During the World Economic Forum meetings in Davos, Switzerland, last week, I livestreamed several events on YouTube, but one caught my attention. It was about renewed push for Africa’s self economic determination. The room was overcrowded, security was a nightmare, and several dignitaries stood freezing outside for 20 minutes waiting to get in. This tells you everything you need to know about how seriously people took what was happening inside. I have sat through enough development conferences to know the difference between performance and intention. What unfolded at the convening of the Accra Reset Initiative in Davos was not another well-meaning declaration destined for a filing cabinet in Geneva.
It was, to use a now famous term, a ‘rupture’. A clean break. The moment African leaders stopped pretending the current system can be reformed and started building its replacement. And if you are sitting in a cushy office at WFP, the World Bank, or any of the alphabet soup of development agencies that have made careers managing African poverty, you should be deeply unsettled right now. I don’t think the message is that Africa is rejecting partnership. In my view, it is more like this: the partnership you have been selling has expired, the customers know it, and they are no longer willing to be polite about things. There was something like a gasp across the room when the boss of an African multilateral announced that the continent has $4 trillion in domestic capital pools.
Actual money, sitting right now in pension funds, insurance companies, sovereign wealth funds, and development banks across the continent. For context, that is more than 50 times the total annual development assistance flowing into Africa from all sources combined. Meanwhile, African pension funds alone are sitting on half a trillion dollars, much of it invested in US Treasury bonds instead of African infrastructure. Simply because a lie has been allowed to take deep root. The lie that Africa cannot be trusted to manage its own money. That fiction died in that conference room. What made this one different from every other grand initiative was the specificity.
Nigerian pension reforms already require a portion of managed funds to go into infrastructure, private equity, and venture capital. It is working. It is generating domestic financing at scale. The regulatory frameworks exist. The capital exists. What has been missing is permission. And what happened at Davos is that African leaders stopped asking for it. Private sector participants seemed to have the most impatience. One pointed out that everyone in the room knows exactly what needs to be done. Skills development, continental integration, domestic investment, and regulatory clarity. Africa is not where it is because of lack of knowledge. Far from it.
Even more exasperating is the fact that the money haemorrhaging out of the continent already exceeds the money trickling in. According to a report published in collaboration with The Rockefeller Foundation this week, Africa is now paying China $22.1b (Shs78.3 trillion) on a net basis over the last five years. Between 1980 and 2009, Africa lost an estimated $597b to $1.4 trillion in net resource transfers. So the entire premise of the aid relationship is backwards. Africa does not have a resource problem. It has a governance problem, a negotiation problem, and a political will problem. And you know what? Some African countries are already doing some of this stuff.
Ghana, Nigeria, and Zimbabwe are implementing sin taxes on alcohol and tobacco while building social health insurance systems. They are governing. Present tense. Active voice. You cannot ask the aid industry to reform itself out of business. It will not happen. Which is why the Accra Reset matters. It is not trying to fix the old system. It is building around it. The Accra Reset is the alternative. Imperfect, ambitious, risky, but necessary. It is Africans telling the development industry: We are done being your project. If you want to be partners, come as equals, ready to respect our priorities. If not, step aside.