SPECIAL FEATURE
MDB lending could provide an additional US$260 billion in annual financing by 2030
capital by 2030 to help bridge the immense SDG funding gap, especially given the current debt stress scenario (see page 22). The OPEC Fund Strategic Framework 2030 has prepared and positioned the institution well to respond to the calls for MDB reform. While the global environment may evolve under different
scenarios, the OPEC Fund retains an important role for driving progress on the 2030 Agenda in any scenario, either as a countercyclical financier or as a steward for higher growth and development. The OPEC Fund will remain responsive, impactful and agile to implement its mandate under any scenario.
LAYING THE FOUNDATIONS FOR POVERTY REDUCTION
Africa’s investment needs are enormous. But first of all it must foster its homegrown talent
A frica needs vast amounts of money. But to attract inflows the countries must improve their track record in providing an investor- friendly and secure environment. A major step towards this goal is the general improvement of living conditions. The escalating prices of essential commodities pose significant hurdles for many citizens as they strive to meet their everyday needs. In August 2023, Nigeria, Africa’s largest economy, saw its annual inflation rate rise to 25.8 percent, marking an 18-year high. In South Africa and Kenya fuel prices reached all-time highs, while in Ethiopia the cost of living almost tripled in the last year. The lack of economic progress affects the fight against poverty: From 1990 to 2018 the number of people living in extreme destitution in sub-Saharan Africa rose from 284 million to 433 million as population growth outpaced economic growth. The COVID-19 pandemic further exacerbated the crisis: Real GDP per person was lower in 2022 than 10 years earlier. Polls show that job creation is by far the most-cited priority of 18- to 35-year-olds. Africa has the youngest population in the world, with 70 percent of sub-Saharan Africa under the age of 30. The Mo Ibrahim Foundation, a British-Sudanese NGO, reckons that 18 million formal jobs must be created annually to absorb the numbers entering the labor force. The current figure is 3 million.
Almost half of 18- to 24-year-olds in 15 countries surveyed last year by the Africa Youth Survey said they were thinking of emigrating. A similar picture emerged from the latest Arab Youth Survey, published in August 2023, which found that 53 percent of people aged 18-24 in the eastern Mediterranean region and 48 percent of those in northern Africa wanted to move abroad. According to the United Nations, over 31 million Africans live outside the country of their birth, mostly within the African continent. The majority of migration is intra-regional or intra-African, especially in western and southern Africa, while about 25 percent of African migrants go to Europe. The main reasons for migration are inadequate living conditions, unemployment, famine, the effects of climate change and armed conflicts. Improving wealth often starts at the grassroots. In Ghana, the fairafric chocolate factory is aiming to secure a bigger share of the profits generated by chocolate sales – and keep those profits in the country.
valuable finished goods. Growing and harvesting cocoa is the lowest-paid link in the chocolate value chain. The result is that farmers receive a mere 5 or 6 percent of what a chocolate bar sells for in Europe or the USA. In contrast, fairafric – founded by the German social entrepreneur Hendrik Reimers – keeps the production process in the country that produces the raw materials. The goal is to create a profitable company and distribute the gains more equitably. By keeping manufacturing at home, fairafric supports other local businesses and helps to build infrastructure. It is a model that could be applied in other places. Many African countries have large reserves of natural resources. In Ghana, it’s cocoa. In Botswana, it’s diamonds. In Nigeria, it’s oil. All too often the African countries miss out on the part that generates the biggest returns.
The traditional pattern of trade since colonial days is African countries exporting cheap raw materials to richer countries that
use them to manufacture
Hendrik Reimers, founder of chocolate producer fairafric
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