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Comments and Questions
by Steven Langdon
There has been widespread debate and analysis about poverty in Africa, reflecting the fact that most parts of the world saw marked poverty reduction during the 2000-2015 United Nations Millennium Development Goals period but sub-Saharan Africa saw persistence of high poverty rates for large numbers of people in most countries. Different measures of poverty have been consistent in showing this African poverty persistence, including the World Bank Poverty Line approach and the broader Human Development Index (HDI) and its associated Multidimensional Poverty Index (MPI.)
One of the countries where poverty has continued to be high, despite its petroleum wealth, has been Nigeria. This has been particularly significant given that Nigeria’s population is the highest in Africa and expanding quickly.
This has made the country a particular focus of poverty research, making use of a wide variety of measures to track social conditions besides the traditional approaches. A new Commitment to Reducing Inequality (CRI) Index measures three factors crucial to reducing gaps between the rich and poor — social spending, tax policies and labour rights. Nigeria ranks last out of 157 countries analyzed.
The World Bank has also launched a new indicator, the Human Capital Index (HCI,) suggesting the future social situations of a country’s population, based on chances of a child reaching age five, healthy growth, expected years of schooling, quality of learning available and the adult survival rate. Again, Nigeria’s ranking is very low — 152nd out of 157 nations.
If Africa is to succeed in marked poverty reduction in the context of the 2015-2030 UN Sustainable Development Goals (SDG) effort, it is clear that socio-economic policy and its implementation in Nigeria must improve in a major way. I have worked with the World Bank in Nigeria and know that the governance challenges in the country are great. But the critical needs of millions of poorer Nigerians will have to lead to new urgency and commitment to counter poverty in the largest nation on the continent.
For more on poverty measures in Nigeria and their implications, please see the attached.
by Steven Langdon
There are challenges to relying on official statistics in parts of Africa, as we discuss in our recent book (African Economic Development, by Langdon, Ritter and Samy — published by Routledge in 2018.)
Recent evidence from Benin suggests these challenges may be particularly great in measuring trade flows between individual African countries, with much trade being carried out informally by small-scale traders without being calculated numerically at border posts. Three researchers (Jarreau, Mitaritonna and Bensassi) have undertaken a large scale survey of informal traders crossing the Benin-Nigeria border, asking them the extent of their import and export of goods — then comparing this with official trade statistics for the same 171 border points.
The results were dramatic. Some 85% of exports were not recorded and 50% of imports. The goods involved are not just agricultural products, but include a diverse range, including textiles and transportation equipment.
As the researchers conclude, “this confirms that trade statistics on the continent suffer from a serious blind spot.” Given the importance African countries are giving to initiatives for continental free trade, the gaps in existing trade measurement are especially problematic. This blind spot on trade statistics also underlines the wider need to improve official statistics in other areas to contribute to better African economic policy-making.
For more details on this Benin research, please see the attached link.
by Steven Langdon
In our recent book (Langdon/Ritter/Samy, African Economic Development, Routledge, 2018,) we discuss how various African countries have begun to diversify their international financial sources, using bond issues, for instance, so as not to depend as much on direct foreign investment.
Now further diversification is becoming evident in the form of sukuk bonds from Islamic sources. This is lending in which interest payments are not allowed, with agreed levels of profit sharing from project results. Over US$2.3 billion in such financing has taken place in Africa since 2014, with the Ivory Coast and South Africa as the largest recipients (and Muslim Asian and Gulf States countries as the main source of the funds.)
It is important for Africa to broaden it’s sources of capital for development, so this trend is a significant plus — as the World Bank and other international agencies have recognized. For more details, see the attached link.
by Steven Langdon
Farmers in Niger and other parts of arid Africa are making their own “green revolution” — by expanding the cultivation of “gao” trees, also known as “winter thorn.” Faced with drought and high prices for fertilizer, farmers have grown over 200 million “gao” trees in Niger, providing nutrition to the soil and retaining water from the scarce rainfall.
We provide a detailed discussion of this remarkable success in the agriculture chapter of our new book, “African Economic Development,” published this year by Routledge. Now the Guardian newspaper in the UK has published an update on recent developments, along with illustrations of “gao” trees and their output. The article emphasizes as well the contribution of the trees to countering climate change pressures.
Please see the attached article:
Traditional economic development thinking has emphasized sectoral advances in such areas as agriculture, resources and industry. Just as technological innovation has transformed the dynamics of North American and Asian economies, however, technological change is now bringing remarkable advances to some African countries. Kenya has been a particular example of this process.
Technology hubs have grown, especially in Nairobi, such innovations as internet banking have spread across the country and technological education has grown for young women as well as men.
The following video from PBS provides powerful testimony of how these changes can improve the conditions and opportunities of the poor in Kenya. High tech mapping of the Kibera area in Nairobi, the video shows, provides insight into where services are located — and most needed. Education is also shown as a pathway to new skills and options for poorer Kenyans, including young women.
by Steven Langdon
Mineral developments in many African countries used to give minimal attention to environmental effects. But this has been changing in recent years. Our recent book, “African Economic Development” (published in 2018 by Routledge,) outlines examples from Nigeria, Liberia, Niger and Mozambique; local communities and environmental groups in these cases have worked to counter pollution damage to people and wildlife, drawing support from such foreign institutions as the European Investment Bank and from domestic university scholars.
Now a major Chinese-financed initiative to mine bauxite in Ghana has spurred similar objections from local environmental and community groups. The Ghana government has stressed high economic benefits from the mining project, but protestors point to considerable potential damage to the rainforest ecology in Ghana. Ghana’s famous Kakum National Park, with its tree-top canopy walk amidst huge old-growth trees, is an example of this ecology in the country.
Environmental and community groups have seen success in enforcing punitive payments from petroleum multinational corporations in Nigeria, and have established improved pollution policies in the case of the aluminum smelter operated by BHP Billiton in Mozambique.
What will be the outcome of this new struggle in Ghana? This will be a case to track carefully. See the attached link for more information.
by Steven Langdon
When I was working with the World Bank in Nigeria, Ngozi Okonjo Iweala was one of the most impressive people with whom I dealt. On leave from the World Bank, she was trying to shape more disciplined budgets for the country, so that Nigeria could better develop a more inclusive economy built on its massive oil resources.
It was a difficult task, she told me. But at that point (before she became the country’s Finance Minister) she was hopeful.
Now, after years in that job, Ngozi has written a book revealing just how challenging her task was. Quartz Africa’s Fewi Fawehinmi outlines what Ngozi has written, and draws out the main difficulties she faced in the structure of Nigerian budget-making. Not only did legislators change rapidly in Parliament (leaving few with budget experience,) but the budget depended on assumptions about the world prices at which Nigeria could sell its oil, and these shifted continually while the budget was being considered. Add to that external pressures (Ngozi’s mother was kidnapped to try to get the Minister to change her approach to fuel subsidies in 2012.)
“Nigeria, says Fawehinmi, “remains very dysfunctional in the way it carries out the normal business of government.” Ngozi’s book may help in at least a small way to change that.
[For more, see the following link: https://qz.com/1290954/fighting-nigerian-corruption-might-be-dangerous-but-preparing-a-nigerian-budget-is-hell/ ]