Africa, with a population of over 1 billion people, has the world’s youngest and fastest-growing middle class. Africa is on the verge of tremendous political, economic, and social revolution, with a median age of 14 years younger than any other continent. Every year, around 20 million job seekers enter the labour market in Sub-Saharan Africa. If these young people are integrated into the economy, they have the potential to make a significant contribution to the region’s development and growth.
Financial institutions and development banks must invest in the impending transition to assist Africa to realize this demographic dividend. That involves boosting the private sector, which is the engine of job growth, as well as changing how we function.
Investing in Africa’s future is a win-win situation in all sectors of economic development because many of the continent’s largest challenges are global issues that will touch us all. COVID-19 has made this painfully evident, foreshadowing what is ahead in the age of climate change. To avert the worst effects of global warming, Europe must work with countries all over the world to help them achieve climate resilience and sustainability.
Despite its abundant natural resources, Africa is plagued by high poverty rates due to political and historical issues. Nine of the ten poorest countries are in Sub-Saharan Africa, and the pandemic’s economic aftermath is expected to have added another 32 million people to the total.
Nonetheless, the continent’s outlook is shifting. Because investors have turned their attention to telecommunications, retail, and services, the country’s oil and mining sectors now account for only a small portion of long-term capital inflows. An average of 90,000 people in Sub-Saharan Africa joins the Internet for the first time every day. Africa is swiftly establishing itself as the new global centre of mobile banking, a trend that will increase the continent’s economies’ access to global markets, strengthen their resilience, increase transparency, and create jobs.
Africa has a unique potential to leapfrog into a greener future due to its low degree of industrialization (reflected in its tiny contribution to global warming). African leaders must support innovation and the adoption of the best available technologies if they are to prosper. Water, renewable energy, and clean mobility must all be made available to everyone.
Since 1965, the EIB( European Investment Bank) has operated in Africa, investing 59 billion euros in 52 African countries while developing a model that other international financial organisations can learn from.
Last year, EIB has allocated 71% of its funding to fragile states or least-developed countries in Sub-Saharan Africa, where it sought to support positive changes in the region, such as rapid economic growth, improved political stability and integration, increased foreign investment, and more and better business opportunities. This approach is based on a desire to listen to African leaders and collaborate with forward-thinking innovators. This enables the EIB to respond quickly to local needs and goals while staying within EU policy guidelines.
The EIB has undertaken strategic meetings with the presidents of Senegal, Ghana, and Tunisia, as well as African Union Commissioner Josefa Sacko, over the last few months. The EIB also took part in the recent Africa summit in Paris held by French President Emmanuel Macron, as well as the EU-Africa Green Investment Forum in April. Leaders from both sides emphasized the importance of a deeper partnership on both occasions.
Many African leaders have acted decisively in the face of the COVID-19 outbreak. Africa and Europe can face down the current health and economic crisis by working together to sketch out agreed investment objectives for long-term, inclusive recovery.
In recent years, the EIB has greatly streamlined its African operations. Following conversations among EU officials about how to improve the European financial architecture for development, the EIB has been thinking about how to refocus its contributions to maximise their impact in support of EU and African goals.
The EIB can help address the growing demand for ever-stronger economic and commercial relations between Europe and Africa by enhancing how it delivers development funding in close collaboration with the European Commission and the European External Action Service. Continents will either sink or swim together in an age of climate change and global pandemics.