African Economic Conference to discuss continental transformation through knowledge and innovation

The continent of Africa can easily be described as a paradox. This is one continent that is so endowed and yet its poverty is so palpable. The paradoxical nature of reality on the continent seems to defy any logic and efforts including foreign direct investment, donor support in loans and grants and internal effort at economic and social transformation. The continent also has the highest penetration of mobile telephony services, which in recent times has been identified to contribute to economic growth.

The drive to move the continent out of the doldrums is being taken from various angles, by some governments, civil society organizations and financial institutions.

In the first week of November 2014, the United Nations Economic Commission for Africa, (UNECA), the African Union (AU) and the African Development Bank (AfDB) would hold the annual African Economic Conference in Addis Ababa, Ethiopia.

The theme for the conference is “Knowledge and Innovation for Africa’s Transformation”.

In the background note to the conference the organizers argue that “how well Africa harnesses knowledge and innovation will shape its future and the fortunes of younger generations for many decades to come.”

The organizers say the AU Agenda 2063 and the African Common Position on the Post-2015 development agenda identify science, technology and innovation as key pillars for Africa’s development.

“As the continent pursues its agenda of an integrated, prosperous and peaceful Africa driven by its own citizens and representing a dynamic force in the global arena, success will depend on adequate accumulation of skills, technology and competences for innovation”, the note said.

While admitting that most African governments recognize the importance of knowledge generation and innovation, it indicates that “the continent continues to experience an acute skills deficit in areas that are critical for the realisation of the goal of structural transformation.”

Arguing further, the organizers said the fact that a significant number of engineers and science graduates are unemployed in Africa further underlines the many facets (including the slow pace of structural transformation) of the mismatch between the demand and supply of skills that exists on the continent.

“The proliferation since the 1950s of institutions of higher learning and think tanks devoted to addressing the various challenges of Africa’s development has not brought about a significant narrowing of the continent’s skills/innovation gap. Neither has it enhanced the employability of the labour force. Instead, while opportunities for new economic activities and entrepreneurship have expanded in recent years, the skills mismatch has made it impossible, in particular for the youth and women, to derive direct benefits from economic growth. Consequently, the relevance of the knowledge proffered by African institutions of higher learning is increasingly being called into question,” it said.

While admitting the failure of efforts to lead to transformation, the organizers pointed to a bright part of the story. “On the bright side and despite these challenges, a new crop of innovative digital entrepreneurs is rising in Africa with Africa’s youth showing a keen propensity for absorbing and adopting new technologies,” it said.

The organizers say, a key goal of the Conference will be to examine the best ways in which to use knowledge and innovation to boost youth employment and foster the adoption of new technologies by the wider economy as a result.

John Kerry calls on other countries to do more to stop ebola

I am sharing with you an op-ed by US Secretary of State, John Kerry on the ebola crisis that has hit the world.

A few rich nations are now providing most of the money and doing most of the work. That has to change immediately.

President Obama has made it crystal clear that Ebola is an urgent global crisis that demands an urgent global response. The United States has intensified every aspect of our engagement, and that includes providing Ebola treatment units, recruiting first responders, and supplying a critical set of medical equipment. The administration is working as a team to make sure that we bring all our resources to this effort; for my part, I am working extremely closely with Rajiv Shah, the USAID director, Deputy Secretary of State Heather Higginbottom and our Ebola Coordinator Ambassador Nancy Powell.

But I want to expand that effort with an urgent plea to countries around the world to step up even further. While we are making progress, we are not where we need to be. There are additional needs that have to be met in order for the global community to respond effectively to this challenge — and to make sure that we protect people in all of our countries.

Those needs are described in these slides. They show the very real need for more countries to move resources of specific kinds. It is not just a question of sending people, though it is vital to send people. But we need Ebola treatment units. We need health-care workers. We need medevac capacity. We need mobile laboratories and staff.

We also need nonmedical support: telecommunications, generators, incinerators, public communications capacity, training, construction. There is a desperate requirement for major assistance to strengthen health systems of stricken countries, for cash to support them in this critical time and for transportation to get equipment to the right people and places.

All of these things are frankly urgent if we are going to move quickly to contain the spread of Ebola. We need airlines to continue to operate in West Africa and we need borders to remain open. We need other African countries with the capacity to send responders to join the effort. And we need to make sure that the brave health-care workers who go are properly trained, properly equipped  and supported to prevent additional infections.

Many countries are already contributing, but the scale of needs is dramatic. The United States has contributed $113 million to the United Nations response. Smaller countries have stepped up to the plate – some quite remarkably. Some smaller countries are contributing way above their per capita population.

But the fact is more countries can and must step up to make their contributions felt, and the charts tell the story. There are not enough countries to make the difference to be able to deal with this crisis. We need more nations – every nation has an ability to do something on this challenge.

As the charts show, we already have a shortfall still of some $300 million. The United Nations has identified $1 billion in urgent needs, reflected in the pie chart. The World Bank has put in 22 percent. The U.S.A. has put in 11 percent. Private sector, 10 percent. More is needed – you can see the tally.

Providing this money is a critical component of our ability to be able to meet this challenge, and we need people to step up now. Now is the time for action, not words. And frankly, there is not a moment to waste in this effort.

Ebola: Lessons Unlearned

I share with you a write-up by the Executive Secretary of the United Nations Economic Commission for Africa (UNECA), Dr. Carlos Lopes. He writes on the ebola crisis in Africa.

Dr. Carlos Lopes

By Carlos Lopes

When in March this year Guinean authorities reported the first positive tests for Ebola in the West African region, the news came as a surprise for scientists and were treated passively by most. After all Ebola had killed over a period of thirty years more than two thousand people, since it was first discovered in Yambuku, in the DRC.   Never did it surface outside the Great Lakes and it has never been perceived as a threat for an entire country.

About a century ago when the Spanish flu became a pandemic, it is projected that about 40% of the population was ill. An estimated fifty million died.  People were fine in the morning and would die by the nightfall. Closer to our time we saw the reactions we got when HIV/AIDS was first discovered. It was total panic, with countries not issuing visas, putting ineffective controls in place and reacting as if it was transmissible though thin air. In fact, even closer to our times, we remember the SARS, or Severe Acute Respiratory Syndrome, alert, that came after an outbreak in China and Southeast Asia, about ten years ago. That syndrome was indeed prone to airborne contagion, yet nobody remembers airline crews refusing to fly to affected countries. A more commonly known transmissible airborne disease is tuberculosis. Again, nobody heard, even remotely, about measures being taken to quarantine people, let alone regions or countries due to tuberculosis.

The reason it is important to reflect on history is because the African continent cannot afford a serious threat like Ebola to be de-contextualized. It brings us back to the stigmatized Africa. In the process, there will be no focus on the efforts needed to deal with the issue. The economic and social consequences of such misguided perceptions are already devastating.

Why has Ebola hit so hard?

Ebola has been stopped every time an outbreak was announced, thirteen times in fact, except this time. It is important to understand why, as well as be bold about learning from the current mishaps that contributed to the emergency this time around.

These include the fact that the affected countries have poor health systems; information flow is poor; and there is an almost total absence of good communication. We can regret the decadent health infrastructure, particularly in remote rural areas.  We can add our concern about the huge deficit of medical personnel available to combat any pandemic.  Africans have to right to be outraged that only 1% of the pharmaceutical research is devoted to diseases that affect the continent, which carries 25% of the world’s disease burden.  All of this is true and sadly well known.

The reason influenza only kills about half a million a year or that SARS only had about 12% death rate compared to Ebola’s 54%, is certainly the existence of a well developed capacity in Western of Southeast Asia countries. It is not because of the nationality or origin of the affected.

Today there are reported Ebola cases in seven countries, with over 2000 deaths and 20,000 estimated cases. There is nothing, absolutely nothing, in the current forms of dealing with the situation that can effectively impede say tomorrow, half the African countries having reported cases. For each African country putting in place draconian measures that are not medically justified they have to think of themselves being under the same measures, in a not so distant future, as a very  likely possibility.

This brings us to the issue of solidarity!

More than solidarity, it is about common sense. Ebola can only be tackled through massive investment to address on an urgent basis the contributing factors to the outbreak. Countries in the epicenter are over-stretched and they need the whole of Africa to put a stop to misinformation and instead join the call for action for substantial funding of the outbreak control measures. The UN estimates the need at 1 billion dollars immediately. WHO has a clear roadmap for the process. The minimum to expect is that Africa comes in solidarity for this emergency package to be implemented without any more hesitations. Time is pressing. That is the real solidarity.

The economic impact

The economic impact of the Ebola outbreak will be significant. Estimates by the Economic Commission for Africa confirm that several points GDP reduction are to be expected in Guinea, Liberia and Sierra Leone, due to a combination of factors. These include significant reduction of mining operations, disruption of agricultural cycles with direct impact of upcoming harvests, restriction to domestic and cross-border trade, substantial reduction of air travel, postponement of already negotiated or foreseeable investments, spectacular diversion of public funding towards combating the epidemic, impact on fiscal space and, finally, inability to pursue initiated reforms.

Investors are influenced by the panic mode that has been spreading through the media. They think it is a risk to deal with entire countries. It is as if the Ebola bodily fluids transmissibility had gone from individuals to countries. This is fuelled by the concentric circles of quarantine, neighborhood shut downs and border closures, all highly publicized by the international media. The gear used by the medical personnel that can afford it reminds us of the images of Chernobyl and Fukushima.

Economic consequences are never far from the social ones.  Humanitarian actors are complaining that instead of opening arms for their work they are being restricted. The ethnic or regional stigmatization has had tremendous costs for segments of the population that were already isolated geographically. Individuals suspecting the symptoms may not be sure they have Ebola, but are sure that the devil is in the hospitals. Behavioral issues such as what one eats, how one conforms to hygiene protocols or plain human right for care and decent death, require a humane and compassionate attitude. More than half of the victims have been women.  Food price increases and local markets disruption or closure, are threatening fragile consumption patterns.

Africans are only going to win this fight if they deal with its spread. As much as vaccines can and should play their role, at this stage they are not at the centre of the response. The serum of the Ebola survivors is already being considered the most immediate resource for the victims that reach a medical unit. But even that commands considerable means and capabilities.  We need to have such facilities first. There must be a special emphasis on containment, prevention and preparedness. It is unprecedented to have such a high number of medical personnel, as many as 120 so far, dying from a transmissible disease. It only becomes possible if one does not possess basic equipment.

The world is showing that it has unlearned from inflectional diseases, rather than learn from accumulated knowledge. Ebola is just the last episode in a long course on hysteria faced by the continent. This time around instead of succumbing to it Africans need to fight back.

Africa, Ghana rising? Whose Africa? Whose Ghana?

By Emmanuel K. Dogbevi

Some citizens protesting bad governance and economic decline in Ghana.

Only as recently as 2012, Africa was in focus as the world’s economic rising star. The continent posted very healthy figures in GDP growth over a decade. Foreign direct investments (FDI) rose, there was growth in real estate development and declining inflation.

In 2012 for instance Chinese contractors were reported to have had a turnover in housing in all 53 African countries to the tune of $40.8 billion, and the top three countries were Angola, Nigeria and Algeria, accounting for 41.7%.

These were record investments in Africa, and the economies of some African countries were feverishly and ecstatically rebased to reflect ‘realistic’ economic data.

When the list was drawn for the world’s 10 fastest growing economies in 2012, about seven were African countries including Ghana and Eritrea.

Never mind that Eritrea is one of the poorest, conflict ridden countries on the continent and it is ruled by a suffocating and ruthless dictatorship with a nauseating record of haunting and hunting down its own citizens, but nonetheless it made it to the list.

Ghana’s economy in 2011 grew almost 14.4% and inflation dropped to about 9%. The country became a good example of democratic success on the continent, as if to say democracy necessarily stimulated economic growth.

A sign announcing Ghana's capital Accra as a Millennium City.
The broken texts reflect the mismanagement and neglect of the country's economy and infrastructure.

Incidentally, one of the factors that put African countries in focus was the fact that the developed countries were struggling to recover from the ripples of the global financial crisis of 2008 which was precipitated mainly by the housing and banking industry in the US. African countries luckily were untouched by the devastating effects of the crisis, for the simple fact that the financial systems of the countries on the continent were not well developed as that of the west and more importantly, these economies were not integrated into the financial systems of the west.

Ghana, for instance had just rushed into producing oil, and the investments in oil infrastructure had boosted the economy, but sadly that was soon to be seen as a flash in the pan. The country suddenly entered an election year, and the records show that in every election year the country’s economy runs out of control due to government over spending. There was also the case of poor planning riddled with so much ‘political expediencies’, short sightedness and lack of political savvy, and just after 2013, the country’s economy started to show rapid decline.

Whatever the western media saw to start proclaiming the rise of Africa is hard to tell. May be they were looking at the figures - it could also possibly be that they were doing penance. The western media might have been moved by guilt to start singing the chorus of Africa rising after having spent several decades declaring the continent hopeless and dark.  The media probably felt it owed the continent ‘fair’ and balanced reporting, and the continent’s leaders lapped it, including academics. Not many questioned the data. The few who tried to be skeptical were labeled, blacklisted and somehow punished in subtle but notable ways that showed that everyone believed in the data or at most, didn’t want to probe further to ascertain the veracity of the data. “Numbers don’t lie’ some argued.

But the growth like a bubble didn’t last long and burst. In the case of Ghana, long before the government of the day began admitting there is decline, the same western media is already hammering the economic decline which is now dimming the faint glimmer of hope that most of the country’s poor held when oil was discovered.

Ghana has been touted as the continent’s great example of a modern democracy on a continent ravaged by conflict resulting from electoral disputes. But long before the country was raised and praised as an adorable symbol of democracy, some Ghanaians who observed the system critically pointed out that the country’s democracy was a façade. The closest the country had got to a democracy was to organize elections and announce results. Despite evidences of rigging and intimidation of citizens and the media during electioneering activities, long-suffering citizens have always accepted the final results as announced by the country’s electoral commission for the sake of ‘peace’.

Results of the 2012 presidential elections were disputed and eventually went to the Supreme Court. After several months in court the matter was settled and the opposition accepted the outcome. The Court declared the incumbent government winner.

Incidentally, while Ghana is considered one of the countries in Africa with free expression and a free press, journalists are often intimidated, and while it’s hard to prove, a few influential ones have been bribed into burying facts and instead they trumpet and defend propaganda.

Majority of media organizations are owned by politicians and their allies, and media organizations that follow the professional path are punished by being denied advertizing and sometimes accreditation to cover national events.

The façade is so glaring but as usual, most people are playing the ostrich.

Now the country seems to almost hit rock bottom. The budget deficit continues to widen, becoming a major constraint to fiscal and debt sustainability and the government has turned to the IMF for help. But if one listens to both the president and the finance minister, it is hard to tell what the government has gone to the IMF for – however, the suspicion and belief among most citizens is that it has gone to the IMF to seek a financial bailout, and other citizens have suggested it is a subtle way to reign in government expenditure and bring about fiscal sanity based on IMF conditionalities.

Perhaps the western media was too quick to praise the continent and that might have gone into the head of its leaders, most of who recorded evidences has shown to think more about the power they grab and wield, much more than creating wealth and ending inequality.

Don’t tell me Africa is rising yet. I live in an African country, I will know when it does, and while we are at it, there goes Ghana, already losing her shine.

Bring back our girls, but bring back Nigeria too

By Emmanuel K. Dogbevi

Now it seems the world is waking up to the news of the senseless kidnapping of school girls in Chibok, in northern Nigeria. Not even the government of Nigeria showed any sensitivity to the issue, until protests from within and outside the country appear to have jolted it into some kind of action.

And typical of an African government, who all over the continent continue to be uncaring, aloof and ever greedy and selfish with often ineffective policy directions except in matters that they and their cronies benefit, the clueless Jonathan government as expected has reacted by setting up a committee. That’s what African governments do – they are experts in setting up committees to address issues they often are very much aware of or are responsible for just so they would be seen as doing something about it.

The legendary lethargy, cruelty and vulgarity of the Nigerian political class is not lost on anyone. It is the only country in Africa that I am aware of where people who steal public money spend and display that ill-gotten wealth openly. They steal and flaunt it.

The kidnapping of these girls is only a continuation of the sad state of affairs in Nigeria. The country itself has been kidnapped long ago and not many seem to have noticed. And the only way the country would start assuming any sense of state is when it is itself rescued! The kidnapping of these poor girls was because there doesn’t appear to be a state. Nigeria has lost to a large extent its statehood and must be rescued.

For the most populous country in Africa with one of the most richest oil fields in the world and now rebased as the continent’s largest economy to be in the quandary it finds itself today is unacceptable to say the least.

Nigeria is a nation lost to kidnappers parading as politicians and leaders. And as the world calls for the rescue of the girls, let’s all note that the country itself needs to be saved.

Bring back our girls. Bring back Nigeria.

As Obama pledges $7b for energy in Africa, where is the $63b pledge for health care?

President Barack Obama

By Emmanuel K. Dogbevi

President, Barack Obama is in Africa for the second time since becoming President of the United States of America and he is pledging funds to help the continent. This time, he is pledging $7 billion to deal with the energy crisis in sub-Sahara Africa.

"More than two-thirds of the population of sub-Saharan Africa is without electricity, and more than 85% of those living in rural areas lack access," a statement from the White House has said.

Sub-Saharan Africa will need more than $300 billion to achieve universal electricity access by 2030, the statement added.

This was how the CNN captured the pledge in its reportage: “US President Barack Obama pledged $7 billion Sunday to help combat frequent power blackouts in sub-Saharan Africa.”

Funds from the initiative, dubbed ‘Power Africa’, will be distributed over the next five years, it said.

Most countries in sub-Sahara Africa have huge power deficits leading to constant power outages. These outages are affecting lifestyles and industries. Businesses are losing millions of dollars in revenue and investments as a result.

President Obama is no doubt a charismatic leader. He seems passionate about making a positive impact on the world, but is he getting as much as he wants done? Would this new $7 billion pledge materialize?

These questions are necessary because when Obama first came to Ghana in 2009, he made a financial pledge to fix Africa’s broken health care sector, with particular emphasis on public health. He made a pledge of a whopping $63 billion.

Making his policy speech on Africa in Ghana’s Parliament in Accra Saturday July 11, 2009, he said even though enormous progress has been made on the continent in health care and many more people with HIV/AIDS still live productive lives and are getting the drugs they need, “too many still die from diseases that shouldn’t kill them, when children are being killed because of mosquito bites and mothers are dying in child birth, then we know that more progress must be made."

If that pledge has been fulfilled, it would be worthwhile to know how much of that has been disbursed. It would also be useful to examine what benchmarks were set to attain the goals for which the amount was pledged and if it was ever given, to look out for what has been achieved so far after nearly three years.

It is one thing to pledge, and it is another thing to deliver on the pledge. Before another celebration is
organized for this new initiative, looking at the very critical situation of Africa's energy challenges, and in the  light of the truth, there should be compelling reasons to seek to know what happened with the $63 billion pledge to support the health care sector in Africa.

African Development Forum discusses how Africa can benefit from its natural resources

By Emmanuel K. Dogbevi

There is no doubt that the African continent is rich in natural resources.

The continent with an estimated over one billion population is rich in renewable and non-renewable natural resources, however, there is general agreement that the continent does not benefit from its vast resources. These resources are mined and exported in their raw form.

Africa produces more than 60 metal and mineral products and is a major producer of several of the world’s most important minerals and metals. But issues about Africa’s natural resources are vexatious.

Some of the minerals mined out of Africa include gold, diamond, PGE’s, silver, iron, uranium, bauxite, manganese, chromium, nickel, bauxite, cobalt and copper. Platinum, coal, and phosphates are also mined on the continent.

Africa also has rich forests, marine and aquatic resources that have been exploited for years, but Africa’s share of the revenues, “have been miniscule compared to what the mining companies have realised,” said Dr. Stephen Karingi, the Director, Regional Integration, Infrastructure at the United Nations Economic Commission for Africa (UNECA) in 2011.

Dr. Karingi has also said the top 40 mining companies operating in Africa reportedly made net profits of about $110 billion in 2010 alone. And these companies have a net asset base which exceeds $1trillion.

Information available also indicates that mining has come to dominate the export earnings of many African countries. In 2005 minerals accounted for more than 80% of exports in Botswana, Congo, DRC, Guinea, and Sierra Leone and more than 50% in Mali, Mauritania, Mozambique, Namibia and Zambia. By 2008 sustained demand from a burgeoning Chinese economy had seen prices for minerals reach new heights.

Jean Noel Francois, the Acting Director, Department of Trade and Industry at the African Union (AU) Commission has also said in 2011 that even though Africa’s mineral resources are fuelling growth and development in many industrialised and emerging economies of the world, Africa still remains poor, under-developed and dependent on donor assistance for national budget support.
He further reiterated the fact that Africa consumes very little of its own mineral resources and exports most of it as raw materials, “with little or no local value addition and beneficiation.”

The Eighth African Development Forum (ADF VIII) held from October 23 to 25, 2012 sought to discuss these issues and chart the way on how Africa can harness it’s natural resources to benefit its people.

The conference jointly organised by the UNECA, the African Union Commission and the African Development Bank is under the theme “Governing and Harnessing Natural Resources for Africa’s Development”.

“The ADF, an ECA) flagship biennial event created in 1999, is a multi-stakeholder platform for discussing the effectiveness of Africa’s development policies and strategies…. It is to establish an African-driven development agenda that reflects consensus, and has the  potential to yield specific programmes for implementation,” the conference concept paper has said.

The Concept paper further states that the Forum will build on the outcome of the Fifth Joint African Union (AU) Conference of African Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development held in March 2012 in Addis Ababa under the theme “Unleashing Africa’s potential as a pole of global growth” and the analytical work carried out in the Economic Report on Africa 2012 under the same theme.

It adds, the platform offers as much an opportunity to build partnerships as for the occasion to further deepen discussions on implementation of: the Africa Mining Vision (AMV); the AU Declaration on Land; the Framework and Guidelines for Land Policy in Africa (F&G); the Implementation Strategy for the Accelerated Industrialization Development for Africa (AIDA); Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests; and other frameworks for best practices in the management of mineral, land, fisheries and forest resources.

The overall objectives of the Forum are to  raise awareness and cultivate deeper understanding of the role of Africa’s natural resource governance in its economic transformation. It will also provide an opportunity to discuss frameworks, policy options and strategies to better integrate mineral, land, fisheries and forest management into national resource management programmes, strategies and policies.

And some of the specific objectives include to demonstrate the role that Africa’s mineral, land, fisheries and forest resources could play in its broad social and economic development; Deliberate on the challenges that mineral, land, fisheries and forest resources mismanagement pose to Africa’s development, and offer governance and management models that can best support the continent’s transformation; and promote sharing of models, experiences, best practices and lessons learned in enhancing the role of natural resources in development in Africa among others.

Some of the expected outcomes include the following; Better-informed stakeholders about the role of natural resources in Africa’s development; Deeper understanding of stakeholders on how to translate frameworks and visions for natural resources management into practical policies and actions; and Strengthened capacity of stakeholders to advocate for prudent management of minerals, land, fisheries and forest resources to enhance their contribution to development.

African countries must go beyond talk to action. The global economic crisis and the eurozone crisis are enough evidence for action now.

The citizens of Africa have waited long enough. The teeming youth of Africa need jobs.

The 2012 African Economic Outlook (AEO) argues that youth unemployment figures will increase unless African countries move swiftly to make youth employment a priority, turning its human capital into economic opportunity.

The AEO has also warned of looming domestic and external risks posed by the continued economic crisis in the eurozone.

This crisis, according to the AEO, threatens to constrain growth by lowering the demand for Africa’s exports, reduce tourism earnings and financial flows from foreign direct investments, Official Development Assistance and remittances.

Dr. Emmanuel Nnadozie, the Director of Economic Development and NEPAD Division, United Nations Economic Commission for Africa (UNECA) has also argued that, “Exporting raw materials is equal to exporting your jobs.”  He indicated that, processing those raw materials on the continent would offer jobs to citizens and add value to exports.

According to him, it is important to get Africans into the global value chain. He said that can be done through natural resource governance, knowledge and human resource development and growth that is strong and broad-based.

2012 Economic Report on Africa shows continent has potential to be pole of global growth

By Emmanuel K. Dogbevi

The 2012 Economic Report on Africa has been launched. The report was launched last week in the Ethiopian capital, Addis Ababa during the 5th Joint Annual Meetings of the AU Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development.

The report which makes a strong argument that Africa has the potential to be a pole of global growth, calls for efforts to unleash the continent’s full potential to fully play that role.
The 2012 edition of the report titled ‘Unleashing Africa’s Potential as a Pole of Global Growth’, examines recent developments in the world economy and implications for Africa and analyses the economic and social prospects for 2012.

Africa’s potential to be the next global pole of growth has never been in doubt. Despite the ripples of the 2008 global economic crisis which are being felt and as the current Eurozone crisis goes on, Africa has shown resilience and continues to grow, even though the report acknowledges that the Eurozone crisis could negatively affect Africa.

The report  provides evidence among other factors to show that Africa could be a pole of global growth and goes on to propose a clear plan on how to unleash the continent’s development capacity and mobilize resources for its structural transformation.

According to the report, after a strong rebound in 2010, the world economy slowed in 2011 owing to increased risks and uncertainties that are expected to remain in 2012 and beyond.

It takes note of the negative effects of the triple crisis of 2007–2009 – food, energy and finance – which still linger, and the euro area sovereign debt crisis, it says, has aggravated the structural imbalances in the world economy and cast doubt on the prospects for sustained growth and a quick recovery.

The shift of “toxic assets” from private sector to government balance sheets in major developed economies did not relieve the global financial system as expected, “but instead worsened government fiscal positions, paced by new global financial turmoil with the onset of the euro area crisis,” it says.

Noting that the depth and complexity of the global crisis has so far defied the many policy responses applied by the major developed countries, which kept interest rates low and pursued fiscal austerity measures to restore fiscal credibility, the report posits that, despite these measures, however, long-run structural problems, such as increased income inequality, dysfunctional labour markets and global imbalances, have intensified.

African economies, the report said, rebounded quickly from the 2008 financial crisis as commodity prices rose and export revenues returned to pre-crisis levels, enabling them to finance the necessary investments.

But with the political turmoil in North Africa, coupled with the euro area crisis, growth slowed in 2011. Still, some African countries continued to post double-digit growth, reflecting increased commodity prices and strong domestic demand, the report said.

Citing the world economy which grew at 2.8 per cent in 2011, down from 4 per cent in 2010, largely because of decreased demand and greater uncertainty, it indicated that gross domestic product (GDP) growth in developed economies declined from 2.7 per cent in 2010 to just 1.3 per cent in 2011, on both demand and supply factors.

Domestic demand, however, the report said, particularly in the developed world, stagnated owing to obstinately high unemployment and depressed consumer and business confidence, as fear of a second recession became widespread. Low growth in the developed world is expected to persist at least until the end of 2012.

Outlining examples of growth in the European Union, the US and Japan, it said growth in the European Union (EU) levelled off from 2 per cent in 2010 to 1.6 per cent as the euro area registered only 1.5 per cent growth in 2011. The euro area crisis struck at consumer and business confidence, and lowered private consumption and investment against a backdrop of re-emerging financial turbulence and a bank credit crunch. The EU is expected to register minimal growth of 0.7 per cent in 2012, and the euro area a mere 0.4 per cent.

Growth in the United States (US) it shows, declined to 1.7 per cent in 2011 from 3.0 per cent in 2010, reflecting continued sluggish private consumption and reduced government expenditure. An elevated oil price, high unemployment and persistent deleveraging held down disposable household income. US growth is forecast to slip to 1.5 per cent in 2012. Downside risks lie in fiscal policy choices and the spillover effects of the euro area crisis on still fragile financial institutions.

However, the report says, some positive signs have emerged in job markets, which might
influence the 2012 presidential election and the subsequent economic policy orientation and the pace of the recovery.

Japan’s economy, it stated, switched from 4.0 per cent growth in 2010 to a contraction of 0.5 per cent in 2011, mainly owing to the shock of March’s devastating earthquake and tsunami on private consumption and investment.

Export growth slowed, reflecting the disaster’s disruption to supply chains as well as the yen’s climb. Post-disaster reconstruction expenditure and rising manufacturing confidence are, however, projected to enable the economy to rebound with 2.0 per cent growth in 2012. In the medium and long term, though, an ageing population, mounting public debt and deflationary pressures will weigh heavily on growth, it said.

The ‘economies in transition’ grew 4.1 per cent in 2011, as in 2010, but still below pre-crisis rates, the report said.

It indicated that domestic demand remained weak, as high unemployment and increased household indebtedness constrained private consumption and investment. However, export revenue rose on high commodity prices. The economies in transition are expected to grow 3.9 per cent in 2012, yet they remain vulnerable to spillovers from the euro area crisis owing to their close economic links to that bloc.

In 2011, developed economies’ overall fragility weighed heavily on developing countries’ growth, which stood at 6.0 per cent, down from 7.5 per cent in 2010; growth is projected to decline further to 5.6 per cent in 2012, the report said, adding that, overheating worries have receded, but high unemployment and political turmoil in some countries are still threatening growth prospects.

Developing countries, it said, have tried to make up for the decline of external demand by stimulating domestic demand and pursuing expansionary policies.

East and South Asia—the world’s growth engine—also felt the global economic chill through slackening exports, it noted.

It said, growth slowed to 7.1 per cent in 2011 against 8.8 per cent in 2010, despite robust private consumption and investment. Natural disasters affected regional industrial production and supply chains. Growth is projected to further decelerate to 6.8 per cent in 2012 as external demand from developed countries stays depressed.

Citing China and India, the report inidcated that the two largest emerging economies, were slowed by headwinds from the world economy in the fourth quarter, though they maintained excellent growth of 9.3 per cent and 7.6 per cent, respectively, in 2011.

“High inflation eroded Chinese household incomes and government attempts to limit bank credit—stemming from anxieties of an overheating economy—put pressure on private investment. The major risk for China’s economy comes from a possible external demand slump, which would depress export growth. China is forecast to grow 8.7 per cent in 2012,” it said.

“India’s buoyant private consumption was its main growth driver. Rising prices of basic foods, water and electricity have, though, become a source of public protest against government policies. India is expected to keep its growth momentum, at 7.7 per cent in 2012. Low productivity of rain-fed agriculture and a possible reversal of capital inflows are the main risks,” the report said.

According to the report, Western Asia’s economic growth edged up from 6.3 per cent in 2010 to 6.6 per cent in 2011, mainly on a high oil price and greater social security spending.

Increased energy export income and supportive macroeconomic policies propped up growth in oil-exporting countries, while some oil-importers saw recovery led by fiscal stimulus and domestic demand. Others contracted  or stagnated because of social and political instability.

Growth for the region is expected to decline sharply to 3.7 per cent in 2012 as a result of regional political uncertainties and a possible downward trend in the oil price.

Economic growth in the Latin America and the Caribbean (LAC) region, it said, decelerated to 4.3 per cent in 2011 from 6.0 per cent in 2010, despite the vigorous domestic demand attributable to favourable labour markets, high commodity prices, global low interest rates and currency appreciation. Growth rates were divergent across the region: South American countries continued to benefit from emerging economies’ commodity demand, sound economic fundamentals and increased domestic demand. Mexico and the countries in Central America and the Caribbean, in contrast, experienced slow growth, influenced by the weak US economy.

The world economy, the report explains, is entering a period full of uncertainties and challenges. In the short term, the euro area sovereign debt crisis might push the global economy into another prolonged and deep recession or slow global growth, at steep social cost. High unemployment and rising food and energy prices have already widened income inequality and stirred up widespread discontent and social instability around the planet. The failure of developed country governments to provide long-lasting solutions to correct global imbalances deepens the malaise.

Africa, the report noted, is not immune to the global crisis, though it is now in a much better position to deal with external shocks. The expected global economic slowdown may well cut demand for its commodity exports, reduce prices and thus hurt its export revenues, but increased output alongside its gradual moves to diversify its exports—as well as recently improved intraregional trade—can help the continent to better weather adverse global developments.

ODA shortfalls, it noted, could threaten many aid-dependent African countries’ social development programmes, but could also encourage the continent to mobilize more domestic resources and reduce over-dependence on foreign financial assistance.
In view of these risks and challenges, the report calls on African governments to implement growth-supportive macroeconomic policies in the short run, while adopting long-term development perspectives.

“To be more specific, they should increase their investments in programmes such as education, health and infrastructure that can enhance their economies’  long-term growth potential in the bounds of their fiscal space. Monetary policy needs to be accommodative to support growth, but must be combined with income policies to provide a minimum social security cushion for the weakest groups in society, so as to consolidate the achievements in reducing poverty over the last decade,” it says.

In the long term, Africa’s, it says, governments need to pursue economic diversification and structural transformation vigorously in order to reduce vulnerability to external shocks, such as the euro debt crisis or volatility in commodity prices. Moreover, African countries must continue to diversify their export destinations and expand economic partnerships, including those with new development partners, while deepening intra-African trade and investment.

The report believes that, crucially, African countries can grow faster by unleashing their productive potential—by aggressively investing in infrastructure and human capital, and by promoting good governance.

“This will require strong political leadership and a firm institutional framework to fulfil the broad, transformative long-term agenda,” it says.

The report is a joint publication of the Economic Commission for Africa (ECA) and the African Union (AU).

How travelling within Africa is prohibitive for many Africans

By Emmanuel K. Dogbevi

Travelling within Africa can be fun - real fun. Because meeting other Africans in their own countries adds a certain flavour to one's experience of the continent, a good opportunity to share in the continent's alluring natural scenes.

It is even more exciting to taste other African meals.

The experiences can be at certain times surreal and at others awesome. But travelling within Africa is burdensome, hectic, and almost impossible for most Africans, and that in itself has contributed to a large extent to the lack of knowledge among Africans of each other's culture and general worldview .

The challenges of travelling within Africa begins with the high cost of transport fares both by air and by road. The cost of travelling to neighbouring countries is prohibitive for many Africans, sometimes more than it costs to travel to Europe or the USA.

Most average Africans cannot afford the transport costs ranging around $1000 or more.

There is also the high cost of hotels on the continent.

Then there is the visa requirements, often more stringently applied for Africans than for Europeans and Americans. Indeed, it is often easier for citizens of these continents to acquire visas to African countries than it is for Africans themselves.

For instance on the website of the South African High Commission in Ghana is a list of 40 countries exempt from requiring visas to enter that country and the only African country on the list is Botswana! Probably all other South African Development Cooperation (SADC) countries, 12 of them might be exempt as well, but there is no information on the website about that. Botswana is a member.

I started writing this piece as I waited at the Hosea Kutako International Airport in Windhoek Namibia on transit to Durban via Johannesburg on December 1, 2011.

My trip itself was eventful. It started with the application for visa at the South African High Commission in Accra. I filed my application two days to the start of the trip on December 30, 2011. That was so because I had only returned from another international assignment in Addis Ababa the previous Friday November 25, 2011, late in the afternoon and therefore, the only time I could put in my application for a visa to South Africa was Monday November 28.

The Embassy staff minced no words in telling me that I couldn't apply for a visa when my trip was only two days ahead! I overheard some applicants being told to return for their passports in two weeks! What?! I thought. How should a visa to South Africa take two weeks to process? But that's the rule!

There is however, this very intriguing story of a friend I met in Addis Ababa. He told me of his ordeal in the hands of immigration officials at the Bole International Airport in Addis Ababa. He was in Ethiopia at the invitation of a state institution. There is no Ethiopian Embassy in the European country where he lives and so he had to get his visa on arrival at the airport. But on arrival at the airport, he was detained and questioned over what he was coming to Ethiopia to do! Meanwhile, as my friend was being questioned, other visitors of another race were being waved through immigration with broad smiles.

He asked the officials why they have detained him an African and yet allowed the visitors who might be coming from Europe to go through so easily. This was what the official told him, "these are tourists and our country's economy depends on tourism."

In spite of pointing out to the officials that he was in their country at the invitation of a state institution and that they should check on the list of guests for the specific event that he had mentioned, indicating that his name was on the list, they were adamant, until one official recognised him, because of his job in the media and asked his colleagues to let him pass.

A week after this sore incident, my friend returned to Ethiopia at the invitation of the United Nations Economic Commission for Africa (UNECA), just as myself and he was detained again. It took the intervention of an official who recognised him during his first detention to get my friend out. This is Africa, and yet Africans cannot enter each others' countries freely.

Well, back to my story with the South African High Commission in Accra. I was given the visa on Wednesday afternoon November 30, 2011 and I was able to make my trip.

But my experience at the High Commission was no different from what I would have gone through seeking a visa to a European country. Interestingly however, my experience at the US Embassy in Accra was smoother than I had thought, but it is perhaps, because I was going to the US at the invitation of the US Department of State Foreign Press Centre. And my experience at the Ethiopian Embassy so far was the best! Each time I had applied for a visa, it was issued the same day within an hour! And all I needed to submit were my passport, one passport photograph, an invitation letter from my hosts, an introduction letter from my office and the visa fee.

At the South African High Commission, I was asked to submit my hotel reservation form and bank statement, even though my trip was being fully sponsored by Siemens Southern Africa. I was asked to submit an introduction letter from my office, even though this is not indicated on the requirements for a visa on the application forms. It takes more than four hours to go through the visa application submission process with a cranky security man at the gates calling the shots and deciding on who he would let into the premises.

Meanwhile, the requirements for applying for a visa as stated on the application form are as follows: A passport; proof of booking of airline ticket; two identity passport photographs; prescribed visa fee if not exempted; supporting documentation confirming the purpose of the visit and vaccination certificate if required. But at the High Commission, officials would ask of bank statements and letter of introduction from employers - these are not stated among the requirements for visa application!

Travelling from Ghana to Nigeria by road can be a nightmare! The unnumerable security checkpoints on the roads and the extortions are just unbelievable, often done brazenly and cruelly in broad day light by uniformed officials on duty.

It is equally gruelling to travel from Ghana to Ivory Coast. Some of the drivers collect money from travellers to bribe officials on the way, just so they would have smooth passage.

Only last month the African Trade Policy Centre (ATPC) of the Economic Commission for Africa (ECA) organised the first Africa Trade Forum that looked at how Africa can trade itself out of poverty. And some of the issues that came up were the physical and non-physical barriers that exist beween African countries.

Although global trade is valued at around $30 trillion, Africa's share is only about 3% and intra-African trade is currently estimated at an abbysmal 10%.

It is necessary for African countries to take a second look at the facts that create these difficulties, that obviously hamper the continent's growth. It is being trumpeted now that this is Africa's time, as the continent has been experiencing growth, in the face of the challenges facing Europe and the US.

A good example that other African countries can also learn from is the relationship between neighbours South Africa and Namibia. As I experienced at the Hosea Kutako International Airport in Windhoek, I was able to purchase Internet airtime at the airport using the South African rand and was given change in the Namibian dollar. The currencies of the two countries are valued at one to one. I gave the attendant 100 rand as I bought 20 Namibian dollars worth of airtime, and I was given change of 60 Namibian dollars and 20 South African rand!

That certainly is a good example worth emulating by other African countries, apart from making travelling across the continent less cumbersome even as countries take into consideration security issues.

Nearly 400 million Africans have mobile phones - Report

By Emmanuel K. Dogbevi


Africa’s mobile phone industry is seeing phenomenal growth despite the ripples of the global economic crisis.

The continent’s mobile phone market has grown up to 25% in 2008, a study conducted by Blycroft Publishing, a UK-based telecommunications publisher with a focus on mobile markets has found.

The report published Thursday September 17, 2009 in London says the mobile phone sector on the continent has seen the activation of 74 million new subscribers.

The report noted that at the end of March 2008 the African mobile market stood at 296 million subscribers.

“During 2008 the market grew by more than 74 million subscribers reaching 370 million mobile subscribers as of the fourth quarter of 2008, representing a remarkable 25% increase in the size of the market,” it said.

Some of the factors that contributed to this growth, the study found, included the launch of 11 new networks in Ghana, Benin, Botswana, Congo Brazzaville, Guinea-Conakry, Kenya, Niger, Nigeria, Senegal, Sudan and Uganda.

In Ghana the newest network, Zain was launched in December 2008 and Orange launched both in Niger and Uganda.

Other factors attributed to the growth are most likely economic growth and proliferation of networks within Africa.

The report also indicated that as of May there were 163 mobile networks live across Africa spanning both GSM and CDMA technologies.

Meanwhile, in Ghana, there is a debate over the exact percentage of the country’s population actually using mobile phones.

While the National Communications Authority (NCA) says it is 55%, which accounts for some 12.1 million of Ghana’s about 22 million population, the figure was recently disputed by an official of Tigo. A GNA report quoted Ms. Lucy Quist, Tigo’s Head of Operations for Africa as saying the current wireless penetration in Ghana is 47%, which puts the figure at 10.34 million of the population.

In an interview however, CEO of Kasapa Telecom, Mr. Bob Palitz told ghanabusinessnews.com that it is difficult to tell the exact number of mobile phone users in Ghana. He said there is a difference between the number of chips that people have bought and the actual number of people who are actively using their mobile phones.

He argues that there are people who have more than one mobile phone chip from different networks and might not necessarily be using all of them.

He told ghanabusinessnews.com that the methodology of counting is problematic. He said, the counting is done every three months and within that three months, it is possible that a customer of one network could leave and connect to another network, and all the networks would count this subscriber. “This leads to duplication,” he said.

In spite of the conflicting figures, there is certainly growth in the mobile phone industry in Africa and for that matter Ghana, and there is evidence that it is driving economies and leading to growth.

Source: www.ghanabusinessnews.com

Africa not attractive investment centre for American businesses - Report

By Emmanuel K. Dogbevi

American businesses are not investing in Africa as they should due to a number of reasons including corruption, lawlessness unstable governments and inadequate infrastructure.

They are also hesitant to put their money in African countries because of the apparent lack of political will by African governments to curb corruption, a report released Wednesday May 20, 2009 by Baird’s CMC, a communications marketing consultancy together with the US Chamber of Commerce.

The report a copy of which was made available to ghanabusinessnews.com indicates that, overall, US businesses do not view Africa as an attractive place to invest.

The businesses take into consideration, the image of lawlessness, corruption, unstable governments, an inadequate infrastructure, uneducated or untrained people, and an unwelcoming government attitude toward business.

The businesses believe that these practices handicap those who will not or cannot “play the game” by these rules.

In addition, returns are not reasonably ensured or sustainable because costs can often escalate for reasons unrelated to business operations and the rules can change unexpectedly. This means that the time and resources already invested could be lost, the report said.

The report which is titled ‘The conversation behind closed doors: Inside the Boardroom: How Coporate America Really views Africa’ is in two parts, the study for the second part is ongoing.

The US Chamber of Commerce which is the world’s largest business federation has a membership of more than three million businesses and organizations of every size, sector and region as well as 112 affiliates in 99 countries around the world.

One of the objectives of the qualitative survey was to examine why US companies hesitate to invest in Africa. It also looked at what American businesses and African countries can do to increase US investments across the continent.

Ten industries were looked at in the survey and these are,aerospace/defense, agribusiness, consumer goods, health care and information and communications technology.

The others are, infrastructure, media, petrochemical/extractive, pharmaceutical and transportation.

The Executives who were interviewed, the report indicated, do not yet believe that they are at a competitive disadvantage because they are not investing in African countries.

According to the report, with no competitive traction, there is no sense of an opportunity being missed. Furthermore, since Africa is not selling itself overtly by asking for investment, the continent does not attract enough attention amidst competition for investment from other developing countries or regions. The only exceptions to this are China and India.

While the report recognized the fact that African countries are marketing themselves and creating the environment to attract investments, the lack of the following is a disincentive:

The fact that the rule of law does not prevail to the degree required to make Africa an attractive investment destination. This applies to corporate, societal, and criminal law.

Africa, the businesses observed, does not offer a sufficiently large middle class of consumers or show consistent economic growth that could promise a future market. Most African countries are small and have poor markets, and there are barriers to regional markets—such as taxes and the freedom of movement of people and goods.

According to the report however, if African countries want to position themselves, to attract a lot more foreign direct investment (FDI), from America, then they should do several things including the following:

• Invest in the health and education of the African people to create a large pool of skilled and productive human resources.

• Invest in and maintain infrastructure—transportation, communications, electricity, and security—so that there will be a reliable society in which to operate.

• Build a functioning legal system to ensure the rule of law, transparency, and fair play.

• Create a positive climate for foreign investments by reducing bureaucratic processes, eliminating corruption, and reforming tax systems, irrespective of country of origin.

• Ensure stable political environments—that may or may not be based on western democratic principles—that work toward the common good of all stakeholders in society.

700,000 children to die in Africa as a result of global economic crisis!

By Emmanuel K. Dogbevi


The yet to be realized consequences of the global economic crisis holds a bleak future for Africa’s children, the World Bank has said.

The continent would be worst hit, even though, it was the least affected at the beginning of the crisis.

700,000 babies would die before they reach the age of one, as a result of the global economic crisis, according to the World Bank’s Vice President for Africa.

“This is a serious human and development disaster that is waiting to happen,” she said.

Ms. Obiageli Ezekwesili told Journalists on the continent during a video conference from the Bank’s Washington office on Wednesday April 22, 2009, that the impacts of the global crisis on the continent would be enormous.

She said 25 of the world’s 35 countries categorized as fragile by the World Bank are in Africa.

She also warned that unless effective responses and measures are taken most African countries would not be able to achieve the Millennium Development Goals (MDGs) by the year 2015.

Ghana and Tanzania were on course to achieve the number one objectives of the MDGs, which is half poverty by 2015 but due to the crisis, these countries are not likely to achieve the goal.

Some of the likely impacts of the crisis on the continent include a drop in foreign aid, foreign direct investments and remittances. Some foreign investors are holding their investments, foreign aid is not likely to increase because most countries are looking within to help their people first and most Africans who used to remit their families on the continent are out of job.

Ms. Ezekwesili reiterated the point that investments in Africa should go into infrastructure development so as to open up the continent’s economy to create jobs.

She also urged investments in agriculture which has the potential to increase employment.

Even before the economic crisis, Africa, despite the progress it was making still had a lot more to do to develop its human capital and economy.

Lack of transparency, accountability and inconsistencies in economic policies coupled with poor political leadership have been the bane of the continent.

Saddled with these counter-development trends, it does not appear the continent would be able to weather the storm when the full impact of the crisis hits.

Sadly, it is the poor and vulnerable who would bear the brunt of the effects, while the elite would continue to loot national coffers to cushion themselves and their cronies.

Invest in agriculture to overcome food shortages in Africa – Kofi Annan

By Emmanuel K. Dogbevi



Africa can overcome its food shortages if agriculture is taken seriously and investments made into the sector, Mr. Kofi Annan has said.

The immediate past General-Secretary of the United Nations, was speaking at the signing of a Memorandum of Understanding (MOU) between Standard Bank and Alliance for a Green Revolution in Africa (AGRA), in Accra Wednesday March 18, 2009.

He said, “there is no doubt that if Africa were to overcome its food shortages, that we would need to take agriculture very seriously and invest substantially in agricultural development.”

The ceremony which took place at the La Palm Royal Beach Hotel, saw the signing of a partnership agreement between AGRA and Standard Bank for a US$100 million low interest loan to help assist African farmers.

Mr. Annan noted that, the agreement to help assist Africa’s small scale farmers out of poverty, signals a new way of doing business.

He indicated that until now African smallholder farmers have been struggling on their own. He said, “it is only the African farmer who swam or drowned alone without any financial assistance, no insurance and no government assistance.”

Mr. Annan also stated the fact that it is the women who mostly work to feed the population in Africa.
He was hopeful that an insurance programme would be introduced to help African farmers.

Mr. Annan said “the signing of this agreement today shows that we recognize that the global food and financial crisis is continuing to have impact on Africa’s most vulnerable - inflation, food shortages, trade imbalances, and the tightening of global credit which pose huge social, economic and political risk for this continent.”

He was optimistic that Africa can and should become self-sufficient in food production. Admitting the fact that governments cannot do it alone, he said governments and partners in the public and private sector should come together to bring the transformation that is required to develop agriculture.

Mr. Annan believes that the action initiated by Africans will bring transformation to many lives and put food on the tables of millions in Africa.

The Millennium Development Authority (MiDA) also declared its intention to participate in the partnership. Its Chief Executive Officer, Mr. Benjamin Esson Benjamin made a contribution of US$2 million to the programme.

The Chief Executive of Standard Bank, Jacko Maree said, the goal of the bank was to perform a transformational role in the continent’s agriculture in partnership with other organizations.

In addition to the US$100 million made available for lending over three years by Standard Bank, AGRA and other partners are providing US$10 million loan guarantee fund.

The fund would operate initially in Ghana, Mozambique, Tanzania and Uganda. Each country would receive US$25 million.

Lending to Africa’s smallholder farmers are considered high risk by financial institutions and this has limited credit to these farmers which has consequently affected growth of the agriculture sector on the continent.

This fund is therefore, a major boost to the development of agriculture on the continent.

Bob Geldof believes biofuels can eradicate poverty in Africa

By Emmanuel K. Dogbevi

The biofuels debate isn’t going away anytime soon, just like the global financial meltdown, the food crisis and energy crisis, which is directly related to the surging interest in biofuels as alternative sources of energy.

There are also growing fears that the festering global financial crisis which has already impacted the eating habits of many people, coupled with the growing interest in biofuels would greatly change eating habits.
Renowned singer, philanthropist, political activist and biofuels advocator Sir Bob Geldof believes that biofuels can be developed from feedstocks without impacting food production, thereby, providing a positive impact on poverty-stricken communities by giving the opportunity to develop energy independence and eradicate poverty across Africa.

Information available to ghanabusinessnews.com say Sir Geldof is scheduled to be the keynote speaker at the World Biofuels Market 2009 to be held in Brussels from March 16 to 18.

He is expected to present the outlook for biofuels sustainability in Africa.

He says, “Africa has always used biofuel as a primary source – wood, dung, residue, etc. and can build responsibility on this tradition.”

Sir Geldof recognizes that instrumental procedures must be in place such as regulated industries, sustainable cropping in a sustainable economy, and utilizing non-arable land for non-edible crops.

He also believes that the biofuels cultivation in Africa could provide an influx of capital into the economies of African nations.

This position is however in sharp contrast with that of the UN’s top adviser on food, Prof. Olivier de Schutter. He told the BBC in May 2008 that investments in biofuels are “irresponsible”. Earlier his predecessor Jean Ziegler, had condemned biofuels calling their production a “crime against humanity” and called for an immediate ban on their use.

Ghana as a country is vigorously involved in the biofuels industry. Gold Star Biofuels, a subsidiary of Gold Star Farms Ltd., is cultivating five million acres of land in Ghana to plant jatropha for the production of biofuels for export.

In April 2008 Brazilian president, Luiz Inacio Lula da Silva signed an agreement with the Ghanaian government to produce sugarcane for biofuels in Ghana.

The agreement was signed while he was in Ghana for the United Nations Conference on Trade and Development (UNCTAD XII).

During the signing ceremony, da Silva said, “in Ghana we are developing a project that will result in growing 27,000 hectares (of sugarcane) for the production of 150 million litres of ethanol per year that are destined for the Swedish market.”

And then in November 2008 a Norwegian company ScanFuel Ltd., was reported to start operations outside Kumasi in the Ashanti region to produce biofuel. The reports said ScanFuel will initially cultivate Jatropha seeds, considered high oil-yielding on 10,000 hectares of land.

The company which has a Ghanaian subsidiary, ScanFuel Ghana Ltd said its Ghanaian unit has contracted about 400,000 hectares of land, with up to 60 percent reserved for biofuel production, “not less” than 30 percent for food production and the remainder for biodiversity buffer zones.

But some analysts continue to argue that the growing interest in biofuels could negatively affect food crops production on the African continent. The argument is based on the fear that productive agriculture land could be ceded for the cultivation of crops for biofuels, and this obviously could exacerbate the food crisis.

Indeed, it is now known that with the global financial crisis, many people are changing their diets. Reports indicate that because people do not have enough money to spend on healthy meals, they have resorted to eating unhealthy foods which could potentially have adverse effects on their health.

Would aid save Africa from effects of global financial crunch?

By Emmanuel K. Dogbevi

The global food and energy crisis, and now the financial crisis are making the future of life in Africa more uncertain, especially for the poor, and Africa has been relying on aid for over 60 years now to solve its economic and development challenges. To what extent has aid worked?

The developed world has spent around 600 billion dollars on aid since 1958, and yet the number of sub-Saharan Africans living in poverty keep increasing.

Meanwhile, the full impacts of the global financial crisis is expected to hit the continent, but the extent of the effect is not known yet, making the outlook even more ominous.

Donald Kaberuka, president of the African Development Bank, said on October 7, 2008: “Although Africa is relatively protected from the initial impacts on the financial markets, the continent could be seriously affected by the weakening of global economic growth and a decline in demand for products from emerging markets… The current crisis will increase the cost of borrowing on capital markets, and make access to the markets more difficult… Budgetary pressures resulting from the various rescue plans could reduce the volume of aid and investments in Africa, and lead to rise of protectionism.”

While the banking sector on the continent has not as yet felt the spiraling effects of the global financial collapse, FDI, remittances and African economies in general are shrinking.

According to an IMF World Economic Outlook Reported of October 2008; “Economic growth in Sub-Saharan Africa (SSA) is expected to moderate in the face of the financial turmoil and high energy and food prices… Overall growth is projected to decline from near 7 percent in 2007 to just over 6 percent 2008-2009.”

For instance in Ghana inflation for January 2009 has hit over 19% and Nigeria, the largest economy in West Africa which in 2005 paid up its external debt of $14 billion is now piling up external debt, which has so far reached $3.76 billion and inflation in that country is rising.

Ghana on the other hand received debt forgiveness. The Heavily Indebted Poor Countries (HIPC) initiative and other debt forgiveness programs canceled billions of dollars in debts and as a result, Ghana’s debt fell to around 41 percent of gross domestic product in 2006, from 70 percent of 2005.

However, high state spending deficits, partly due to measures to alleviate electricity shortages and high oil import costs, pushed government debt back up to 52 percent of GDP in 2007, according to ratings agency Standard & Poor’s – that was in June 2008.

The country is currently running a budget deficit of 13.3% of GDP.

Analysts do not think Africa can come out of the woods by depending on aid. Indeed, it is feared that even aid inflows to the continent would equally shrink as donor countries battle their own recession.

The Accra High Level Conference on Aid Effectiveness held in Accra, Ghana in September 2008 emphasised the fact that aid is not sufficient to deal with the continent’s development problems, and other factors ought to be looked at. Factors such as corruption, the strengthening of internal mechanisms and fair trade should be tackled to address the continent’s development challenges.

A large amount of aid money to the continent is siphoned into individual pockets and there are no properly established check and balance mechanisms for the use of aid money, and in instances where they exist, they hardly function effectively to make sure aid money meant for development go into these areas.

Dabansi Moyo, an economist with the World Bank is of the view that “development is not rocket science, it is very clear what works in terms of development. Africa has got lots of role models and doesn’t have to look to America and Europe, but can look to emerging economies.”

She told the BBC that Africa can do what these economies have done. “They have not relied on aid, they have gone to the capital markets, they’ve attracted trade and foreign direct investment and encouraged microfinance.” She advised that a very important factor like microfinance can be done on individual bases and “we don’t have to rely on governments to do that.”

She said further that there is no need to argue on the basis of a strong moral imperative to help Africa. She said, “We as a global society need to decide whether we want Africa to continue to be a drag on the global economy or to participate as an equal participant on the global stage?”

“If we want to see Africa and Africans as equal partners and its economies to grow, and its people to break out of the chain of poverty and grow,” she argued, “then this is the model, the model that we know works, it must be through trade, entrepreneurship, through capital market and fdi and through participation of locals, this is the model.”

She expressed concern about the fact that 60 years on Africa has no infrastructure. Most African countries are not growing because there are no entrepreneurs and the governments cannot raise the money through taxes to invest in education, health and other social services, she said.

Comparing Africa to some of the rapidly emerging economies, she said 60 years ago some of these countries were poorer than Africa. These countries she said, did not rely on aid, “they figured out what to do,”she emphasized.

“It is time for Africa to break out of the vicious aid cycle,” she said.

The global financial, food and energy crisis is not relenting anytime soon, and Africa as a continent must take a decision to move beyond aid and do the right things that have worked for other countries, especially, emerging economies of Asia, because aid won’t save the continent.