Africa’s infrastructure has been identified as one of the key elements significant in fostering the continent’s development agenda. It is expected that the cost of infrastructure will continue to rise as many African states seek urban developments. As a result, Africa also stands at the brink of risking the outcomes of congested and expensive living standards in its cities, consequently inhibiting its attraction to investment. As African states grapple with these phenomenons, they must also keep sight of what is to be gained, if the influence of infrastructure in steering economic growth is anything to go by.
Can the delicate balance between modern finance policy and the development agenda be achieved? Strathmore Business School had the privilege of hosting Dr. Donald Kaberuka former President of the African Development Bank and Chair of Centum Investment, together with Sheila M’Mbijjewe, Deputy Governor at Central Bank of Kenya for the second episode of the Africa Matters series in a riveting conversation of Africa’s modern finance policy and its practicability in advancing the continent’s developmental agenda.
Offering the opening remarks to the discussion of the day, Dr. George Njenga, Dean Strathmore Business School, noted with great emphasis the importance of reflecting on the impact, while drafting development policies. Sharing his passion for societal impact, he made the following remarks, “Many African countries continue to languish in extreme poverty. As we deliberate on this particular element on the role of finance policy in influencing development, we must take cognizant of the current context of our people. Are the adopted policies of good will to enriching the dignity and the living standards of our people?”
Discussing the challenges and opportunities presented in Africa’s financial landscape, Ms. M’Mbijjewe gave an overview of how Africa’s financial scene continues to witness drastic changes and the implications thereof as Africa transitions into a new era. “In order for the financial sector to be solid and stable, we need to have clear structures. The global vision for Africa has been witnessed in its increased protection for good trade relations. However, this is not deprived of challenges. The global stage continues to face numerous uncertainties, and so does Africa. Terrorism and insecurity, bulging youth unemployment demography and cyber crimes are just but a few of the many hurdles that continue to have great repercussions on the financial sphere.”
Ms. M’Mbijjewe identified Kenya as one of the countries in Africa with the most vigorous financial sectors. In her remarks she stated that the financial sector in Kenya is increasingly growing in complexity, an element made possible through strong capital and financial markets, and the presence of financial institutions which have different and independent regulators.“Financial instruments are changing from the traditional bonds and bills to digital investment portals services. 90% of all transactions in Kenya are done through mobile money. This has boosted our financial inclusion to a 75% reach. Currently, there are 22 local domestic banks with 5 holding up 70% of the market share. Sacco’s in Kenya are also gaining significant popularity. 60% of the Sacco assets in Africa are in Kenya.
Policy structures which address financial inclusion and integrity (the ability to follow process and to acknowledge forbearance.) will be the elements that uplift Kenya and Africa’s development agenda,”
Donald Kaberuka’s vast experience delved deeper into Africa’s ability to attract investment opportunities, stating that the conditions favorable for doing business in Africa are still negligible and hence unable to attract and breed good investment projects. “Africa is still unable to attract investment opportunities that will fund development agendas like infrastructure. We need to make revenue collecting systems more efficient by reducing corruption and capital flaws. Narrow development priorities have led to an unfocused attention to infrastructure.” In addition, he noted that, “Big development projects that do require large resources are difficult to manage, and are also difficult to attract funding. Policy shifts have sometimes delayed projects from taking off and from eliciting the required and expected outcomes. Policy shifts must be keenly looked into before being adopted.”
Concluding the discussion, Kaberuka noted that although Africa continues to record a stable and positive growth trajectory, this is yet to illicit the level of growth Africa requires to realizing its full potential. “Africa’s growth is not looking too attractive as it should be. This is because Africa’s two largest economies; Nigeria and South Africa have not been doing too well. A 7% growth rate may seem admirable, but this is hardly significant. We need to record an estimate that exceeds the 9 – 10% growth rate mark. The importance of a conducive and supporting infrastructure that fosters that level of growth and development is hence inevitable.
About The Africa Matters Series
The Africa Matters Series is an initiative by the Alumni Executive Committee comprising of Strathmore Business School’s vibrant alumni body; with an objective to build and nurture thought leadership that enhances societal impact across Africa and the Globe.
Through an ever-endearing devotion to continuous learning, The Africa Matters Series initiative takes recognition of the impact of knowledge in transforming minds, worldviews and shaping a better future. Having this in mind, the series is calibrated to a three-tire thematic structure which addresses Africa’s pressing concerns for transformational leadership in steering its growth and supporting policies that foster sustainability.
The last episode of the Africa Matters Series will take place on September 29th – October 1st 2017 at Great Rift Valley Lodge and Golf Resort, Naivasha.