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Environmental Struggles in Africa — a new Ghana case

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.

https://qz.com/1296808/a-10-billion-china-deal-to-mine-bauxite-in-ghana-is-facing-fierce-environmental-push-back/

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HOW SIERRA LEONE IS BEATING TROPICAL DISEASES

The Economist, June 21 2018.

Original Article: Sierra Leone and NTDs

SIXTEEN years ago Hannah Taylor woke up with a fever. Her legs began to swell to four times their normal size. They have been that way since. People shunned her because of their putrid smell. “For six years, I thought my big fut was caused by evil witchcraft,” she said outside her shack in Freetown, the capital of Sierra Leone.

The lymphatic filariasis (elephantiasis) ailing her was caused by a mosquito-born infection that could have been treated safely with a pill costing no more than $0.50 before it progressed. Instead, microscopic worms infested her body, causing catastrophic and irreversible damage.

Elephantiasis is one of 17 neglected tropical diseases (NTDs) that affect 1.5bn people, disabling children and keeping multitudes poor. Huge progress has been made against these diseases since an agreement in 2012 by pharmaceutical firms to donate billions of dollars’ worth of drugs. Even so, many African countries struggle to get the necessary pills to those in need.

Strangely Sierra Leone, one of the world’s poorest countries, is doing better at beating back such diseases than almost anywhere else in Africa. This is despite a devastating civil war from 1991 to 2002 that claimed 70,000 lives and wrecked the health system. What little remained of it was gutted by an Ebola outbreak in 2014 that killed lots of doctors and nurses. As a result the country has only some 400 doctors to treat its 7m people. Corruption also makes the nation sicker. Most people have to pay bribes to doctors and nurses for basic treatments.

Fifteen years ago as much as half the population was infected with the worm that causes onchocerciasis, or river blindness (see map). Many villagers in the southeast used to think it was perfectly normal for people to go blind after 30, says Mary Hodges, from Helen Keller International, a charity that works on blindness and malnutrition. Yet by 2017 only 2% of people carried the worm, and there had been no new cases recorded of people going blind from onchocerciasis in a decade. Elimination is expected by about 2022.

Other illnesses are also being beaten. Schistosomiasis, also known as snail fever and bilharzia, is a parasitic worm infection that slowly destroys the kidneys and liver. It, too, is in retreat among children. So are soil-transmitted helminths, infections caused by roundworms that can stunt mental and physical development. The worm that caused Hannah’s elephantiasis was also once widespread. But there have been no new cases since 2011.

Ending the stigma is also important. Radio programmes where panels of experts, victims and local leaders answer calls from listeners about their concerns have helped to break down misconceptions and encourage people to get treatment. It is no good just lecturing villagers about how river blindness is caused by the black fly when they think it is witchcraft, says Dr Hodges. There has to be a conversation.

Hannah, who was depressed about her condition for years, later put on a brave face and campaigned to raise awareness about it and to break down taboos. “De bodi fine,” she said, slapping her swollen legs with a cheerful smile, “de bodi fine.” Hannah, who passed away last week, recently said she was pleased her children would not suffer as she had.

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Governance Challenges and Budget-making in Nigeria

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/  ]

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A Worn-Out Trade Deal. RWANDA REFUSES TO REMOVE TARIFFS ON IMPORTS OF USED CLOTHING

The Trump administration wants the African nation to remain open to imports of clothing donated to charities in rich countries

The Economist.  May 31st 2018 | KIGALI AND MANSFIELD

Original Article: A Worn-Out Trade Deal

 For an additional first-hand account of the second-hand clothes market in Kenya see Mitumba 101: The Second Hand Clothing Trade in Kenya” by Katrina Shakarian, in KIVA Stories from the Field, July 22, 2013

IN A market in Kigali, Rwanda’s capital, a cacophonous auction is under way. Sellers hold crumpled T-shirts and faded jeans aloft; traders shout and jostle for the best picks. Everything is second-hand. A Tommy Hilfiger shirt goes for 5,000 Rwandan francs ($5.82); a plain one for a tenth of that. Afterwards, a trader sorts through the purchases he will resell in his home village. The logos hint at their previous lives: Kent State University, a rotary club in Pennsylvania, Number One Dad.

These auctions were once twice as busy, says Félicité Mukarurangwa, a trader. But in 2016 Rwanda’s government hiked import duties on a kilo of used clothes from $0.20 to $2.50. Now she struggles to break even. The traders are not the only ones who are unhappy. Exporters in America claim the tariffs are costing jobs there. In March President Donald Trump warned that he would suspend Rwanda’s duty-free access to American markets for its apparel after 60 days if it did not back down. That deadline expired on May 28th without Rwanda shifting its position.

The dispute tugs at the threads of a trade that knits together charity and business, gift and profit. Globally, about $4bn of worn clothes crossed borders in 2016. The share from China and South Korea is growing, but 70% still come from Europe and North America. Most go to Asia, eastern Europe and Africa, the largest market. The trade clothes the poor and creates retail jobs. But governments worry that cast-offs undercut their fledgling industries. Imports are banned or tightly restricted in 41 countries, from South Africa to India.

A complex supply chain begins with people like Elizabeth Forsythe, stuffing a bag of old clothes into a donation bin in north London. She assumes that they will end up in a charity shop. But in most rich countries the supply of used clothing far outstrips demand. Less than half of donations are sold locally. Most of the rest are sold to exporters. In Britain a tonne of textiles from a bin fetches £170-315 ($225-420). At Savanna Rags, in Mansfield in the English Midlands, 500 tonnes of old clothes glide along conveyor belts each week. The workers, mostly eastern European immigrants, sift items into categories depending on the market, such as “childrenswear” and “Asian clothing”, transforming a jumble of fabric into plastic-wrapped bales.

In Africa, these motley bundles are a valuable commodity. Men’s clothes are pricier, since fewer arrive. American pieces are often too large and have to be resized by tailors. No matter. “A person would rather buy second-hand from America, instead of buying a new Chinese product,” says Nelson Mandela, a Ugandan trader with a suitably second-hand name. Shoppers complain that new Asian clothes damage easily and look like uniforms, without variety. Hucksters sometimes dunk Chinese imports in dirty water to pass them off as used ones from Europe.

Some suspect that high-quality, unworn clothes are smuggled into bales as a way for the rich world’s clothing industry to offload samples and unsold items. “It’s just a form of dumping,” says Belinda Edmonds, the executive director of the African Cotton and Textile Industries Federation, an industry body.

Second-hand imports now dominate African markets. Researchers at the Overseas Development Institute, a British think-tank, reckon that Tanzania imports 540m used items of clothing and 180m new ones each year, while producing fewer than 20m itself. African manufacturing is weak for many reasons, from clumsy privatisations to crumbling infrastructure. But second-hand imports are a major culprit, according to a paper in 2008 by Garth Frazer of the University of Toronto. He estimated that they accounted for half of the fall in employment making apparel in Africa between 1981 and 2000.

Spinning wheels

Loose fibres blow around the idle machines at UTEXRWA, a textiles and garment factory in Kigali. The plant operates at 40% of capacity and employs 600 workers, down from 1,100 in the 1990s. It is hard to compete, sighs Ritesh Patel, its manager, when a used T-shirt sells for the price of a bottle of water. Instead, the company specialises in uniforms for police, soldiers and security guards, which cannot be bought second-hand.

Even so, says Mr Patel, higher tariffs have not helped much. “The big challenge is not second-hand clothes or Chinese clothes,” he says. “It’s buying power.” Although the government is promoting “Made in Rwanda” products, firms like UTEXRWA cannot produce cheaply enough for most local consumers. Zips, dyes and synthetic fibres are sourced from other continents. A new garment-maker has opened in a special economic zone, cutting and sewing Chinese-made fabrics. But it mostly sells abroad. Where nascent industry shows promise, as in Ethiopia, it is often export-led.

Rwandan apparel exports currently enter America under the African Growth and Opportunity Act (AGOA), which eases market access for African countries. The threatened suspension would hurt, but not very much. Last year Rwanda sent a mere $1.5m of apparel to America. Nor, with 12m people, is it a big market. America is more concerned about Kenya, Uganda and Tanzania, which all planned to phase out second-hand imports before yielding to American pressure.

Meanwhile, exporters of used clothes in the rich world, like Savanna Rags, have other worries. Fast-fashion retailers churn out poorer-quality clothes, which do not survive long enough to be worth reselling. Sorting is moving to India, Pakistan or the United Arab Emirates, where wages are lower. Skittish consumerism and ruthless competition have long underpinned the used-clothing trade. They may now be un-ravelling it.

Selling second-hand clothing in Gikomba market in Nairobi

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Africa and Climate Change: New Evidence of Damage

Africa and Climate Change: New Evidence of Damage

 

     by Steven Langdon, Adjunct Research Professor of Economics, Carleton University

 

 When the Intergovernmental Panel on Climate Change (IPCC) presented its most recent Assessment Report in 2014,  the consensus of the thousands of scientists involved was that global warming was taking place at a rate that could cause “irreversible detrimental impacts.”  More than fifty percent of this was caused by human activity,  the Report indicated,  especially the high rate of emissions of carbon dioxide and other Greenhouse Gases resulting from fossil fuel consumption, cement production and gas flaring.

These trends have continued since 2014 and are widely recognized by global climate observers,  as illustrated in 2017 by the National Aeronautical and Space Agency (NASA) in the United States.

The IPCC Assessment Report concluded that Africa would be especially impacted by global climate change,  with temperatures very likely to rise by more than the world average in West and Southern Africa,  and higher chances of extreme rainfall and heat events in East Africa and elsewhere. Rising sea levels also threaten low-level coastal areas in many parts of the continent.

As discussed in the book we have just published (Langdon, Ritter and Samy, 2018, African Economic Development, Abingdon and New York: Routledge,)  this demonstrates how negative environmental externalities from global carbon emissions damage African populations despite limited emissions within Africa itself. We also point out in the book the more constricted capacity for African countries to finance adaptation and mitigation measures to counter these trends.  Data reported by the Economist,  and already posted in this blog,  show that increasing variability in temperatures is affecting Sub-Saharan Africa more than other parts of the world.

Evidence of climate change damage in Africa has been growing since the IPCC Report – ranging from drought in Southern Africa to bleaching of coral reefs in East Africa and subsequent reductions in fish stocks.  The accompanying article from the New York Times (May 24, 2018) provides another example of such damaging effects,  in this case associated with rising sea-coast levels in northern Senegal.  It also describes adaptation efforts in the community to counter these rising levels.

 

“Wrath of Coastal Erosion” is Devouring a Senegal Fishing Hub

ByAurelien Breeden

  • May 23, 2018

SAINT-LOUIS, Senegal — Houses on the shore seem to have been ripped open by a giant claw. The corner of an abandoned school is gutted, leaving what looks like a gigantic bite mark. All that is left of a nearby mosque is a flattened pile of concrete blocks and twisted iron rods.

The culprit behind this destruction in Saint-Louis, on the northern edge of Senegal’s Atlantic Coast, is not some mythical sea monster, but the ocean itself.

At a rate that is increasingly worrying to residents and officials, waves are lapping at buildings on the shoreline, pulling sand away and eroding foundations until walls collapse and floors cave in.

On a recent morning, Massamba Diaw, 70, showed a jumble of ruins in the sand.

“Two months ago, we were standing here, under a roof,” he said. Like most men in his neighborhood, Mr. Diaw was a fisherman. Like many of his neighbors’, his house is now crumbling.

About 80,000 people live in the poorer neighborhoods of Saint-Louis, where coastal erosion is an immediate threat.

 

“We all feel really sad, and threatened,” Mr. Diaw said, pulling his grandchildren away from the edge of his first floor, which is now exposed to wind and rain. “What will these kids do in the future?”

Eroding shorelinesare a globalproblem, made worse by the rising sea levels that result from climate change.

But the impact is particularly stark in Saint-Louis, especially on the Langue de Barbarie, or Barbary Tongue, a thin, sandy peninsula that extends over a dozen miles further south and acts as a natural buffer with the ocean.

“For the past decade, people here have really started to suffer the wrath of coastal erosion,” said Latyr Fall, the city’s deputy mayor for economic issues.

Saint-Louis, a city of over 232,000 that was first settled by the French in the 17th century, was the colonial capital of French West Africa until 1902.

It is split in two by the Senegal River, which snakes down from the north, forming a natural border with Mauritania. Eastward, on the mainland, is most of modern Saint-Louis. Westward is the Langue de Barbarie, which separates the river from the ocean until the two meet.

In the middle is an island best known to tourists for its preserved 19th-century colonial architecture — low, pastel-colored houses with vivid shutters and wrought-iron balconies, some renovated and turned into elegant guesthouses, others slowly crumbling but still graceful.

The island became a Unesco World Heritage sitein 2000, and is host to cultural events like annual jazzand contemporary dancefestivals. Erosion isn’t discussed much, said Staffan Martikainen, a Finn who runs an artistic residency programthere.

“It’s surprising, in view of the fact that both the fisherman’s peninsula and the island might be gone in two generations, that real estate prices don’t go down,” he said.

But across the bridge that spans the small arm of the Senegal River, in the poorer neighborhoods on the Langue de Barbarie, coastal erosion is an immediate threat. About 80,000 people live there, on a stretch of land that is barely 600 feet wide in some places.

Crowds of children race the streets, jumping out of the way of horse-pulled carriages and sputtering minibuses. Green fishing nets lie tangled on the sidewalk while tethered goats munch on trash in sandy side alleys.

Many in these neighborhoods are from the Lebou ethnic group, traditionally a fishing community. The ocean might have destroyed their homes, but it was also a source of food, income and community.

“In Saint-Louis, if fishing thrives, everything thrives,” said Mr. Fall, the deputy mayor. “But if fishing hurts, then everything hurts.”

Fishing is now harder than ever for about 250 families that have lost their homes to erosion. Most of them — roughly 850 people — were resettled by the local authorities in a temporary camp several miles inland.

Abdou Gueye, 42, is one of them. His house was destroyed during a storm surge in August and his family was brought in October to the temporary settlement, a mix of small concrete houses and tents known as the Khar Yalla camp, in an empty field far from downtown.

It has several outdoor showers and toilets, and some outside lighting, but lacks proper access to water and to waste management, and it is prone to flooding.

Still, it is the distance to the coast that ails these fishermen the most.

“Now we have to pay for transportation to the ocean,” Mr. Gueye said, sitting under a pitched white tarp to avoid the sun. In the bustling fishing district, neighbors conveyed reports of a brewing storm, or of a good catch. “Now we are far away from all that information,” he added.

Nearby, Yaram Sène, 20, said leaving was on everybody’s mind. “There is nothing here, no police, no health facility, no school,” she said.

Mr. Gueye said each family had received about $900 from the authorities when their houses were destroyed, but nothing since. Few can afford to move elsewhere.

For those who still live on the Langue de Barbarie, Senegal is paying the French construction company Eiffage to build an embankment that shields houses from the ocean swell.

Made of giant five-ton bags of sand topped with rock-filled cages, it will run for about two miles down the coast until it reaches parts of an old colonial-era sea wall that are still standing.

But officials stress that the embankment is an emergency buffer to protect houses from immediate destruction, not a permanent fix for the erosion. Longer-term solutions have been proposed: building breakwaters or a new sea wall, resanding the beaches or clearing them to create a buffer zone.

The authorities are still waiting for results from continuing engineering studies to determine what to do. President Emmanuel Macron of France recently promisednearly $18 million to help, adding to existing funds from the World Bank.

Some, like 53-year-old Ahmet Diagne, are taking matters into their own hands.

Mr. Diagne used to live in Doun Baba Dièye, a village of fishermen, cattle breeders and farmers just south of Saint-Louis. But in 2003, scrambling to evacuate floodwaters swelling around the city, the Senegalese authorities hastily dug a channel in the Langue de Barbarie.

The breach quickly grew, bringing erosion to villages that had previously been shielded from it, and submerging Doun Baba Dièye. In 2009, residents started moving inland.

From his fishing boat, early on a recent morning, Mr. Diagne pointed to what was left of his former village: a few ruins on the shore, and a sunken tree covered with cormorants that used to be in the town square.

For the past several years, with financial help from the government and international organizations, he and his community have planted thousands of mangroves and pine trees known as filaos, to halt erosion and reclaim land then used to farm and sell cassava, cabbages, melons, sweet potatoes and other produce.

Mr. Diagne became a local expert of sorts on coastal erosion, even for those in Saint-Louis who had previously derided his warnings that they, too, would soon face his village’s fate.

“It was a bit hard for me in the beginning,” he said. “I received calls from people telling me: ‘Stop talking nonsense. You did not attend school. Who are you to talk about erosion and rising sea levels?’”

“But now,” he said, “people are calling me back.”

 

Follow Aurelien Breeden on Twitter @aurelienbrd.

A version of this article appears in print on May 24, 2018, on Page A8 of the New York edition with the headline: ‘Wrath of Coastal Erosion’ Devours a Fishing Hub in Senegal. Order Reprints| Today’s Paper| Subscribe

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CLIMATE CHANGE WILL AFFECT DEVELOPING COUNTRIES MORE THAN RICH ONES

Temperatures in tropical climates will become far more variable.

Original Article: Climate Change and Africa

By THE DATA TEAM, The Economist, May 9th 2018

GLOBAL warming is often used as a synonym for climate change, and most discussions of the topic focus on the expected increase in average global temperatures. However, the frequency and severity of individual, catastrophic weather events depend heavily on the variability of temperatures as well as their mean. The larger the swings, the more often extremely hot or cold conditions can wreak havoc.

Unfortunately, according to a new study by Sebastian Bathiany of Wageningen University and three other scientists, poor countries are not only predicted to bear the brunt of the increase in average temperatures, but also to suffer from higher variation. Their paper finds that, as the planet warms, soil in areas near the equator will dry up, reducing its ability to dampen temperature swings. This problem is expected to be especially acute in the Amazon rainforest. Consequently, the authors expect the standard deviation of monthly temperatures to increase by nearly 20% in Brazil.

In contrast, countries in the northern latitudes, which are mostly rich, will not be affected nearly as much by changes in soil moisture. Far from the equator, countries will actually see smaller temperature fluctuations, because of changing atmospheric patterns. In terms of both means and variances, the countries that bear the most historical responsibility for climate change are likely to be the ones least harmed by its consequences.

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AFRICA’S ALTERNATIVE PATH TO DEVELOPMENT

BROOKINGS,  Thursday, May 3, 2018; Brahima Sangafowa Coulibaly

Original Article:   AFRICA’S ALTERNATIVE PATH

 

Brahima Sangafowa Coulibaly

Senior Fellow – Global Economy and Development; Director – Africa Growth Initiative

Recent projections indicate that several Sub-Saharan African countries will experience robust economic growth over the next five years. By 2023, around one-third of the region’s economies will have grown at an average annual rate of 5 percent or higher since 2000.

And yet, as The Economist observed last year, Africa’s development model “puzzles economists.” After all, only four of the continent’s high-growth countries are natural-resource dependent. Nor is overall performance due primarily to industrialization, as traditional development models would have predicted. What, then, explains the strong economic performance?

New research by the Brookings Institution’s Africa Growth Initiative and the United Nations University World Institute for Development Economics Research (UNU-WIDER) might hold the key to answering that question. According to the forthcoming book Industries Without Smokestacks: Industrialization in Africa Reconsidered, there is evidence to suggest that Sub-Saharan Africa is undergoing a more profound structural transformation than we think.

Africa owes this structural transformation not to traditional industries, but to new developments in tradable services and agro-industries that resemble traditional industrialization. Aside from horticulture and agro-business, these new industries include information and communication technology-based services (ICT) and tourism.

This is a departure from the historical norm. Traditionally, as Harvard University economist Dani Rodrik points out, economies that have sustained robust growth rates without relying on natural-resource booms, “typically do so through export-oriented industrialization.” But in Africa, manufacturing as a share of total economic activity has stagnated at around 10 percent, with economic activity moving from agriculture to services. And because the rate of productivity growth in services is only about half that of manufacturing, the aggregate productivity gains needed for sustained growth have fallen relatively short.

This process of premature deindustrialization is not unique to Africa. But it is more consequential for the continent, given the scale of its development challenges. Owing to its young, rapidly growing labor force, Africa now needs to create more than 11 million jobs in the formal economy every year. But as Nobel laureate economist Joseph E. Stiglitz has warned, Africa cannot replicate East Asia’s manufacturing-led model, so the question is whether it can leverage modern services to achieve economic development.

According to Foresight Africa: Top Priorities for 2018, a Brookings Institution report previewing the results of Industries Without Smokestacks, services exports from Africa grew more than six times faster than merchandise exports between 1998 and 2015. In Kenya, Rwanda, Senegal, and South Africa, the ICT sector is flourishing. In Rwanda, tourism is now the single largest export activity, accounting for about 30 percent of total exports. Ethiopia, Ghana, Kenya, and Senegal are all integrated into global horticultural value chains, and Ethiopia has become a leading player in global flower exports.

As these smokestack-less industries have grown, they have generated new patterns of structural change that are distinct from those of East Asia’s manufacturing-led transformation. But, if properly stewarded, they could play the same role in Africa’s development as manufacturing did in East Asia.

Manufacturing-led growth proved to be an effective development model in East Asia for three main reasons. First, manufacturing has higher productivity than agriculture, and it can absorb a large number of moderately skilled workers migrating out of the agriculture sector. Second, manufacturers benefit from technological transfers from abroad, so their productivity rises in line with global trends. And third, the shift to manufacturing in East Asia was oriented toward exports, which allowed production to be scaled up.

According to John Page, one of the editors of Industries Without Smokestacks, Africa’s growing service sectors share these same characteristics. In addition to being tradable, they have higher productivity and can absorb large numbers of moderately skilled workers. And like manufacturing, they also benefit from technological change and economies of scale and agglomeration.

Moreover, Africa’s smokestack-less service sectors have the added advantage of being less vulnerable to automation. Notwithstanding automation’s many benefits, it presents challenges for countries where the overriding priority is to create a sufficient number of formal-sector jobs.

While economists have been increasingly confident that Africa’s development model will be different from that of East Asia, they have been less certain about what shape it will take. An industries-without-smokestacks model offers one possible answer.

From a policy perspective, African leaders should explore more ways to support these industries’ growth, either through targeted reforms or by incorporating them into national industrialization strategies and broader development agendas. The development of industries without smokestacks can occur alongside efforts to develop those with smokestacks, thus offering a multifaceted approach for Africa to achieve structural transformation.

 

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A NEW PAN-AFRICAN FUND WILL GIVE A BOOST TO FRANCOPHONE AFRICA’S FLEDGLING STARTUPS

Quartz Africa, January 24, 2018,  Yomi Kazeem

Original Article: NEW PAN-AFRICAN FUND

Partech Ventures, a Silicon Valley-based venture capital (VC) firm, has launched an Africa-focused fund which will look to provide early-stage funding to promising startups and founders on the continent. The fund has raised $70 million of its $100 million target, making it one of the largest Africa-focused funds.

Partech Africa is backed by French bluechip corporate partners with “a strong footprint in Africa” including Orange, Edenred, JCDecaux Holding and Bpifrance, a French investment banks as well as multilateral financiers: International Finance Corporation and the European Investment Bank.

The new fund plans to differentiate itself by not limiting operations to Kenya, Nigeria and South Africa, the continent’s leading ecosystems.”We think the impact of a local VC should also be to widen the scope and look at other markets that people know less of,”says Tidjane Dème, general partner at Partech Africa. This includes Francophone African countries Côte d’Ivoire, Senegal and Cameroon as well as Ghana, Tanzania and Uganda.

Francophone Africa in particular has been a significant under-tappedmarket for tech startup investors over the last decade. The region of over 120 million people in 24 countries across West, Central and North Africa includes some of the world’s fastest growing economies led by Côte d’Ivoire and Senegal.

And yet, between 2010 and 2016, there were 167 private equity deals in Anglophone East Africa alone (Kenya, Ethiopia, Tanzania, Rwanda and Uganda), according to AVCA data. During the same period, Francophone West Africa saw a third of that. More than 30% of that has gone to Côte d’Ivoire. Investment for tech startups is even more scarce.

Perhaps a testament to that stance, Partech Africa is headquartered in Dakar, Senegal and is looking to build permanent presence in other African cities to ensure a first-hand understanding of local markets. “We’re making sure our investment team is based in Africa and lives and works in the same context as these startups and can really understand where they’re coming from and the product they’re building,” Dème says.

More Africa-focused VC firms are raising significant funds to support local startups on the continent. Last October, CRE Venture Capital, an African VC firm, led the $40 million Series C round of Andela. The round also saw participation of TLcom’s Africa-focused fund, headed by Omobola Johnson, Nigeria’s former ICT minister. Partech’s research showed startups on the continent raised $366 million in 2016—a $90 million increase from the prior year.

Another gap Partech Africa is looking to plug is the lack of early stage funding much of which has typically been provided by incubators and accelerators on the continent. With majority of private equity investment going towards tickets above $10 million, according to Partech’s data, Dème says it’s the gap below $10 million that needs to be addressed. As such, Partech Africa will be providing funding between between $600,000 and $6 million. The big hope for Partech Africa, according to Dème, is that its smaller early-stage funding tickets “not only address existing demand but also hopefully drive demand for the lower stages as we create a call for more startups.”

 

 

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MORE PEOPLE THAN EVER NOW HAVE ELECTRICITY IN AFRICA, BUT 600 MILLION ARE STILL IN THE DARK

Quartz Africa, 30 April 2018, Lucy Shaw, Matt Tilleard and Gabriel Davies

Original Article: Electricity in Africa

Around 600 million people lacked access to electricity in Africa, according to World Bank data from 2014.

If you have read an article about electricity in Africa before, this number is not new to you. It has become a familiar, almost totemic refrain in every op-ed, panel discussion and program launch addressing electrification on the continent. The statistic is so frequently cited that it can sometimes wash over its audience like a repeated cliché.

Several days ago, the World Bank quietly updated the statistic based on 2016 data. This update provides us with a space to appreciate, again, the heavy and urgent burden of human consequence this statistic represents. It should imbue us all with a renewed sense of urgency.

But some 600 million people still lack access to electricity in Africa, according to World Bank 2016 data. In other words, no absolute progress has been made since 2014.

Over the two years from 2014 to 2016, the off-grid population has gone down slightly. In fact, electricity has reached an impressive additional 76 million people and the electrification rate increased by 5 percentage points to 43%%. But, these 76 million new connections only slightly outpaced population growth of 54.5 million people. So the absolute number of people living without electricity has fallen by only 21 million and the headline statistic remains basically steady at a rounded 600 million people.

There are some encouraging signs. 60% of the newly connected population were in rural areas, where people are more difficult to connect. The urban electrification rate moved slightly from 72% to 74% while rural electrification increased from 16% to 23% in the same time frame. So, progress is being made in the more difficult task of rural electrification. But it’s not enough.

What does this all mean?

The electrification sector has not been standing still. Pay-as-you-go solar has attracted $750 million in investment over the past five years, mini-grids are gaining traction with hefty donor funding allocated across the continent (our estimate is over $600 million) and public sector electrification efforts by national governments are intensifying.

But, this update confirms again that universal electrification is hard and expensive. Grid connections cost anywhere between $250 and $2500+ depending on proximity to the grid. Mini-grids that offer a grid-like service still cost between $500 and $1500 to connect each household. Electrification in a continent where over 60% of the population still live in rural areas is even harder.

So our message isn’t one of discouragement. Instead, we’d propose that we use this update to look with fresh eyes at this staggering statistic; 600m people in Africa lack electricity. We must renew our appreciation for the scale of the challenge and the human consequences of failure.

Universal electrification is the seventh of the Sustainable Development Goals that the global community has committed to achieve by 2030. Even on very optimistic assumptions about the current connection trajectory, 240 million people in Africa will still lack electricity in 2030. To reach our goal, governments, donors and investors need to rally anew behind both government electrification efforts and private sector players in the utility, mini-grid and solar home system sectors

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U.S. POLITICIANS GET CHINA IN AFRICA ALL WRONG

By Deborah Bräutigam

The Washington Post, April 12, 2018

Deborah Bräutigam is the Bernard L. Schwartz Professor of International Political Economy and director of the China Africa Research Initiative at Johns Hopkins School of Advanced International Studies. Her latest book is Will Africa Feed China?

In Washington, Republicans and Democrats generally look at China as a new imperial power in Africa: bad news for Africans. But is this really the case?

Just before his visit to Africa last month, former secretary of state Rex Tillerson accused China of using “predatory loan practices,” undermining growth and creating “few if any jobs” on the continent. In Ethiopia, Tillerson charged the Chinese with providing “opaque” project loans that boost debt without providing significant training. As secretary of state, Hillary Clinton sang the same tune, warning Africans to beware of this “new colonialism.” China, we are often told, is bringing in all its own workers or “grabbing” African land to grow food to send back to feed China.

But researchers who have explored China’s role in Africa suggest that many of the things our politicians believe about Chinese engagement are not actually true.

Light Rail Transit System, Addis Ababa, Chinese Project

  1. Jobs and training

Take jobs and training. Lina Benabdallah, a political science professor at Wake Forest University, studies Chinese investments in African human resource development programs. “Africans are being invited to Chinese universities. China is offering scholarships,” she said. “When Africans are thinking about technology [and] skills, they are thinking of China as a valid option.”

Surveys of employment on Chinese projects in Africa repeatedly find that three-quarters or more of the workers are, in fact, local. This makes business sense. In China, textile workers now earn about $500 a month — far more than workers in most African countries. Chinese investors flocking to set up factories in low-cost countries like Ethiopia are not thinking about importing Chinese workers. Like U.S. and European factory owners who moved their factories to China in past decades, Chinese firms are now outsourcing their own manufacturing to cheaper countries.

  1. Predatory lending

Are the Chinese engaging in predatory lending? Here, researchers can also shine light on a murky subject. Scholars at Boston University and Johns Hopkins University have been painstakingly assembling databases of Chinese loans provided since 2000.

In Africa, we found that China had lent at least $95.5 billion between 2000 and 2015. That’s a lot of debt. Yet by and large, the Chinese loans in our database were performing a useful service: financing Africa’s serious infrastructure gap. On a continent where over 600 million Africans have no access to electricity, 40 percent of the Chinese loans paid for power generation and transmission. Another 30 percent went to modernizing Africa’s crumbling transport infrastructure.

Some of these were no doubt pork barrel projects and white elephants: airports with few passengers, or bridges to nowhere. African presidents, like others, love to cut ribbons and leave legacies of big buildings. Chinese companies will receive nearly all of the contracts to build this Chinese-financed infrastructure. Questions have been raisedabout its quality. Yet on the whole, power and transport are investments that boost economic growth. And we found that Chinese loans generally have comparatively low interest rates and long repayment periods.

  1. Land grabs

“Land grabs” — a term used for any purchase, rental or theft of relatively large amounts of land — are controversial around the world, but especially in Africa, where colonial powers like Britain and France grabbed nearly the entire continent. The stories that China was now a “land grabber” in Africa seemed to make sense. After all, China has 9 percent of the world’s arable land, 6 percent of its water and over 20 percent of its people. Africa has plentiful land and the planet’s largest expanses of underutilized land and water. And Chinese companies were clearly interested in investing in Africa; some came to inquire about land.

And so the land grab rumors began to spread. On the CBS Newswebsite, we read: “China recently purchased half the farmland under cultivation in the Congo.” German president Angela Merkel’s top African adviser told reporters that a devastating famine in the Horn of Africa several years ago was partly due to China’s “large-scale land purchases.” Even Swedish crime writer Henning Mankell recirculated a “land grab” story: “I read just the other day that China has rented land in Kenya to move some one million peasants to Africa.”

Intrigued by these stories, I did what academics do. Instead of tweeting what might have been fake news, I set up a research project.

Our team at the International Food Policy Research Institute and at Johns Hopkins University collected a database of 57 cases where Chinese firms (or the government) were alleged to have acquired or negotiated large (over 500 hectare) amounts of African farmland. If all of these media reports had been real news, this would have amounted to a very alarming 6 million hectares — 1 percent of all the farmland in Africa.

We spent three years tracking down every single case. We travelled from Madagascar to Mozambique, Zimbabwe to Zambia. We confirmed that nearly a third of these stories, including the three above, were literally false. In the remaining cases, we found real Chinese investments. But the total amount of land actually acquired by Chinese firms was only about 240,000 hectares: 4 percent of the reported amount.

The stories of large-scale land grabbing and Chinese peasants being shipped to Africa to grow food for China turned out to be mostly myths. As researchers at the Center for International Forestry Research concluded after their own rigorous research: “China is not a dominant investor in plantation agriculture in Africa, in contrast to how it is often portrayed.”

We found a story of globalization, not colonization; a story of African agency, rather than Chinese rapacity. In Mozambique, I met African investors like Zaidi Aly, who had traveled to Brazil to learn how to grow soybeans for local chicken feed. There, he met a Chinese firm buying soybeans. Aly invited them to invest in soybeans with him. Hit by a prolonged drought, their joint venture failed. The Chinese returned home. But Aly told me it was a net gain: “I learned so much from them.”

To be sure, increased Chinese engagement comes with significant and very real challenges for many Africans. Traders complain about competition from Chinese migrants. In our research on Chinese factories in Africa, we’ve interviewed African workers who now have jobs but complain about Chinese bosses who expect long hours at low pay.

Chinese demand for African ivory, abalone, rhinoceros tusk and materials from other endangered species has taken a significant toll on conservation efforts. And Chinese President Xi Jinping’s recent lifting of his own term limits is bound to embolden African leaders who are reluctant to leave their comfortable presidential posts.

China is often lambasted as a nefarious actor in its African dealings, but the evidence tells a more complicated story. Chinese loans are powering Africa, and Chinese firms are creating jobs. China’s agricultural investment is far more modest than reported and welcomed by some Africans. China may boost Africa’s economic transformation, or they may get it wrong — just as American development efforts often go awry.

This was produced by The WorldPost, a partnership of the Berggruen Institute and The Washington Post.

African Union Building, Addis Ababa; Another Chinese Project

 

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