Growth in Africa has picked up in the past few years, but it’s not without challenges. As the continent aims to lift millions of people out of poverty, it must contend with what constitutes healthy growth and how to create high-quality jobs, among other questions. Akinwumi Adesina, president of the African Development Bank, sat down with McKinsey’s Rik Kirkland to talk through these issues and look at opportunities in agriculture, energy, and more. An edited transcript of their conversation follows. Interview transcript
I’m excited that, this year, growth has picked up—to 4.1 percent, we project. But the topic really on my mind is, yes, I like that, but it still seems to me like survival growth. The kind of growth I want is prosperity growth. And prosperity growth really means that we must be growing in Africa at double digits. That’s what we need to be able to draw millions and millions of people out of poverty.
Challenges in Africa’s growth story
When I look at Africa’s growth and economic picture, one concern that I have is the nature of the growth process—that it’s not been able to create a lot of jobs.
We have a lot of joblessness on the continent. A third of Africa’s youth is unemployed. Another third is underemployed and unhappy. If you have a lot of young people who are unhappy, that’s going to create or worsen political, economic, and social fragility.
The second one that I think is very important is the link that I see between this joblessness and terrorism. I see in Africa what I call a “disaster triangle” that feeds this. Anywhere you have these three factors, you have terrorists operating. First is a high level of rural unemployment. Second is extreme poverty, especially in rural areas. Third is areas where you have high levels of climate and environmental devaluation.
Africa’s Business Revolution: How to Succeed in the World’s Next Big Growth Market
As we look at Africa’s growth story, we have to make sure that these underbelly things are addressed: [creating] jobs for Africa’s youth; making sure we deal with rural poverty, because there’s quite a lot; and also making sure that we allow African economies to be more resilient and therefore able to adapt to climate change that is impacting the continent.
Africa today has a huge opportunity. By 2030, the size of the food and agriculture industry is going to be worth over $1 trillion. This is going to be the new wealth for Africa.
I want to get young people into agriculture as a business, because agriculture is the biggest money-making market globally. Nobody drinks oil. Nobody smokes gas, right? But everybody eats food. And you’ve got a population of 1.2 billion people you have to feed.
The continent is spending $35 billion a year importing food. If you don’t change that, it’s going to grow to $110 billion by . It has a real implication for how we maintain macroeconomic stability of Africa. The best way is, Africa should produce what it eats, and Africa should add value to what it produces.
When I became president of the bank, I couldn’t think of anything more important: one of my first five priorities is just to give universal access to electricity in Africa. We’re in the 21st century, for crying out loud. The African Development Bank is putting $12 billion of our money into the power sector over the next five years. We’re going to leverage $45 billion to $50 billion to drive universal access to electricity in Africa.
Africa’s overlooked business revolution
If you take a look at it today, the numbers aren’t encouraging, because 645 million don’t have access to electricity. I want to make sure that we get all that done within ten years. Now, we’ve already started massively. Last year at the bank, we supported over [3.8 million] people having access to electricity. And in the next two years, we expect to raise that to 29 million people.
Africa’s infrastructure gap is still a lot: about $68 billion to $108 billion a year. But I believe that the money can be found in Africa. That’s why I launched the Africa Investment Forum. It’s going to be Africa’s largest-ever investment platform. We’re trying to leverage global pension funds, sovereign wealth funds, and institutional investors into Africa—into power, into water, into sanitation, into urban infrastructure—to support the momentous growth that Africa needs to be able to drive millions of people out of poverty.
If we get infrastructure right, if we get energy right, and if we create a lot of jobs for Africa’s youthful population, I think we’ll have a new dynamism, a new growth process. Not just in GDP, because people don’t eat GDP. But one that’s actually impacting the lives of people and can lift hundreds of millions of people out of poverty.