← World Bank | The Development Podcast
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- [00:04]
A
Welcome back to the development Podcast. I'm Tony Carasani, and it's a pleasure to be with you again. In today's episode, everything's connected.
- [00:14]
B
Over the past two years, we've launched a set of strategic initiatives. These are not siloed plans. They reinforce one another and they bring together the full benefit of the World bank group alongside our partners, because we're going to have to all work in concert to deliver results at scale.
- [00:31]
C
When we think about tourism, you're also thinking about infrastructure around it. You're thinking about training, you're thinking about restaurants, entertainment, monuments. So there's a very important ecosystem around tourism.
- [00:44]
A
And from one ecosystem to another, we'll unpack a plan to scale up agribusiness.
- [00:50]
D
So the farmer is key to growing our economy, and it's also key that he earns enough for his family. Farming tea is critical for us, and the challenge is how do we double the revenue?
- [01:04]
A
All that coming up in this episode of the development podcast. All right, a lot to get into, so let's dive in. As you know by now, job creation is the North Star for the World Bank Group. But how can we go about it in a way that has a truly catalytic impact? Well, in short, the answer is to build ecosystems where all the elements can interact with each other while also supporting each other. But this requires what we call foundations. They range from roads and power to things like digital access, health care, education, and nutrition. Over the last few years, the World bank group has been busy launching strategies that reinforce each other. From Mission 300 focused on connecting 300 million Africans to electricity to delivering affordable health services to 1.5 billion people across the globe by 2030. Building job systems was the theme of this year's annual meetings, where President Ajay Banga connected the dots.
- [02:10]
B
So let me be clear. Jobs are not an accidental byproduct of of development or a trade off. They are the ultimate outcome of development done right. Everything we do, healthcare, infrastructure, digital access, energy, education, ultimately is in service of that outcome. A real opportunity for people to earn a living, support their families, shape their futures. Skilling a young woman is not enough if there isn't reliable electricity to power the factory that might hire her. A road reduces poverty only if it connects a farmer to a market and is built not to wash away in a flood. A clinic matters because it keeps people healthy enough to learn, to work, to contribute. Jobs are not one development goal among many. They are the one that sits atop all the others.
- [03:02]
A
There, Ajay was talking about foundational infrastructure. Now there are two other components or pillars for building job systems as well. First, there's policy and regulatory reforms, which we'll touch upon in another episode. There's also mobilizing the private sector at scale, which we've unpacked on this podcast before. Okay, last recap, I promise. We've also discussed the five sectors the World Bank Group has identified for job creation. Those again are infrastructure and energy, agribusiness, health care, tourism, and value added manufacturing, what Andre Baga calls engines of growth. Here in D.C. egypt's Minister of Planning, Economic Development and International Cooperation, Rania Al Mashat told us how the country's development of tourism has spurred job creation in several other industries.
- [03:57]
C
When we talk about tourism In Egypt, it's 15% of GDP. And more importantly, the employment multiplier, which is each direct job creates how many indirect jobs is quite significant. We're talking employment multiplier of 2 to 3. So it means that if we focus on tourism as a key priority sector, we are able to generate multiples of jobs. When we think about tourism, you're also thinking about infrastructure around it. You're thinking about thinking about training, you're thinking about restaurants, entertainment, monuments. So there's a very important ecosystem around tourism.
- [04:37]
A
So there you have it. An ecosystem with different industries supporting each other, with a strong foundational infrastructure. Which brings me to agriconnect. Unveiled at this year's annual meetings, agriconnect supports smallholder farmers moving from subsistence to surplus. Helping them to become commercially successful is critical to creating jobs, reducing poverty, and improving global food security. Here's Ajay Banga again.
- [05:07]
B
The developing world has the ingredients. It has land, it has sun, it has water, it has people. Africa has 60% of the world's uncultivated arable land and and can boost yields on land that is already farmed. Latin America already produces enough food for well over a billion people, but infrastructure there is a challenge. And across Asia, smallholder farmers manage most farmland. An enormous base that we can help to lift with better technology, better finance, and better access to markets.
- [05:40]
A
Through agriconnect, the World Bank Group announced a pledge to to double our financing to $9 billion a year by 2030 and to mobilize an additional 5 billion alongside our partners. And you heard about the importance of one foundation, better technology. Well, to get a better sense of how everything really is connected when building job systems, I spoke to Nigeria's Minister of Communications and Digital Economy about their journey. Dr. Bosun Tejani. Welcome.
- [06:12]
E
Good to be here.
- [06:13]
A
So my first question for you Is where is Nigeria on its journey to digital transformation and how do you see that transformation's impact on creating jobs?
- [06:21]
E
I think Nigeria is blessed, to be honest, in terms of where we are on the journey. Of course there's still so much to cover. But the way I like to frame it is you break it down into three different pieces so you have the foundational investments and infrastructure that you require for any society to take take advantage of digitalization. So you're talking about things like ubiquitous connectivity, right? Which is meaningful and affordable and is available to everyone on that journey. I think we're almost 40% into it. But the good thing is that working with the bank, we're going to close that gap in the next three to five years. Then the second layer, beyond infrastructure. Of course, on that infrastructure you can talk about things like access to subsea cables, access to data center subsea cables. We have the highest number in West African region. We have eight subsea cables. Nigeria is already the data hub for the West African region. So many of the OTTs and large technology companies will route their data through Nigeria. We're seeing increase in investment in data center. There should be more, but that is also happening. So that's the first layer. The second layer is what you call the stack. The that help society to be able to take advantage of this thing. So you want a payment stack which will allow for interoperability. Nigeria has the best interbank settlement system in Africa, not just in West Africa region. You want the digital ID system which the bank actually funded. We have about 130 million of our adults already digitally identified, which is a strong technology stack to help us. The third one which is missing is a data exchange system. Then on top of this too is where you get people building applications to aid digital transformation. Nigeria is already home to about seven unicorns in Africa, which a business is worth over $1 billion. So we're seeing increased application in digital solutions to deliver services. Government is already embracing it, but there's still solutions within government that exist in silos. And if you carefully look at the gaps that I've identified, you ubiquitous connectivity. Plug in Daga more data center data exchange system. Once we're able to plug that, I think we're seeing a country of about 230 million people that is about to transform its entire society.
- [08:37]
A
And in terms of other sectors, how do you see the impact of this digital transformation on other sectors in the Nigerian economy and their ability to also create value?
- [08:49]
E
It's tremendous. You see Nigeria, I was talking earlier about close to seven Unicorns in the financial services space. This is an area where Nigeria has been extremely successful. Like when you speak to people, people will tell you that some of the banks there are more digital than US banks because we've invested in technology in that sector. If we plug the gap that exists, we will see a situation where technology, particularly digital technologies, can help enhance how we deliver health services. Because if our hospitals are connected, it aids the delivery of services. Better government can be a lot more informed. You know, details of what is happening across the country can be a lot more aggregated. The same for education. Technology can help us to enhance learning by helping teachers gain access, introducing the use of smart technologies into school. You can't do that if you don't have the ubiquitous connectivity. Same for agriculture, for instance. We're already saying that countries with ubiquitous connectivity infrastructure, they're already applying technology in smart agriculture to enhance their outcomes. To For a country like Nigeria that is adding 5 million new people every year, our population is projected to be half a billion in about 20 years time. We do not have a choice but to see how smart agriculture will help us to meet our food demand, thereby ensuring that we're not dependent on other countries for food. This is why connectivity is important. Our precedent has set the agenda to achieve a $1 trillion economy that's not going to be possible without digital technology.
- [10:19]
A
If you feel like getting into the weeds of technological innovation a bit more, stick with me. Ajay Banga also talked about something called small AI. I was intrigued. So I had a chat with one man who knows all about it, the Dean of Global Business at Tufts University. What is small AI and why does it matter for developing economies? We're here with Bhaskar Chakravorti to tell us a little bit more. So can you help us understand what exactly is small AI versus big AI and why it matters so much for developing economies?
- [10:54]
F
Yeah, great question, Tony. So big AI is the AI that we hear about almost every day, if not every hour, that seems to be infiltrating every aspect of our lives. This is AI being developed primarily in Silicon Valley and other hubs like, like that, with large language models being trained on massive data sets. These models are sort of all purpose models. You know, they're attempting to do everything that any human or team of humans can do. So they're aiming for a form of super intelligence. So that's big AI. It is power. Right now the objective is to get to the most powerful form of intelligence. It's also extremely expensive. By 2029, close to $3 trillion, trillion with a T will have been invested in it. And it requires massive amounts of data, massive amounts of computation power, and which also translates into enormous energy needs. So we need to have many new forms of energy infrastructure that needs to be developed. Small AI is getting away from the power and as being the driving force. It's purpose, purpose driven. Narrower data sets with models trained on a specialized source of information for a specialized purpose. Those purposes vary depending on where you are in the world. If you are in the developing world, there's lots of need that has gone unmet for generations. Needs in healthcare, needs in education, needs in financial inclusion, needs in major sectors that employ people like agriculture. These are all sectors where people are operating in difficult circumstances with poor infrastructure, low productivity, the state of the human condition is not where it needs to be. So if a tiny injection of knowledge can move the needle even a small bit, it leads to a big change in terms of people's welfare, in terms of productivity. And that's what small AI can do.
- [13:00]
A
Purpose versus power. I like that. Very interesting. So now when we talk about job creation in emerging markets, what are the opportunities that small scale AI can create that big AI might overlook?
- [13:11]
F
Yeah, so there are lots of opportunities for small AI to be able to not only improve productivity and improve people's well being, but also create jobs. So let's take an example of perhaps the, one of the most promising ones of small AI, which is agriculture based tools. So this could be a tool and there are lots of tools available. There's a tool called Nuru, there's a tool called Plantex. And what these tools do is they help identify what is the nature of the pest that's on your crop. So if you think about most agriculture across the developing world is being done by smallholder farmers who don't have access to sophisticated technologies or access to information about, you know, what's happening to their crops and so on and so forth. About 40% of their crops get destroyed by pests. Now if I can identify what the pest is, and these tools help you do that, then I can come up with a remedy that is homegrown and you can apply it in your context, you could reduce that 40% crop discretion. By the way, if you're in sub Saharan Africa, that number is 50%. So if you can reduce that to 20%, 25%, whatever it is, massive swing in people's incomes. So what that does is it creates jobs for farmers. It potentially extends the livelihood and income capacity not just of farmers, but also of women and that creates new jobs for others in the community. They can send more children to school on a consistent basis. In the meantime, there are a number of different kinds of workers who can be employed. Agriculture extension workers who can work with the farmers to make them aware of this tool and how to utilize them. Others who can work on improving the data. Get a wider ecosystem of IT people and data people trained so that you can scale up these applications so there are many, many layers of jobs that can be created in if a simple app like detecting a pest in a field run by a smallholder farmer can take off.
- [15:16]
A
That is super interesting. Thank you for joining us.
- [15:18]
F
Absolutely, thank you.
- [15:20]
A
Of course, technological innovation is just one part of the story. Another crucial aspect is the role of the private sector. With that in mind, let's return to agriconnect, which again supports the move from subsistence farming to to value chains. So to find out more, I sat down for a cup of. Well, you'll soon guess with Chega Karundi, Chairman of Kenya Tea Development Agency, and Nidhi Pant, co founder of S4S Technologies.
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G
Hello, my name is Nidhi Pant. At S4S, we are empowering smallholder women farmers to become food processors. So we start by providing them with renewable energy powered food processing equipment so that they can process the surplus produce which would otherwise go waste or for which they would get lower price. So basically instead of selling a tomato, they can now sell tomato ketchup. And through this they can access more higher valued markets and capture more value for their produce. So we are working with 5,000 women entrepreneurs and they earn an additional income and initial profit of thousand to $5,000 based on how much they process. So we are first preventing the food from getting wasted, creating more jobs and entrepreneurship opportunities for women and at the same time providing more sustainable food ingredients to food and beverage industry.
- [16:47]
A
That's fantastic, Chegen. Please tell us more about your business as well.
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D
Our business is tea. We grow tea and we are small scale growers of tea in Kenya. And our organization is owned by 700,000 tea growers, small scale tea goers. We aggregate tea from these small scale goers and collect it from the farms and deliver to the factory. The factory therefore manufactures the tea. Own up the logistics. So we transport the tea to Mombasa, which is the exit port. Then we warehouse it and export to the world. We are the biggest exporters of tea in the world. We are third producers. First is China, second is India. But they consume most of their tea so the smallholder cannot reach the market without Aggregation. So we aggregate this for them and help them in the value chain which they own. So we manufacture and export tea.
- [18:02]
A
That's wonderful. Nidhi, tell us a little bit more about the importance of energizing women and entrepreneurs in the agribusiness sector.
- [18:10]
G
I would like to start by giving an example of Rekha Taiy who we work with. She has a child who's of special needs and also a daughter. So before we started working with her, her daughter was taking care of this young boy and was not able to go to school because Rekha Tai had to work as a daily wage worker at someone else's farm. Used to leave her home at 5am and only be back by 7pm and she was out the whole day. And this young girl was taking care of her brother. When she started working with us, she not only started earning an assured additional income, but what it brought was that her daughter could now go to school as she was able to have an opportunity created at the village level. Started working at her home, she could set up her own processing unit very close to the farm, at her home itself. And she had more control over her time. So what we realized was that with the men farmers, they are great at producing the produce. But what they lack is the information about markets, how they can go up the value chain, what are the different ways in which they can manage their P and L structure. So we started creating these opportunities for them. So which not only gives them an income but at the same time provide them with dignity, have more control over their time, invest in the prosperity of their families when they started earning. Most of them now also feel they're equals. They have decision making powers in their families, in their communities. Most of them take leadership positions in their villages. So we have seen a shift in their own mindset. They feel more confidence. So for us, an important way to energizing these women is to create everything designed, keeping them at the center and create opportunities which provide them with dignity as well as financial independence.
- [20:07]
A
That's an amazing story, Jige. I want to get a little bit into the why. So can you help us understand what why is it so important to help farmers get beyond subsistence farming?
- [20:18]
D
It's very, very important. Our farmers depend on tea revenue. So it becomes very, very important that the revenue takes care of its cost. So it becomes very important therefore to commercialize our tea. We are the second largest generators of foreign currency in our country. That speaks volume of our importance in the national economy. So there are challenges of course, because we have very good quality tea. But not fetching enough. So we therefore need to find ways and means of increasing revenue for the farm. Remember, 700 members mean families, so we have an average of five people per family. I'm talking of 3.5 million people. And therefore the impact on the ground is heavy. From the farm level to the factory level, to logistics to warehousing to exports means that the impact in the economy is also very high. So the farmer is key to growing our economy and it's also key that he earns enough for his family. Farming tea is critical for us and the challenge is how do we double the revenue? We are very grateful to the IFC for what they have done in the past. We have to double the revenue of tea farmers, and we can't do that without reaching out the market. And that market is outside our country. We feel that the right institution to help us in this journey is international finance cooperation.
- [21:57]
A
Thank you to Chege and Nidhi. That's almost all we have time for, but I'm going to leave you with a performance from the annual meetings by Mufasa, a Kenyan poet, actor, writer and teaching artist. Enjoy. Also, do like and subscribe wherever you get your podcasts and look out for our next episode in early December. Thank you all for listening.
- [22:22]
H
My grandmother was no magician, but I've been told it was miraculous how she schooled and fed the children with no job. She did not pull a rabbit out of her heart. She was known to pull strings for her children. To my grandmother, anyone old enough to say I'm hungry was old enough to go to the farm. And I remember we planted maize, veggies, beans, potatoes, even mangoes, avocados, you could have called them the fruits of our work. Farming was a passion rooted in our existence. Our house structure did not say high standard of living, but I'll tell you right now, for fun, we climbed tall fruit trees and it was our standard of living. I watched a three acre farm, raised a banker, a pharmacist, an entrepreneur. And I'm not saying farming always bought enough. I'm saying it was pivotal. When everything was tough, I learned people make people. And farms do not just feed people. They nourish communities. They feed dreams, they plant realities. I say agriculture and it's easy to think food on the table. But when I table our needs, you will see agriculture has done way more for the people held families more than hands handed a future today, even to people who know nothing about plants. But some appeal for their plants. I'm talking drivers, engineers, policy makers, marketers, a chain of jobs. And you are free to think where I come from. And I want to say Kenya, but I can also say Africa and still mean to say agriculture is the backbone of our economy, the spine to food security. I want to say it has upheld us, but I can also say it has held us down. A crown on the head of farmers who cannot be seen in a concrete city. But don't we feel it when the prices are too high, when farmers are going through it? Isn't it a survival all through it? Ain't we affected by factors that affect a farmer? And yet it's like we're left farming in the hands of a past, getting older and older. But age is not what you lose when you let agriculture be an aging sector, when the world is peeling and when it takes extra skin to take care of your kin. The hunger of those who lack something to eat will not let us sleep in peace. And it's not just mothers. Everyone pays when the youth cannot find a job that pays till tomorrow is a dream. And agriculture can close the distance between today and a vision. But if only we do something about a sector that has been deemed less appealing to dealing. If only we induce young minds to come into a venture that needs the adventure of innovation, creativity, high energy. I close my eyes and for millions of young people at the end of a corner, I see agriculture as a way, a chance, a shot to make it, to make it out, to make something of themselves, to lead self, to lead for all our sake. So what are we waiting for?