Domesticating the Africa Development Bank’s (AFDB) ‘High Fives’ Agenda in Swaziland
By Terence Mabaso
Research has proven that trade is a key driver of economic growth and development. It remains the most reliable and productive way of supporting the efforts of poor countries to significantly reduce their heavy dependence on foreign aid and of integrating them into the global economy. In recent years, increased economic growth and development through trade has been achieved in countries like Brazil, China, India, Malaysia, South Korea, and South Africa, amongst others. Against this backdrop, the African Development Bank (AfDB) has come up with a new transformative agenda to drive sustainable and inclusive growth and development in African countries. This new agenda is known as the ‘High Fives’.
The ‘High Fives’ seek to: (i) Light up and power Africa; (ii) Feed Africa; (iii) Integrate Africa (iv); Industrialize Africa; and (v) and Improve the quality of life for the people of Africa. The ‘High Fives’ are intrinsically linked to the African Union’s Agenda 2063, the United Nations Sustainable Development Goals (SDGs), and other global commitments, including the resolutions of the Twenty First session of the Conference of the Parties on Climate Change (COP 21). The ‘High Fives’ framework, which spotlights the above mentioned development agendas by concentrating on a selected number of targets, is expected to run for a ten-year period, from 2015 to 2025.
Through the framework, the AfBD hopes to: (i) increase electricity in the continent to 160 GW by 2025; (ii) transform Africa into a net food exporter rather than being a net food importer, as it is currently the case; (iii) increase the industrial Gross Domestic Product (GDP) to US$1.72 trillion and drive for the tertiary sector development in order to reduce Africa’s over reliance on primary commodities and semi-processed goods; (iv) develop and deepen the continent’s financial systems and infrastructure including collateral registries, credit bureaus, credit ratings, and payment and settlement systems, all of which are necessary to foster financial stability and the successful operation of modern integrated financial markets; and (v) create 25 million jobs and train 32 million young people, benefiting 50 million Africans.
The AfDB has pledged to invest more than US$70 billion over the tenure of this project. This money is accessible through grants and soft loans, depending on the particulars of each project, the funding window used (whether ADB, ADF or Trust Funds) and the circumstances of country concerned.
How does the ‘High Fives’ framework fit into Swaziland’s development agenda and what opportunities await the Country? First, the Government of Swaziland is in a drive to increase power generation to ensure that by 2022, the Country has enough power to drive both household and business as well as industrial economic activities. The National Development Strategy (NDS) also views agriculture as holding the potential to drive inclusive and equitable growth. The creation of the Financial Services Regulation Authority (FSRA) amongst many other proposed developments in the financial sector bear testimony to the Government’s commitment to improving the financial sector which are all expected to lead to the creation of jobs locally. Yet these successes are masked by the high socioeconomic challenges faced by the majority of Swazis especially the 70% of the population residing in rural areas. The Country could adopt a similar development concept to drive speedy, transformative, sustainable, and inclusive growth and development through trade.
It is expected that the ‘High Fives’ framework may possibly facilitate the country’s access to finance, while meeting the national targets as articulated in the NDS. The ‘Swazi High Fives’ could be prioritised as follows (i) Light up and power Swaziland; (ii) Industrialise Swaziland; (iii) integrate Swaziland into the world economy; (iv) Improve the quality of life for the people of Swaziland; and (v) achieve food security for Swaziland.
In the case of Swaziland, the ‘High Fives’ may have to be linked to trade in order to facilitate ease of implementation, monitoring and evaluation. Trade can encourage and enhance productivity, technological advancements, investments, job creation, incomes, improve economic and consumer welfare, as well as increase government revenues, amongst other things, thereby increasing the country’s rate of inclusive growth and development.
Trade in agriculture could be the most suitable sector to implement the ‘High Fives’ mainly because (a) Swaziland has comparative advantage in agriculture; (b) agriculture is a growing sector; (c) agriculture can be implemented countrywide; and (d) monitoring and evaluation can easily be done in the agriculture sector given the backward and forward linkages that the sector has with other sectors of the economy.
Using the ‘High Fives’ to create a conducive environment for agricultural trade could increase the country’s benefits accruing from trade, allowing for speedy economic growth and development, as well as help the country to achieve first world development status by 2022, as per the national vision: Vision 2022. Using the ‘High Fives’ framework is in line with the country’s National Development Strategy (NDS), which aims to create a conducive environment for trade, increase production and diversify Swaziland’s exports. More importantly, Swaziland could be able to meet the United Nations’ Sustainable Development Goals (SDGs) targets since 9 out of the 17 SDGs are directly linked to trade, especially SDG Goal 8, 9 and 17. Additionally, through trade, Swaziland will be able to meet the Agenda 2063 Goals, as almost all of them are inherently linked to trade.
‘Light up and power Swaziland’ could lead to increased access to electricity countrywide which in turn will allow for increased production of goods and services. According to the Central Bank of Swaziland, in 2014/15 Swaziland imported 978 GWh of the 10741 GWh consumed in the country. As such, increasing local electricity production could reduce the high cost of electricity which often threatens production, especially for small, micro, and medium enterprises (SMMEs) in Swaziland.
‘Industrialise Swaziland’ could be aimed at increasing the production of merchandise goods, particularly in light-scale manufacturing, and encouraging value addition in goods as well as diversify the production base. Currently, Swaziland’s exports are mainly composed of primary products with very minimal value addition. At the same time, Swaziland is heavily reliant on imports, recording a trade deficit of E252.3 million in 2014, according to the Central Bank’s 2014/15 Annual Report.
Consequently, industrialising Swaziland could lead to an increase production, value addition in exports and diversify the export base in the process. ‘Industrialise’ Swaziland could create linkages between the agriculture sector, Swaziland’s most dominate sector, and manufacturing sector-which is a sector that needs to be improved.
‘Integrate Swaziland’ will enable the identification and establishment of new export markets for the country’s merchandise goods as well as improve trade facilitating activities. According to the Central Bank of Swaziland, during the 2014/15 financial year about 60% of Swaziland’s exports were destined to the other Southern African Customs Union (SACU) Member States. It is expected that integrating Swaziland into the African, and global economy could increase the country’s exports and thereby generating employment for the 28.1% of the population that is unemployed-as per the strict definition-and improving the quality of life for the people of Swaziland. Through employment creation and improved quality of life, the Swazi people are expected to be able to afford healthy and nutritious food, especially the 200,065 food deficit people as per the Millennium Development Goal (MDG) Report of 2015. In fact, it could be critical for Swaziland to achieve food security and thus be able feed all her people. Aligning the country’s aspirations of becoming a developed country by 2022, meeting the targets set by the United Nations and the Africa Union could be achieved through adopting the AfDBs framework to increase trade.
There are clear benefits that could accrue to the economy if the country were to adopt a simple and highly focused approach like the AfDB ‘High Fives’. Proper implementation of this framework will enable Swaziland to meet her development goals with ease and in less time than anticipated. Furthermore, linking national development strategies could place the Country in a better position to access the AfDB funding set aside to drive the ‘High Fives’ development agenda.
About the author: Terence Mabaso is a Research Fellow at the Swaziland Economic Policy Analysis and Research Centre (SEPARC). He conducts research on Trade Policy in Swaziland. Terence can be reached at firstname.lastname@example.org. He writes in his personal capacity.