<p><iframe loading="lazy" src="https://www.youtube.com/embed/okF1P5biqKo" width="640" height="360" frameborder="0" allowfullscreen="allowfullscreen"></iframe></p>
<p>This episode of Focus On &#8211; held in Germany &#8211; spotlights The Hamburg Sustainability Conference. The event gathered policymakers and business leaders from around the world to discuss efforts towards advancing the United Nations’ Sustainable Development Goals. CNBC Africa’s Godfrey Mutizwa spoke to the UK&#8217;s Development for Women and Equalities Minister, Anneliese Dodds and World Bank Group President, Ajay Banga for more.</p>


maxresdefault

Focus On: Hamburg Sustainability Conference 2024

<div style="max-width: 100%;"></div>
<p><script src="//players.brightcove.net/1571595826001/c0AOssA7_default/index.min.js">
</script></p>
<p>President of the World Bank Group, David Malpass told CNBC Africa that the plan to commit $150 billion to Africa over the next five years shows the acceleration of the pace of investment to the region. He also noted that 38 African countries have approached the global lender for assistance and programs with vaccination. Tilewa Adebajo, CEO of CFG Advisory shares his thoughts on the World Bank’s development plan for Africa.</p>


Assessing World Bank’s five-year development plan for Africa

<div style="max-width: 100%;"></div>
<p><script src="//players.brightcove.net/1571595826001/c0AOssA7_default/index.min.js">
</script></p>
<p>Remittances to Sub-Saharan Africa declined by an estimated 12.5 per cent in 2020 to $42 billion, according to the latest report by the World Bank Group. Nigeria saw the most decline. Dilip Ratha, Lead Economist at the World Bank joins CNBC Africa for more.</p>


COVID-19: SSA sees sharp decline in remittances in 2020


<h3 class="wp-block-heading">KEY POINTS</h3>



<ul class="wp-block-list"><li>Economic activity collapsed in Sub-Saharan Africa in the first half of the year.</li><li>Nigeria&#8217;s economy expected to shrink by 3.2% this year.</li><li>South Africa’s output is forecast to contract 7.1% this year, the deepest contraction in a century.</li><li><a>Angola, DRC &amp; Ghana are having to cope with weaker external demand &amp; lower prices for oil &nbsp;&amp; metals</a>.</li><li>Agricultural commodity exporters, Côte d’Ivoire, Ethiopia &amp; Kenya, have suffered from a collapse in demand.</li><li><a>Economic activity in Sub-Saharan Africa on course to contract by 2.8% in 2020, the deepest on record</a>. Growth could resume to 3.1% in 2021</li><li>COVID-19 pandemic likely to push millions in the region back into extreme poverty.</li></ul>



<p></p>



<h2 class="wp-block-heading"><strong><em>Recent developments:</em></strong><em> </em></h2>



<p>Sub-Saharan Africa has been ravaged by the COVID-19 pandemic, and economic activity collapsed in the first half of this year. The pandemic has taken a heavy human and economic toll, causing the most serious disruption to region-wide economic activity on record. Sub-Saharan Africa has suffered as a result of the impact of the pandemic on its key trading partners, the disruption to global travel and supply chains, and the collapse in global commodity prices, particularly for oil and industrial metals. These shocks have heightened risk aversion among investors and prompted unprecedented capital outflows.</p>



<p>In Nigeria and South Africa, activity has fallen precipitously in the first half of the year. <a>Several industrial commodity exporters, such as Angola, the Democratic Republic of Congo, and Ghana, have had to cope with weaker external demand and lower prices for oil and metals</a>, in addition to domestic disruptions. Agricultural commodity exporters, including Côte d’Ivoire, Ethiopia and Kenya, have suffered from a collapse in demand as well as disruptions to supply chains. The fall in global travel as a result of the pandemic has hit hard on countries with substantial exposure to travel and tourism, such as Cabo Verde, Ethiopia, Mauritius, Seychelles.</p>



<p>Inflation has crept up in the region, reflecting currency depreciations and supply chain upheaval. While many countries have announced fiscal support measures, in many instances these involve reprioritizing existing budgets given fiscal constraints. International institutions have called on bilateral creditors to suspend some debt payments.</p>



<h2 class="wp-block-heading"><strong><em>Outlook:</em></strong> </h2>



<p class="has-text-color has-very-dark-gray-color"><a>Economic activity in the region is on course to contract by 2.8% in 2020, the deepest on record. Per capita GDP is anticipated to fall even more sharply, likely pushing millions in the region back into extreme poverty. </a>Growth could resume to 3.1% in 2021 assuming the pandemic fades in the second half of the year, that domestic outbreaks of the virus follow a similar path, and that growth in major trading partners rebounds. Sub-Saharan Africa faces daunting hurdles to contain COVID-19 given weak health care capacity, lack of access to basic sanitation, and the prevalence of informal economic activity across much of the region.</p>



<p class="has-text-color has-very-dark-gray-color"><a>The economy of Nigeria is expected to shrink by 3.2% this year, given the collapse in oil prices, which represent 80% of the country’s exports, about a third of banking sector credit, and half of government revenues. South Africa’s output is forecast to contract 7.1% this year, the deepest contraction in a century, as stringent but necessary containment measures curtail economic activity.</a></p>



<p class="has-text-color has-very-dark-gray-color"><a>Economic activity among commodity importing economies is anticipated to shrink this year despite lower oil prices, as international travel restrictions weigh on tourist visits. Industrial commodity exporters’ GDP is similarly anticipated to contract in 2020 as domestic disruptions are compounded by low prices for oil and metals. Agricultural commodity exporters are also expected to experience a collapse in economic activity this year despite being somewhat insulated from commodity price declines, as foreign direct investment and tighter financial conditions delay investment.</a></p>



<h2 class="wp-block-heading"><strong><em>Risks: </em></strong></h2>



<p>Risks are tilted firmly to the downside. A longer lasting and more severe pandemic would trigger an even deeper recession in the region and have devastating effects on the health and well-being of the region’s population. The effects of the pandemic are expected to markedly increase the region’s vulnerability to debt distress, and these strains will be compounded by the increased borrowing necessary to fund larger deficits. Severely constrained government resources could lead to a curtailment of critical public services during the pandemic and further weigh on activity.</p>



<p>There are also growing concerns that the pandemic may cause a food security crisis in the region as border closures and trade restrictions disrupt trading in food and agricultural products. The region’s large numbers of displaced people could complicate efforts to prevent the spread of COVID-19. In addition, there is the risk of social unrest as governments prioritize efforts to thwart the virus and peacekeeping efforts lose momentum. Rising unemployment, falling incomes, and potential shortages of essential items could lead to instability and weigh on activity well after the pandemic has faded.</p>



<p><a href="https://openknowledge.worldbank.org/bitstream/handle/10986/33748/9781464815539.pdf">Download <em>Global Economic Prospects</em></a></p>



<h2 class="wp-block-heading"><strong>World Bank Group COVID-19 Response</strong></h2>



<p>“The&nbsp;<a href="https://www.worldbank.org/">World Bank Group</a>, one of the largest sources of funding and knowledge for developing countries, is taking&nbsp;<a href="https://www.worldbank.org/en/who-we-are/news/coronavirus-covid19">broad, fast action</a>&nbsp;to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery.&nbsp; This includes $50 billion of new IDA resources through grants and highly concessional loans.”</p>



<figure class="wp-block-table"><table><tbody><tr><td></td></tr><tr><td></td><td><img loading="lazy" decoding="async" width="424" height="812" src=""></td></tr></tbody></table></figure>



<p><a href="http://www.worldbank.org/en/publication/global-economic-prospects">Download this data</a></p>


International travel for South Africans is now allowed, this is how it will work

This is how badly COVID-19 has ravaged Sub-Saharan Africa

<div style="max-width: 700px;">
  <video-js
    data-account="1571595826001"
    data-player="c0AOssA7"
    data-video-id="6158291046001"
    data-embed="default"
    controls=""
    data-application-id=""
    class="vjs-fluid"></video-js>
</div>
<p><script src="//players.brightcove.net/1571595826001/c0AOssA7_default/index.min.js">
</script></p>
<p>The World Bank Group approved today a $500 million program to help countries in Africa and the Middle East fight the locust swarms that are threatening the food security and livelihoods of millions of people. The bank’s financing package will deliver immediate and long-term support to help hard-hit farmers and rural communities control the swarms, withstand the dual crises of COVID19 and locusts and restore their livelihoods. World Bank Group President, David Malpass joins CNBC Africa for more.</p>


World Bank approves $500mn to aid Africa’s fight against locust plague

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6087742297001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<p><script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script></p>
<p>To discuss the World Bank Group&#8217;s strategy to maximise finance for development, International Finance Corporation&#8217;s (IFC) Vice President for Economics and Private Sector, Hans Peter Lankes joins CNBC Africa for more.</p>


IFC’s Peter Lankes on how to maximise finance for development


<p>NAIROBI (Reuters) &#8211; Tanzania’s economy expanded 5.2% in 2018, the World Bank said on Thursday, the second major report this year from a multilateral financial institution contradicting rosier government figures.</p>



<p>Tanzania’s finance minister had told parliament last month that growth was 7% last year</p>



<p>In a report, the World Bank, which makes its calculations based on state data, also forecast 2019 growth at 5.4% &#8211; again lower than the government’s estimate of 7.1%.</p>



<p>Last year’s growth was affected by a decline in investment, exports and private lending, the report said.</p>



<p>“Data related to consumption, investment and net trade suggest that growth softened in 2018,” it said.</p>



<p>President John Magufuli embarked on an ambitious programme of industrialisation after coming to power in 2015, investing billions of dollars into infrastructure, including a new rail line, reviving the national carrier and a hydropower plant.</p>



<p>But government interventions in mining and agriculture have led to declining investment in east Africa’s third largest economy. Foreign direct investment has more than halved since 2013, while private sector lending growth plummeted to less than 4% in 2018, far below the 20% average between 2013-16.</p>



<p>The World Bank report follows an unpublished International Monetary Fund (IMF) report in April that also raised questions over Magufuli’s handling of the economy.</p>



<p>A leaked version of the report, seen by Reuters, accused the government of undermining the economy with “unpredictable and interventionist” policies, saying medium-term growth would be around 4-5 percent, again below official forecasts.</p>



<p>In its report, the World Bank said investment growth was subdued partly because of government struggles to meet spending targets in development projects.</p>



<p>The economy could grow to 6% by 2021 “with a modest improvement of the business climate and a pick-up in [foreign direct investment] and other private investment,” the bank said.</p>



<p>Other economic indicators also point to a slowing economy.</p>



<p>The current account deficit widened to 5.2% percent of GDP in the year ending January 2019, up from 3.2% a year earlier, the bank said. The value of exports dropped nearly 4% last year, partly because the government banned cashew exports, a major foreign exchange earner, due to low prices.</p>



<p>On the other hand, the construction of the standard gauge railway and expansion of Dar es Salaam port helped drive up the value of imports by 7.8%, the World Bank said.</p>



<p>The government should minimise economic risk by improving the business environment and fiscal management, it recommended.</p>



<p>Globally, Tanzania is also vulnerable to weaker demand, tighter financing conditions, and higher international energy prices, it said.</p>



<p>Reporting by Omar Mohammed; Editing by Katharine Houreld and Andrew Cawthorne</p>


World Bank contradicts Tanzania’s rosier growth estimates, what you need to know

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=6013377262001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>The World Bank Group together with the government of Kenya, France, and the United Nations are hosting the “One Planet Summit” which seeks to accelerate and focus attention on climate investments in line with the Paris Agreement objectives. The IFC has launched a report on the potential climate investments in cities for more CNBC Africa is joined by the IFC&#8217;s Vice President of Economics and Private Sector Development- Hans Peter Lankes.</p>


Kenya gears up for global climate change summit

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5977556297001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>The latest World Bank doing business report places Rwanda at the 29th position globally among the top 50 easiest places to do business. According to the report, Rwanda emerged as the top reformer. Rita Ramalho, Senior Manager at the World Bank Group joins CNBC Africa’s Michael Mugisha for more on this.</p>


Rwanda rank high on WB ease of doing business report

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5856343640001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>According to the 2019 World Bank Doing Business index report, the Sub Saharan Africa region recorded the most reforms with Rwanda, Kenya, Togo and Cote D’Ivore indicated as the most improved economies. Manuel Moses, Country manager for International Finance Corporation, World Bank Group elaborated this further.</p>


Doing business report: Sub-Saharan African economies set new record

<p>IFC, a member of the World Bank Group, today announced a $60 million investment in a regional risk-sharing facility to support Bank of Africa Group’s lending to small and medium enterprises in eight African countries, facilitating growth and job creation in the region.</p>
<p>The investment was made possible with support from the Women Entrepreneurs Opportunity Facility (WEOF), launched by IFC through its Banking on Women Program, and Goldman Sachs 10,000 Women. Further support came from the Global SME Finance Facility, a blended-finance partnership among IFC, the UK Department for International Development, and the Netherlands Ministry of Foreign Affairs.</p>
<p>IFC’s investment will cover as much as 50 percent of the risk on up to $120 million equivalent in loans to local SME’s in Burkina Faso, Ghana, Madagascar, Mali, Niger, Senegal, Tanzania and Togo. Half the facility is earmarked for women-run businesses, and for climate-related improvements, such as energy efficient equipment upgrades, small solar or biomass systems, and climate-smart agricultural supply chains.</p>
<p>Cristina Shapiro, Head of 10,000 Women, said, “Goldman Sachs research shows that closing the credit gap for women-owned SMEs in emerging markets could push income per capita an average of 12 percent higher by 2030. Women entrepreneurs have real potential to impact Africa’s future growth. Through this partnership, we will help to build resilient, women-owned businesses, and enable women entrepreneurs to reach their full potential with the capital and support they need.”</p>
<p>Oumar Seydi, IFC Regional Director for Africa, said, “Expanding SME financing, especially in markets where risks are higher, is an important pillar of IFC’s Africa strategy. This facility will allow BOA to extend over 5000 loans to underserved SME’s in the next five years. It could have a transformational impact in the participating countries, seven of which are low income, and five fragile or conflict-affected.”</p>
<p>SMEs are a prime source of growth, jobs and innovation, but can only succeed when they can access sufficient financing. In sub-Saharan Africa, where roughly 350 million new jobs will be needed in the next 20 years, they account for 30 to 60 percent of GDP, and 67 percent of jobs.</p>
<p>The WEOF is a facility dedicated to expanding access to capital for 100,000 women entrepreneurs globally. IFC’s Banking on Women Program has committed 64 investments globally worth $1.71 billion, and advised on 39 projects since its launch in 2010. Of these, the WEOF has supported about $1 billion in commitments to financial institutions in 26 countries.</p>
<p>IFC plays a significant role helping SMEs access financing. The Global SME Finance Facility is a key part of this strategy, helping financial institutions better meet the financial needs of SMEs. Since its creation in 2012, the Global SME Finance Facility has provided investment and advisory solutions to more than 130 projects in 32 countries, strengthening financial infrastructure in low-income markets. It has committed over $1 billion in investments.</p>
<p><strong>About Bank of Africa Group</strong><br />
Bank of Africa Group is presently established in 18 countries, 8 of which are in West Africa (Benin, Burkina Faso, Ghana, Ivory Coast, Mali, Niger, Togo and Senegal), 8 in East Africa and the Indian Ocean region (Burundi, Djibouti, Ethiopia, Kenya, Madagascar, Rwanda, Tanzania and Uganda) as well as in the Democratic Republic of Congo and in France. Bank of Africa Group has its majority shareholding held by BMCE Bank the third bank in Morocco. It provides solid strategic and operational support to Bank of Africa Group, as well as direct access to international markets thanks to its presence in Europe, Asia and North America. Established over 35 years ago, BOA Group presently has 6,000 employees and a consolidated balance sheet of €7.7 billion and consolidated net profit of €125.3 million as at December 31st, 2017, with €76 million Group profit.</p>
<p><strong>About IFC</strong><br />
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit www.ifc.org</p>
<p><strong>About Goldman Sachs 10,000 Women</strong><br />
The Goldman Sachs 10,000 Women initiative is a campaign to foster economic growth by providing women entrepreneurs around the world with a business and management education and access to capital. The initiative has reached women from across 56 countries through a network of 100 academic, nonprofit, and bank partners. In partnership with the International Finance Corporation (IFC), Goldman Sachs 10,000 Women launched the first of its kind global finance facility in 2014 to enable access to capital to more women entrepreneurs.</p>
<p>&nbsp;</p>
<p>&#8211; IFC (International Finance Corporation) press release.</p>
<p>&nbsp;</p>


IFC to invest $60 million in Bank of Africa to support SME lending in eight African countries

<p><em>By Professor Landry Signé, David M. Rubenstein Fellow in the</em> <em><a href="https://www.brookings.edu/experts/landry-signe/">Global Economy and Development Program and Africa Growth Initiative at the Brookings Institution</a>, distinguished fellow at <a href="https://africanstudies.stanford.edu/people/landry-sign">Stanford University’s Center for African Studies</a>, </em><a href="https://www.weforum.org/people/landry-signe">World Economic Forum Young Global Leader</a>, <em>and author of “<a href="https://www.amazon.com/Innovating-Development-Strategies-Africa-International-ebook/dp/B0727RRF3X">Innovating Development Strategies in Africa: The Role of International, Regional and National Actors.</a>”</em></p>
<p>This year’s <a class="js-external-link" href="http://www.imf.org/external/spring/2018/">Spring Meetings of the Boards of Governors of the International Monetary Fund (IMF) and World Bank Group</a> were full of thought-provoking discussions on emerging challenges and opportunities facing the African continent. I especially found that the conversation during <a class="js-external-link" href="http://www.worldbank.org/en/events/2018/04/21/the-state-of-the-africa-region-leveraging-innovation-to-transform-agriculture-and-energy"><em>The State of the Africa Region</em></a><u>,</u> the meetings’ premier event on Africa, particularly captured the key trends shaping the continent’s economic landscape. Interviewed by CNBC Africa Senior Anchor Gugulethu Mfuphi, Dr. Albert Zeufack, chief economist for Africa at the World Bank Group, eloquently presented the Bank’s most recent findings on <a class="js-external-link" href="https://openknowledge.worldbank.org/handle/10986/29667">African economies</a>.</p>
<div class="inline-widget alignright">
<div class="inline-widget-inner">
<article class="archive-view profile has-photo">
<div class="expert-info">
<h3 class="title"></h3>
<div class="contact"></div>
</div>
</article>
</div>
</div>
<p>Below are what I found to be the most insightful comments and ideas I heard throughout the week, which world-renowned economist Zeufack also emphasized during the event. These points, shared with the governors of central banks, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations, and academics, I think accurately reflect and anticipate the economic future of the continent.</p>
<ol>
<li>
<h3><strong>Regional trends: Sub-Saharan Africa’s growth overall is rebounding and likely to be sustained, but only given certain conditions. West and East Africa are leading the way, but Central Africa is struggling. Angola and South Africa are undergoing positive economic transitions.</strong></h3>
</li>
</ol>
<p>After a slowdown in recent years, growth is returning to Africa (with projections of 3.1 percent growth in 2018, and 3.6 percent in 2019-20). The regression has stopped and, for the first time since 2016, per capita GDP growth has been positive.</p>
<p><strong>READ:</strong> <a href="http://cnbc.africa/insights/2018/04/21/imf-africa-outlook/">The IMF has altered its outlook on Africa, this is what’s changed</a></p>
<p>In fact, two of Africa’s largest economies, Angola and South Africa, are undergoing significant transitions—positioning them and the continent for higher growth, given their weight to Africa’s GDP. As mentioned in the recently released <a class="js-external-link" href="https://openknowledge.worldbank.org/handle/10986/29667"><em>Africa’s Pulse,</em></a> “In Angola, the revisions reflect the expectation that a more efficient foreign exchange allocation system, increased availability of foreign exchange due to higher oil prices, rising natural gas production, and improved business sentiment would help support the rebound in economic activity. In South Africa, slowing inflation and improving business confidence are expected to help sustain the ongoing recovery in domestic demand, especially in investment.”</p>
<p>Moreover, as illustrated in Figure 1.14 from that report<em>,</em> East and West Africa’s growth prospects have strengthened and are leading Africa in and to higher growth. For example, Ethiopia, Rwanda, and Tanzania (East Africa) are growing at over 6 percent. Senegal and Côte d’Ivoire, and Ghana and Guinea to a certain extent, are powering through growth with improved performance as well.</p>
<p>Despite this optimism, there are reasons to be cautious. These positive growth trends are based on two assumptions that are not guaranteed: First, commodity prices will rise or remain stable. Second, African countries will accelerate and deepen macroeconomic and structural reforms.</p>
<p>Additionally, despite the positive and relieving trends, the continent is still not growing fast enough and is still far from pre-crisis levels. Governments should therefore continue deep macroeconomic and structural reforms. For example, the CEMAC region (Central African Economic and Monetary Community) needs deeper structural reforms and smart fiscal adjustments. Countries should therefore keep strengthening their reforms to achieve success.</p>
<figure class="wp-caption aligncenter"><a href="https://www.brookings.edu/wp-content/uploads/2018/04/global_20180423_ged_africaspulse_gdpgrowth.png"><img loading="lazy" decoding="async" class="lazyautosizes lazyloaded" src="https://i1.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_ged_africaspulse_gdpgrowth.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1" sizes="auto, 1379px" alt="Global_20180423_ged_africaspulse_gdpgrowth" width="1379" height="1045" data-src="https://i1.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_ged_africaspulse_gdpgrowth.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1" data-srcset="https://i1.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_ged_africaspulse_gdpgrowth.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1 768w,https://i1.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_ged_africaspulse_gdpgrowth.png?fit=600%2C9999px&amp;ssl=1 600w,https://i1.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_ged_africaspulse_gdpgrowth.png?fit=400%2C9999px&amp;ssl=1 400w,https://i1.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_ged_africaspulse_gdpgrowth.png?fit=512%2C9999px&amp;ssl=1 512w" /></a><figcaption class="wp-caption-text">Source: World Bank. Africa’s Pulse, No. 17, April 2018.</figcaption></figure>
<ol start="2">
<li>
<h3><strong> Debt is obviously rising, but the most concerning trend is the change in debt composition, which brings market-led risks that countries are not well equipped to manage. The situation may also be aggravated by investment inefficiency. In fact, the number of countries at high risk of debt distress has doubled since 2013, now standing at 18.</strong></h3>
</li>
</ol>
<p>The question of debt sustainability has returned as an issue of concern for the continent and was prominent throughout the Spring Meetings. Debt has been continuously rising, with the average debt-to-GDP ratio increasing by 15 percentage points from 2010 to 2017. Some countries’ debt-to-GDP ratios have multiplied by five during the same period. In the first quarter of 2018, eurobond issuance exceeded Africa’s 2017 year-end amount (Figure 2.18).</p>
<figure id="id=&quot;attachment_508262&quot; " class="wp-caption aligncenter size-article-inline"><a href="https://www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_bond-issuance.png"><img decoding="async" class="lazyautosizes lazyloaded" src="https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_bond-issuance.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1" sizes="1114px" alt="Source: World Bank. Africa's Pulse, No. 17, April 2018." width="1114" data-src="https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_bond-issuance.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1" data-srcset="https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_bond-issuance.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1 768w,https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_bond-issuance.png?fit=600%2C9999px&amp;ssl=1 600w,https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_bond-issuance.png?fit=400%2C9999px&amp;ssl=1 400w,https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_bond-issuance.png?fit=512%2C9999px&amp;ssl=1 512w" /></a><figcaption class="wp-caption-text">Source: World Bank. Africa’s Pulse, No. 17, April 2018.</figcaption></figure>
<p>More notably, debt composition has also been changing extremely fast, as countries are moving toward short-term maturities and market-led debts, and away from concessions and long-term financing. This situation exposes African countries to new type of risks, very complex market-led risks that countries are “not well-equipped to manage,” according to Zeufack. It is uncertain if Africa will be able to service the debt (especially since the maturities are mismatched in tightening fiscal spaces).</p>
<p>Also worrying is the fact that countries are not necessarily using this debt efficiently. On the contrary, moderate borrowers (with a 10- to 20-point increase of average public borrowing debt between 2012 and 2017) are mostly borrowing for consumption instead of investing. If heavy borrowers (with more than a 20-point increase of average public borrowing debt between 2012 and 2017) are investing, they are not doing so efficiently. These factors are lowering growth in many of these countries.</p>
<figure class="wp-caption aligncenter"><a href="https://www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_debtdistress.png"><img loading="lazy" decoding="async" class="lazyautosizes lazyloaded" src="https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_debtdistress.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1" sizes="auto, 1242px" alt="More notably, debt composition has also been changing extremely fast, as countries are moving toward short-term maturities and market-led debts, and away from concessions and long-term financing. This situation exposes African countries to new type of risks, very complex market-led risks that countries are “not well-equipped to manage,” according to Zeufack. It is uncertain if Africa will be able to service the debt (especially since the maturities are mismatched in tightening fiscal spaces). Also worrying is the fact that countries are not necessarily using this debt efficiently. On the contrary, moderate borrowers (with a 10- to 20-point increase of average public borrowing debt between 2012 and 2017) are mostly borrowing for consumption instead of investing. If heavy borrowers (with more than a 20-point increase of average public borrowing debt between 2012 and 2017) are investing, they are not doing so efficiently. These factors are lowering growth in many of these countries." width="1242" height="899" data-src="https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_debtdistress.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1" data-srcset="https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_debtdistress.png?w=768&amp;crop=0%2C0px%2C100%2C9999px&amp;ssl=1 768w,https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_debtdistress.png?fit=600%2C9999px&amp;ssl=1 600w,https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_debtdistress.png?fit=400%2C9999px&amp;ssl=1 400w,https://i2.wp.com/www.brookings.edu/wp-content/uploads/2018/04/global_20180423_africaspulse_debtdistress.png?fit=512%2C9999px&amp;ssl=1 512w" /></a><figcaption class="wp-caption-text">Source: World Bank. Africa’s Pulse, No. 17, April 2018.</figcaption></figure>
<ol start="3">
<li>
<h3><strong> Moving forward, countries should develop the appropriate fiscal space and domestic resource mobilization to service debt, increase investment efficiency, rethink infrastructure financing, and fully embrace innovation in order to leverage disruptive technologies to boost productivity, especially in the agriculture and energy sectors. </strong></h3>
</li>
</ol>
<p>I was pleased that much of the conversation at the event focused on solutions to many of these challenges. In fact, Zeufack stressed the importance of accelerating and deepening reforms to strengthen the growth momentum.</p>
<p>First, proper fiscal space should be created to appropriately service debt, with a substantial increase in domestic resource mobilization. Countries should wisely collect and spend their own funds on the public goods and services they need. Second, countries should adopt reforms aiming to increase the efficiency of investments, from project selection to successful delivery. Increasing efficiency will provide additional resources for macroeconomic stability and debt sustainability. Third, infrastructure financing should be more meticulously designed and implemented by African countries to avoid bad deals that substantially increase debts without delivering sufficient quality infrastructure. Finally, countries have to fully embrace innovation, and harness, scale up, and leverage technologies to boost productivity across and within sectors, especially in agriculture and energy.</p>
<p>As was evident throughout the Spring Meetings, leading economists like Zeufack and Makhtar Diop consider bridging different sectors to achieve macroeconomic and structural transformation and bring big data, artificial intelligence, education, and a strong endogenous private sector to help accelerate the much-needed development of efficient productive sectors to be absolutely critical for Africa’s success.</p>
<h2>My final thoughts</h2>
<p>Given the <a href="https://www.brookings.edu/opinions/capturing-africas-high-returns/">tremendous economic potential of Africa</a>, it is critical, when implementing these reforms, to ensure that <a href="https://www.brookings.edu/research/broadening-the-benefits-of-growth/">Africa’s fast economic growth leaves less, not more, poor people behind</a> contrary to what happened in the past decades. Some of the challenges and solutions presented here are further discussed in my book released by Cambridge University Press, <a class="js-external-link" href="https://www.amazon.com/Innovating-Development-Strategies-Africa-International-ebook/dp/B0727RRF3X"><em>Innovating Development Strategies in Africa: The Role of International, Regional, and National Actors</em></a>, as well as in some shorter publications on <a href="https://www.brookings.edu/blog/africa-in-focus/2017/11/16/the-road-ahead-for-fixing-africas-infrastructure-deficit/">infrastructure (including energy)</a>, <a href="https://www.brookings.edu/blog/africa-in-focus/2017/10/16/the-quest-for-food-security-and-agricultural-transformation-in-africa-is-the-caadp-the-answer/">agriculture</a>, <a href="https://www.brookings.edu/blog/africa-in-focus/2017/10/13/innovate-or-fail-the-options-open-to-africa-for-implementing-the-sdgs-and-agenda-2063/">policy implementation</a>, and the <a class="js-external-link" href="https://theconversation.com/why-africas-free-trade-area-offers-so-much-promise-93827">potential impact of the African Continental Free Trade Area</a>.</p>
<p>As beautifully said by Mfuphi during the April 21 event, “The music is back on; the party hasn’t yet started.” In other words, the return of growth is encouraging, but much more needs to be done to accelerate the growth momentum and scope, and broaden its benefits so that no one is left behind.</p>


The state of African economies unravelled

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5727967013001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>The IFC, a member of the World Bank Group, recently announced new financing of R1.2 billion to support FNB’s lending to small and medium enterprises, with a focus on women-owned businesses.</p>


IFC earmarks R1.2bn for women businesses

<div style="display: block; position: relative; max-width: 640px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5632886449001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>The WB&#8217;s Doing Business report is in its 15 year, Cemile Hacibeyoglu, Private Sector Specialist at the World Bank Group says the good news is that, 80 per cent of the reforms in this year&#8217;s report have been implemented by developing countries.</p>


African economies adopt record number of reforms

<div style="display: block; position: relative; max-width: 640px;">
<div style="padding-top: 56.25%;"><iframe loading="lazy" style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5595374637001" width="300" height="150" frameborder="0" allowfullscreen="allowfullscreen"></iframe></div>
</div>
<p>The World Bank has invited South African companies to grab a piece of the US45 billion dollars that the group has set aside for projects in Africa. This comes as South African companies are missing a chance to participate in procurement opportunities in World Bank Group Financed projects in Africa despite being eligible to compete for the supply of goods and services in these projects. Bongi Kunene, Executive Director of the World Bank for South Africa/Nigeria and Angola joins CNBC Africa for more</p>


World Bank invites S.A companies to stake claim to $45bn projects

<div style="display: block; position: relative; max-width: 640px;">
<div style="padding-top: 56.25%;"><iframe loading="lazy" style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5595362596001" width="300" height="150" frameborder="0" allowfullscreen="allowfullscreen"></iframe></div>
</div>
<p>CNBC Africa&#8217;s Gugulethu Cele caught up with Gabriel Goddard, lead economist for Southern Africa at the World Bank Group’s Trade &amp; Competitiveness Global Practice to discuss to unpack South Africa&#8217;s effort in enabling environment for innovation.</p>


Critical role of science, and technology in economic development

<div style="display: block; position: relative; max-width: 640px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5526792074001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>The World Bank Group and the Africa Competition Forum say that on average African economies score 26 per cent lower than other countries globally when it comes to enforcement of competition laws.</p>


World Bank Group

Focus On: Hamburg Sustainability Conference 2024

Assessing World Bank’s five-year development plan for Africa

COVID-19: SSA sees sharp decline in remittances in 2020

This is how badly COVID-19 has ravaged Sub-Saharan Africa

World Bank approves $500mn to aid Africa’s fight against locust plague

IFC’s Peter Lankes on how to maximise finance for development

World Bank contradicts Tanzania’s rosier growth estimates, what you need to know

Kenya gears up for global climate change summit

Rwanda rank high on WB ease of doing business report

Doing business report: Sub-Saharan African economies set new record

IFC to invest $60 million in Bank of Africa to support SME lending in eight African countries

The state of African economies unravelled

IFC earmarks R1.2bn for women businesses

African economies adopt record number of reforms

World Bank invites S.A companies to stake claim to $45bn projects

Critical role of science, and technology in economic development

The state of competition policy in Africa

News Tips

Advertise With Us

World Bank Group

Focus On: Hamburg Sustainability Conference 2024

Assessing World Bank’s five-year development plan for Africa

COVID-19: SSA sees sharp decline in remittances in 2020

This is how badly COVID-19 has ravaged Sub-Saharan Africa

World Bank approves $500mn to aid Africa’s fight against locust plague

IFC’s Peter Lankes on how to maximise finance for development

World Bank contradicts Tanzania’s rosier growth estimates, what you need to know

Kenya gears up for global climate change summit

Rwanda rank high on WB ease of doing business report

Doing business report: Sub-Saharan African economies set new record

IFC to invest $60 million in Bank of Africa to support SME lending in eight African countries

The state of African economies unravelled

IFC earmarks R1.2bn for women businesses

African economies adopt record number of reforms

World Bank invites S.A companies to stake claim to $45bn projects

Critical role of science, and technology in economic development

The state of competition policy in Africa

News Tips

Advertise With Us

Newsletters