Davos 2016 - Africa's Next Challenge

thank you for joining us for this CNBC Africa debate that will be broadcast live from the World Economic Forum in Davos, Switzerland, broadcasting live to 48 countries in sub-Saharan Africa over the

next

hour, we will focus on Africa's

next

challenge

, the continent hosts to nine of the 15 countries in the world. The fastest growing economies so far in the last 10 years productivity has fallen How will the fourth Industrial Revolution affect Africa? Please join me for what promises to be a lively debate Paul Kagami President of the Republic of Rwanda Hans Vestberg President and CEO Ericson worldwi Hal Mariam deselen the Prime Minister of Ethiopia, Akan Wumi Adash, President of the African Development Bank and shortly, Yi osen Bajo, Vice President of Nigeria, will join us, unfortunately you are a little late due to the delay of your plane, welcome to the joy of live streaming, gentlemen, thank you.

Thank you very much for joining me, speaking in such general terms, the fourth Industrial Revolution is about the convergence of man and machine. I borrow it here from the world economic forum. Digitalization is changing the way we do everything. Emerging technologies are developing faster than we can govern. but there is a key foundation for all this and it is technology. The African continent has an energy deficit. 645 million people do not have access to electricity on the African continent, representing just over half of the total population. It takes energy to fuel technology and without technology, you can't make those quantum leaps in education, healthcare, financial inclusion, agriculture.

I was very lucky to attend an event last night and I am now going to present it to President Adash of the African Development Bank, who revealed a vision for a new agreement. on energy for the African continent and we are going to begin to establish that vision and how exactly we are going to execute it, President Adash, well, thank you very much. I think we're talking about the fourth industrial resolution and the The first Revolution was simply a steam engine, whether it's the first, the second, the third, the fourth, 50 Industrial Revolution, they all start with something basic: you have to have electricity.

You say that electricity is like blood in your body. If you have blood, you leave it if you don't. If you don't have blood, you don't leave it, and what happens is that 137 137 years after Thomas Edison developed the light bulb, a simple light bulb, Africa is in the dark makes no sense, right? Today you were quoting the figure of approximately 645 million people without blood. access to electricity, 700 million additional people can't even cook with basic things right now, these are numbers that we know and we really think this is not acceptable and that's why I was very happy with President Kagami and Prime Minister H Mariam and the president. uh Alpa K from uh from guinea and our prime minister from the Ivory Coast joined us yesterday and Mr.

Kofana when we launched the New Deal on energy for Africa what exactly are we talking about, first and foremost we want to make sure that it is universal access to electricity by 2025, with electricity, then you can have industrialization, you can create jobs, small and medium-sized businesses can work, schools can function, vaccines can go to hospitals and be saved, you know, and then Africa will not be known for the darkness of your cities or the darkness of Rural areas everywhere will be bright, you know, that's critical to what we're talking about and I think the next part is really about industrialization and you were talking about that there, if you're going to have industrialization, take a look.

In our current situation in Africa, Africa represents 1.9% of total global manufacturing. We are here in Davos. Some of you might like skiing and stuff if you literally have a skateboard and you put it on this platform here and there. What is Africa's share in global manufacturing? You can skate on it. It has reduced from 3.4% in the 1990s to 0.9% today, so as we talk about the fourth Industrial Revolution, one thing we need to do is make sure that whatever Africa processes. produces what Africa processes, whether it's minerals, metals, agriculture, oil and gas, we may be at the bottom of the value chain, we have to get to the top of that value chain and process and add value, that's why that It is the kind of industrialization that will create jobs for us on the continent and I hope that we can talk about that today and what kind of skills we need to be able to definitely talk about skills and stem cells in stem skills in In particular, President Kagami, science, technology, engineering and mathematics, let me bring you here and President Adash has already pointed out to the heads of state who were in the room last night supporting the New Deal on energy for Africa, tell me about the political will, sir. behind this initiative, well, thank you, political will is really what is at stake here or in other policies, maybe the political will is there, but in the end it does not translate into the many things that we want to happen in Africa and beyond.

I think the political will is there, especially in recent times, government leaders, business leaders, aligning their language and speaking the same language with a sense of urgency that something must be done and I think we are finding that, even if it is too late o We are trying to do what we have known for a long time should happen, and that is that the government has its role to play. Businesses have their role to play and we need to come together to ensure that we are practical in doing things depending on how we organize ourselves as organisations.

Well, actually political will is the starting point, whether we realize the level of energy and the goals that we want to set so that energy can lead us to achieve many other things, such as manufacturing or growing industries in different sections. It is essential, but for that energy to be available, of course, for example, in Africa we have enormous potential in various energy sources, but it is not understandable why we are at the point where after so long knowing that energy It is so essential for other things to happen. So what we have to consider is the political will, the policy and the governance of it to make these things really happen, because all the ingredients are there, all the things that we have to take advantage of or even the skills to implement the things, all these things are there in Africa. so we probably need to look deeper into why this political will is not moving as fast as we need and I should say we need to move very fast, we are definitely going to talk about the speed of execution, Prime Minister, I am going to bring you here, the vision clearly states that all Africans must have access to electricity by 2025, what are the key

challenge

s that we have talked about?

Take that political will, create action, execute What other challenges do you think the Prime Minister sees in achieving that goal? Thank you. First of all, I believe that like any nation, Africa also needs to transform its economy and that economic transformation needs vibrant leadership, you know, in Africa and the lack of leadership is one of the main problems and a bottleneck that This limitation must be resolved and we as Africa's leaders must prove that this time we are up to the mark because Africa has a great opportunity and is now becoming a global survey for growth.

That opportunity must be taken advantage of and we need you to know how to solve this challenge. We also know that there are a number of challenges in terms of, you know, technology transfer skills and, you know, the lack of that capacity that needs to be improved and, again, countries like Rwanda, Ethiopia, we have challenges in logistics and all kinds of those things, but the main challenge again is the electrical infrastructure. Energy is the main challenge in Africa. It is also one of the challenges, of course, there is an infrastructure deficit in Africa in many ways, but the main challenge is I have a reliable and quality source of energy that makes industrialization possible in my country.

We have witnessed double-digit growth over the last 12 years and the need for electrical power is growing at 25-30%, which is beyond the growth rate. are doing in the country, so it means that we have to move very quickly in energy development if we want to move faster in development again. I appreciate what the world, the African Development Bank, has launched the president's vision, which is very essential and Africa has a huge potential for green renewable energy sources like in my country and we have to harness this potential right now and we need that the private sector enters and participates in the development of this potential in the country.

We have again in Africa. We need to also see that the issue of good governance needs to be addressed properly. You know this is important. We cannot hide that there is a problem of good governance in Africa. We should have zero tolerance against corruption and we should have a vibrant bureaucracy that helps the private sector. participate and we should also have political stability and macroeconomic stability where the private sector comes in and engages, so I think there are dubious challenges, but the two narratives that Africa is growing and that again Africa is a doomed continent They are wrong for us, Africa.

Africa is not a doomed continent. There are challenges, but it is a continent on the rise. We can address the challenges together with political commitment today that is emerging in Africa. Hans, the Prime Minister, refers to involving the private sector. Ericson has been on the continent for 120 years. you have about 3,000 people in 50, three countries out of 54 in Africa, tell me about the private sector involvement and your strong foray into operations on the African continent, first of all, I think there are a couple of things that are happening in the continent that are extremely important to have economic growth and sustainable development and one is, of course, universal access to electricity, which is extraordinarily important; the rest, of course, the technology that is spreading throughout the continent, I am referring to 80% at this moment. of Africans have a mobile phone, which is amazing how fast it has gone, but it is slow compared to what we will see in the next 5 years, so we will go from 70 million people in Africa with access to the Internet to 700 million in 2021. so think about those two assets that Africa now has, they are sitting on electricity to the extent possible and then of course the technological technology which of course is enabling the fourth technological revolution in Africa, start using Abed technology to transform the industry, but not only that I mean doing things that some of these heads of state are doing here, transforming society by starting to have digital healthcare, digital education, inclusion, because all that It will be important when we have economic growth in Africa and we simply need to have that, but this time we can combine it with sustained development and I think it is a unique opportunity that Africa has.

Right now, many of the African heads of state are talking about smart cities because we still lack the scale that we have. We don't have the scale yet, we still lack a little bit of competence to work with governments and really understand how to do it using these assets, but clearly 21st century infrastructure is coming rapidly to Africa based on private investments and that's what we know . It will continue and I think it is more important for us to work together, as President Kagami said that it is necessary to work on the borders here because we have one part of the solution, the heads of state and governments have another, and of course, this society overall has to be a part of this, that's what we see in the future and that's why I'm excited to be there for 120 years and I also have a plan for the next 120 years, for sure now I want to be a little more specific of the country. again to establish some context and we are looking at a situation where the first Prime Minister is referring to Africa Rising and the Africa Doom and Gloom scenario.

Now, President Kagami, we have sat on this platform for several years in a row and I think we are facing challenging times and potentially more challenging than when we sat here in 2015 in January 2015, obviously, Rwanda is seen as a beacon of hope, has been transformed since the genocide of 199, there is economic growth, there is development, there is digitalization, but sir, I need to ask you given the external environment and challenges, including the fall in commodity prices and the risk-free environment, What keeps you up at night? Well, there are challenges all over the world and they will continue to be there, they will always be there, but what keeps me going Tonight whatWhat we want is to try to do more and better than what we are already doing.

I think some of these challenges, although they come with opportunities, include a positive side around these problems, they make us Africans, at least in Rwanda, think more. and smarter at the same time, these challenges remind us that there are actually things we should be doing that are within our means that we are not doing, maybe we should stop rushing through everything and also remember to carry forward who we are. able to do I give you a simple example if you look at the level of African internal trade which is now very low, while we also know that if we Africans were to trade with each other across borders, we would make a lot of gains in the growth of our GDP.

Trade in Africa is still 12%, well if there is an increase it is one or 2%, you know, but we need much more than that, and these are things that we don't have to wait for and they are really not related . to some of the challenges that we are seeing outside that worry us and that are actually affecting us, so we could easily compensate for what we are losing from the outside by also focusing on what is very close to us and what we can do among ourselves African ladies and gentlemen, as I mentioned earlier the vice president of Nigeria is late, he is now in the room, please welcome y osen bass, vice president of Nigeria, to the stage to join our discussion.

Thank you very much for joining us, Mr. Vice President. I'm going to give you a moment to breathe while Go to the Prime Minister of Ethiopia and then to President Adash, let's talk again about the details of Ethiopia, since you alluded to a very high growth rate over the last decade, over 10% , which the government is targeting and correct me if I'm wrong, but above 11% for

2016

, but softer. Commodity prices are impacting the environment and already its GDP, agriculture's contribution to GDP is probably falling from around 40% to 35%. You still believe that you are going to achieve that aggressive growth target and is that a direct result of your growth and transformation program, which is the second growth and transformation program that you have brought back to Ethiopia.

I would say that fast, accelerated, broad-based, inclusive and shared growth is simply not an option for us because if we don't, I know the poverty rate is moving very fast and it will envelop you, so there will be a big problem. The history of development in Many Nations tells you that there should be something that pushes you very hard so that you can advance very quickly in Economic Development. and deliver so we put this in um and we tried for the last 12 years and we succeeded and we put it in again for the next five years to grow at a double digit rate.

We know that the global economy is not favoring us in some ways, but there is also a great opportunity for Ethiopia on the other side of economic development, emerging economies like China, India, there is no more competitiveness in leverage-intensive manufacturing, now it is the Africa's turn, so Ethiopia has that opportunity that we have. grab even though the price of the commodity, of course, the price of the commodity will always be volatile because you have to add values ​​to the commodity if you want to have a price that will help you move forward, so Ethiopia is now focusing on becoming a manufacturing center, especially in light manufacturing. uh where we can compete better in the global market this time, so again we have opportunities when there is some slack in some areas of the economy, you know, there are also opportunities in others and we need to take advantage of that opportunity as much as possible.

The opportunity that the global economy now provides to Ethiopia, that is why we want to attract more FDI from emerging economies and also from other global partners. We have witnessed this and we are working very hard to facilitate the development of industrial parks in Ethiopia with enormous vigor and companies like pbh and the big Asian companies and the prime minister I am going to intervene there and take it to president adash because no can we have a conversation about growth on the African continent without touching agriculture and the potential to industrialize the supply chain the value chain as it relates to agriculture, president adash, if you could also comment on what this will do for the women.

I'm not sure if he knows this, but half of the farmers in Africa are, in fact, women, sir, well, uh. First let me comment on what the two presidents and also the prime minister said. I think you are absolutely right when President Kagami talked about the need for Africa to diversify its economy. To me, we have all these economic headwinds that are there. but they exist because of the nature of the growth process, our growth process has been commodity based, therefore, but when you export raw commodities, you are subject to those low prices, their volatility and the contraction in China is a big problem and Also, the slow growth in Europe is also a big problem for us in Africa, but what we really need to do is agree on three things first.

I have never seen any country or region that has really developed by concentrating on Primary Raw Materials, people make money at the top of the chain, at the bottom of the chain, so what Africa has to do is diversify its mix of exports, but also make sure that everything you export, be it gold, be it diamond, be it copper. It's aluminum, whatever it is oil and gas, whatever it is, we have to process it and be at the top of the global value chains, that is the first and second thing we have to do and President Kagam mentioned that actually is to focus much more on regional trade now, if we take the continental free trade area that we have today, we know that in Africa, southern Africa, we have the East African community and all that, it is a trillion dollars in total, so yes we are able to open most of The exposure to global volatilities that we have will decrease.

Countries that are actually much more focused on regional trade are less likely to face many of those volatilities. The third thing that I think is absolutely very critical is agriculture, which you mentioned today. Africa has 65% of the global amount of arable land left in the world to feed us all so well. I don't plan to be Al Alive by 2063 or whatever it is in 2070, but at least there will be approximately 9 billion people who have to feed themselves by 2050 and they don't smoke gas, they don't drink oil, you know, they eat food in Africa has the ability to do it, so we must unlock the potential or AG, these presidents are doing that and so is the vice president. of Nigeria with a new government there, but in trying to do that, the question we have to ask ourselves is what kind of agriculture, agriculture is not a way of life, it is not a social sector, it is a commercial right and therefore , we have to ensure that Today, we do a commodity-based agri-food industrialization of the continent.

Civo Ghana Nigeria Cameroon produces 75% of the world's cocoa supply, the size of chocolate. The market is 100 billion a year, but Africa represents only 2% of that right, so we have to establish We Created Agro Allied Industries at home that process everything we have ever had into high value commodities. That is the way to make a lot of money and talk about the issue of women. I am very passionate about women's issues in Africa. See if you support women. Farmers with access to technology, access to finance, link them to markets, can do wonders. All these presidents are doing great things in that and what we want to do as the African Development Bank is announce that in a bank, we are going to provide um, a $300 million facility um that will allow us to direct the financial institutions to learn more to the women and that will allow us to leverage three billion dollars for women farmers and women-owned businesses uh in Africa, we have to unlock that potential of women across the African continent and one last point that I think I'm going to highlight is the fact that that you know what is political, what is critical, you know it yesterday, when we had the New Deal on energy and we had this President and everyone was there we all agree on one thing, whether it be agriculture, whether it be me, I don't care, whatever it is, without energy, we can't solve it, that political will is fundamental and by that I mean that we all agree. that Africa is tired of being in the dark, also tired of having discussions about profit, we've been having that for years and years, but having that discussion about profit in the dark because if you don't have electricity, you can't fix it. any of those issues and I'm going to take that opportunity to update the vice president, so a little bit of context that we talked about at the beginning of this debate on the African Energy New Deal, which was announced last night.

Then we got into a little context about Rwanda and Ethiopia and obviously also chatted about the agricultural context. We've been waiting for you sir to get a little update. The Nigerian economy is now back in the context of President Bhari recently presenting his

2016

budget based on an oil price of $38 a barrel. We know that the news headlines here at the World Economic Forum in Davos have focused on the oil price crash that is happening now. below $30 a barrel and telling how that affects Nigeria. Well, first let me apologize for delaying you. The truth is that there is no way not to be affected by the fall in the price of oil.

I mean, we had initially thought it was $38. Conservative enough, uh, in planning the budget, but that's gone, as you pointed out below, uh 30, but for us there's also a silver lining because it means we're not paying any subsidies, it would freeze something on the order of about 5 billion. of dollars. which was a subsidy cost so in terms of the budget I mean we are still working on the numbers but low oil prices also mean there is some upside there but overall we still have to think in terms of funding the budget , you know, and uh. We have about 2.2 trillion, something on the order of about...

I think that would come down to about 4 billion US deficit that has to be financed and, with the low prices, obviously we're going to have some challenges with that, but We are looking at internal resource mobilization, we are looking at internal revenue, especially VAT, expanding coverage for VAT collection and also, um, Customs being more efficient with customs and general governance issues, managing everything the process of uh. government spending more closely and with much more transparency, so we think that with proper governance around budget management and expenditure management we can do quite a bit, recently implemented some processes, such as putting all of the public officials and all the public servants on an electronic platform, which of course has also generated substantial savings.

We've also created the TSA, the Treasury Single Account, which means that all government revenue goes into, so to speak, a common fund. and uh the Ministry of Finance can, with an objective, take a look at all the government finances, see the expenses, see, see the receipts and also be able to monitor the expenses, some of them will save us substantial sums of money and I think that for us governance is key, you know, transparency is key and, if we are able to do those things, I think we might be able to get away with our less than $30, although we hope that some magic, some invisible hand changes the things. very soon I just want to check the time, we have 30 minutes left for our discussion.

I think we've established a lot of the context. Now we are going to accelerate the pace because we have a lot of ground to cover. cover when it comes to Africa's next challenge H I haven't been ignoring you sir, I come to you because of recent reports about Barkley's PLC withdrawing or reducing its exposure to emerging markets and one of those territories is sub-Saharan Africa. I'm going to ask you what you use to assess the level of risk in an economy and what would make you walk away. This goes to the pessimistic side of the conversation, Prime Minister you alluded to earlier, probably talking to the wrong person.

I think we have never left the competitive country that we entered, so I think in the long term there are always challenges in different countries. I think you are therefore stupid or absolutely, I mean, of course, if we are not allowed. we will be there we will not be there but we are long term we believe that we are working working with infrastructure we are working with Services we are trying to educate our employees I mean, for us it is very important to be in In all these countries we are working with scalable solutions throughout the world.

I say, I say let's sell the same onetechnology in New York than in Rwanda or Ethiopia. It's the same technology, so for us we can get all the different exposures of Africa's needs. building our technology for that is very important. I think when, of course, you understand the challenges that you have in raw material production volume and all that, it all goes back to what President Ki said, that's also a time when you need to think smarter. that it is always necessary to act in the face of a crisis. I think it's the best time to think about how you can work differently, how you can be more efficient.

I mean think about the tools that are coming to Africa and yes, I sound like a parot returning to ICT. but that is a natural thing across the continent, connectivity, mobility, broadband and cloud are coming to Africa in a big way, almost every African will almost have a smartphone within 5 years, think about what it can do as a government using that tool. To be able to obtain public educational information services in a much more efficient way than today, once you have energy, yes, energy, of course, today you do it without energy, but you do it with fuels which, of course, are diesel residual, etc.

Of course, it's much better to have electricity that is renewable and all that, so yes, we need to go hand in hand, but we don't need to wait for that to happen because it will still happen, the technology will come out. I'm going to remove it. of two private investors on the African continent in our audience Jeffrey White is the CEO of Agility uh, a large multinational logistics company that invests in the African continent or the African continent, rather, Jeffrey, please be very, very brief . I'm just giving Hans some support for being the Only private sector voice on the panel I feel very alone here Al is going to speak to Global Ambassador Helen High, who is sitting here in the front.

I would also like to know her opinion, but please be brief. I have to talk about skill development. We have a lot more ground to cover, Jeffrey, thank you very much, so we are investing across the continent in building physical distribution networks and, in fact, I think Africa's next challenge in relation to the fourth Industrial Revolution is probably mistaken. term becauseWhat I believe from an African perspective is that we have challenges in relation to power in relation to infrastructure and those are historical challenges that are being solved and worked on. In fact, I think the fourth Industrial Revolution provides a huge opportunity for Africa to really adopt and if you look at what happened with the cell phone market, Africa made a quantum leap from not having cell phones to using them to transform the economy to access the information, um responsibility, traceability and everything, and I think a lot of what I've heard.

In Davos in the last two days it's about the fourth Industrial Revolution and actually, if Africa embraces it, it will be another quantum leap that Africa can take to catch up with Helen. Can we receive your contribution? Jeffrey, would you mind passing the microphone to Helen? "I'm very happy to hear everyone say industrialization because China is moving from a labor-intensive economy to a capital-intensive economy. Currently, 85 million jobs are disappearing from China, so clearly there is a huge golden opportunity so that Africa can take advantage of that and I." I also heard that in 2025 there is this energy project, but how about the next five years?

Because all those jobs are moving out of China. Now, is Africa ready in the next five years to understand that? And that's a question really for the prime minister. from Ethiopia and another question I would like to raise is last November, during the China-Africa Collaboration Forum. China talked about five pillars of collaboration with Africa and 10 projects out of the 10, the main one is to help Africa build industrialization second. One is to help Africa build a modern agricultural industry. The third is to support Africa in finance. The fourth is infrastructure development and as a result of this, China has committed to giving 60 billion to Africa in the next three years.

What is your opinion? I mean, I would like to know the opinion of the president of Rwanda to talk about the relationship between China and Africa in the coming years, so I will take a pause on the relationship between China and Africa. I'm going to take it to digitalization, which again is the basis of the fourth industrial revolution. I am talking about a smart partnership with Erikson that started in March 2015. What benefits are you getting from smart Rwanda? This is about the transformative nature of technology that H has been alluding to, Mr. President. We are already seeing huge benefits and there will be more to come.

We work with Smart Rwanda and other technology companies. And we are seeing that the convergence of, for example, bringing together the side where business education and research and also finance us We, these things are coming together, so on the side of the startups or the existing EX companies that are come together, we have created a special economic zone where, for example, we have had these startups and existing companies coexisting and living side by side with the tenants. like Kanag Giman and now we are going to have the Institute of Theoretical Physics to help with that and then companies in this area like Ericson and others involved in this area will join in, as well as what we have also created in terms of the Innovation Fund. in fact, the African Development Bank also supports it, so when we put these three components together, they show that coming together and working together for the common interest that we are talking about in digital development and the associated benefits can happen and we just scale. that is already becoming obvious and again this is not an end in itself, you also need to make sure that this is linked to the understanding, involvement and participation of the general public, in which citizens need to participate.

All of this has to be oriented towards the growth we want, but also towards growth that is inclusive and associated with development. Mr. Vice President, I will bring you back here. I need more context on Nigeria given its importance to the region it is located in. the largest economy by GDP, has the largest population Bah Haram sa Safety and security has been a key concern, also corruption and how the new administration is addressing both issues. Can you use this form to give us an update? That front again, this comes back to our topic because it directly affects the foreign direct investment that has been declining in Nigeria, sir, well, as far as Boko Haram is concerned, what we know now is that militarily, bam, it has practically degraded almost completely, so in terms of military force or power, B Haram is practically non-existent, but of course you find suicide bombings and bombings of soft targets and that kind of activity, and that is what can really constitute the current threat that we are trying to eliminate. people are returning to their homes, to their farms, especially in areas like Mauri, which are the worst in areas like Boro State, which is in the northeast and which is possibly one of the worst areas of heat and, um, the other areas. ad dama and ybe are relatively stable, so we think that in terms of a real existential threat, bharam has degraded substantially and we don't consider it to be a major problem today, but of course we have to deal with the consequences of That, we have a large number of internally displaced people, a large number of people who have been displaced, the economy of that region, of course, has been practically devastated, so there are enormous human and social concerns, enormous economic concerns. that we have to deal with the issue of corruption, yes, well, the corruption that we are dealing with, uh and um, of course, we actually took office with that on that platform where we will deal with the issues of corruption and transparency in general and we will ensure that there is an appropriate solution.

Governance, however, the thing is that for us the right approach, I mean, apart from ensuring that there are consequences for corruption, the right approach really is to improve our systems across the board to ensure that we have systems that are transparent, systems that anyone can question. Anyone can audit systems that people can go through without bottlenecks because I'm really talking about rent seeking and corrupt behavior is actually largely instigated by systems that are opaque and not transparent, so our emphasis is in developing systems that work smoothly and that don't work. I don't have the number of bottlenecks that exist.

Can I say something about the issue of foreign direct investment because I think it is necessary to make it clear that Africa's economy is not collapsing, they are not collapsing at all. a very resilient region, do not forget that during the last 10 years Africa was growing by 5.8%, almost 6%, even now with the economic crisis we have, the slow growth in Europe and also the weakening of demand, to although the projection is that Africa will grow. grow around 4.4%, so Africa is still the place to invest now, Africa's government foreign direct investment is still close to $70 billion right now, Africa's governments are doing great things, the vice president just mentioned this and the president of Rwanda is doing Fantastic job of the prime minister of Ethiopia in general microeconomic management in fiscal management in times when the cost of doing business in Africa has gone down tremendously and you know, just take a look so that Africa remains, in fact, to Ellen's point, the place to really invest.

Now what we have to do is look for opportunities in the current situation. You are mentioning the case of China. Now China has excess industrial capacity right now, but if you look at industrial wages in China, we compare them to China. Industrial wages in Africa are about 1.25% of what they are now in China, so even as China internally seeks to build its economy through domestic consumption, right, and wants to outsource its industries, Africa is the place to what to go making in Ethiopia is fantastic for leather. I mean, we're here in Davos, it's very cold here in Davos, right, but everyone has to wear shoes.

Africa produces a lot of leather. We have a population of 1.1 billion people, which will be 2.5 billion. people, president, announcement, I have to bring it back, so I have 16 left. 16 minutes left. Let me finish that point that what I am trying to make is that Africa needs to develop industrial growth engines and those industrial growth engines are what are going to actually drive foreign direct investment that will mobilize domestic capital markets so that we can grow. and develop ourselves. You know that we cannot develop simply depending on others. You know we have to grow domestic capital markets.

We have to make sure we mobilize. our Sovereign World funds we have a trillion dollars in pension funds in Africa today we are talking about infrastructure, we have the resources to do it, they are actually available right here, can we spend the last 15 minutes talking about skills development and its importance? That's in this conversation because the Prime Minister and then H. Westberg I want them to come. It's one thing to have technology, so first we have the power, then we have the technology, but how to use it and what to do with it is incredibly important, so science.

Technology Engineering Mathematics Are we making the necessary investments? The Prime Minister followed B Hans. First of all, I am obliged to comment on the cooperation between China and Africa, which is the best cooperation I have ever seen as far as developing countries are concerned. I think that platform is. It is important to mention when it comes to any type of development, it means technological upgrading and accumulation, so we must have vibrant scientific technology from kindergarten to our university systems. That is very important for the future of Africa, so we have to work. on skills development as well as science, technology, mathematics and all those essentially well-designed subjects in Africa Hans, no, I think going back to foreign direct investment and education because they are very closely matched, of course, doing it for foreign investment direct is really There is a lot about transparent infrastructure, the country is functioning, but one thing that is enormously important for Africa, of course, is to have its own work, that we have the competition in Africa.

H we have Ethiopians working for eggs in Ethiopia, we have South Africans working for us and Of course that has to increase competition because infusing people from another continent who will be there for a while will not generate growth for fear that the technology will alsoreplace jobs. No I dont think so. That will cause efficiency and I think it is a mistake to think that the technological revolution will actually reduce jobs. It is the greatest opportunity for Africa that can be seized. We have heard before. That is the leap that can be made. Inclusion of the African continent can be achieved through the use of education. reduce the possibilities, but again it is also about obtaining the labor, the competence that is needed to do it in each and every one of the countries, which will make consumption grow towards domestic consumption so that money does not flow towards outside and that will be between countries and again technology. will play a vital role, so don't forget that leadership surrounds yourself with the right skills, President Kagami, you find yourself in an unpredictable environment.

We said before that technology is new, technology is being developed and it is difficult to govern that technology, are you getting the right people involved? people people to help you make the decisions that you will have to make in this somewhat explosive technological Industrial Revolution absolutely and in fact some of those who work very closely with Ericson as we said with ericon with Cisco with different these are the best advisors in terms of technology and technology producers, but let me add something and add to what H just said before people worry about technology replacing well-known people or displacing them from their jobs, why don't we also focus on making sure ? that we use technology for the right reasons, which is to increase productivity and if we did, then it would be EAS to see what technology is harmful, if anything, and then from there we can handle that as a different problem, but here the Lines become blurred, people talk. about technology taking away jobs and so on and we forget that actually in Africa for example we have a deficit of technology and how to use it for productivity and higher productivity, so how do we start worrying about another problem when we have to do it with first?

However, it all comes down to the education and skill development that we were talking about so that people can work alongside technology and can augment that technology. I see you want to come here, pres. I want to go in because I want to link the I point out that, um, technology, science, technology, engineering, mathematics and, with industrial development, there is no doubt that we need the right type of skills, but what we have in Africa is a total disconnect between the needs of the labor market and, actually, the kind of skills that people have at our University are giving labels to people, but they are not giving them the skills that the labor market needs, so we have to break that disconnect .

The second thing is that we at the African Development Bank are actually supporting the uh Kani melon. University in Rwanda, to train a new generation of Africans who are world class in terms of computer technologies and things like that that will really help Ericson and everyone else in Africa, but I mean we need to look at the development in Africa, in my opinion, what we now call skill improvement zones. What I want to say quickly is that we have to connect agriculture. I'm talking about clusters of industries where students come out of universities and are exposed to skill sets, whether it's in you know healthcare industry agriculture whatever engineer whatever Ericson and all that, so that they have the broad skill set. that the labor market needs and some of the Finance Ministers are here so that tax incentives can then be used to encourage companies to hire in these upskilling zones, that way you shorten Erin's search cost etc. ., you look at the labor market, you make entry into the labor market much easier and then you link skills and industrial development.

I think this is very fundamental, but one last point we must pay attention to is education. Let us not forget that by 2050 only 6% of Africans will have completed Taritarian education and by then the technologies will have disappeared, so what we have to do is accelerate education, primary education, training in science and technology, but making sure to accelerate access to tararia education. It all comes down to skills and don't forget that vocational training will be very crucial in this fourth Industrial Revolution Minister Adina I'm going to do something that I usually don't do now that we have eight minutes left in the broadcast I'm going to give each of the panelists, I'm going to splitting it into equal parts, you will get final comments, but I want you to mention whether the EXC of the 4th Industrial Revolution excites you or terrifies you in the African context, Mr.

Vice. President, I'm starting with you, well, it certainly excites me, it certainly excites me, because the truth is that for those of us that have a large number, those countries that have a large number like ours, we have absolutely no choice but to follow the technology path, I mean, look at e-learning, for example, and the use of electronic tablets to teach large numbers of people, the use of mobile phones to teach large numbers of people, we have millions of people to than teaching, there is absolutely no way to catch up with all the teaching requirements. within the time we have if we are going to depend on conventional teaching methods, we are now investigating all the possibilities, we are considering mobile phones as possibilities for teaching, we are considering training 500,000 teachers in the next few months how are we going to do that without technology It is absolutely impossible I think the truth is that you cannot there is absolutely no way to circumvent technology in any case it is the way to go it is the path of progress whatever the cost may be my opinion is that the advantage is absolutely amazing, the opportunities are great and I think we should really try it and make sure we're a big part of it, let's mix it up, no. protocol here, hun vestberg, you are the next sir.

I think it's amazing to have spent time with you over many years and here I am on a panel with three distinguished guests and heads of state and then I talk about technology, which I do every day. I think we are very far away. I think I see enthusiasm. I see opportunities. The challenge is, of course, to scale it to see that the solutions can be scaled and have a kind of possibility of collaboration between the public and the private. Ultimately, we need. Bold leaders who truly embrace the technological transformation happening on the continent to reach public service.

I think that's the most important thing. You are particularly excited, Prime Minister. Yes, it excites me because it gives us a great opportunity in front of us. to catch up, but it also terrifies me, if we continue as usual, we will be in a disastrous situation, you have a little more time, sir, don't you want to use it? Okay, here we go, president, okay. I have the president and President Kagami taking their time to resign, but I think I'm very excited, because to really take advantage of the fourth industrial revolution requires energy, so I think the energy revolution in Africa is fundamental to that and you know that in Over the next 5 years, the African Development Bank will allocate $1 billion to the energy sector and mobilize between $4 and $50 billion under this new energy deal for Africa and a transformative partnership.

The other is that we need a skills revolution in Africa. We need to make sure that we improve the skills and capabilities to actually use the right type of technologies and connect with many of these new industries at the end of the day. I think we also need an employment revolution because we have a population of young people. They are very restless, they are very smart, but they are looking for jobs, so as we make technology, as we industrialize, as we solve Africa's energy problem, not only will we be excited, but it will be the hundreds of millions. of young Africans who will be enthusiastic. because the opportunities have finally come for them and I believe our role as leaders in Africa is to unlock that opportunity, we have no choice, you want a little more time sir, I once again, I can move on, you can move on Go ahead, I'm going to give you, I have four minutes left, President Kagami, I'm waiting, I'm waiting for time for you, do you want to add one more, yes, but I just want to say that we need a public-private partnership in everything that we are talking about.

If you talk about these leaders, all they are doing is providing what I call private sector led industrialization enabled by the public sector, so creating an enabling environment for the private sector to invest, this will be very critical, the Governments will not be able to do everything, the private sector is fundamental in all these things that we are talking about and I think the last thing I want to say is that most of the time, when we talk about the opportunities for Africa, we are constantly looking outwards. we must look within the vice president mentioned domestic resource mobilization we have to mobilize our sovereign funds we have to mobilize our pension funds we have to make our capital market function well so that we can use our resources on our terms to develop on the trajectory that we Africa needs to continue and I think that's really where the opportunities are for us and I think I've used enough time pres kagami they've been very generous, you have three minutes left First of all, I think the fourth industrial industrial revolution is very exciting and the only thing What it means are the benefits that the ACR has to produce and consume, which I think we need to reverse, in our own case, in Africa we also need to start producing technologies instead of just being consumers, but that will happen if we continue to do some of the things that we are doing education education science technology mathematics management of that is something that we must continue to invest in and people for us in Africa we also do not need to simply be thinking about the fourth Industrial Revolution and forget that there is work that has not been completed in terms of even being at the right level with the third Industrial Revolution, so in my opinion, I have one step forward in the third Industrial Revolution and I have another step forward in the fourth Industrial Revolution and I have to make sure that I am doing a good job so that we can move forward .

The other point is that people are worried about the fourth Industrial Revolution in terms of job displacement and so on. Go ahead, artificial intelligence and 3D printing that can have harmful side effects, etc., but remember that we are the ones making these technologies. I think our intelligence, our own intelligence, must be smarter than real artificial intelligence, so let's use our own intelligence to make sure that we handle artificial intelligence and bring out the good side of it. I think that's my opinion gentlemen, it's been an absolute pleasure with that spiritual debate on Africa's next challenge, ladies and gentlemen, thank you very much, that's all from the CNBC Africa debate coming to You Live from the World Economic Forum which is currently in session in Davos.