The President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, announced at the 2023 Africa Investment Forum (AIF) Market Place in Marrakesh, Morocco, that the bank has provided $1.5 billion to support the export of value-added agricultural products through the Special Agro-Industrial Processing Zones (SAPZs) initiative.

The announcement was made during the inauguration of the Alliance for SAPZs.

Adesina emphasized the importance of Africa moving away from the export of raw agricultural commodities and focusing on exporting value-added products. He stated that SAPZs play a crucial role in providing the necessary infrastructure to support agro-industrial development in Africa.

“Africa must end the export of raw agricultural commodities. We must recognize that the fastest way to poverty is via the export of raw commodities, while the highway to wealth is from the export of value-added products,” he said.

“And that is why SAPZs are important. They provide critical infrastructure to support agro-industrial development in Africa.”

The partners in the Alliance for SAPZs include the Islamic Development Bank, the International Fund for Agricultural Development, the Arab Bank for Economic Development, the European Union, and the Korean Export-Import Bank. The collective effort of these partners has mobilized $1.5 billion in support of establishing 25 SAPZs in 11 African countries.

To further expand SAPZs across the continent and leverage the Africa Continental Free Trade Area (AfCFTA), Adesina emphasized the need for countries to scale up resources, partnerships, and alliances. He expressed excitement about the growing number of partners joining forces to rapidly scale up SAPZs across Africa.

The Alliance aims to mobilize at least $2 billion in financing and investment commitments from its members and partners over the next five years. Achieving this goal will lead to an additional 15 to 20 SAPZ projects in various countries across the continent.

“The Alliance will raise funds through various investment windows for project preparation, project development and construction, and financing for tenant companies,” Adeshina said.

The AfDB president announced last week at the Norman E. Borlaug Dialogue organized by the World Food Prize Foundation, that Africa’s food and agricultural industry is projected to be worth an estimated $1 trillion by 2030. This underscores the AfDB’s push to bolster food production and export in the continent.

During the inauguration of the SAPZs, partners pledged an additional commitment of about $3 billion to support the initiative. The SAPZs’ initiative is seen as a strategic move to enhance agricultural value chains, promote industrialization, and contribute to economic development in Africa.

Tackling the challenges

Despite efforts by the AfDB and stakeholders to promote the SAPZs initiative, several challenges have stood in the way. Dr. Benedict Oramah, the President of the African Export-Import Bank (Afreximbank), highlighted political instability in Africa as a significant obstacle to funding major projects, including those related to agro-industrial development. He emphasized the need for the development of comprehensive project financing ideas and proposals for the continent.

Oramah also pointed out that budgetary constraints are a primary obstacle to facilitating financing and project implementation. He stressed the importance of resource allocation and suggested the establishment of continental regulations that countries should respect. Additionally, he emphasized the significance of justice for initiatives beneficial for business.

While there is a commitment from partners to support the SAPZs initiative with an additional pledge of about $3 billion, addressing political instability and budgetary constraints remains crucial for the successful implementation of projects aimed at promoting agricultural value chains and industrialization in Africa.

In a move that underscores growing concerns about the global economic and political landscape, Moody’s Investors Service announced on Friday that it has downgraded its outlook on the U.S. government’s debt from “stable” to “negative.”

This decision was attributed to the combination of escalating interest rates and heightened political polarization within Congress.

While Moody’s retained its top triple-A credit rating on U.S. government debt, it is the last of the three major credit rating agencies to do so. Fitch Ratings had previously lowered its rating to AA+ from AAA in August, and Standard & Poor’s downgraded the U.S. in 2011. The shift to a negative outlook, however, raises the risk that Moody’s could eventually strip its triple-A rating from the U.S.

The implications of a lower credit rating are substantial. A reduced rating could lead to increased interest rates on Treasury bills and notes, potentially impacting taxpayers. The yield on the 10-year Treasury has surged from about 3.9% to 4.6% since July, a sharp increase that some market analysts attribute in part to the August Fitch downgrade.

“In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues, Moody’s expects that the U.S.’s fiscal deficits will remain very large, significantly weakening debt affordability,” Moody’s stated in a release.

The Biden administration pushed back against Moody’s decision, pointing at the strength of the American economy.

“While the statement by Moody’s maintains the United States’ Aaa rating, we disagree with the shift to a negative outlook,” Deputy Treasury Secretary Wally Adeyemo said. “The American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset.”

However, Moody’s cited concerns about congressional dysfunction as one of the reasons for the downgrade in outlook. As lawmakers left Washington for the weekend, there was no clear plan to avoid a potential government shutdown by Nov. 17.

Moody’s highlighted recent events, including debt limit brinkmanship and political turmoil, as indicators of the deepening political divisions in the U.S.

“Recently, multiple events have illustrated the depth of political divisions in the U.S.: Renewed debt limit brinkmanship, the first ouster of a House Speaker in U.S. history, prolonged inability of Congress to select a new House Speaker, and increased threats of another partial government shutdown,” Moody’s said.

The federal government’s budget deficit surged to $1.7 trillion in the budget year that ended on Sept. 30, up from $1.38 trillion the previous year. Analysts warn that with interest rates on the rise, interest costs on the national debt could consume a growing share of tax revenue.

Even though the move by Moody’s does not automatically downgrade America’s creditworthiness, it heightens the possibility. The prospect of a U.S. downgrade could have ripple effects, potentially impacting Americans’ investment portfolios, making borrowing more expensive, and increasing the cost for the government to service its debts.

At Tekedia Institute, my lectures have been focusing on Personal Economy and Global Workplaces.  Let’s discuss compensation and how it varies across economies and markets,

Compensation is a mirage in America because it could be convoluted. Yes, you can be a supervisor, big boss, and “Oga”, and the person reporting to you is making more money than you! Unlike in Corporate Nigeria where titles/levels correlate with earning, in America, anything is possible!

In the semiconductor industry, they can hire you as a new PhD graduate, and your role is to “supervise” design legends, with some logging decades of experience.  You “manage” them, “review” them and set  deadlines for them, but do not be deceived, you are an “ofeke boss”. Some earn 3x whatever you make. And if one is a Technical Fellow, you could be “managing” someone who earns 8x your take-home.

How does that happen? America pays for value added, not titles, they say. The design legend you “manage” delivers more value than you the manager. It is like an Athletic Director in a university who hires a coach and can fire a coach, but the coach can make 10x what that Director takes home! Of course, in Southern America, the highest paid people in universities are not the presidents (i.e. vice chancellors) but football coaches (Alabama’s coaching legend Nick Saban takes home $11.41M yearly, the athletic director, his boss, may be taking home around $1M).

As we evaluate workplaces, Nigeria makes them simpler: in a bank, once you move a level, you earn what everyone at that level is earning. In the US, there is nothing like that. Both could be doing the same thing but the other colleague is going home at 2x your rate. 

Here is my message: put efforts as you negotiate those range-based compensations of  $25 – $120 per hour, knowing that someone could be paid $120 per hour when you are offered $30 per hour.

Comment on Feed

Comment 1: I once had a former colleague who had issues with this because he was earning lower than a subordinate.??. It’s actually painful if you are the one affected, but funny if you are not.

Although some Nigeria HRMs intentionally do this because of favouritism and not because of value added.

My Response: In Nigeria, you manage that by asking to be put in the right level. In the US, you can be in that level but still be paid lower. Levels typically correlate with pay scale in Nigeria; in the US, not.

Join us today at Tekedia Mini-MBA as we examine how to build professional webinality (web+personality). Yes, in this social media age, to ascend professionally, you need to find a creative way for people to know what you think you know. If you know it and keep it to yourself, you stall. But if you make it possible for others to know, wings will emerge to carry you up, because the zenith of all careers happens when people could recommend you in your absence.

Good People, you must build your professional webinality!

Tekedia Mini-MBA is an innovation management 12-week program, optimized for business execution and growth, with digital operational overlay. It runs 100% online. The theme is Innovation, Growth & Digital Execution – Techniques for Building Category-King Companies. All contents are self-paced, recorded and archived which means participants do not have to be at any scheduled time to consume contents.

Besides, programs are designed for ALL sectors, from fintech to construction, healthcare to manufacturing, agriculture to real estate, etc. And we have 3 LIVE Zoom sessions weekly, anchored by business executives you admre. It is the #best school.

Go here and register for the next edition. We’re rated 5 stars, Excellent and Amazing. Cost is N90,000 or $170 for the 12-week program.