President of the African Development Bank (AfDB), Akinwumi Adesina, has encouraged the Irish business community to invest more in Africa.
Adesina said the direct foreign investment of Ireland in Africa is too low and called for more investment portfolio in the continent.
The AfDB chief was speaking at the seventh Africa Ireland Economic Forum in Dublin, where he also met with President Michael Higgins of Ireland.
‘If you are not investing in Africa, you [are] not in business. Foreign direct investment of Ireland in Africa was $572 million at the end of 2020 and represented only 0.05 [percent] of Ireland’s total net foreign direct’, Adesina said.
‘This is too low. Ireland should invest a lot more in Africa. Let’s raise the ambition for Africa from Dublin and set a higher target of 15 [percent] of Irish investments in Africa.
‘Enormous opportunities abound in Africa, and Ireland should invest more in Africa. The African Continental Free Trade Area presents a huge market, which is estimated to be the second largest free-trade zone in the world, with a size of $3.3 trillion’.
Adesina also expressed appreciation for Ireland’s contribution of €2,000,000 to the AfDB for climate adaptation in Africa.
‘This is another demonstration of Ireland’s strategic partnership with Africa, in its efforts to adapt to climate change. I wish to express my deep appreciation for this contribution by Ireland – a good friend of Africa’, Adesina added.
‘Africa needs all its friends and partners, as the continent copes with a myriad of hurdles on the racetrack of development’.
Data from the AfDB shows that Africa witnessed a decline in its GDP growth rate to 1.6 percent in 2020 due to the Covid-19 pandemic, while about 30 million people fell into poverty, and 29 million jobs were lost.
The continental bank also noted that the Russia-Ukraine conflict could lead to an additional 1.8 to 2.1 million people in Africa being pushed into extreme poverty in 2022 and 2023, respectively.
‘About 30 million metric tonnes of food imported annually by Africa from Russia and Ukraine will be lost for this year. Fertiliser prices have tripled, with Africa facing some two million metric tonnes of fertiliser shortage, which risks reducing food production in Africa by between 20 to 50 percent’, he said.
According to AfDB’s economic outlook for 2022, financing the economic recovery to pre-Covid-19 levels will require additional financing of $432 billion in 2020 to 2022, or roughly $144 billion per year.
The recovery will however be challenged by the heavy debt burden that Africa has due to the pandemic with 23 countries either in or at the risk of high debt distress as of February 2022.
Improved Foreign Direct Investment (FDI) in Africa, recalibration of the Debt Service Suspension Initiative (DSSI) and the G20 common framework are sure ways to help Africa reduce debt vulnerabilities.
