African Leaders Urge Governance, Financing, and Capacity Reforms for Transformation

African policymakers, economists, and development leaders have issued a powerful call for sweeping governance reforms, stronger domestic resource mobilization, and innovative partnerships to accelerate economic transformation across the continent’s most vulnerable economies—its transition states. The call came during a high-level Policy Dialogue organized by the African Development Institute (ADI) of the African Development Bank Group (AfDB) at the 66th Annual Conference of the Nigerian Economic Society (NES), held in Abuja.

Themed “Driving Africa’s Economic Transformation in Transition States: The Role of Capacity Development and Knowledge Management”, the dialogue brought together hundreds of participants, including economists, academics, students, government officials, and international partners, reflecting the urgency of addressing fragility across the continent.

Africa’s Transition States: A Growing Challenge

Transition states are countries facing severe political instability, security crises, economic fragility, and climate shocks. According to the AfDB, 24 African countries are now classified as transition states, up from 22 just four years ago.

Eric Ogunleye, Director of ADI, warned that the situation is worsening:

• Over 250 million Africans are directly affected by fragility.

• More than 44 million were forcibly displaced by mid-2024.

• Conflict-affected countries have seen 20% lower growth rates and steep declines in health and education outcomes.

He cautioned that instability in the Sahel, the Horn of Africa, and the Great Lakes region threatens to derail development for decades unless bold reforms are undertaken.

Financing Africa’s Development Gap

Abdul Kamara, AfDB Director General for Nigeria, stressed that Africa must achieve at least 7% annual GDP growth and 3.5% per capita GDP growth consistently for four to five decades to meet Agenda 2063 targets.

The financing needs are staggering:

• Africa requires $811 billion annually to achieve inclusive and sustainable growth.

• The continent faces a funding gap of $680 billion every year.

• Transition states alone require $210 billion annually, but face a shortfall of $188 billion.

Kamara emphasized that inclusive growth—driven by job creation, women’s and youth empowerment, and technology investment—is at the heart of the AfDB’s approach. He highlighted the Bank’s investments, such as Nigeria’s $618 million iDICE program, which supports startups and the creative economy.

The Role of Governance and Political Will

Experts at the dialogue stressed that good governance and conflict resolution are prerequisites for meaningful development.

Emmanuel Owusu-Sekyere of the African Center for Economic Transformation (ACET) warned that: “Efforts must first focus on ending the conflict before any developmental activity can start. The most important thing is to ensure reforms focus on establishing good governance and visionary leadership. That is where the buck starts and ends.”

He underscored the corrosive impact of corruption and weak political will, calling them Africa’s “elephant in the room.”

Domestic Resource Mobilization: Taxes, Remittances, and Illicit Flows

Adeyemi Dipeolu, Faculty Member at ADI and former advisor to Nigeria’s president, drew attention to Africa’s low tax-to-GDP ratio:

• Africa: 17%

• Latin America: 29%

• East Asia: 26%

Dipeolu also highlighted:

• Illicit financial flows costing Africa $90 billion annually.

• Remittances rising to $56 billion in 2024, a potential financing tool.

• The risks of unsustainable borrowing, noting that seven of nine countries in global debt distress are African.

Opportunities in Climate and Blended Finance

Jane Mariara, Executive Director of the Partnership for Economic Policy (PEP), pointed to the decline in traditional development aid but highlighted emerging opportunities in climate finance, which surged to $137 billion in 2024.

She urged transition states to:

• Strengthen debt management capacity.

• Explore blended finance and risk-sharing instruments.

• Build institutional capacity to better access climate-linked resources.

Building Capacity and Knowledge for Resilience

Across the discussions, a unifying theme was the importance of capacity development and knowledge management as foundations for long-term transformation.

Ogunleye stressed that Africa must move away from “copy-and-paste” policy models and instead design locally relevant, evidence-based strategies rooted in indigenous knowledge and context-specific realities.

In his closing remarks, Seedwell Hove, Division Manager of ADI’s Policy Management Division, summarized: “One of the key takeaways is that capacity development is foundational to economic growth and transformation, while knowledge management helps to scale impact. These must underpin reforms if Africa is to move from fragility to resilience, and from transition to transformation.”

A Path Forward

The dialogue underscored that Africa’s transition states can only overcome fragility through strong governance, coherent development strategies, sustainable financing, and inclusive partnerships. With nearly a quarter of the continent’s countries classified as transition states, the urgency of action cannot be overstated.