African Economic Conference 2024
Securing Africa’s Economic Future Amidst Rising Uncertainty
Saturday, 23 November 2024
8:00 a.m. – 08:45 a.m
Ahunna Eziakonwa
Director, Regional Bureau for Africa
Opening remarks (7 minutes)
Your Excellency Advocate Duma Boko, President of the Republic of Botswana
Your Excellency Honourable Dr. Phenyo Butale, Minister of International Relations, Botswana
Dear Prof. Kevin Urama, Chief Economist and Vice-President of the African Development Bank Group
Dear Mr. Claver Gatete, Executive Secretary, United Nations Economic Commission for Africa
Esteemed leaders, members of governments, diplomatic corps and colleagues joining us remotely
Ladies and Gentlemen
I am profoundly grateful to the Government of Botswana for hosting the 2024 African Economic Conference in the beautiful city of Gaborone. A vibrant city that has welcomed travellers from the four corners of the world with warm Batswana hospitality. Botswana is home to Letsile Tegobo, the breakout star of the 2024 Olympic Games, who showed the world that Africans can lead from the front with grace and humility.
The theme for this year’s conference -- “Securing Africa’s Economic Future Amidst Rising Uncertainty” -- is quite pertinent and very timely. This year has been quite tumultuous. We have witnessed escalating global conflicts, increasing political polarization, with the rejection of incumbents in U.S. and European elections, and severe climate volatility. This uncertainty threatens Africa’s development prospects.
Wars in Ukraine and Palestine have pushed annual global military spending above $2.4 trillion, the highest level since 2009. This is diverting resources from investment in the Sustainable Development Goals. Furthermore, the World Bank estimates that the reconstruction of Ukraine and Gaza could cost half a trillion dollars, also crowding out development spending.
Extremist politics is pushing the world towards increased trade protectionism, with threats of tariffs and the retreat from multilateralism further marginalizing African countries due to their vulnerable position in global value chains.
Our continent continues to bear a disproportionate cost of climate change - a problem we did not cause. African countries have the daunting task of raising some $250 billion annually (10% of GDP) for climate action, and less than 10 percent has been raised. There is a yawning gap between the financing that African countries need for climate action, and the paltry sums being made available. Furthermore, over three-quarters of the sums available are loans, not grants. This is further indebting a continent that will pay over $160 billion in debt service this year alone.
Your Excellencies
Distinguished guests
These global uncertainties challenge us to rise above prevailing circumstances and invest in the Africa we want. A proud continent characterized by shared prosperity, productive regional integration, vibrant and entrepreneurial youth, accountable governance, and with freedom from fear, disease and deprivation.
This is why, since 2006, UNDP has been a proud convener of the African Economic Conference, in partnership with the African Development Bank and the United Nations Economic Commission for Africa. Together, we have brought together some of the finest minds and visionary leaders from across the continent and beyond. This gathering serves as a dynamic platform to develop solutions to Africa's most pressing development challenges.
This year's conference theme captures the essence of our recent global experiences—characterized by increasing geopolitical tensions, weakening multilateralism, and a growing disconnect between transnational challenges and the cooperative frameworks needed to address them.
UNDP's 2024 Human Development Report sheds light on societal and political polarization risks and the global gridlock that complicates our ability to tackle common adversities such as conflicts, climate change, and the transition to greener economies. However, despite these challenges, the HDR points to opportunities for pro-poor growth and transformative innovation.
Today, as we stand at the crossroads of global uncertainty, the need for innovative development financing in Africa has never been more pressing. In a world redefined by multiple crises, our traditional financial frameworks are being tested like never before. While the $1.3 trillion annual financing gap required to attain the SDGs remains glaring, it is imperative that we pivot towards more innovative financial solutions—especially those that promise not just immediate relief but pave the way for long-term sustainability.
For example, to optimize financing and investment flows, we must reduce the cost of borrowing by improving the accuracy and objectivity of credit ratings. UNDP estimates that credit rating inaccuracies cost African countries $75 billion in excessive interest and foregone lending. As part of our approach to supporting African countries in improving their credit ratings, we have launched a publicly accessible Africa Credit Ratings Resource Platform to serve as a one-stop shop for data, methodological information, and research on credit ratings. We also provide bespoke technical assistance and capacity building to African countries preparing for credit ratings or rating reviews.
Guided by the necessity for grassroots innovation to tackle Africa's structural challenges, UNDP is embracing digital revolution and technology as critical levers in navigating the impacts of global uncertainty and ensuing disruptions. Our 2023 Digital Entrepreneurship Report, jointly produced in collaboration with the African Union and other partners, has highlighted educational technology, financial services technology, health technology and agricultural technology as potential catalysts to promote sustainable development through innovation.
This is why, UNDP's timbuktoo initiative, launched earlier this year, aims to mobilize and invest US$ 1 billion of catalytic and commercial capital to transform 100 million livelihoods and create 10 million new jobs. We are continuously establishing vibrant Unipods of innovation, 13 across the continent, in African universities that are engineered to catalyze breakthroughs in supporting countries by utilizing local knowledge and the latest technologies. And today, the participation of young African researchers at this conference underscores our dedication to leveraging their intellectual capabilities in mapping out future developmental pathways.
Your Excellency
Ladies and Gentlemen,
To conclude, allow me to highlight three critical areas that I believe could be transformative given the current global uncertainty landscape.
First, we must strengthen resilience to global shocks by reducing Africa's dependency on food, fertilizer, and fuel imports. Currently, nearly 70 percent of the continent’s global exports are raw and unprocessed primary commodities, highlighting the continent’s vulnerability to international commodity shocks. We must invest in the technology, infrastructure and skills that will enable a continent with 60% of the world’s solar resources to provide sustainable and affordable energy for all, and 65% of the world's remaining uncultivated arable land to feed itself and others.
Second, we must prioritize the diversification of our economies and promote its strategic integration into regional and global value chains. This approach is not merely an economic strategy—it is a necessary adaptation to the global economic climate, enhancing our resilience and enabling us to respond more effectively to economic uncertainty and shocks. We need to mobilize resources at scale to fill strategic infrastructure, health and education gaps. It is only through such approaches that we can enhance our defences against global market fluctuations and build a more stable foundation for current and future growth.
Third, we must take steps to ensure that Africa’s abundant resources finance its growth. We must staunch the illegal outflow of Africa’s money. The continent loses some $90 billion to Illicit financial flows every year. The tens of billions in financial deposits by African pension funds, sovereign wealth funds and insurance companies must be made to work for the continent. African countries leave billions of dollars on the table in natural resource deals. We must come up with robust strategies to harness and utilize Africa’s financial wealth.
This year’s AEC will be remembered as a forward-leaning, solutions-oriented gathering of Africa’s brightest minds. A conference that provided the framework that will put great ideas and cutting-edge analysis to work for the African people. Putting countries back on track to attain the SDGs and articulating a pathway of hope and progress, despite multifaceted global uncertainty. As I mentioned earlier, Africa can lead with purpose and grace. We have an opportunity to demonstrate this truth over the next few days. I look forward to fruitful deliberations.
Thank you for your kind attention