.

“This will require vision and commitment from political leaders but also from the African Development Bank and the broader development community called upon to provide support through technical assistance, capacity building, continuous dialogue and advisory services,” the report said.

Lessons from the experiences of the African Development Bank, UNIDO, UNECA and other development organisations highlight five key enablers that have been common to almost all countries that have rapidly industrialised their economies.

In successful industrialising countries, these enablers have typically been integrated into a comprehensive industrial policy that has enabled businesses, both large and small, to develop along the value chains of selected, high-potential industrial sectors.