KENYA/FILE: African Development Bank president, Donald Kaberuka urges investment in education and transport, warns of "oil curse"

Record ID: 362232

  • Title: KENYA/FILE: African Development Bank president, Donald Kaberuka urges investment in education and transport, warns of "oil curse"
  • Date: 4th April 2012
  • Summary: NAIROBI, KENYA (APRIL 03, 2012) (REUTERS) VARIOUS OF AFRICAN DEVELOPMENT BANK PRESIDENT, DONALD KABERUKA, TALKING TO REPORTER (SOUNDBITE) (English) DONALD KABERUKA, PRESIDENT OF THE AFRICAN DEVELOPMENT BANK SAYING: "I am happy to tell you that whether you look at the rate of capitalisation, liquidity, quality of supervision, quality of regulation I think the banking sec
  • Embargoed: 19th April 2012 13:00
  • Keywords:
  • Location: Nigeria, Kenya, Togo, Madagascar, South Sudan
  • City:
  • Country: Togo South Sudan Madagascar Nigeria Kenya
  • Topics: Business,International Relations,Economy,Politics
  • Reuters ID: LVA3G3R0192DTO0C1PADO1O01II0
  • Story Text: African banking and financial sectors, in particular, are doing very well, especially when compared to their counterparts in Europe, the head of the African Development Bank (AfDB) president said on Tuesday (April 3).
    Donald Kaberuka praised African economies for maintaining stable growth rates, despite the rough economic global climate.
    "I am happy to tell you that whether you look at the rate of capitalisation, liquidity, quality of supervision, quality of regulation I think the banking sector in Africa can say we showed the world how to manage banks; both in normal times and in crisis times," he said in an interview with Reuters.
    Fast economic growth rates on the continent in recent years have caused an explosion of demand for basic infrastructure like roads as well as reliable power supplies.
    African leaders say the continent has to invest a minimum of 92 billion US dollars in its infrastructure per year, in order to keep up with the demand.
    Kaberuka said he expected total infrastructure spending on the continent to rise from the $42 billion invested last year.
    "One to invest in those infrastructures which are critical for sustainability and I have especially in mind energy and transport. Bring down the cost of energy. Number two invest in the current population barrage. The so called demographic dividend to build sustainability for the future," he said.
    Kaberuka also warned that African nations joining the elite club of oil and gas producers should invest in education and roads while supporting traditional sectors to avoid falling into the "oil curse" trap.
    Ghana, Kenya, Mozambique, Tanzania and Uganda have all discovered oil and gas in recent years, thrusting them into a crossroad between following the likes of Botswana into prosperity or the likes of Nigeria into overdependence on oil.
    Kaberuka said governments should resist using windfall from oil and gas exports to pursue populist policies like sharply raising wages of workers in the public sector.
    Earnings from the resources should instead be channeled into sectors like education and the infrastructure in order to build a sustainable base for future development, he said.
    "If you get the hang of these two: education for the poor and especially their children and then allow small businesses, small enterprises, especially those owned by women and those close to agriculture that will be 60 percent of the problem resolved," said Kaberuka.
    "I think the excitement must be tempered must be tempered with the fact that these are inherited resources, this is an inherited wealth. You did nothing to create it. So use that window of this resource to create a base for a sustainable model of development for the future to investing in human capital and physical capital," he said.
    AfDB expects the continent to maintain an average growth rate of 6 percent this year, thanks to reforms in management of public finances, higher investment and the continent's own consumers.
    Growth on the continent has attracted investments in sectors like mining, telecoms and financial services from local and foreign firms.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2012. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register