Akinwumi Adesina: Africa must move beyond aid to concessional financing to develop

Akinwumi Adesina, president of the African Development Bank (AfDB), says Africa must move beyond aid and focus on concessional financing to drive its development.

Speaking with Arise TV on Monday, Adesina said the continent cannot beg its way to development.

Concessional financing comes with lower interest rates, longer repayment periods, and more flexible terms.

On January 25, the United States (US) froze nearly all foreign aid worldwide.

Adesina said while it may be necessary for low-income and fragile states to depend on aid, true progress requires countries to mobilise domestic resources and secure concessional financing.

“I don’t believe Africa should beg its way to development. You know, Africa can be supported, but I have always believed that development must be done with pride. You must be able to say, I’m better than this. I do this for my own pride, for my own people,” the AfDB president said.

“If you have a baby that is born and is fed on milk, a time comes when that baby has to start eating solid food, start eating meat, and start growing up. So I think that for low-income countries, for fragile states, that has been helpful.

“But I do think that for countries to develop or accelerate their development, they need to have concessional financing, which is not aid. They need to also be able to mobilise their domestic resources to be able to get their institutional capital working for them.”

Speaking on the tariffs imposed by the United States President Donald Trump, Adesina said he was not concerned, emphasising that African nations must focus on their own economic priorities.

He highlighted Africa’s vast economic potential, particularly in agriculture, renewable energy, and minerals essential for modern technology.

“Why should I be worried when we have 477 million young people below the age of 35 that is going to make Africa the workforce of the world, brimming with talent, entrepreneurship and skills and capacities,” Adesina said.

“Why should I be worried? When it comes to the issue of renewable energy in the world, the largest renewable energy sources are in Africa. Why should I be worried when it has to do with energy transition that you mentioned globally?”

He stressed Africa’s critical role in the future of electric vehicles and energy transition, noting that the continent possesses abundant reserves of lithium, cobalt, platinum, and other essential minerals.

“Just the lithium-ion batteries is going to be what, roughly about $7 trillion by 2030 but by 2050 that market on electric vehicle market is going to be worth $59 trillion and so it’s a question of how you develop, position yourself but develop your own manufacturing capacity so that you are not selling raw materials,” he said.

“Because when you sell raw materials, you know, if somebody slams your tariff for selling raw materials, it’s not strategic for that. But if I am actually selling you semiconductors, if I am selling things that you need, it is very difficult for you to just wave me around like that. So I think the lesson there is for African nations to industrialise.”

‘AFRICA MUST INVEST IN ITS YOUTH NOT WATCH THEM LEAVE’

Addressing concerns about governance and leadership, Adesina cautioned against generalising Africa’s challenges, saying that many African nations are making significant economic progress.

He underscored the need for accountable leadership focused on human capital development, infrastructure, and economic stability.

The AfDB president criticised ineffective youth empowerment programmes, calling for more investment in young entrepreneurs.

“We got to make sure our young people have skills. They have jobs. We must hold ourselves accountable for the young people of this government. I can’t accept that the future of Africa’s youth lies in Europe. I am not against people migrating. No, don’t get me wrong, but it must be in an Africa growing well, policy growth, accountable for its youth,” he said.

“Coming back to Nigeria, for example, we have this thing called Japa, the people are leaving. No, we have to turn that around. Well, we’ve got to really believe first in the youth. What the young people need to find is investment. Then with trust, confidence, capital behind them.

“All our young people are flying out and going and that makes me ashamed as president of African Development Bank, and I can’t take it, because that is a market failure, that is a missing institution problem and I said, look, we are going to change that. That is why we are rolling out what is called youth entrepreneurship investment banks.”

The economist said the financial institution is dedicated to providing capital to turn the ideas of young people into great businesses.

On June 25, 2023, the AfDB president said his institution was ready to establish a Youth Entrepreneurship Investment Bank in Nigeria.

Adesina on October 18, 2024, said AfDB has approved $100 million for the establishment of the investment bank in Nigeria.

He said the new bank will support the youths’ businesses in Nigeria using technical assistance, business incubation, quasi-equity, and debt.

Additionally, the bank will deploy guarantee instruments to de-risk the lending to the businesses by financial institutions in Nigeria.