Prof. Kevin Chika Urama, FAAS

Senior DirectorAfrican Development Institute (ADI)

African Development Bank, Global Community of Practice Seminar, 15 & 16 March 2021

“Strengthening individual, organizational, and institutional capacity for inclusive growth in Africa –without which the global sustainable development goals and Africa’s Agenda 2063 will not be achieved”

Strengthening Institutional Capacity for Inclusive Development in Post COVID-19 Africa

Presentation Outline

• Introduction: Why Knowledge and Institutional Capacity?

• Institutional Capacity in Africa before COVID-19

• Implications for Inclusive Development in Post-COVOD-19 Africa

• About the Seminar?

• Concluding Question

Why Focus on Knowledge Systems and Institutional Capacity?

“Africa doesn't need strongmen; it needs strong institutions” Obama

What Institutions & Organizations To Focus on?

• “Capacity” refers to the availability of resources and the efficiency and effectiveness with which individuals, organizations, or institutions deploy these resources to identify and pursue their development goals on a sustainable basis.

• Institutions are the formal or informal rules of the game of a society.

– Organizations are the actors or players – groups of individuals bound by a common purpose to achieve defined objectives within the rules of the game.

– Individuals are the key actors and beneficiaries from both institutional and organizational systems of a society.

• Knowledge: facts, information, and skills acquired through experience or education; the theoretical or practical understanding of a subject.

Key FunctionsInstitutions shape the performance of the economies by their effect on the costs of exchange and production:

Knowledge, Institutions and Organizations are the “soft infrastructures” that shape the way economies cope with market failures and exogenous shocks such as COVID-19. The Pareto-efficient outcome is only one of many possible outcomes achievable in perfect market conditions under certain institutional arrangements.

Adapted from Boliari, N (2007)

Key Components of the Soft Infrastructure

Supreme Audit & Accountability

Systems

Integration, collaboration, and

coordination to achieve coherence

& economies of scaleGovernance

structures, systems, and operations

Business Development and Industrialization

Institutional Capacity in Africa Before CoVID-19

2.80

2.90

3.00

3.10

3.20

3.30

3.40

3.50

3.60

3.70

3.80

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: AfDB CPIA Website

CPIA Components 2004 - 2018

Quality of Public AdministrationEconomic managememntQuality of Budgetary and Financial ManagementEfficiency of Revenue Mobilization

Institutional Capacity and Government Effectiveness in Africa Before COVID-19

0

0.5

1

1.5

2

2.5

3

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

GERD by SDG Regions, 1996 - 2016

World

Landlocked Developing Countries

Least Developed Countries

Small Island Developing States

Africa (Sub-Saharan)

Western Asia and Northern Africa

Africa (Northern)

Asia (Western)

Asia (Central and Southern)

Asia (Central)

Asia (Southern)

Asia (Eastern and South-eastern)

Asia (Eastern)

Asia (South-eastern)

Latin America and the Caribbean

Oceania

Oceania (Australia/New Zealand)

Northern America and Europe

Europe

Northern America

Capacity in Research for Development

Worl

d s

har

es o

f G

DP

, GE

RD

, res

earc

her

s an

d

pu

bli

cati

ons

for

the

G20

, 200

9 an

d 2

013

(%)

Low investments in knowledge and institutional capacity underpins the capacity underpin almost every aspects of human existence.

Investments in Institutional Capacity and GDP Growth are closely linked

Source: UNESCO Science Report, 2015

Implications for Inclusive Development in Africa

-

5.00

10.00

15.00

20.00

25.00

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Tri

llio

ns

Middle East & North Africa

North America

Sub-Saharan Africa

East Asia & Pacific

European Union

Central Europe and the Baltics

Caribbean small states

Latin America & Caribbean

South Asia

Gross Domestic Product by Regions, 1995 – 2018 (Constant US$ 2010)

1. Africa’s GDP is among the lowest in the world

-9

-7.9

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Fiscal Balance - Pre-COVID-19 Fiscal Balance - COVID-19

Fiscal Balance in Africa 1980 - 2021

3. Low fiscal capacity to adapt to exogenous shocks such as COVID-19

0

1000

2000

3000

4000

5000

6000

7000

8000

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Kg

per

Hec

tare

Cereal Yield

East Asia & Pacific

European Union

Latin America &CaribbeanMiddle East & NorthAfricaNorth America

South Asia

Sub-Saharan Africa

Source: World Bank May 2020

Total factor productivity in agriculture is lowest in Africa than all other regions of the world

3. Low factor productivity in in key sectors

Cocoa Norminal Prices

Year (1960-2017)

Price

s

1960 1970 1980 1990 2000 2010

12

34

COTE D IVOIRE GDP Growth(Annual %)

YEARS (1961-2018)GDP

1960 1970 1980 1990 2000 2010 2020

-10

-50

510

15

Norminal, Cocoa,Coffee,Cotton, Tea Prices(1960-2017)

YEARS

Coco

a,C

offe

e,C

otto

n,T

ea P

rice

(Dollars

)

1960 1970 1980 1990 2000 2010

12

34

REAL COCOA,COFFEE,COTTON,TEA PRICES (1960-2017)

YEARS

Cocoa,C

offee,C

otton,T

ea p

rice (D

ollars

)

1960 1970 1980 1990 2000 2010

12

34

56

78

Key for lower panel only: Cocoa (Black), Coffee (Red), Cotton (Green), Tea (Blue).

32.29

0

20

40

60

80

100

120

140

160

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

M7

M1

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20192020

Crude Oil Price 2006 - 2020 (US$)

4. Reliance on commodity exports with little value addition creates low returns to and high vulnerability to external shocks

Low value added by sector (% of GDP)

0

10

20

30

40

50

60

1990-1999 2000-2009 2010-2018

Agriculture, value added Industry, value added

Services , value added

GDP Per Capita 2019 (261-114704)CPI, 2019 (Range: 9 - 87)

5. African countries rank poorly in Corruption Perception Index, 2019 and GDP per Capita

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Territorial Emissions, UNFCC Data – Values in MtC/year. Own Analyses

OECD Africa Asia Europe North America

Historical Territorial CO2 Emissions 1959 - 2014

7. And Africa remain more vulnerable to the external global shocks even when it contributes little due to low capacity to adapt

The Conundrum

Gross National Incomes and School Enrolment Rates, 2007

1. The relative cost of higher education per student trained as a proportion of Gross National Income (GNI) is higher in Africa than in the developed countries, including the USA and Europe.

2. African governments are the primary source of funding for higher education in Africa. Limited fiscal space men that other development challenges: poverty alleviation, climate change adaptation, water insecurity, peace, etc., may be prioritized

1. African University rely Mostly on Government Funding and Contribute GDP Growth

0

10

20

30

40

50

60

70

80

90

100

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

MIL

LIO

NS

Linear (Total income) Linear (Total expenditures)

Funding Gap in One Key Anchor Institution (US$)

Source: African Development Institute, Capacity Development Needs Assessment, 2018

Key Challenges:

1. Donor dependency and unstable funding for program implementation.

2. supply-driven agenda setting, 3. Low productivity and variability in the quality and

relevance of work produced.4. Low utilization of local capacity and low demand for

technical services by African experts in the RMCs.5. Lack of appropriate infrastructure for capacity

development and research6. High staff turnover and brain drain due to lack of

resource to offer competitive salaries and benefits, 7. Inability to cope with the rapid technological

transitions in their respective sectors, 8. Non-conducive environment and incentives to quality

research and impacts.

2. Lack of continuity and longevity in Africa-led knowledge & capacity development institutions

3. Knowledge Dependence

Solving the Conundrum

• The Sussex Manifesto, 1979: calls for the rejection of the notion that existing international division of labour in science and technology, which has engendered self doubt, the associated knowledge dependence and binomial linear relationships between the “Global North” and the “Global South” in ways that hinder innovation in Africa by in Africa by Africans.

• In 2008, former Liberian President, H.E Ellen Johnson Sirleaf reminded delegates at the Science in Africa Summit that: “No country on earth has developed without deploying, harnessing and utilizing S&T, whether through technology transfer or homegrown solutions”.

• President Kagame on the other hand, stressed that: “We in Africa must either begin to build our scientific and technological training capabilities or remain an impoverished appendage to the global economy” The New African, vol. 494, p. 78.

• There is one thing developing countries cannot do without: home grown capacity in scientific research and technological know-how. Increasingly a nation’s wealth will depend on the knowledge it accrues and how it applies it, rather than the resources it controls. The “have” and the “have-nots” will be synonymous with the “knows” and the “know-nots”. Serageldin. 2008.

• These statements are anchored in decades of attempts by the African governments to turn around its development fortunes through efforts to mainstream STI in Africa’s development policies and actions. Examples include the Monrovia Strategy (1979), the Lagos Plan of Action,(1980), the Abuja treaty (1991), and most recently, the adoption of Africa’s science and Technology Consolidated Plan of Action (CPA) by the African Union in January 2007.

• 2010: African Manifesto for Science, Technology and Innovation called for accelerated investments in STI in Africa. Urama et al. (2010). African Manifesto for Science Technology and Innovation African Technology Policy Studies Network (ATPS), Nairobi, Kenya. http://www.scienzecittadinanza.org/public/set-dev_africa20manifesto.pdf

• The African Development Bank Group recognized that “No matter the amount of financial resources mobilized for Africa’s development, such funds would yield only limited or modest results if countries do not have the human, organizational and institutional capacity to absorb and effectively utilize them”, AfDB, 2010.

• The African Development Bank Group recognized that “weak institutions and capacity to formulate and implement policies, strategies, programmes and projects remain a persistent challenge in RMCs across the continent, particularly in ADF countries and in RECs” African Development Bank Group, 7th General Capital Increase (GCI-VII) 2019, para. 99, ADF15 paper, para 212.

• The African Development Bank is stepping up its efforts to help overcome this constraint.

The 6th G-CoP Seminar

• Strategic Options for Strengthening Africa’s Knowledge Institutions to effectively support Inclusive development transitions in Africa: what needs to be done differently?

• Strategic Options for Mobilizing Resources for Strengthening Institutional Capacity for inclusive development in post-COVID-19 Africa; and

• Organizational and Operational Arrangements for a Continental Knowledge and Capacity Development Fund (KCDF) for Africa.

Seminar Goals: Critically examine

Theme 1: Strengthening Knowledge Institutions

1. Strategies to achieve and retain a critical mass of endogenous capacity (individual skills, organizational and institutional systems) - competencies and experiences, organizational structures, systems, and information resources for transformative change in Africa?

2. How investments in knowledge, institutional capacity, technology and innovations can be structured to effectively contribute to socio-economic development and improved wellbeing in Africa?

3. How to catalyze on the unprecedented challenges of COVID-19 as an opportunity to rethink strategies for strengthening institutional capacity in African-led Institutions?

4. New frameworks for strengthening knowledge and institutional capacity and its effectiveness at the institutional, national, and regional levels? What are the implementable strategic programs and policy priorities to make a difference?

1. Continental strategies, policies and frameworks for mobilizing adequate resources at scale for enhancing Africa’s knowledge systems and institutional capacity for inclusive development post-COVID-19?

2. Role of African the African Public and Private Sector: How Africa can mobilize domestic (public and private) resources in support of African knowledge systems and institutional capacity for inclusive development in Africa. What are the opportunities, structures, organizational systems, and incentives needed at national, regional and continental scales?

3. Role of International Development Partners (Multi-lateral and bilateral), Philanthropies, and Private Sector: What are the opportunities, structures, organizational systems, and incentives needed for transformative change in cost efficiency and development effectiveness of international support to African knowledge and capacity development institutions?

4. What specific action can specific stakeholders take to address low confidence/trust in African institutions? What can African institutions themselves do? What can African governments, private sector and philanthropists, civil society do? What can development partners and funders do?

Theme 2: Resource Mobilization

1. Organizational arrangements to support resource mobilization at scale and effective operation of a continental Knowledge for Capacity Development Fund (KCDF) for Africa?

2. Organizational structures to accelerate the implementation of Africa’s continental development strategies: AfDB’s High-5s and AUC’s Agenda 2063, ACFTA; regional and national development agendas, etc.?

3. Types of institutional actors and key functions the KCDF could such a fund support?

– Strengthening governance structures, systems, and operations, – Skills development, – Knowledge systems, research, and innovation- ways learning by doing inclusive development. – International collaboration, regional integration, and coherence– Core funding for institution building

4. Hosting Arrangements: How well positioned is the African development Bank Group to convene and host the proposed Knowledge and Capacity Development Fund for Africa? What are the strengths, weaknesses, opportunities, threats to hosting such a fund at the AfDB and how can these be mitigated?

5. Structures and policies to Implement the fund: What will be the role of Stakeholders: Donors, Continental Organizations, National Governments, the Diaspora, Private Sector, NGOs, etc.?

Theme 3: Organizational and Operational Arrangement

Key Risks to Watch

RISKS TO WATCH

Complexity

Risk Perception, Mitigation

and Guarantees

Bureaucracy

Informality

Complexity – institutions, capacity, African development, knowledge systems mean different things to different stakeholders

Bureaucracy – existing formal and informal rules and cultures for managing organizations create inertia for transformative change.

Informality – unwritten rules of the game and cultural traits passed from generation-to-generation slow transformative change

Path dependency - Individuals and organizations are used to existing institutional structures and resist changes.

Risk Perception, Mitigation and Guarantees: uncertainty and information asymmetry can lead to innovation nostalgia.

Knowledge Dependence: impeding knowledge and institutional capacity for socio-technological transitions to inclusive development in Africa

Knowledge Dependence

Path dependency

Knowledge Dependence

“Africa tends to be a child with many parents, very many parents. And unfortunately, most of the parents want their child to learn how to walk their way… and most of the parents do not want to hear and listen to the child when the child is asking to walk their [own] way. Our researchers, our PhDs, our patents, our ideas, we are a child, and nobody wants to allow us to walk our way. If you unpack that analogy, there’s quite a bit in there.” CGD, 2019, p. 10 – 11.

Source: Urama et al. (2010). African Manifesto for Science Technology and Innovation African Technology Policy Studies Network

(ATPS), Nairobi, Kenya. http://www.scienzecittadinanza.org/public/set-dev_africa20manifesto.pdf

YES, TOGETHER WE CAN.

“ Our journey has never been one of shortcuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work or seek only the pleasure of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things,…, who have carried us up the long, rugged path towards prosperity and freedom” - H.E President Barack Obama, Inaugural Address, 20 January 2009.

Can We do this?

The New Normal

The African Development Institute’s, AfDB Virtual Capacity Development Academy (VCDA) –transforming technical assistance, training and policy dialogue for inclusive development in Africa.

36

Thank You

African Development Institute“Strengthening capacity for inclusive growth in Africa – without which the global

sustainable development goals and Africa’s Agenda 2063 will not be achieved”

Contact: e-mails: Africandevelopmentinstitute@afdb.org

k.urama@afdb.org

© African Development Institute, 2020

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