Serving as one of the panelists at the AfDB forum on Investing in Africa’s Resilience: Creating Jobs and Wealth through Regional Markets, Finance and Development Planning Minister, Samuel D. Tweah noted the need for a new structural thinking on the design of overseas development assistance. For more than five decades, the share of ODA that goes to social service has been far greater than what goes to infrastructure development.
Social services while viable, do not provide short run benefits to developing countries, hence the need to create a strategic balance or align social sector services with job creations and skills. Social safety net such as conditional cash transfers has no direct linkage with skills, so within short run, the individual returns to his status quo of wrestling poverty.
If the private sector is the only viable alternative to economic growth and development, then development funders should redirect most of their assistance towards investment in infrastructure and agriculture, Minister Tweah noted.
Despite the enormous progress achieved, extreme poverty is still been concentrated in South Sahara Africa, especially those considered as fragile states. Achieving inclusive growth and sustainable development goals will require creating wealth for the poorest populations thereby requiring more attention on countries affected by fragility.
It is on this basis that Minister Tweah raises a question on whether we should see fragility through a social or investment lens. He notes that while the social dimension of addressing fragility is important, it is now time to reshape our thinking towards the private investment angle; something we have struggled with for the past 75 years in African development since the end of the second war.
While we support the WTO, there is a stronger need to focus on regional integration and trade as a path way to economic growth with each country leveraging on its comparative advantage. This approach is to ensure that countries in the region address the productivity constraints and challenges hindering higher production of commodities that can be traded across borders. So, if agriculture value chains for example are the binding constraints in different countries, fragility solutions should focus on this challenge so to increase regional cross border trade.
In response to a question, Minister Tweah noted that the continent needs to see fragility from a whole new context of wealth creation that focuses on opportunities for leapfrogging through sustained private sector investment and jobs creation. If 80% of the people living in extreme poverty will be in countries afflicted by fragility by 2030, then there is a fierce urgency for a heavy push in private sector development, Minister Tweah noted.
2019 April 17 UN ECOSOC Forum on Financing for Development side event organized by the African Development Bank brought together speakers from diverse backgrounds including Dr. Khaled Sherif, Vice President, Regional Development, Integration and Business Delivery, African Development Bank, Ms. Ahunna Eziakonwa, Assistant Administrator and Regional Director for Africa, UNDP among others.
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