President of the African Development Bank Akinwumi Adesina has expressed his full confidence in the leadership of South Africa to shift the trajectory of Eskom for the better.
Adesina was speaking on the side-lines of an investment roundtable in New York titled ‘A New Economic Vision for Africa’.
He called Nigeria and South Africa two critical powerhouses on the continent that have lagged in growth due to structural and other impediments that need reliable and stable electricity as a basis to grow.
With the bank a major investor in Eskom, Adesina says Eskom’s unbundling is a government decision.
He expressed confidence in the changes underway at the utility and for leadership of the country to pull a Tiger Woods-type turnaround moving forward.
“That’s the government’s decision; I can only speak from the perspective of lessons from other parts of the world. I think parts of the world also say monopolies are not efficient; monopolies also cost a lot of money. It’s difficult politically obviously because the issues that have to be done but I think what the government is doing is the right thing – unbundling the power generation, the power transmission from the power distribution. You get more efficient individual entities. At the end of the day, people talk about whether tariffs will go up – sometimes the higher tariffs are simply an indication of transfer of inefficiency costs on customers,” says Adesina.
Adesina called on the United States to up its investment game in Africa as he made the case for the world’s largest economy to look beyond traditional sectors on the continent.
He told the audience that Africa should no longer be seen as a museum of poverty, rather a continent that will be driving global growth going forward.
Two-way trade between Africa and the United States stood at $39-billion dollars in 2017.
Between Africa and China, that number rises to a whopping R204-billion dollars in 2018, with calls for a rethink in the world’s largest economy.
Adesina explained that there was a lot of scope for investment in regional connectivity infrastructure development, particularly to give support to the African Continental Free Trade Area; in ICT and international services.
But it’s agriculture that he argues should be a powerhouse sector throughout the continent.
The bank itself has invested R24-billion dollars over ten years in business-minded agriculture development.
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