CENTRE FOR ECONOMIC AND LEADERSHIP DEVELOPMENT
SOUTH AMERICA AFRICA MIDDLE EAST ASIA WOMEN SUMMIT (SAMEAWS) DUBAI 2019
THEME: Developing Female Transformational Leaders: A New Paradigm for Growing Emerging Economies. DATE:
VENUE:
NOV. 22
Dubai - UAE
2019
F O R PA R T I C I PAT I O N A N D S P O N S O R S H I P, P L E A S E C O N TA C T Centre for Economic and Leadership Development C/O Amazons Watch Magazine Portsmouth Technopole, Kingston Crescent Portsmouth, PO2 8FA United Kingdom.
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Ken Giami On 11th October 2019, Ethiopian Prime Minister and African Leadership magazine person of the year 2018, Abiy Ahmed Ali, was awarded the 2019 Nobel Peace Prize "for his efforts to achieve peace and international cooperation, and in particular for his decisive initiative to resolve the border conflict with neighboring Eritrea.” At 43, Prime Minister Ahmed, who is also Africa’s youngest leaders at the moment, has done all Africans, and his native Ethiopians proud, and especially all the young people of Africa who see in him a symbol of hope and possibilities. At a time when majority of the leaders across Africa are much older men, Abiy Ahmed’s Nobel Prize is a pointer to the belief that if young people are given the chance, they can make a difference, especially at a time when the average age of an African president is 62, whereas the median age of Africa's population is 19.5. I therefore lend my voice in congratulating the youthful prime minister for what I believe is a well-deserved win. It is noteworthy to mention that recipients of the African Leadership magazine “Persons of the Year” prestigious Awards are well deserving of the recognition, seeing that two of the past recipients were immediately awarded with a Nobel Prize after the Persons of the year conferment. First being the former President of Liberia, Her Excellency, Ellen Johnson-Sirleaf, who emerged as the African Leadership magazine Person of the Year 2011 and thereafter was awarded the highly coveted Nobel Peace Prize 2011 for “her nonviolent struggle for the safety of women and for women's rights to full participation in peace-building work." Well, this speaks volume to the credibility of the Person’s of the Year Nomination Committee and holds firmly true that indeed Africans Lead the World. Recognizing Abiy Ahmed’s Contributions to the continent’s growth in February this year 2019, African Leadership magazine Awards nomination committee approved the emergence of the Prime Minister as the African Person of the Year 2018, after he resoundingly emerged with over 90% of our readers votes cast. 7 months later, Mr. Ahmed was bestowed with the Nobel prize, painting an all too familiar route for an ALM person of the year. In 2011,
ANOTHER AFRICAN LEADERSHIP MAGAZINE PERSON OF THE YEAR, PRIME MINISTER ABIY AHMED’S WINS NOBEL PEACE PRIZE 2019 …amidst ethnic and tribal concerns at home
Taking a short stroll into Dr. Abiy’s past, he has tirelessly worked for peace since his teenage days until he joined the Ethiopian National Defense Force where he worked in the Intelligence and Communication Department. As a member of the United Nations Peace Keeping Force, (UNAMIR), he led several intelligence teams where critical situations were addressed. Dr. Ahmed was also instrumental to resolving civil unrest where he became a central figure of influence, which led to the preferences he enjoyed in the political sphere. The recent Nobel Prize win is another testament that he is still working for peace today. While, I am not unaware of the ethnic rivalries and local political issues which the prime minister continues to deal with at the home front, leading to various protests, killings and internal dissents, resulting to serious security issues, I urge all stakeholders of Ethiopia to engage constructively for the progress of their nation and indeed all of Africa. This recognition, and others that the prime minister has received in recent years, is not an end in itself, but a call to greater service for the peace and development of not just Ethiopia but Africa as a whole. I urge the prime minister to accept the award as both a humbling experience but a call to challenging time ahead. I also urge African young people to not only aspire for leadership in their communities and nations, but seek a life of impact at whatever levels they are currently in life. Congratulations, Prime Minister Abiy Ahmed!
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CONTENTS 18
How Japan Can Help Harness Africa’s Blue Economy
COVER STORY Pan Africanism: Towards an African Renaissance, Not yet Uhuru
6
22 Globalization and Development. The Impact on Africa; A Political Economy Approach
32
24
The World looks to Africa as the Last Frontier
Economic Trade in West Africa For Hardwork 45 Reward In STEM e Building Blocks of 56 Th Entrepreneurship e African Private 64 Th Equity Scene Africa ready for 48 Isnuclear energy?
40 52 28
14
How to Facilitate Trade in Africa Mapping a way to a greener consumer culture China: Lessons for a Developing Africa
...A Publication of African Leadership (UK) Limited
Publisher/CEO Ken Giami Publisher@africanleadership.co.uk Group Managing Editor Kingsley Okeke editor@africanleadership.co.uk +44 74 184 71670 Associate Editor Arvy Nahar aknahar@africanleadership.co.uk +44 77 89 590 363 Editor – At – Large Martin Roche martin@africanleadership.co.uk +44 77 157 49621 Editor, International Affairs Kenneth Nkemnacho nkemnacho@africanleadershp.co.uk +44 74 018 88866 Creative Graphic Designer John Mutum Chief Operating Officer / Executive Director Furo Giami Group Head, Finance & Administration Boma Benjy Iwuoha Manager, Adverts & Sponsorships Joseph Akuboh joseph@africanleadership.co.uk Manager, Sales & Business Developments Samuel Moses Elaikwu elaikwu@africanleadership.co.uk Head, Events & Conferences Ehis Ayere Director of Operations North America Happy Benson Head, Research and Admin - North America Christy Ebong Head, South African Bureau Oluwatoyin Oyekanmi Business Development Managers Sheba Nyam, Stanley Emeruem, Amang Saliyuk
Associate Editor Joshua Ogbonna Staff Writer Vivian Ozoemena Executive Assistant to the Publisher Jolayemi Mayowa mayowa@africanleadership.co.uk Contributing Editors Major Aku A Amboson FSS (Rtd) Jibril Ndace Correspondents / Representatives David Lekpa – New York, USA Sabrenah Sumrah-Kelly – Atlanta, USA Saikou Jammeh – Banjul, The Gambia Erin Lewis - Washington DC, USA Kudzai Mtero – Pretoria, South Africa Nomia Machebe – Johannesburg, South Africa Lady Ngo Mang – Paris France Josephine Adageog – Accra Ghana Linda Kimenyi – Nairobi Kenya Contributors Matshona Dhilwayo, Chifuniro Kandaya Arthur Becker, Charles Peter Yomi Henry-eyo, Barnabas Thondhlana Splendour Eloke Young, Miracle Nwankwo
CORPORATE HEADQUARTERS Portsmouth Technopole, Kingston Crescent, Portsmouth PO2 8FA, United Kingdom +44 23 9265 8276; +44 74 3880 2727 AFRICA HEAD OFFICE 13 Mambilla Street, Off Aso Drive, Abuja-Nigeria +234 703 682 7724; +234 803 7920 639 UNITED STATES OFFICE: 6008 Old Rolling Road, Alexandria, VA 22310 +1 202 394 8489, +1 202 367 6916 e | info@africanleadership.co.uk f | +44 (0)23 9265 8201 w | africanleadership.co.uk ISSN 2006 - 9332 While great care has been taken in the receipt and handling of materials, production and accuracy of content in the magazine, the publishers will not take responsibility for views expressed by the writer.
...Promoting Innovation, Entrepreneurship & Development In Africa
Cover Story
US-China Trade War; Africa’s Gain. Joshua Kayce-Ogbonna
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With the evolution of time and the advancement of technology, man gave in to more productive use of the mind rather than the primitive attachment to wars and other vulgar exertions.
In the distant past, wars were fought on the strength and consummate advantage of a superior military might, stories of conquered and subdued territories abound with blood marks as signposts of the battles. These wars gave rise to emperors and subjects with thrones overran and royalties bent eternally as serfs. With the evolution of time and the advancement of technology, man gave in to more productive use of the mind rather than the primitive attachment to wars and other vulgar exertions. Of great concern is the lingering war between superpowers, China and the United States
6 | African Leadership | November 2019
of America. For a little under four decades, America’s GDP constituted about 30 percent of the world’s, while that of China aggregated around 5 percent. Today with the growing influence of the Chinese, the country is right on to become the next world power. All through Donald Trump’s campaign, his slogan was built on “Making America Great Again”. On assumption of office, his leadership style was nationalist in approach and somewhat fascist in political leaning. While his rambunctious utterances gave a fillip to concerns among world leaders, his centrism made the near-lean American economy
Cover Story
flowery again. Mr.Trump’s personality as a businessman who never held a public position, save for his surprise entry into the race for the oval office in 2015 may be counting against him. His erratic personality and predilection for making unpredictable commentaries on governance issues and matters pertaining realpolitik via his popular social media hangout, Twitter, has certainly cost the US its respectable place in global diplomacy, with the US President inadvertently setting the country up, on several war fronts. From the pre-election promise of building a border wall and having the Mexicans pay for it, the repeated threat of invading North Korea, the European Union, Iran, Syria, to the petulant and derogatory salaciousness about African countries and the increase in tariffs and ultimately, the ban on certain Chinese products, the overreaching has not created quite a few enemies within the circle. China, on the other hand, has been accused of intellectual property theft and unfair economic practices. One of the trump cards of Mr. Trump is the trade deficit between the US and China. After an investigation and a thorough review of China’s economic activities, Trump initially imposed a 25 percent duty on $50 billion worth of
Chinese exports, which the U.S. trade office judged to be “appropriate” given the level of damage done to the U.S. economy. However, President Xi Jinping China retaliated by imposing duties on $50 billion worth of U.S. exports, Trump upped the ante by imposing a 10 percent tariff on another $200 billion worth of Chinese goods. China has retaliated in kind, imposing tariffs on about 85 percent of all goods it imports from the U.S. While the war still stands as it is, there are feelers that with the 2020 election coming up, and the hassles of the reelection campaign, he will be motivated to rapidly shrink the U.S. trade deficit with China to fulfill a core promise he made during his 2016 campaign. What does this mean for Africa as a continent? With the European Union and America raising eyebrows about the Chinese and their dealings, the Renminbi has been the most active external currency in the African market with a plethora of China-funded infrastructural projects and investments in Africa. According to an official release from the Chinese government, “the modern state of the People's Republic of China has built increasingly strong economic ties with Africa. There are an estimated one million
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The African economies provide another sensible choice for the Chinese to take advantage of first-rate growth opportunities both for political reasons and investment returns.
www.africanleadershipmagazine.co.uk
Cover Story
Chinese citizens residing in Africa. Additionally, it has been estimated that 200,000 Africans are working in China.” African countries have thrown open its doors to the Chinese with state-owned Chinese corporation leading the construction and investment charges. At the seventh annual Forum on China-Africa Cooperation in September 2018, delegates from both countries met. The collaboration and cooperation which is reportedly set to make Africa one of China’s greatest allies in the current global market environment, saw China announced it would be providing $60 billion in financial support to Africa. The African economies provide another sensible choice for the Chinese to take advantage of first-rate growth opportunities both for political reasons and investment returns. China’s massive infrastructure projects in Africa, including dams, railways, ports and telecommunications networks, has continuously befuddled the west. According to a Mckinsey report, between 2000 and 2014, the stock of Chinese investment in Africa went from 2 percent of US levels to 55 percent. The
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Twitter, has certainly cost the US its respectable place in global diplomacy, with the US President inadvertently setting the country up, on several war fronts.
8 | African Leadership | November 2019
report estimates that, at the current breakneck pace, China will surpass US levels within a decade. While most external investors are responding by subscribing to tenured bonds by the African governments, the Chinese have registered an unshakable presence in Africa by investing hardware because of a firm belief in the prospect of the Africa continent. While Africans have been made to believe that the continent is going to live with the westernbuilt rumors of deprivation, diseases, depression, and desertification, the Chinese have seen no better time to believe the age-long recital that Africa is Rising.
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The African economies provide another sensible choice for the Chinese to take advantage of first-rate growth opportunities both for political reasons and investment returns.
* beauty, * education, * entrepreneurship
Country Focus Category
Cameroon’s Hydropower Renaissance How local banks’ participation & novel infrastructure financing will change lives Zhengjia Meng & Patrice Caporossi
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To achieve this, IFC and the World Bank are helping the government construct the Nachtigal Hydropower Plant—a privately owned and operated 420-megawatt (MW) power plant on the Sanaga River.
Although Marie-Paule Effagon has access to electricity, she and her family have experienced frequent power outages— sometimes for as long as two days at a time.
of Cameroon’s population has access to electricity, and this percentage is much less in rural areas. For those who have access to electricity, the high cost is a significant household expense.
“The food I had bought for the month would perish, my kids would not be able to study after school and the level of criminality and aggressions in the streets would increase considerably during that period,” said Effagon, a 48-year-old teacher living in Yaounde, Cameroon.
To improve the lives and longterm economic prospects of Effagon and other Cameroonian citizens, the government of Cameroon created a plan whose scope and vision are as vast as the need itself: to increase access to power to 88 percent of all people in electrified areas by 2022. The initiative also aims to increase generation and transmission capacity to meet
But she could be considered one of the lucky ones: just 60 percent
10 | African Leadership | November 2019
Country Focus
demand that is expected to quadruple by 2035. To achieve this, IFC and the World Bank are helping the government construct the Nachtigal Hydropower Plant—a privately owned and operated 420-megawatt (MW) power plant on the Sanaga River. InfraVentures, an upstream unit of IFC developing bankable projects, helped develop and structure the project in its early stages, spending $13 million of development capital. This project is now IFC’s largest power investment in Africa. In addition to IFC’s equity of €60 million and debt financing of €110 million for the project, IFC helped put together a €916 million loan package from development finance institutions and commercial banks. We also provided interest rate swaps to help the project company mitigate interest rate risk. Key project development and structuring support came from across the World Bank Group. The €1.2 billion Nachtigal facility will increase the country’s power-generation capacity by nearly a third and bring clean, affordable power to millions.
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Selling electricity at around €0.06 a kilowatt hour, Nachtigal will provide very cheap power that will help sustain economic growth and save the country $100 million in generation costs annually.
Selling electricity at around 0.06 a kilowatt hour, Nachtigal will provide very cheap power that will help sustain economic growth and save the country $100 million in generation costs annually. Construction of the plant—which is expected to begin operations in 2023—will create up to 1,500 direct jobs, of which 65 percent will be locally sourced.
Nachtigal—with project development and structuring support from the World Bank Group—is different. Participation from across the institution was critical because it helped find ways to bring in private capital, which can build and operate these plants in an efficient manner while not burdening the country’s finances with more debt.
Hydropower’s Promise in Cameroon
Innovative Methods to Meet Key Goals
Increasing energy access is key to Cameroon’s goal to become a middle-income, industrialized country with poverty levels below 10 percent by 2035. Energy is among the priority areas identified in the country’s growth and poverty reduction strategy, which emphasizes the need for agricultural diversification, increased productivity, and large-scale public investment projects.
IFC began developing the Nachtigal project five years ago, through its InfraVentures window, working upstream as joint developer. We worked closely with Cameroon’s government and French utility company Électricité de France (EDF) to confirm the technical, financial, and environmental feasibility of the project, and address bureaucratic bottlenecks to create conditions that would allow the project to move forward. IFC’s presence at the early development phase of the project also increased its appeal to commercial lenders by leveraging IFC’s structuring capabilities. That also ensured the project would be developed according to international environmental and social standards.
There’s no shortage of promise: Cameroon has the third largest hydropower development potential in sub-Saharan Africa, estimated at over 12,000 MW. But across the region, complexities and risks often deter the private sector from considering investment opportunities.
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Country Focus
In parallel, World Bank staff supported the country’s reform efforts to unlock the hydropower potential. The Lom Pangar dam, financed by the International Development Association (IDA), regulates the flow on the Sanaga River, which improves the hydrology along the whole river. The World Bank is also assisting with basin management and dam safety across Cameroon, and electricity produced by Nachtigal will be transported by a transmission-network company that has recently been created and is supported by a specific $325 million World Bank project. Critical sector reforms were jointly supported by IFC and the World Bank to ensure a conducive environment for public-private partnership (PPP) development. Furthermore, nearly €450 million in projectfinancing guarantees from the World Bank and the Multilateral Investment Guarantee Agency (MIGA) proved crucial in crowding in international capital. Nachtigal sets a benchmark for local-currency-denominated financing—the debt package includes a Central African CFA franc-denominated tranche of approximately €170 million with an unprecedented underlying maturity of 21 years. IFC’s engagement in Cameroon’s power sector spans two decades. IFC participated in the financing of the Dibamba and Kribi power plants, commissioned in 2009 and 2013 respectively, and supported the privatization of the national distribution company by providing advisory services and arranging a €250 million syndicated loan. Cameroon has the third largest hydropower development potential in Sub-Saharan Africa—estimated at over 12,000 megawatts (MW). Yet, despite these resources, only half the population has access to electricity. Moreover, the average retail price is more than €0.12/ kilowatt hour (kWh)—higher than many U.S. consumers pay. Deploying hydropower resources
South Africa) have closed with finance from local banks or investment funds. There are several reasons for this; let’s explore a few: Most infrastructure financing needs are in hard currency. In much of Sub-Saharan Africa, it’s not efficient to swap local currency to hard currencies. This limits the usefulness of local currency financing.
is key to lowering the cost of electricity and ensuring a competitive economy. The 420 MW Nachtigal project goes far to achieve this, while boasting limited environmental and social impacts. The project cost is estimated at €1.2 billion with a five-year construction period. Once constructed, Nachtigal will provide clean, affordable, base load power for €0.6/kWh. One of Nachtigal’s key innovations is the mobilization of an unprecedented 21-year local currency facility whereby five local and regional commercial banks are providing debt financing of €171 million— about one-fifth of the total project debt. In theory, local currency financing can reduce currency mismatch risks of infrastructure projects. It can also reduce foreign exchange exposure for countries and help develop the local market, building local banks’ capacity. But in practice few large projects in SubSaharan Africa benefit from domestic finance. In fact, since 2014, only two of 55 reported infrastructure projects in the region (with the exception of
12 | African Leadership | November 2019
Local banks often lack the expertise to deliver complex project financings. In addition, balance sheet or regulatory limits often preclude local banks from providing debt with more than a 5–7 year tenor. Local currency volatility and convertibility limit the appetite of project developers to take local currency risk; often they demand government take it instead. This is accomplished through a euroUS dollar indexed tariff structure. When the government takes on currency risk developers are not incentivized to seek local currency financing. So, why was Nachtigal different from the other 50 or so transactions in Sub-Saharan Africa in the past five years?
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Nachtigal sets a benchmark for localcurrency-denominated financing—the debt package includes a Central African CFA francdenominated tranche of approximately €170 million with an unprecedented underlying maturity of 21 years.
Country Focus
But, what’s more, it drove down the annual cash flow requirement for debt service due to tenor extension, resulting in a lower tariff. The structure further allowed a significant portion of the tariff to be denominated and paid in CFA francs, reducing foreign exchange risk to the country.
How did the transaction parties accept such a large portion of local currency financing? First, interests were aligned between the developers, lenders, government, and the guarantor (the World Bank). The government’s aim was twofold: maximize the local currency component to reduce foreign currency exposure and develop local lending capacity for longterm project finance. For the developers and lenders, they accepted about 20 percent of the Power Purchase Agreement tariff in local currency without indexation to foreign currencies. This helps finance local content, which is significant for the project. Local currency financing provided a natural hedge against the portion of tariff payable in local currency. For the World Bank, we recognized the development impact of mobilizing private sector financing while helping local banks. The limited underwriting capacity of local banks was partly mitigated by the extensive involvement of the World Bank Group. The International Finance Corporation (IFC), as the structuring bank, led the technical, financial, and environmental/social due diligence while coordinating different development finance and commercial banks. Local banks benefited from this comprehensive process and deal structuring led by a global finance institution. Another element was the World Bank’s deployment of
a loan guarantee to mitigate government and regulatory risks to enable a 21-year loan from local banks. The World Bank and the lenders developed a structure giving local banks the choice to sell the loan back to the government at the end of years 7 and 14 if the local bank cannot be replaced. This effectively granted the local banks two put options to transfer the loan off of their balance sheets under certain pricing conditions. The government’s commitment to purchase the loan at years 7 and 14 was further backstopped by the IBRD guarantee. This way, the local banks gained the flexibility to extend the tenor and achieve the amortization profile while complying with regulations. Lastly, the local currency (CFA franc) has been stable with a reasonable base rate and its convertibility is generally known. Indeed, Cameroon is a member country of the Central African Economic and Monetary Community. The CFA franc has a fixed exchange rate with the Euro and its convertibility is guaranteed by the French treasury. These features make it a stable currency even when the countries that use it face political and economic uncertainties. Frankly, local financing for Nachtigal was not expected at the beginning. It came as a result of all parties’ open-mindedness and determination. The World Bank played an honest broker role to align interests and design a win-win structure. The structure and the *tenor of the loan were truly unprecedented.
While it takes time to develop long-term infrastructure financing capacity and markets in Sub-Saharan Africa, Nachtigal demonstrated that local currency financing is possible, today— if sponsors, lenders, and the development finance community are innovative and committed to finding solutions. Certainly, from the World Bank’s perspective, we look forward to replicating this solution elsewhere. Zhengjia Meng works on the financial structuring and PPPs team within the World Bank’s Infrastructure Vice Presidency. He is focused on financial analysis, deal structuring, and risk mitigations to support the development of hydro, gas, and renewables projects. Prior to joining the Bank, Patrice Caporossi was a director within the export and project finance department of Societe Generale, one of the leading European banks in that field. Within the World Bank’s Infrastructure Vice Presidency, Patrice provides services and financing support for large infrastructure projects in the power, oil, gas, and transport industries in order to attract private capital.
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Increasing energy access is key to Cameroon’s goal to become a middleincome, industrialized country with poverty levels below 10 percent by 2035.
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Development Issues
Globalization and Development. The Impact on Africa; A Political Economy Approach Ishaku Bitrus Lere
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Globalization and development in African countries is aimed at encouraging a neo colonial system of domination by the International Monetary Fund (IMF).
The concept "globalization" has become a subject of debate among scholars who want to understand its nature, character, and ramifications. Its pervasiveness makes it important to study and difficult to ignored. Thus the process appears to reinforce the hegemony of core capitalist state while replicating underdevelopment,
14 | African Leadership | November 2019
Development Issues
marginalization and dependency for the African countries. As the word is widely described by liberal scholars to make us believe that globalization is commonly used as a short hand way of describing the spread and the connectedness of production, communication, and technologies across the world. Therefore all the great changes involved in the restructuring the word today, the single most important force may prove to be globalization. A market driven and multidimensional process, globalization rendered obsolete invented division of the world into developed and developing countries, industrialized and industrializing nations, and core and periphery. Globalization has become the celebrated catchword in recent global economy and political transaction. Argument has raged since the collapse of the Soviet Union in the early 1990s and the subsequent introduction of the new world order with its globalization agenda that the world is turning to become a good place for both the developed and the developing countries. But while the spread of globalization agenda as encouraged by the Western countries is seemingly to their
advantage. The African countries are gradually reclining into poverty, economic stagnation, insurgency, terrorism and political crisis with nothing to celebrate in the global economy. Thus globalization and development in African countries is aimed at encouraging a neo colonial system of domination by the International Monetary Fund (IMF), the World Bank and other international financial institutions to create a global free market for goods and services to the advantages of the European countries. Therefore such interactions between the developed and the developing nations will cause a potential damage for a lot of poorer nations like the developing countries.
Conceptualizing and contextualizing globalization and development There are multiplicity of definitions and descriptions by scholars of varied ideological convictions. There are two contending opinions, the apostles and the disciples of globalization are known as liberal scholars and they viewed globalization as the savior of the developing countries. The
developed world has always set a pace and as well as the agenda. Globalization means that the world has become a small village whereby distances has been shorten through the use of communication gadgets such as mobile phones, internet services, e-mail etc and transportation. Thus to the pro globalist, that it involves the diffusion of ideas, practices and technologies It is something more than internationalization and universalization. It is not simple modernization or westernization. It is certainly not just the liberalization of markets. As observed by Anthony, globalization is seen as ` the intensification of the world wide social relations which link distance locations in such a way that local happenings are shaped by event occurring many miles away and vice versa. This involves a change in the way we understand geography and experience localness as well as offering opportunity it brings in the form of technological change. Pro globalist in supporting the above assertion, define globalization as a process of advancement and increase in interaction among the countries and people facilitated by progressive technological
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Although the economic dimension constitutes the heart of the process, it is not essentially restricted to economy; it is also applicable to politics, which is the globalization of democracy and governance.
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Development Issues
changes in locomotion, communication, political and military power, knowledge and skills, as well as interaction of culture and the value system and practice. Thus no wonder, the Deputy Managing Director of International Monetary Fund (IMF), Allasane D, Ouattara also defined globalization as `` the integration of economies throughout the world through trade financial flows, the exchange of technology formation and movement of people``. Globalization is seen as a means by which every economy should be run as nearly as possible as a pure market economy to make things easier for the capitalist development within and outside the economy, it means also that all enterprises should be privatized to facilitate capitalist enterprises. That is why it is emphasized that the aim of globalization is for the external opening up of the new `open up` domestic economies of the satellites for the G7 around the world to come in for development. Therefore, these scholars would want us to believed that, globalization is a comprehensive term for the emergence of a global society in which the economy, political, environmental, cultural and social factors in the developed world will bring significant changes for the people in Africa. Today there is no any country in Africa that is on the transition period as a result of the impact of globalization for any form of modernity. On the other divide, radical political economist surgically laid the bare the hidden underbelly of globalization. Kofi Bucknor defined globalization as "a process that has been taking place over several decades, characterized by unprecedented level of interaction, intercommunication and integration, both economic and political in the world. A process that is driven by international trade, cross border financial flows, information and communication technology and
increased competition for global markets. Thus globalization is seen as an epoch of global interactions initiated and sustained by capitalist driven countries with the sole aim of meeting their domestic needs. That is why globalization is defined as `` dollar imperialism intrumph, it means the United Nation, International Monetary Fund (IMF), the World Bank under United States domination, though they are global organizations. He further that, globalization means the end of Warsaw treaty; so that the globe will have only one military alliance against everyone else, it calls for the triumph of privatization everywhere in any form and incorporation of public enterprises to international capitalist monopolies operating under various covers. It means global compliance with patent laws made by United State information system. It refers to the effort of the International Monetary Fund (IMF), the World Bank and others to create a global free market for goods and services which it will cause irreparable damage to the economy of the poor nations. That it is really a means to exploit the African countries. This was obvious because America was not part of the colonization of the world and it is an effort by them to colonize the whole universe.
16 | African Leadership | November 2019
Globalization is also seen as the rapid expansion through giant multinational companies to several areas of the world, including areas where it has hitherto been resisted or put in check side by side with this expansion. It is the phenomenal development of computer technology, telecommunications and transportation in favor of developed countries. The later served as the main vehicle of the former. Thus globalization, is globalization of capitalism not the globalization of "neutral", economic system or globalization
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That is why it is emphasized that the aim of globalization is for the external opening up of the new `open up` domestic economies of the satellites for the G7 around the world to come in for development.
Development Category Issues
of post capitalism as the imperial intellectuals and their slaves in the underdeveloped countries would want us to believed. To the anti globalist, globalization is seen as a phenomenon that generates global ills, it states that, it is generally meant that the liberalization and intensification of international linkages in trade, finance, product, transportation (the economy, and research, education and culture, politics) has accelerated through the discovery of micro electronics, information processing, communication and bio technology thereby reducing the world as against developing countries. This is to mean that, globalization is not in favor of the African countries, this is because emphasize is on economic sphere which is the heart beat of the world as correctly asserted; contemporary globalization is multidimensional. Although the economic dimension constitutes the heart of the process, it is not essentially restricted to economy; it is also applicable to politics, which is the globalization of democracy and governance. This assertion is based on the fact that, there is a general consensus that the benefits derivable from the process are unequally distributed between the rich and the poor countries and between the elite and the poor in every country particularly the developing nations (HDI Report 2000/2001) Thus from the fore going explanation, the liberalist succeeded in deceiving some people that globalization is a neutral body, a panacea for modernization. This is out right fallacious fabrication at the highest order. There is no any country in Africa that has witnessed any form of development as a result of the integration into the global economy, and none is in the process or a stage of transition to modernity as a result of globalization. The opposite is the case; this is because confusion become more pronounced as a product of globalization
for African countries, this manifest itself in the form of political, economic, social and cultural crisis becomes a global phenomenon across African nations which are caused as a product of the so called globalization. As a consequence there are no empirical and substantive facts to buttress their claim. Therefore, globalization can be defined as a system of advanced neocolonialism that emerged spearheaded by the world super powers who where hitherto not part of the petition of the African countries to participate and extend their tentacles to capture those territories that were not colonized to destroy the economic base of the less developed countries by making them absolute dependence and as mere primary producers of raw materials through the process of integration into the global labour market and capital leading to inequality and widen the gap between the rich countries and poor nations of the world. The concept "development" was defined differently by scholars. The liberal scholars made the people of Africa to believed that development was equated with economic growth in which they viewed development as rapid and sustainability in terms of output per capita, it sees development in terms of technological, economic and demographic changes in the society. Thus the definition focuses on growth as well as increase in productive of the society but says very little or nothing about human beings that are involved in the production process, that the word "development" has some indicators which include; Gross Domestic Product (GDP) of a country, income per capita and the size of the nation wealth. Development is said to occur where change is total, complete change in property relationship. He argues that development implies that majority of the people must have guarantee
access to the wealth of the society; it is the concerted effort by the underprivileged group or classes in successfully challenging the existing order in order to emancipate themselves. In supporting the above assertion that the key factor in the development of human society is human beings. According to Dudley Seers advanced the argument that in seeking to establish whether a certain society has experienced development, we must ask the question what is happening to unemployment? What is happening to inequality? What is happening to poverty? He further argued that if there is a decline in these indices the country is experiencing development. If one or two of these problems and especially the three have been growing worse, then it will be strange to call it development. Therefore in summary, development can be defined as a structural transformation of the economy polity and culture in such a way as to provide self reliance, as well as self-generating and selfperpetuating. It is a frontal attack on poverty, unemployment, diseases, hunger, exploitation and a deliberate effort to move the society forward. Ishaku Bitrus Lere is of the Department of political Science, Faculty of Social Science Plateau State University Bokkos, Nigeria.
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Development is said to occur where change is total, complete change in property relationship.
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Category Trade & Investment
How Japan Can Help Harness Africa’s Blue Economy Siddharth Chatterjee
The blue economy in Africa is neglected, ignored or underexploited, but it can offer a range of African solutions to African economic problems. More than one-quarter of Africa’s population lives within 100km of the coast and derive their livelihoods there. According to the International Energy Agency (IEA), by 2020, the annual economic value of energy activities related to maritime affairs will reach EUR 2.5bn.1 Out of the 54 African countries, 34 are coastal countries and over 90% of African exports and imports are transported by sea. The territorial waters under African jurisdiction cover
a surface area of 13 million km², with a continental shelf of some 6.5 million km² comprising exclusive economic zones (EEZ). The continent covers 17% of the world’s surface water resources. The strategic dimension of the blue economy is an indisputable reality for African countries. It is for this reason that it has been included in the African Union’s Agenda 2063 and that a practical handbook on the blue economy was prepared by the United Nations Economic Commission for Africa in March 2016. According to an FAO study, the total gross added value of the
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fisheries and aquaculture sector in Africa is estimated at USD 24bn, i.e. 1.6% of the GDP of all African countries. Still according to FAO, this sector employs some 12.3 million people, but is largely underexploited. There is a need to professionalize the aquaculture and fisheries sector. By any standards, Africa is at least underusing, possibly even drastically wasting, its blue economy potential. This must be rectified. By some estimates, the African maritime industry is already worth USD 1 trillion annually. But, with the right economic policies implemented, it could triple in just two years.
Trade & Investment
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If the continent is to establish a viable blue economy, African countries must begin with focus on the current limited infrastructure and capacities to assure maritime security and coastal protection.
Japan is essentially a Blue economy and a global economic giant. Africa can learn and benefit from Japan. Let me start by commending Japan for co-hosting the Blue Economy Conference with Kenya and Canada in Nairobi in 2018. If the continent is to establish a viable blue economy, African countries must begin with focus on the current limited infrastructure and capacities to assure maritime security and coastal protection. The second imperative is to establish partnerships, including innovative financing models, preferably driven by the private sector. Kenya co-hosted the Sustainable Blue Economy Conference (SBEC) between the 26th and 28th November 2018 with Canada and Japan.3 SBEC aimed to make progress towards safeguarding and developing the world’s water bodies and the ecosystems that live therein. The conference hosted over 17,000 participants from 184 countries and sought to exploit the potential of oceans, seas,
rivers, lakes by leveraging on the latest scientific knowledge and innovation while ensuring the proper conservation of the aquatic resources for generations to come. During the conference, President of Kenya Mr. Uhuru Kenyatta made several pledges including enhancing security in the high seas, combating illegal fishing while supporting sustainable and responsible fishing of endangered species and key fish stocks, among other things. Japan’s support to the Blue economy will ensure that the Blue/ocean economy, will be “a major contributor to continental transformation and growth” as envisaged in the Agenda 2063, Furthermore the sector will benefit from Japanese expertise in maritime security and safety. Japan has proven expertise and demonstrated real contributions in ensuring freedom and safety of navigation, as witnessed by Japanese contributions to improving navigation safety in the Straits of Malacca. I actually see Kenya as a gateway to Africa. Kenya has the ports. It has the infrastructure. It is interconnected. It is a beacon of hope in a region of instability. In fact it represents everything that we want to see happen all across Africa. And therefore to me Kenya becomes even more crucial in becoming the convener and the facilitator of the entire Blue Economy dialogue.
We as the UN family stand ready to support Japan in advancing a sustainable Blue Economy in Kenya. Five areas where Japan’s ocean industry expertise could be shared to promote the blue economy in the Africa region. i. Most African states are looking seaward for alternative nonconventional renewable sources of energy. There’s interest in offshore solar power as having high potential as a major source of energy. Japan private sector can help here. Japan’s largest solar power plant, the Kyocera Corporation’s Kagoshima Nanatsujima Mega Solar Power Plant, is an offshore technology built on reclaimed land jutting the waters of Kagoshima Bay, generating 70 MW of energy in Kagoshima City. The project has an annual power generation capacity of 78,800MWh and is expected to supply clean electricity to approximately 22,000 average households. ii. While there’s been no commercial developments to date there’s still international interest in deep-sea mining in the Indian Ocean. For polymetallic nodules, Japan is a pioneer investor in the Indian Ocean and the International Seabed Authority entered into contract with Japan after the Law of the Sea Convention came into effect. Japan can help with mining technology, processing technology and environmental impact assessment. There’s also growing interest in developments in relation to deep water gas hydrates energy reserves (reservoirs of gas trapped in ice crystals) where Japan is at the cutting edge. India and Japan last year carried out a joint survey for gas hydrates using a Japanese drilling ship in the Indian Ocean. Japan has set itself the target of bringing methane hydrates into the mainstream by the early 2020s. Prime Minister Modi has listed work on gas hydrates among the top 10 potential areas of research for India.
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Trade & Investment
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Aquaculture is a key driver of the Blue Economy in the Indian Ocean providing food, nutrition and employment opportunities to the people in the region
iii. R&D in marine biotechnology is emerging as a promising sector for growth and employment in the Indian Ocean. The Indian Ocean region is rich in marine biodiversity: we’re likely to see the realisation of marine biotechnology potential, including the culture of a range of marine organisms for biofuels, bioremediation and bioproducts.
v. Japan can strengthen the digital blue economy in the Indian Ocean: the undersea cables and the electronic services that they can enable, such as broadband and data exchange. Japan can contribute to the growing digital fabric connecting the Indian Ocean: it’s got some of world’s top vendors of submarine cable systems.
iv. Aquaculture is a key driver of the Blue Economy in the Indian Ocean providing food, nutrition and employment opportunities to the people in the region. Since capture fisheries face the problem of overfishing in the region, the challenges of food security can be addressed through aquaculture production. Aquaculture has the potential to transform the global food system for the better. Japan has tremendous skills in this industry and can assist African states in developing aquaculture systems that expand the range of foods and the nutritional content of those foods, while ensuring that the industry is economically and environmentally sustainable.
UNDP is the longest serving co-organizer of TICAD process with the Government of Japan. Co-organizing TICAD process provides Japan and UNDP with important strategic advantages, including: (1) facilitating global discourse on Africa’s development; (2) promoting innovative partnerships; (3) Enhancing integration of the UN Development System; and (4) Enhancing strategic partnerships with Japan in Africa as the key driver of the corporate strategic partnership with Japan. In addition to the issues raised above, we expect TICAD 7 to promote Africa’s blue/ocean economy to enhance sustainable
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use of marine resources, developing port facilities and facilitating marine transport. Furthermore we expect the issue of Africa’s infrastructure and connectivity to be high on the TICAD 7 Agenda as this will unlock the construction and management of quality transport infrastructure, such as ports, maritime corridors, airports, railroads, bridges and trunk roads that are efficient in view of life-cycle cost, reliable, safe, resilient against natural disasters and environmentally friendly, to strengthen connectivity in Africa, utilizing state of the art infrastructure technology. From concerns around environmental sustainability to the dangers of corruption and a dearth of actionable data, policymakers need vast resources to get to grips with large swathes of their own territory. There are also challenges related to climate change, rising sea temperatures, ocean acidification and rising sea levels.
Trade & Investment
There are current conflicts driven by lack of demarcation of maritime and aquatic boundaries. This has been a constant source of tensions between neighbouring countries, not only threating any long-term investment considerations, but also leading to irresponsible use of resources. The continent needs to fasttrack resolution of disputes and strengthen their maritime and riparian cooperation mechanisms. This will provide grounds for working on interstate economies of scale and develop strategies for bridging technical and infrastructure gaps among States. In line with SDG 14, development of this sector must also promote social inclusion while ensuring environmental sustainability. In this respect, the continent owes special consideration to people living along the shores of oceans, lakes and rivers, essentially youth and women. The question of how this new frontier can address poverty reduction and hunger when leaving no one behind must be a central consideration. We need to be able to govern resources effectively and be able to utilise them in a way that’s transparent and inclusive.
Siddharth Chatterjee is the UN’s Resident Coordinator to Kenya.
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From concerns around environmental sustainability to the dangers of corruption and a dearth of actionable data, policymakers need vast resources to get to grips with large swathes of their own territory.
Equally daunting is required transboundary negotiation among at least 38 African countries, intensive planning, intersectoral planning, intragovernmental coordination, extensive training and complex multi-stakeholder engagement. The African Union has launched its 2050 Integrated Maritime Strategy in a bid to provide a broad framework for the protection and sustainable exploitation of Africa’s marine resources. At its heart lies the creation of a Combined Exclusive Maritime Zone of Africa (CEMZA), a common maritime space intended to boost trade, protect the environment and fisheries, share information and boost border protection and defence activities.
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Special Report Category
Pan Africanism: Towards an African Renaissance, Not yet Uhuru Mark Malisa, Phillippa Nhengeze
At the beginning of the 21st Century, there was some optimism about the present and future of Africa, especially in the idea of the African Renaissance as articulated by former South African President, Thabo Mbeki. The abolition of apartheid and the insertion of the philosophy of Ubuntu in African and global discourse gave the impression that the revolution had been accomplished and Africa was free at last. As a philosophy, Ubuntu placed importance on the humanity of Africans, a humanity that had been rejected by modernity. The rebirth of Africa was about to begin, and for a while, the fading ambers of Pan Africanism were rekindled. Although Ubuntu is largely associated with the work of Bishop Desmond Tutu and Nelson Mandela with regard to the Truth and Reconciliation Process in postapartheid South Africa, it was also viewed as offering Africa opportunities for a continent free of conflict and civil strife. However, in addition to cultural and political reconciliation, there is an economic dimension and economic justice in the philosophy and practice of Ubuntu. The hope, then, was that, with the ascension to power by the African National Congress, there would be a redistribution of wealth and resources, a movement toward eradicating poverty. Instead, it quickly became apparent that those who became rulers “easily
conceive of power in personal, not social terms; that they are happy to be individually rich in a poor society”. Even the much anticipated abolition of apartheid or the creation of the “Rainbow Nation” had not made conditions better for South African Blacks. The continued existence of economic apartheid showed the extent to which the Rainbow Nation is built on the invisibility of Blacks and Blackness, or their marginalization the failures of interracial harmony without economic justice and resource redistribution. The idea of an African Renaissance was borne of the realization that even with political independence, Africa continued to be exploited by Europe and North America. In other words, the legacy of the Berlin Conference could still be felt across Africa. The colonizing countries had left Africa, but in such a way that Africa had to export its raw materials while being marginalized. Although tethered to the global market and economy, Africa was seen as marginal. This was in spite of the fact that her mineral resources were fueling the industrial development of Europe and North America, among other countries. The African Renaissance also came from the realization that political freedom in Africa had not brought about economic independence, and this was evident in the international
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debt burden carried by Africa. The International Monetary Fund and the World Bank dictated the value of different currencies in Africa in ways that favored the Global North. At surface reading, logic would lead one to conclude that, through hard work and industrialization, Africa and Africans will be free. However, working under neocolonial conditions will not likely lead to a radical transformation of Africa. In his diagnosis of such work, Armah observed: “the African miner’s work is to assist the invading Western pirate in the violation of his motherland. This makes the African miner at best a zombie, at worst a culpable accomplice”. What is unique about the African Renaissance as articulated in the work of Thabo Mbeki is the way it emphasizes the importance of grounding everyday practices (including science) in African
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The idea of an African Renaissance was borne of the realization that even with political independence, Africa continued to be exploited by Europe and North America.
Special Report
‘‘ realities and philosophies. It acknowledges the inability of modernity to work for the good of all Africans, as evidenced by Africa’s continued subjugation. Neither Capitalism nor Marxism, or their derivatives, had brought freedom or unity to Africa. To a great extent, the invitation to participate in the African Renaissance is also a call for Africa’s regeneration through its languages and philosophies. It is possible to argue that the African Renaissance comes from the realization that the dreams and promises of Pan-Africanism have not yet been fulfilled, that the logic and model of capitalist development has faltered. The rapid growth of urban areas has often resulted in crumbling cities, slums, and homelessness. Cities and universities that once produced a spirit of Pan-Africanism now nurture alienation. In addition, there is a growing disconnect among political refugees from Africa, whether in Africa or in the Diaspora. The relationship among Africans, globally, is no longer what it was envisioned to be. In the 21st Century, there is a significant number of educated African immigrants in the United States and Europe, and sometimes statistics indicate that African immigrants rank among the most educated in the United States. However, “in the context of the new African migrations,
particularly to the United States, there is no evidence whatsoever of a Pan-African movement ideology or even sensibility attempting to unite them”. The abundance of information in the age of globalization and the opportunities to network have not led to meaningful solidarity. We have presented Pan Africanism as a philosophy or a way of life for Africans, as defined mainly by people of African descent worldwide. In many ways, it provided a structure that enabled Africans to organize their world, and to work toward a world in which their humanity would be affirmed. Within the narrative, language or discourse of genealogy, Pan Africanism has to be understood as a search for knowledge and truth about Africa, about what Africa is, and a future that can be created. Emerging as it did in the aftermath of slavery and colonialism, it drew attention to the ways in which the encounter with modernity led to the total colonization of Africans, including in the spheres of culture, economics, religion, and politics. Even though it rose as a response to modernity, Pan Africanism was and is a call for the self-preservation of people of African descent and a reunification of Africa. That
The African Renaissance also came from the realization that political freedom in Africa had not brought about economic independence, and this was evident in the international debt burden carried by Africa.
a history of Pan Africanism begins with the encounter with modernity should not be taken to imply that African history and identity did not exist prior to slavery and colonialism. Instead, the encounter destroyed and led to the disintegration of Africa. While early Pan Africanists initially thought the future of Africa lay in embracing capitalism, Christianity, or even Marxism, at the birth of the 21st Century, particularly with the call for an African Renaissance, there was an implicit and explicit acknowledgement that the tools and structures of modernity had not been able to radically alter the conditions of Africans for the better.
Mark Malisa,Department of Educational Research and Administration, University of West Florida while Phillippa Nhengeze Department of Economics, Africa University, Mutare, Zimbabwe
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Trade & Investment
The World looks to Africa as the Last Frontier Kingsley Okeke
As emerging markets like China and India continue to mature, investors are looking to Africa as the “last frontier.” With a population of about 1.3 billion according to the United Nations estimate in 2019 and significant natural resources to boot, Africa has been growing in popularity among investors. While foreign investors' appetite for the continent’s large and expansive markets continues to grow, the recent continental free trade agreement seems to have changed the dynamics and tipped the scale in favor of indigenous investors, eager to get a piece of the pie. This, however, doesn't foreclose the enormous opportunities available for foreign investors with a genuine interest in the continent. Simply put, Africa is large enough for all. Africa’s prime spot in the scheme of things was long foretold. Kingsley Moghalu, former Deputy Governor of Nigeria’s Central Bank and a presidential candidate in Nigeria’s last election, in his speech at the Woodrow Wilson Centre in Washington DC, USA, stated that, “Africa has caught the imagination of the world in recent times as a [potentially] prosperous part of the world.”
What to Note Unlike other parts of the world, especially Europe and South America, investing in Africa varies quite a bit by region.
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Africa offers the highest return on investment in the world. This underlines the sustained interest of investors in the continent’s growing market.
Trade & Investment Category
North Africa, for instance, shares some similarities with much of the middle-east, especially in the areas of oil assets. South Africa is considered a more developed market with a strong mining industry. Sub-Saharan Africa, on the other hand, is still largely untapped and includes lesser developed economies. According to an article titled, How to invest in Africa, published by the global thinkthank on investment – The Balance, Africa offers the highest return on investment in the world. This underlines the sustained interest of investors in the continent’s growing market. A 2016 article by the Chief Executive Officer and ViceChair, Board of Agility, Kuwait, Tarek Hassan Al Essa, titled 6 reasons to invest in Africa and published by the World Economic Forum on Africa, further provides a compelling reason to invest in the continent and they are as follows: Africa
needs infrastructures; the trade barriers are falling off and intraAfrican trade holds enormous potentials; changing consumer behavior; digital transformation; opportunities for sustainable investments; and the continent’s diversification drive. According to the world bank, Sub-Saharan Africa’s growth is expected to average 3. 6 percent in 2019 through 2020. A recent survey by Brookings Institute asked the following questions, how many companies in Africa earn annual revenues of $1 billion or more? Most global executives and academics who spoke to the institute guessed there are fewer than a hundred. Many also said, none. The reality, however, is that there are more than 400 such companies in the continent and they are, on average, both faster growing and more profitable than their global peers. Africa’s fast-growing population and markets present important
opportunities for business in an environment of slowing global growth. At the same time, greater innovation and investment from the business are essential to meet Africa’s unfulfilled demand for goods and services, close the gaps in its infrastructure, create jobs, and decrease poverty. Here, we describe the extent of the African business opportunities in key sectors and suggest steps investors can take to translate that opportunity into profitable, sustainable enterprises
Continental Free Trade Agreement In May this year, the African Continental Free Trade Agreement – one of the most ambitious projects of the African Union, came into force, after 53 countries signed to build a single market for the continent, which will account for $4 Trillion in spending and investment across the continent. It is pertinent to
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Tourism is one of the major drivers of economic growth across the emerging market. Africa’s unique history and natural wonders are gaining attention amid the local and global increase in cultural, heritage, and development.
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Trade & Investment
note that this treaty lays the ground for the much-needed foundation for a unified system and market of goods and services which touches the lives of over 1.2 billion people and moves $3 Billion of combined GDP. As things stand, the IntraAfrica trade accounts for only 17% of the continent’s export compared to 59% in Asia and 69% in Europe. So, if we must move the continent forward, we must urgently pause, ponder and pursue the path that leads to the continent’s unification through trade and commerce.
An Eye on Tourism Tourism: Tourism is one of the major drivers of economic growth across the emerging market. Africa’s unique history and natural wonders are gaining attention amid the local and global increase in cultural, heritage, and development. According to Brookings Institute report titled, “Africa’s tourism potential: Trends, drivers, opportunities, and strategies,” in 2015, foreign direct investment to the African continent totaled $54 billion and official development assistance totaled $51.04 billion, while tourism generated $39.2 billion and created 9.1 million direct jobs within the sector. Clearly, the tourism industry has an increasingly important role in the global economy by contributing to GDP, service exports, and employment. A recent world bank study classified African countries into four categories, using indicators such as such as the ease of doing business; the competitiveness in terms of tourism regulation, infrastructure, and resources; the tourism receipts per long-haul arrivals; the international arrival per head of population; and the forecast of growth in tourism arrivals. The countries are categorized as pre-emergent,” “potential,” “emerging,” and “consolidating” tourism destinations
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In May this year, the African Continental Free Trade Agreement – one of the most ambitious projects of the African Union, came into force, after 53 countries signed to build a single market for the continent, which will account for $4 Trillion in spending and investment across the continent.
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Diplomatic Watch
China: Lessons for Developing Africa Andy Day & Liz Bentley-Pattison
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In 2010 China invested $56bn in in outward Foreign Direct Investment. With inward FDI averaging some $60bn per year, China had, by 2015, converted from a net recipient to a net investor in FDI, a marker of its economic maturity in many respects.
China, like many other rapidly industrialising countries, is discovering that government policy towards ideal family sizes has less of an influence on parents than the cost of housing, schooling and - most significantly - employment prospects and education levels of potential mothers. While the state bore down on parents having more than one child since 1980, there is now a growing realisation that the demographic structure of the population is ageing, becoming more economically dependent,
and with social and economic consequences that are seen as problematic. The two-child policy has been in place for a few years, but many parents (and mothers, especially) are reluctant to have more than one child. China initially pursued an exportoriented path to industrialisation – similar to the Asian Tigers before them – but has begun to diversify into other sectors of the economy in the last ten years. It has done this with an unwavering determination to accelerate growth rates and
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expand its economic reach. We need to understand the factors responsible for China’s economic success.
Labour supply There is a plentiful supply of workers in China with a steady stream of rural-urban migrants in search of work. This is due to the mechanisation of agriculture leading to unemployment and under-employment in rural areas and concurrent growth in industrial work in urban areas. It is estimated that 500,000
Diplomatic Watch
million people will leave the Chinese countryside in search of work over the next two decades. Voluntary migration of the rural population has been accompanied by aggressive re-planning schemes in which rural villages are demolished and new manufacturing settlements built at rapid pace for former agricultural families to move in to.
Wages and unemployment The unemployment rate has fallen in recent years to just over 4%, but high rates in the past drove down wages. If workers demand higher wages, there are many more who will take the jobs available. Wages in other East Asian countries earn up to 10 times more than Chinese workers. This has increased profit margins and attracted inward FDI (Foreign Direct Investment) as American, European and Japanese companies open factories under licence in China.
Female participation in the workforce China’s workforce is characterised by a higher than average female participation in manufacturing industry. Western cultural analyses of gender divisions in the workforce have little relevance in Chinese economic growth. This, along with the One-Child Policy which has meant women were involved in child-raising for a much shorter period than in many other countries, has made a much larger workforce available.
Political system The non-democratic and authoritarian political regime in China has meant that it has been possible to embrace westernstyle free market economics while maintaining control over the political system. In many ways, the planned economy of China (where the state controls economic activity rather than private business) has accelerated
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China initially pursued an exportoriented path to industrialisation – similar to the Asian Tigers before them – but has begun to diversify into other sectors of the economy in the last ten years. It has done this with an unwavering determination to accelerate growth rates and expand its economic reach.
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Category Watch Diplomatic
economic growth because the government has controlled all decision-making. Since Mao in 1953, the government has followed a series of Five Year Plans (or Guidelines, as they are now called, to reflect China’s transition towards a ‘socialist market economy’) which have enabled the government to enact any reforms it feels is necessary. The country is now in its 12th Five Year Plan (2011-2016) and policies include spending 2.2% of GDP on R&D (Research and Development) and moving coastal regions from being ‘the world’s factory’ to being hubs of R&D, top-end specialist manufacturing and services.
to China’s relative economic isolation.
Strong leadership
Foreign investment was encouraged in the initial phase of economic growth. They tended to locate in one of 6 SEZs (Special Economic Zones) or 14 Open Cities in which a relaxation of regulation and government control created a more attractive business environment. These are designated zones where TNCs (Trans National Corporations) are offered incentives such as reduced tax rates to set up manufacturing operations. An example is a Taiwanese TNC, EUPA, which manufactures coffee machines in Xiamen (an Open City) and employs 25,000 workers.
Chinese politicians are said to feel a greater responsibility to the nation than to themselves. Strong leadership from the head of state has been a major factor contributing to economic success.
Free market economics China first began moving away from a centrally planned economy towards a marketoriented system in 1978. Deng Xiaoping was Mao’s successor and he sought to bring an end
Export-led growth This is the strategy which China initially pursued. The strategy is beginning to become phased out in favour of Import Substitution Industrialisation by which consumer products imported for China’s growing middle-class are increasingly being made in China, such as cars, domestic white goods and house- and office-furniture.
Special Economic Zones and FDI
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Private enterprise For many years all manufacturing in China was state owned and operated. This has gradually been relaxed as the economy has been restructured and now up to 50% of businesses are privately owned.
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Voluntary migration of the rural population has been accompanied by aggressive replanning schemes in which rural villages are demolished and new manufacturing settlements built at rapid pace for former agricultural families to move in to.
Diplomatic Category Watch
Energy supply Since the 1990s China has been developing its energy base, with new hydroelectric and nuclear power plants. China is also embarking upon a massive coal-fired power-station opening programme based on its own substantial coal reserves plus imports from Australia and Indonesia. However, serious urban air pollution together with a commitment to limiting carbon emissions after 2030 is leading to a less rigorous expansion of this electricity source.
Investment in infrastructure The government has built many new roads, improved the rail system and made China’s major rivers navigable all year round. China has five of the ten largest container ports in the world (including Shanghai and Shenzhen). Urbanisation has also been encouraged. with a robust urban-construction programme.
Economic diversification China has recently started to diversify into Research and Development, specialist manufacturing and hi-tech industry. It is investing labour and capital in innovation so that it can sustain its economic growth and reduce the risk involved in having a narrow economic base.
Education Literacy levels of China have risen dramatically over the past 20 years and now stand at 95%. This has underpinned the economic development of the country. As a result, China has both large numbers of unskilled workers and a growing number of highly skilled workers. For instance, China trains 600,000 new engineers every year.
‘Going global’ China has started to globalise economically by buying up foreign companies in North
America and Europe particularly. In fact, in 2010 China invested $56bn in in outward Foreign Direct Investment. With inward FDI averaging some $60bn per year, China had, by 2015, converted from a net recipient to a net investor in FDI, a marker of its economic maturity in many respects.
Location China’s geographical location has geopolitical significance because of its proximity to consumer markets and trading partners. South Korea, Taiwan, Japan and Hong Kong are on major trade routes. It is no coincidence that the first SEZs were concentrated on the east coast facing Taiwan and the Pacific, particularly around Hong Kong.
Raw materials
of popular reluctance to have siblings for their single child, the policy - in some regions - is actively going pro-natalist in encouraging larger families. Rapid population growth in China, despite the One Child Policy, has resulted in very large numbers in the economically active population, leading to rapid urbanisation. This has fuelled further industrialisation, allowing for further population growth. Andy Day is based in East Yorkshire and is a retired Geography instructor. Liz Bentley-Pattison is an experienced Geography teacher and examiner who has worked in a variety of settings. She is now Head of Humanities in a sixth form college in Surrey and is a Fellow of the Royal Geographical Society.
China has a great wealth of natural resources, having vast reserves of coal, oil and natural gas. These are being used to fuel the industrial development of the country. However, so large is the country’s requirement for raw materials to feed its manufacturing industries, that it is a major importer of oil, gas, coal, iron-ore, copper and other key commodities in world trade.
Confucian values State and society are emphasized above the individual. There is a long history of submitting personal ambition to that of the community and state through Confucianism. The degree of control and authoritarian structures are more accepted in China than in most western cultures with their emphasis on individualism.
Population growth For over four decades, renowned for its aggressive one-child policy to prevent over-rapid population growth, China eased up on its anti-natalist programme in 2016 by allowing two children per family. Now, in the face
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Development Issues
Economic Trade in West Africa also assists key regional private sector associations to negotiate and meet contractual obligations and access finance.
African Private Sector Alliances USAID/West Africa focuses on private sector alliances in the Livestock and Grains, Transportation, Cashews, and Shea sectors:
Regional Trade in Livestock and Grains
West African economic growth rates have been insufficient in most countries to make significant reductions in poverty. Essentially, West Africa’s farmers and firms produce and trade in highly localized markets and do not achieve the sufficient economies of scale required to attract broad-based investment that could accelerate growth and reduce poverty. This is due to a number of constraints including inefficient transportation and trade barriers along corridors and at borders, a heavy reliance on family and informal sources of financing, and an insufficient supply of reliable and affordable power. These factors result in West African products being uncompetitive in the international market place. USAID/West Africa’s strategy is to work through regional organizations and private sector associations to address critical constraints to competitiveness
and demonstrate West Africa’s productive potential in order to trigger greater regional investment.
West Africa Trade Hub USAID/West Africa’s Trade Program is implemented through the West Africa Trade Hub in Accra, Ghana, in close coordination with a network of African regional private sector partners and public institutions, including the Economic Community of West African States (ECOWAS) (link is external) and the West African Economic and Monetary Union (WAEMU)(link is external). The Trade Hub works through regional private sector associations to assist farmers and firms to meet product quality standards and market requirements, and to produce commercial quantities. The USAID West Africa Trade Hub
32 | African Leadership | November 2019
USAID/West Africa’s Feed the Future strategy identifies livestock (cattle, sheep and goats) and grains (maize, rice, millet and sorghum) as critical staple foods for regional food security. These provide a substantial portion of the protein and calories in the West African diet, and regional trade is essential to ensure access to food and improve nutrition and resiliency to drought and climatic shocks. Regional trade in livestock and grains faces a number of competitive challenges. Low yields make local rice uncompetitive with Asian imports. The expansion of maize production is constrained by aflatoxin and informal bans by West African governments. Trade in cattle and small ruminants are constrained by poor transportation and graft along trade corridors. Livestock trade is confined to live animals because cuts of local red meat cannot compete with imports. Improving storage life and product quality are among the top priorities of regional agricultural association members.
a.
USAID is building the capacity of the West Africa Grains Network (WAGN) and the regional association for livestock and meat (COFENABVI) to help their members meet product requirements, negotiate formal contractual obligations, and access financial services. The Trade Hub and Partner Network link West African farmers to regional processors and facilitate better access to information on market opportunities and increase the understanding of market requirements. This includes building smallholder farmers’ capacities to meet health regulations and grading, handling, and sorting requirements.
African Cashew Alliance (ACA) Smallholder production of cashews has more than doubled in the past decade, but processing in Africa remains a small share of global production. However, African cashew processing is on the rise (35,000 MT in 2006 to 114,500 MT in 2012). It is estimated that even a 25 percent increase in RCN processing will generate over USD 100 million in household income. The ACA, established in 2006, provides support and technical assistance, facilitates investments, and promotes
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The USAID West Africa Trade Hub also assists key regional private sector associations to negotiate and meet contractual obligations and access finance.
market linkages in the cashew industry. The Alliance currently consists of 198 dues-paying member companies ranging from producers to processors and international buyers. The ACA has facilitated the establishment of new cashew processing factories in the region, including the largest cashew factory in Africa. In collaboration with the world’s largest cashew buyers - Kraft Foods, Intersnack, and Red River Foods - the Alliance developed the ACA Quality and Sustainability Seal program to assure compliance with international food safety, quality, and labor standards. The ACA Seal program has provided an opportunity to grow demand on the international market for cashews processed in Africa.
Borderless Alliance High transport costs in West Africa translate into lower prices for the goods of farmers and other producers, and make imports more expensive. Major causes of high transport costs include bribery, administrative delays, arbitrary checkpoints, high taxes, inefficient trade procedures, and poor infrastructure. Incorporated in September 2011, the Borderless Alliance represents a private sector-led coalition to increase trade in West Africa and foster change by exposing trade inefficiencies throughout the region. To address the issues of sustainability and effectiveness, the Borderless Alliance has evolved from an advocacy campaign into the region’s leading free trade advocacy organization. From an initial group of six, the Borderless Alliance now has more than 50 dues-paying members from the private sector across West Africa. Its membership base draws from a broad range of organizations involved in the various supply chains including port authorities, freight forwarders, logistics operators, manufacturers, traders and farmers. The Borderless Alliance’s premise is that by working together, businesses and traders can advocate effectively for change.
Development Issues
Global Shea Alliance (GSA) The shea industry in West Africa is rapidly expanding. Demand for shea butter produced in the region increased by more than 1,200 percent over the last 10 years. The GSA was established in 2011 to help make the shea industry more competitive, sustainable, and profitable for its workers who are primarily women. It has over 350 members from around the world, including the world’s largest buyers of shea nuts and butter, traders, processors, service providers, women’s groups, international brands and retailers, and nonprofit organizations. The GSA supports major initiatives in quality control, standards, and traceability. It works to improve the quality of West African shea products through developing training materials that demonstrate best practices in post-harvest shea nut processing and handling. The GSA is developing industry-recognized quality standards for shea nuts and, finally, is facilitating direct purchases between collector groups and shea nut buyers to encourage faster processing, which also promotes traceability.
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Category Climate Discuss
Global Blueprint for Climate-centred Investment in Africa Alzbeta Klein
On the evening of March 14, tropical cyclone Idai slammed into the southeastern coast of Africa. On the same day, some 1,700 miles due north, I gathered with global leaders and climate experts at the third One Planet Summit (OPS) in Nairobi, Kenya. The two scenes could not have been more different – or more closely linked. The humanitarian emergency triggered by Idai continues to unfold. Beira, Mozambique, with its 500,000-plus residents, bore the brunt of the cyclone’s impact. But the consequences extend much further, not least because Beira is home to the main port for some of its regional neighbors, including landlocked Malawi and Zimbabwe. An inland lake the size of Luxembourg is now displacing hundreds of thousands of people across all three countries.
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At a time when climate change is making catastrophic weather events more common, Idai amounts to a stark reminder of our collective responsibility to boost resilience, especially in the most vulnerable areas
36 | African Leadership | November 2019
At a time when climate change is making catastrophic weather events more common, Idai amounts to a stark reminder of our collective responsibility to boost resilience, especially in the most vulnerable areas. After all, as Beira’s severely strained budget makes clear, the costs of waiting for disaster to strike are much higher. According to Lloyd’s City Risk Index, even in a conservative scenario, climaterelated risks could cost cities $123 billion annually, on average, in lost GDP. The challenge will be compounded as the adverse effects of climate change on agriculture and other rural livelihoods accelerate already-rapid urbanization. In SubSaharan Africa, the number of urban dwellers, already in excess of 470 million, is set to double over the next 25 years. By 2050, the region is expected to account for 20% of the world’s urban residents. But rapid urbanization can also serve as an opportunity to build climate-resilient cities. To make the most of it will require mobilizing large amounts of investment in areas like climatesmart water management, clean transport, and green buildings.
Climate Category Discuss
Mobilization of climate finance was a central theme at this year’s OPS, with Africa being the main region of focus. The participants, who included some of my World Bank Group colleagues, as well as heads of state, civil-society organizations, and privatesector actors, proposed the Africa Pledge, which contains a set of commitments aimed at accelerating climate action that serves the continent’s people.
global development institution focused exclusively on the private sector in developing countries – is essential. In particular, the IFC, a member of the World Bank Group, has been developing and implementing innovative financing products, such as green bonds and carbon credits, to enable private-sector actors to invest in climate mitigation and adaptation efforts.
As part of the Africa Pledge, the World Bank announced that it will deliver $22.5 billion in new climate financing to Africa from 2021-2025. This financing, combined with the World Bank Group’s Action Plan on Adaptation and Resilience, better positions African countries to unlock investment opportunities and manage the risks of a changing climate.
The green-bond market alone, after a decade of rapid growth, is poised to exceed $180 billion this year, and the IFC is eager to help the world seize the unrivaled opportunity in climate finance that this market represents. In 2016, the IFC created the Forests Bond, a first-of-its-kind instrument that gives investors the option of being repaid in cash or carbon credits that can be used to support forest conservation. And last year the IFC launched the world’s largest green-bond fund dedicated to emerging markets, the Amundi Planet Emerging Green One fund, committing $256 million to increase the capacity of emerging-market banks to fund climate-smart investments. Such efforts earned the IFC the title of Green Bond Development Bank of 2018 at this year’s Green Bond Pioneer Awards.
Even with such financing from international institutions, however, the costs of building climate resilience will far exceed public budgets. Mobilizing private capital will be crucial to close the financing gap, and here the role of the International Finance Corporation – the largest
But even with the most innovative instruments, sufficient private investment will not be forthcoming if governments do not create the right conditions. To attract private investment to climate-smart projects and generate a viable project pipeline, African cities and countries must improve their creditworthiness and boost project bankability. The rewards of such efforts would be enormous. A recent IFC study, Climate Investment Opportunities in Cities, estimates that emerging-market cities could attract more than $29.4 trillion in cumulative climaterelated investments by 2030 in six key sectors: green buildings, public transportation, electric vehicles, renewable energy,
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According to Lloyd’s City Risk Index, even in a conservative scenario, climaterelated risks could cost cities $123 billion annually, on average, in lost GDP.
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CategoryFocus Industry
climate-smart water systems, and waste infrastructure and management. Of that, $1.5 trillion would go to Sub-Saharan Africa. Of course, the specific composition of investment opportunities depends on local contexts. For example, this year’s OPS host, Nairobi, has investment potential of $8.5 billion, including $5 billion in electric vehicles. Some governments might be tempted to channel investments toward other development objectives that promise tangible short-term benefits, such as poverty eradication and education. But, if these gains are to last, they must be secured alongside progress on building climate resilience. Otherwise, disasters like cyclone Idai will continue to wash away people’s lives, livelihoods, and futures. Alzbeta Klein is Director and Global Head of Climate Business at the International Finance Corporation.
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But rapid urbanization can also serve as an opportunity to build climate-resilient cities. To make the most of it will require mobilizing large amounts of investment in areas like climate-smart water management, clean transport, and green buildings.
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Trade & Investment Category
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Development Issues
How to Facilitate Trade in Africa Asmita Parshotam
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For African countries that manage to implement the TFA fully, the gains could be massive. According to a 2015 WTO study, the TFA could lead to a 35% increase in exports from least-developed African countries, a 3.5% boost to economic growth across developing economies, and a 20% improvement in the diversification of exports.
While the World Trade Organization's Trade Facilitation Agreement can act as a powerful tool for progress, it cannot work in isolation. It also requires complementary reforms addressing specific country-level challenges, and a well-functioning global trading regime that accounts for developing countries' needs. With the United States and China locked in a trade war, climate action lagging behind climate reality, and the World Trade Organization’s Appellate Body at risk of becoming inoperable, the theme of this week’s WTO
public forum – “Trading Forward: Adapting to a Changing World” – couldn’t be more appropriate. But if the global trading system is to be adapted to twentyfirst-century realities, careful attention must be paid to the needs of developing countries. Consider Africa, which has been working hard lately to deepen intra-continental trade and integration. While such efforts – most notably the African Continental Free Trade Area (AfCFTA) – have the potential to spur growth and development, their impact depends both on complementary global reforms
40 | African Leadership | November 2019
and on countries’ implementation of WTO agreements. Success is far from guaranteed. The Trade Facilitation Agreement, which entered into force in 2017, is a case in point. One of the few WTO agreements to be ratified in recent years, the TFA places developing members’ ambitions at the forefront. It aims to expedite the movement, clearance, and release of goods across borders; establishes measures for effective cooperation between customs and other relevant authorities; and provides for technical assistance and capacity building.
Development Issues
The TFA recognizes that trade facilitation rests on three key pillars: simplification, harmonization, and transparency. Given its global uptake, it has the potential to ensure that reforms reflecting this recognition are “locked in” across countries, including those whose governments might otherwise be reluctant to implement them. For African countries that manage to implement the TFA fully, the gains could be massive. According to a 2015 WTO study, the TFA could lead to a 35% increase in exports from leastdeveloped African countries, a 3.5% boost to economic growth across developing economies, and a 20% improvement in the diversification of exports. Yet, for many African countries, implementing trade-facilitation reforms will require overcoming concurrent challenges, such as supply constraints, slow economic growth, inefficient customs controls, and poor border coordination. In this sense, the AfCFTA – which recognizes the hard and soft infrastructure challenges hampering trade-facilitation reforms on the continent – complements the TFA. But, because the AfCFTA is yet to be
implemented, its contribution remains theoretical. To enable developing countries to pursue complementary reforms, the TFA allows them longer implementation periods, according to their individual needs and priorities. At the same time, it provides a kind of “matchmaking mechanism” for donors to provide technical and financial assistance. But for these partnerships to work, recipient countries must identify their priorities, potential barriers to progress, and the interventions that are needed to overcome them. They must then communicate their conclusions clearly to the donors with which they are matched. A recent study by the South African Institute of International Affairs (SAIIA) goes some way toward demonstrating how to do that, by examining the case of land-locked, low-income Zambia. Among the study’s key findings is that Zambia must go “from land-locked to land-linked” by creating effective regional transportation networks and building close relations with neighbors, in order to ensure well-functioning customs administration, border
control, and access to ports. Both physical infrastructure and information and communication technology are essential.
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1. Consider Africa, which has been working hard lately to deepen intracontinental trade and integration. While such efforts – most notably the African Continental Free Trade Area (AfCFTA) – have the potential to spur growth and development, their impact depends both on complementary global reforms and on countries’ implementation of WTO agreements. Success is far from guaranteed.
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Development Issues
Although Zambia does engage its neighbors in rolling out onestop border posts, these working relationships are not without their challenges and require a balancing act between shared regional goals and national priorities. Carrying out portof-entry operations at a single common border crossing would reduce time spent at borders, lower logistics costs, foster cooperation, and enable the integration of information and risk management. To secure the necessary buy-in for this and other trade-facilitation reforms, the private sector must be included in decision-making.
Trade and Development and the Global Alliance for Trade Facilitation can support this effort by helping to create a pool of government personnel with the knowledge and skills to implement long-term reforms. The TFA, like any WTO agreement, is a powerful tool for progress. But it cannot work in isolation. The necessary complementary reforms addressing specific country-level challenges depend on the proper functioning of the broader global trading system. That is why,
The SAIIA study also underscores the need for Zambia to embed its trade-facilitation reform priorities into the agendas of a range of government agencies, thereby improving coordination. All of these agencies must understand not only national priorities, but also how efforts can be directed toward improving trade conditions and deepening regional integration, thereby contributing to wider global development goals. Training programs and capacitybuilding support offered by the United Nations Conference on
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A recent study by the South African Institute of International Affairs (SAIIA) goes some way toward demonstrating how to do that, by examining the case of landlocked, low-income Zambia. Among the study’s key findings is that Zambia must go “from land-locked to land-linked” by creating effective regional transportation networks and building close relations with neighbors, in order to ensure wellfunctioning customs administration, border control, and access to ports.
42 | African Leadership | November 2019
rather than allowing a couple of large actors to derail that system, the experts gathering for the WTO public forum this week must advance a vision for a system that accounts for all member states’ needs, beginning with the developing countries that are too often left behind.
Asmita Parshotam is an admitted attorney of the High Court of South Africa and a researcher in the Economic Diplomacy Programme at the South African Institute of International Affairs (SAIIA).
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STEM Education Category
44 | African Leadership | November 2019
STEM Education Category
Reward For Hardwork In STEM Miracle Nwankwo
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Although on getting to GE she was offered a very low salary, she was not perturbed, rather, finding herself in a job that pushed her towards her career extremely challenged her.
The Middle East is a patriarchal sphere that is almost impossible for women with visions and aspirations to succeed. It is quite unfortunate that the region has many policies and laws that ban their women from living freely and purposefully, and rather bounds them from reaching for the skies. The region is just beginning to let go of it numerous strong stereotyped laws. However, prior to this time a reasonable amount of women has been able to pull through the limitations to achieving their dreams. Among these women is Iba Masood, a successful woman in STEM. Iba is a Pakistani woman born and raised the United Arab Emirates. She is the co-founder and CEO of a project-planning and recruiting company called Tara AI. Iba is a hardworking and purpose-driven woman, who currently heads the evolution of TARA Intelligence Inc. in Silicon Valley. Her company has recently raised $3 million in new seed funding from YCombinator, Moment Ventures, GSV and others. Prestigious organisations like; Ford, Cisco and Orange Telecom are using artificial intelligence from Tara AI to find top coders for freelance software projects. She was thirteen-year-old when she bore the dream that births her present status. She had always wanted to own a tech-related company in the United States, one that would come to being with her ignition, and grow to become a huge, useful, successful, and resourceful to the technology industry. In pursuit of this dream, she went on to study and at the age of nineteen, Iba gained a Bachelor’s in Finance and was the top of her class. Unfortunately, she had graduated at a time when the world was hit with global economic recession. Despite her good grades, getting hired was a huge problem for Iba, so she was unemployed for a long time. However, she stayed focused and continued to apply jobs while looking out for opportunities to begin creating the future she had dreamt of. Finally, her dedicated efforts began to bear fruits when she was accepted into a trainee program at McKinsey which paved the way for her new role at GE. Although on getting to GE she was offered a very low salary, she was not perturbed, rather,
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STEM Education
she felt that they hit a growth ceiling. She knew she had it in her to create something that would yield even more profit, more jobs, and more and more useful tools and products for the technology industry. She wanted to create something that had even more potential, and this initial success gave her the experience and confidence she needed to move forward.
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At 21, Iba founded her first company, a career platform for graduates to find jobs. The platform really took off, catering to hundreds of Enterprise customers in the Middle East.
finding herself in a job that pushed her towards her career extremely challenged her. She felt a sharp lack of the career stability, that would allow her to support herself financially, do work that was rewarding to her, and have the potential for growth and development in her future. This lack of stability Iba so craved was what propelled her to take calculated risks to achieve her goals. She saw the beauty in taking risks because of the potential reward that it could bring. If she was not getting what she needed the “typical” route, she thought, then she was willing to brave more unique routes to get to her dreams. At 21, Iba founded her first company, a career platform for graduates to find jobs. The platform really took off, catering to hundreds of Enterprise customers in the Middle East. Iba was very proud of her work, but
46 | African Leadership | November 2019
At 25, Iba first came to the US on a visit visa, and eventually stayed with the pull of her latest dream and entrepreneurial endeavor: TARA. In the US, Iba found that her idealized view of the U.S.’s technology sector – the view that the industry was a merit-based space in which everyone had a fair and equal shot – was not so true to reality. In her experience, being a woman and/or a person of color in the start-up world means it may be more challenging for you to get funding, or get opportunities for starting out/ growth that others may get more easily. Having lived/worked in multiple countries/cultures, Iba knows that the US has ways to go in improving opportunity for minority groups. Having faced these challenges, Iba’s resolve was strengthened that the platform she was working on, TARA.AI, was a tool with which she could make a positive and necessary impact in the industry. TARA’s Intelligence is used by software companies to predict and build an early version of their product. This allows a company to predict the tasks they will have to accomplish, and the milestones they will have to reach in order to successfully execute launching a new product. A part of her journey that Iba is very proud of: having TARA become a YCombinator company. Iba first applied to YC at 17, and didn’t get accepted. When she applied again at 26, she was intimidated, feeling that as someone without an ivy league degree and as a Silicon Valley outsider, she may not get accepted. But despite the very
STEM Education Category
real fear, she applied anyway – and not only got an interview, but got in! One thing that Iba brought to the TARA Team from her own knowledge as an entrepreneur with a previous company: no woman is an island. Learn to build a network of friends, partnerships, mentors, peers, advisors, so you never feel that you are working alone. A solid way to ensure consistent development and growth is to surround yourself with a network of people who will constantly push you to grow, look at problems from different angles, and above all, keep believing in your innate ability.
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She wanted to create something that had even more potential, and this initial success gave her the experience and confidence she needed to move forward.
Her advice to other women: At every stage of the process (even when you’ve seen years of success), surround yourself with people who are smarter than you – absorb their wisdom to ensure broadened understanding, and ever-increasing knowledge toward happiness and success.
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Renewable Energy
Is Africa ready for nuclear energy? Laura Gil
Years back, nuclear energy was a fancy option limited to the industrialized world. In due course, nuclear could be an energy source for much of Africa, where only South Africa currently has a nuclear power plant. Governments across the continent are devising development policies to become middle-income countries in the medium term. Socioeconomic growth comes with a rise in energy demand—and a need for a reliable and sustainable energy supply. For industrializing countries in need of a clean, reliable and cost-effective source of energy, nuclear is an attractive option. “Africa is hungry for energy, and nuclear power could be part of the answer for an increasing number of countries,” says Mikhail Chudakov, deputy director general and head of the Department of Nuclear Energy at the International Atomic Energy Agency (IAEA), an international organisation that promotes the peaceful use of nuclear technology. A third of the almost 30 countries currently considering nuclear power are in Africa. Egypt, Ghana, Kenya, Morocco, Niger, Nigeria and Sudan have already engaged with the IAEA to assess their readiness to embark on a nuclear programme. Algeria, Tunisia, Uganda and Zambia are also mulling the possibility of nuclear power. “Energy is the backbone of any strong development,” says Nii
Allotey, director of the Nuclear Power Institute at the Ghana Atomic Energy Commission. “And where do we get energy from? We have hydro, thermal, fossil fuels, and we have local gas—but these are dwindling. They are limited; fossil fuels could run out by 2030. And, the prices are volatile.” For Ghana, cost-effective, reliable electricity is the entry point to higher-value-added manufacturing and exportled growth. For example, the country’s reserves of bauxite— the ore used to produce aluminium—are an important source of income, but for now it is exported raw. “We have a smelter, but it’s not operating at full capacity
48 | African Leadership | November 2019
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For industrializing countries in need of a clean, reliable and cost-effective source of energy, nuclear is an attractive option.
Renewable Category Energy
because electricity is too expensive,” Mr. Allotey says. “If we had cost-effective electricity, we would not be exporting raw bauxite, but exporting smelted bauxite at a much higher price. This would be a big move for Ghana.”
Power to the people African governments are working to make electricity more widely accessible. Roughly 57% of the population of sub-Saharan Africa does not have access to electricity. For many, the electricity supply is characterised by frequent power outages, according to the International Energy Agency, an organisation of 30 mostly industrialised countries that have met a set of energy security criteria. Kenya is considering nuclear to meet the demand generated by hooking up households nationwide, which is expected to contribute significantly to the 30% increase in electricity demand predicted for the country by 2030. A successful nuclear power programme requires broad political and popular support and a national commitment of at least 100 years. “For a long time in our country electrification levels were low, but the government has put in a
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A successful nuclear power programme requires broad political and popular support and a national commitment of at least 100 years.
lot of efforts towards electrifying the entire country,” says Winfred Ndubai, acting director of the Kenya Nuclear Electricity Board’s Technical Department. “Even those areas that were considered to be remote are now vibrant. Within a period of about 10 years we have moved from [a] 12% electrification rate to 60%.” Kenya depends mostly on nonfossil fuel for energy; about 60% of installed capacity is from hydropower and geothermal power.
Is Africa ready for nuclear? “Going nuclear is not something that happens from one day to the next. From the moment a country initiates a nuclear power programme until the first unit becomes operative, years could pass,” says Milko Kovachev, head of the IAEA’s Nuclear Infrastructure Development Section, which works with countries new to nuclear power. “Creating the necessary nuclear infrastructure and building the first nuclear power plant will take at least 10 to 15 years.”
programme requires broad political and popular support and a national commitment of at least 100 years, Mr. Kovachev added. This includes committing to the entire life cycle of a power plant, from construction through electricity generation and, finally, decommissioning. In addition to time, there is the issue of costs. Governments and private operators need to make a considerable investment that includes projected waste management and decommissioning costs. Mr. Kovachev points out that “the government’s investment to develop the necessary infrastructure is modest relative to the cost of the first nuclear power plant. But [it] is still in the order of hundreds of millions of dollars.”
Financing nuclear energy Without proper financing, nuclear is not an option. “Most countries in Africa will find it difficult to invest this amount of money in a nuclear power project,” Mr. Kovachev stresses. “But there are financing mechanisms like, for instance, from export agencies of vendor countries. Tapping into a reliable,
A successful nuclear power
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Category Energy Renewable
Joining a regional grid is another option. “Historically, it has been possible to share a common grid between countries,” Mr. Kovachev explains. “But, of course, this requires regional dialogue.” One example of such a scheme is the West African Power Pool, created to integrate national power systems in the Economic Community of West African States into a unified regional electricity market. Another factor militating against a headlong rush into nuclear power is popular rejection of projects that are costly and hard to finance.
carbon-free supply of energy when vendors are offering to fund it can make sense for several countries in Africa.” Another aspect to consider is the burden on the electrical grid system of the country. Nuclear power plants are connected to a grid through which they deliver electricity. For a country to safely introduce nuclear energy, the IAEA recommends that its grid capacity be around ten times the capacity of its planned nuclear power plant. For example, a country should have a capacity of 10,000 megawatts already in place to generate 1,000 megawatts from nuclear power.
manufactured in a factory setting and transported to sites for ease of construction. While SMRs are expected to begin commercial operation in Argentina, China and Russia between 2018 and 2020, African countries are still wary of such a project. “One of the things we are very clear about in terms of introducing nuclear power is that we do not want to invest in a first-of-a-kind technology,” Ms. Ndubai says. “As much as SMRs represent an opportunity for us, we would want them to be built and tested elsewhere before introducing them in our country.”
Few countries in Africa currently have a grid of this capacity. “In Kenya, our installed capacity is 2,400 megawatts—too small for conventional, large nuclear power plants,” Ms. Ndubai says. “The grid would need to increase to accommodate a large unit, or, alternatively, other, smaller nuclear power plant options would need to be explored.” One option is to invest in small modular reactors (SMRs), which are among the most promising emerging technologies in nuclear power. SMRs produce electric power up to 300 megawatts per unit, or around half of a traditional reactor and their major components can be
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Also, countries are wary that in the event of a nuclear power plant accident, released radioactive materials will harm the environment and lives. Although no fatalities were recorded in the Fukushima nuclear disaster in Japan in March 2011 following the Tōhoku
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A third of the almost 30 countries currently considering nuclear power are in Africa. Egypt, Ghana, Kenya, Morocco, Niger, Nigeria and Sudan have already engaged with the IAEA to assess their readiness to embark on a nuclear programme. Algeria, Tunisia, Uganda and Zambia are also mulling the possibility of nuclear power.
Renewable Category Energy
earthquake, the release of radioactive materials forced the evacuation of tens of thousands of residents.
IAEA assistance While the IAEA does not influence a country’s decision about whether to add nuclear power to its energy mix, the organisation provides technical expertise and other pertinent information about safe, secure and sustainable use to countries that opt for nuclear energy. Safety and security are key considerations in the IAEA Milestones Approach, a phased method created to assist countries that are assessing their readiness to embark on a nuclear power programme. The approach helps them consider aspects such as the legal framework, nuclear safety, security, radiation
protection, environmental protection and radioactive waste management. “Many, many people ask the question: Why nuclear?” Mr. Allotey says. “To me, it’s not about nuclear being an option. It is about energy being an option. Do you, as a country, need energy? And the simple answer is yes. So if you need energy, you need to find cost-effective electricity that is clean and reliable.” “With a rapidly expanding population and plans to grow our economies, we need to work within these constraints,” he adds. “We are a continent that is in dire need of energy.” Ms Gil is a writer and associate public information officer at the International Atomic Energy Agency.
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For a country to safely introduce nuclear energy, the IAEA recommends that its grid capacity be around ten times the capacity of its planned nuclear power plant. For example, a country should have a capacity of 10,000 megawatts already in place to generate 1,000 megawatts from nuclear power.
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Climate Change
Mapping a way to a greener consumer culture Hamieda Parker
Consumption drives environmental collapse. We can blame corporations and governments all we want, but our consumption habits are a large part of the problem. They need to change and the Cape Town water crisis offers a lesson in how we can bring this about.
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The theory of consumption values suggests that people make consumption decisions based on three things: what they know; a moral feeling they get; and a sort of peerpressure.
With global scientists warning that the world is only a dozen or so years away from a deadline to keep global warming below a threshold of 1.5C - or risk worsening the risks of drought, floods, extreme heat and poverty for hundreds of millions of people - the reality of environmental collapse is staring us in the face.
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The landmark report by the UN Intergovernmental Panel on Climate Change (IPCC) released early in October said urgent and unprecedented changes are needed to reach the 1.5C target. It is affordable and feasible to do so – and a significant part of the change needs to happen at the level of consumers.
Climate Change
Consumer behaviour can change Changing human behaviour is considerably difficult, but the Cape Town water crisis offers an excellent example of how consumption habits can change, and change fast, if the right pressure is applied. When rains were good and dams were full, water was taken for granted. Hardly anyone blinked an eye when driving through leafy suburbs, with sprinklers hissing away litres of water every morning; no-one timed their showers, or showered in buckets to catch the water and reuse it; and the thought of the taps running dry never crossed our minds. Then the drought came. And it didn’t go away. Dams almost dried up. The Western Cape government launched an urgent “Day Zero” campaign that worked to change behaviour on a large scale. The city managed to reduce water consumption by more than half to an average of 516 million litres per day in early 2018 down from 1.2 billion litres per day in February 2015.
There is a theory that gives insight into how consumers make choices that helps us understand how this was achieved. The theory of consumption values suggests that people make consumption decisions based on three things: what they know; a moral feeling they get; and a sort of peer-pressure. The Day Zero campaign touched on all three. It focused on water as a finite resource and kept an information stream, if you will, constantly informing people about the situation and the impact of their water usage. People suddenly felt bad about using too much water, and put pressure on those who seemed not to care. The government added impetus with the threat of fines and public shaming. This same understanding can be applied to tackling other detrimental consumption behaviours.
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Developing an ethical consumer culture needs to start with education. We should teach the principles of environmentalfriendliness and sustainability to children in schools.
Consumer culture and the environment Close to 2 billion people make up the world’s consumer class. This is a class that wants everything.
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Special Report Climate Change
It eats highly processed foods, desires flashier cars and bigger houses, and runs up higher levels of debt. It demands more and so production skyrockets. This undermines the natural system: devastating water supplies, natural resources and ecosystems. It also makes it harder for the poor to survive. A recent report on local spending trends shows that 57% of South Africans say they need access to services and products at all times. They want products and services to be available constantly and at the tap of a screen. And they want value. The majority of respondents in the research said they are not loyal to any one retailer; 69% believe the most important thing about a brand is whether it offers value for money. Driven by consumer expectations and demands, brands deliver. There isn’t a hint of environmental concern in this report. South Africans are concerned primarily about value, so how can we create a consumer culture that is equally concerned about sustainability?
Understanding what drives green consumers To develop a roadmap towards such a culture, we wanted to know why South Africans bought “green” products when they did. We wanted to know which of the factors in the theory of consumption values was the most powerful: knowledgeseeking, moral obligation, or social pressure. So we asked South African adults about their purchasing habits and what they believed to be the primary factor behind their ethical consumption decisions. We looked for those people who had previously bought a green product of some kind. The research showed that environmental concern was the strongest reason for “going green”, and that in fact both peer-pressure and moral obligation worked through this concern. So, for whatever reasons, people become concerned about certain environmental issues. They then seek more knowledge on the
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issue. Their moral obligation grows. Their sensitivity to social pressures around these concerns grow. And they make decisions accordingly. Suddenly, a roadmap starts to emerge. And it has three main lanes: information, policy, and education.
Approaching an ethical consumer culture Developing an ethical consumer culture needs to start with education. We should teach the principles of environmentalfriendliness and sustainability to children in schools. And they should be taught that as consumers they have power in society, which could be used for positive change. If environmental concern can be instilled early, children will seek more knowledge around the concerns sooner, will form personal norms and morals sooner and expect these values to be represented in the products and services around them. Brands and their marketers will be forced to connect with
Climate SpecialChange Report
the consumers by making the information they seek readily available and by developing environmentally friendly products in ways that are morally acceptable. And to get the ball rolling on this, policymakers should be writing legislation that forces companies to adopt this kind of “green” consciousness in everything they do. Consumerism is the shovel with which we dug this deep dark hole but it has the potential to be the rope by which we climb out of it. What if we all suddenly turned around, wallets held high, and refused to buy anything that seemed to us to be, even in the slightest of ways, unsustainable, detrimental or unethical?
Hamieda Parker is an Associate Professor at the UCT Graduate School of Business. She lectures the Operations Management core course and the Global Supply Chain Management elective course on the MBA programme. This article is based on a paper co-authored with Thiam Marais, an MBA student at the GSB. The paper is titled, “A study of the factors influencing the purchase of environmentally friendly products.” It was presented at the 8th Global Innovation and Knowledge Academy Conference held in Valencia, Spain in June 2018.
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So, for whatever reasons, people become concerned about certain environmental issues. They then seek more knowledge on the issue. Their moral obligation grows. Their sensitivity to social pressures around these concerns grow. And they make decisions accordingly.
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Category Afripreneur
The Building Blocks of Entrepreneurship Amy Grath
can be pursued by anyone, including a teen. For those who are interested in attaining entrepreneurial success for themselves, Greenberg lays out its three core components. Identify the opportunity. This usually means finding a problem to be solved or a need to be filled. Create value. Solving the problem or filling the need in a unique way. Capture that value.
Today’s high school students are busier than ever. Between studying for SATs, applying to college, nurturing GPAs, and engaging in extracurriculars, students can be so overburdened that the idea of embarking into the world of entrepreneurship can seem like a distant dream. And yet, more and more young people are starting to build their own businesses. Mark Greenberg is the founder and CEO of BuildEd. He uses his experience as an entrepreneur in industries ranging from consulting to real estate investment to develop entrepreneurship courses for partners like ASU Prep Digital and several K-12 programs. According to Greenberg, entrepreneurship is an essential
life skill and it’s never too soon to get started. As he sees it, adapting the proper mindset and learning the basic principles of entrepreneurship can transform students into successful business owners. But it all starts with how you define “entrepreneur.” “An entrepreneur is a problem seeker, a problem solver, and an innovator,” says Greenberg. “I don’t think entrepreneurship is limited to those who start organizations or ventures. More than anything, an entrepreneur is a person that can add value, whether they create something themselves or work for a company.” Under that definition, the path towards entrepreneurship and an entrepreneurial mindset
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“Once you’ve done One and Two, Three is really easy,” says Greenberg. “Everything is an exchange of value. For example, if you’re aware of your company’s needs, and you’re constantly creating value, you’ll be running the place at some point. Conversely, if you just do what you’ve been asked, then you’re only a commodity.” Of course, entrepreneurial skills can be developed outside working for a company or other professional setting. Entrepreneurship starts with finding ways to add value to the environment you’re already in, whether that’s the classroom, the athletic field, at home, or at a part-time job. This can be a novel concept for many high school students. “What if you did two or three things for your parents that you weren’t asked to do?” he asks his students. “How do you think
Afripreneur
that value might be exchanged? When you ask if you can stay out a little later, do you think you might get some of that value back?” As Greenberg sees it, entrepreneurship is much simpler than we tend to think it is. If you have the ability to add value to your community by identifying and solving a problem with an idea or skill of your own, then you’re already on your way to becoming an entrepreneur. All that’s left is to put your idea into action.
Tips for Aspiring Entrepreneurs Optimism is vital. There’s a time and place for constructive criticism and playing the devil’s advocate, but successful entrepreneurs look at every problem they face with the confidence that a solution can and will be found. Don’t fall in love with your idea. “Starting from that place means your ears are closed,” Greenberg explains. “Entrepreneurship, when done properly, is about getting the answers to the test
before you take it.” But if you already think you have the right answers, then you’re going to have serious issues when you encounter unexpected challenges. The best way to counter this is by listening well and being willing to adapt your idea for the sake of finding a solution. Navigate risks with caution. “I think it’s a false premise that entrepreneurs are risk takers,” says Greenberg. “They’re obviously not paralyzed by risk. There’s risk in taking a new job, there’s risk in starting something on your own, but entrepreneurship is about understanding fully what risks you’re taking and mitigating those risks.” In other words, foolish entrepreneurs dive headfirst and blindly into every risk they encounter, but successful entrepreneurs are aware of every potential risk, so they know which are worth taking and which should be avoided. Learn by doing. “Business savvy is something you accumulate over time, based on experience,” says Greenberg. “You have to get in the game. Yes, you need education, but you
also need experience. We want our students to learn by doing.” Greenberg believes any student can be taught the essential skills of entrepreneurship as long as they have a safe space where they can experiment with their ideas; the guidance of an experienced teacher who inspires and challenges them; a strong curriculum that teaches them practical lessons; and most importantly, the opportunity to test their ideas in the real world.
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More than anything, an entrepreneur is a person that can add value, whether they create something themselves or work for a company.
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Category Afripreneur
“If you create an environment with those four things I think you can absolutely create entrepreneurs,” Greenberg says. “I see entrepreneurship education as the great equalizer. You don’t have to have an IQ of 150. You just need to step up, be armed with an idea, and be willing to work hard.” Even if most high school students have yet to develop specific professional ambitions, according to Greenberg’s definition of entrepreneurship, the entrepreneurial mindset is useful far beyond the world of startups and business ventures, and therefore it ought to be learned and adapted by everyone. “Life is about interacting with people, and there’s a lot of problem-solving along the way,” he explains. “Entrepreneurship – your ability to interact with people well and solve problems – will equip you for your personal life, your family life, and your professional life.”
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Of course, entrepreneurial skills can be developed outside working for a company or other professional setting. Entrepreneurship starts with finding ways to add value to the environment you’re already in, whether that’s the classroom, the athletic field, at home, or at a part-time job. This can be a novel concept for many high school students.
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Afripreneur Category
The Importance of Record-Keeping to the Successful Entrepreneur Eloke-Young Splendor
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In order to keep a good track of happenings in any business organization, the role of recording business transactions must not be overlooked.
Some entrepreneurs sometimes fail to understand that recordkeeping in business, is also a serious business as well. Every business person, whose desire for success is not just a one-off goal but a consistent pursuit, must realize the importance of record keeping to her business whether it is a small scale business or a large scale business. This implies that, record keeping cannot be separated from the necessities of a good business ethics. The business world presents a highly competitive environment and for any entrepreneur to continually excel in business, there are some practices
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Category Afripreneur
which must not be neglected or ignored. In order to keep a good track of happenings in any business organization, the role of recording business transactions must not be overlooked. Keeping accurate, consistent records of business transactions is very vital to any person who wants to excel in her business. No wonder scholars have reported that the reason for most business failures can be traced to either poor record keeping or no record keeping at all. Every entrepreneur who desires to excel as a business leader must understand the importance of record-keeping in business. Below are some of the importance of record keeping to the successful entrepreneur. 1. Record- keeping Reveals Her Progress: One of the best ways by which the entrepreneur can measure progress as well as access growth is through the records he or she has kept from the point of purchase till sales. Through the records kept, the entrepreneur can compare her
performance to her goals. A good record keeping enables the female entrepreneur to measure the various points of her business as well as the progress made. Through these records, the entrepreneur can survey prospective markets where the company will invest. Record-keeping actually informs the entrepreneur on whether the company is making progress or not. 2. Record- keeping reveals the sources of cash flow: Having a good record system in a business helps the entrepreneur identify the major sources of cash flow. The entrepreneur can tell which goods are sold more often and which goods bring in more profit. This can help him/ her concentrate more on those goods which bring in much more profit for the business as it keeps track on what has been sold, to who and even the amount for which it was sold. 3. Record- Keeping Gives room for “Repeat Business”: It is the joy of every business to maintain its customers and at the same time increase the
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Record-keeping helps a business to have a strong data base with accurate data of customers; these data can then be used to facilitate repeat businesses.
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satisfaction derived by those customers. Record-keeping gives you the advantage of retaining a strong customer base which is the secret to every popular brand in the world. Successful entrepreneurs have realized that a great way to keep and maintain their customers as well as to grow them into strong endorsers of the brand, is by motivating them to repeat business. Recordkeeping helps a business to have a strong data base with accurate data of customers; these data can then be used to facilitate repeat businesses. 4. Record- Keeping Helps Her Allocate Resources to Her Most profitable customer: Analyzing and monitoring your business accounts, using accurate record keeping can help ensure you allocate your time to the clients that contribute most to your profits. Record-keeping helps you respond to the demand of those clients that patronize you often. Through record keeping, you can keep a stock of their regular demands; as well as monitor when these profitable customers have shifted preference in demand.
Afripreneur Category
5. Record- keeping goes a long way to assist the entrepreneur with plans on how to meet financial commitments: One of such commitments include paying creditors or employees. As record keeping reveals the cash flow in a business, it also creates an awareness that prompts the female entrepreneur to make plans for future financial commitments. Through the records kept, the female entrepreneur can ascertain whether she is ready to fulfill the upcoming task of paying salaries and if no; she can then begin on time to seek alternative ways by which these salaries can be paid. Through accurate recordkeeping, the female entrepreneur is not caught unawares by financial commitments. 6. Serious entrepreneurs use their records to obtain loans: A good record- keeping includes accurate financial statements and the financial statement of any organization is one of the prerequisite for obtaining loans. Most successful entrepreneurs have realized that their financial records can either make or mar their chances of obtaining
business loans. Therefore, serious entrepreneurs try as much as possible to make conscious effort towards keeping and updating business records. Some business persons may see record keeping as hard work nevertheless, this cannot override its indispensability; as it can be tagged the skeletal framework of any successful business enterprise. When entrepreneurs learn how to keep accurate record of business transactions, they will experience a lot more ease in doing business as well as accumulate much more profit.
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Analyzing and monitoring your business accounts, using accurate record keeping can help ensure you allocate your time to the clients that contribute most to your profits. Record-keeping helps you respond to the demand of those clients that patronize you often.
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Category SDGs
Women: the World’s Best Bet in Fighting Climate Change Miracle Nwankwo
Women around the world are linked by a similar pursuit which is their aspiration for the comfort and welfare of their children and families. They all hope for a world and a future where their children can have improved lives than they have had without war, disease, poor education, injustice, and the destruction of the environment. To this end, about 99% of women all over the world are working tirelessly for the future they have hoped for. In different spheres of life and at all levels at the center of every woman’s labor is a purpose driven agenda to make the world a better place. This is why they are the world’s best bet in solving global challenges including climate change. We have seen situations and ordeals change for the better
when a woman comes into the equation, this might still be the only solution to the problems in the world as many have predicted. The earlier the world begins to realize this, the better for all of us. Climate Change according to the UN is the defining issue of the present and we are at a defining moment. Although the impacts of climate change are felt by everyone but at the time not equally. The fact has been that the vulnerable people of the society are the most affected, both in developed or developing countries. However, women bear the greater brunt from the impacts of climate change in situations of poverty and due to existing roles, responsibilities and cultural values.
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In a world where global warming and environmental degradation continues to threaten the pursuit of the sustainable development goals, women have maintained dedicated effort towards influencing health, food security, nutrition, production, and people’s income. This is a pointer that they are not only well suited to find solutions to prevent further degradation and adapt to the changing climate, they also have a vested interest in doing so due to their customary roles in agricultural production, and as the procurers of water, cooking fuel, and other household resources. For this reason, many including experts have come to the conclusion that in tackling the challenges of climate change empowering women to safeguard the environment is the very first step to consider.
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Women have priceless and helpful knowledge of societal values, if harnessed will bring about lasting solutions to climate change.
Category SDGs
Investing in women brings back multiple benefits, because it extends to their families, communities and the countries where they reside. Extensive studies have proven this in many ways. A particular study on women in leadership found that countries with higher female parliamentary representation are easily given to legislative frameworks and resolutions that build environmental development. To further buttress this, some data have suggested that when women have rights to land and many other amenities, they utilize resources sustainably. Therefore, involving women in climate change solutions is a guarantee to adequate safe drinking water, food, clean air, and shelter for the present and future generation. Women have priceless and helpful knowledge of societal values, if harnessed will bring about lasting solutions to climate change. This fact has been revealed by various studies and researches on women who have
also advised the involvement of women as decision makers when plans on resilience and disaster are undertaking, because they adapt easily to the effects. Their contributions as policy makers, educators, stakeholders, caregivers will go a long way in averting the problem of climate change. In the light of this, it is important to note that opportunities for enlightenment and sensitization should be focused on women. More genderfriendly (sponsored) training and workshops should be facilitated so that women can acquire the requisite knowledge and gain skills necessary to combat climate change. With their inherent ability to instill knowledge it can be guaranteed that the knowledge will be extensively used. On the other hand, tackling climate change with a gender lens, automatically address women’s rights, tackling rather than exacerbating existing gender inequalities.
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Investing in women brings back multiple benefits, because it extends to their families, communities and the countries where they reside. Extensive studies have proven this in many ways.
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CategoryFocus Industry
The African Private Equity Scene Ben Alex
Many Sub-Saharan African countries, are gaining the attention of private equity investors. Why? The Boston Consulting Group identifies five factors pointing to a bright future for the private equity industry in Africa: a market still unpenetrated, long-term macroeconomic growth potential, large and increasing number of target companies, an improving investment environment (better public governance, local legal and financial intermediaries increasingly experienced in the field of private equity), lack of alternative financing due to small public equity and debt markets. Beyond these favorable macro tendencies, we have observed a few trends along the financing life cycle of a young company :
The early-stage financing bottleneck According to the Boston Consulting Group, “both major international and local funds are focusing on Africa’s limited pool of large, profitable companies that have proven track records of sound management and the potential to grow regionally or even internationally”. Jumia, which we wrote about here, is a typical example. Yet, numerous small and midsize companies are emerging. “Look beyond the narrow cohort of the continent’s corporate elite and you’ll see that Africa is awash in opportunity” argues the BCG.
There is thus a growing need for funding at the early-stage level traditionally occupied by angel investors and VC funds. According to ValérieNoëlle Kodjo Diop, the Head Of Innovation and New Banking Model for Africa & Mediteranean Basin at Societe Generale, there is a strong financing gap for startups seeking investments up to $350k. Maurizio Caio, Managing Partner at TLCOM Capital, finds that there is a lack of funding between $500k and $1M which typically corresponds to series A and B rounds of financing.
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Accoring to Business Daily Africa, the private investment firm Afvest, based in Kenya, “has set up Sh250 million fund for longterm investment in early-stage businesses” (about $2.5M) with no maximum exit horizons.
Industry Focus
The development of local financing solutions for startups
The development of accelerators and incubators
To tackle the early-stage financing bottleneck, in Kenya, high-income individuals are coming together in “chamas” (a Swahili term that means an investment party or group). Chamas then invest, as a group, at a stage typically occupied by angel investors. As such, companies that receive funding also benefit from the local network and experience of these groups of investors.
The creation of accelerators and incubators, such as iHub in Nairobi, Hub255 in Dares-Salaam or BongoHive in Zambia, concentrate earlystage companies and facilitate their identification by potential investors.
Accoring to Business Daily Africa, the private investment firm Afvest, based in Kenya, “has set up Sh250 million fund for long-term investment in earlystage businesses” (about $2.5M) with no maximum exit horizons. It highly resembles a chama given that its board members notably include Sarah Ngamau, Managing Partner of Creadev Africa, and Nancy Noreh, General Manager of Sterling Capital Limited, a Kenyan investment bank.
In Zambia, BongoHive, Lusaka’s main hub, got creative to attract funding for its incubes. The hub set up their own fund named BongoHive Ventures where they raise money directly from investors. They then reinvest the funds in the startups selected to be part of the hub. BongoHive enjoys a proven success trackrecord and provides a solid training and coaching to its incubes, hence reducing the risks for investors. Moreover, BongoHive through its rigorous selection process provides the due-diligence for investors not familiar with the Zambian market.
Incubator are also being launched by companies such as in Nairobi where the telecom company Safaricom recently launched an innovation center / incubator. According to TechCrunch, “The product incubator will eventually connect to a VC function, including Safaricom’s Spark Venture Fund, to support investments and partnerships”. Meltwater also followed this initiative and launched a Pan-African incubator, MEST, providing training programs and seed funding. They opened three locations in Lagos, Accra and Cape Town.
New investment strategies for growth capital “Given the high degree of volatility and the complex business environments in many African economies, fund managers maintain that minority stakes help manage risk” (BCG). Yet, the consulting firm found that “the majority holdings of several significant private equity funds with both kinds of investments outperformed their minority holdings.” One reason is that controlling stakes allow shareholders to better manage risks.
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To tackle the earlystage financing bottleneck, in Kenya, high-income individuals are coming together in “chamas” (a Swahili term that means an investment party or group).
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Industry Focus
As such, the investment strategy of Creadev, the private equity arm of the Mulliez family, one of the richest families in France, runs counter to that of most of private equity players in Africa. They take majority stakes in companies and provide them with evergreen funding.
Key figures Some stylized facts : In 2017, tech startups only raised $560M in VC funding (+53% YoY). This amount, although growing, is small compared to the $18B raised in Europe and $72B in the US. In 2017, 61% of the above amount was directed towards only
three sectors (fintechs, offgrid energy systems and e-commerce platforms). Between 2011 and 2014, 18% of total deals (not only for tech startups) were signed in East Africa — 25% in West Africa and and 24% in South Africa. Currency risk, and macroeconomic instability more generally, remain an issue for foreign investors. Exchange rate fluctuations make its harder for foreign funds to regain their initial investment at a premium. The Zambian Kwacha lost about 55% of its value against the USD in the past five years. Ben Alex is a South Africa based financial analyst and policy enthusiast
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Given the high degree of volatility and the complex business environments in many African economies, fund managers maintain that minority stakes help manage risk” (BCG)
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In 2017, tech startups only raised $560M in VC funding (+53% YoY). This amount, although growing, is small compared to the $18B raised in Europe and $72B in the US.
Trade and Investment Category
The Leapfrog Model: Venture Capital As A Cure For Africa's Funding Paralysis Olayanju Phillips
the amount invested into Africa in 2017 in excess of $195m, with 45 startups from the Fintech industry raising one-third of total funding. South Africa, Kenya, and Nigeria remained the top three investment destinations for the third year running.4 In its 2018 Tech Startup Funding Report, it records that 210 African tech startups secured $334.5 million worth of investment. This time, Nigeria emerged as the premier investment destination on the African continent, with South Africa and Kenya falling behind it.5 The FinTech sector also Venture Capital is one of the financing options open to privately-held startup companies and small businesses. It is a type of private equity provided by venture capital firms interested in investing in startups with high growth potential in exchange for equity or partial ownership in the company. VC funds fill a void created by high bank lending rates, which cannot be afforded by small companies, especially in their early stages of growth. For instance, the prime lending rate in Nigeria, as of December 2018, was pegged by the CBN at 16.17%.1 These growing companies are also unable to access public equity funds via initial public offerings because most of them cannot meet up with the listing requirements of the Securities and Exchange Commission.
In recent times, Nigeria has increasingly attracted venture capital investments. Within the period of 2012-2017, Nigeria accounted for 73 percent of the US$10.7 billion value of private equity funding in the West African region.2 Partech Ventures, a global investment platform for tech and digital companies, reports that in 2017, $560m was invested into African tech startups by VCs focused on African markets. This was a whopping 53% increase from the amount invested in the previous year, and over a 100% increase from that invested in 2015. South Africa, Kenya, and Nigeria took a lion share of the investments in the continent with 30, 25 and 20 percent respectively.3 Using a different methodology, Disrupt Africa's African Tech Startups Funding Report placed
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Venture capital certainly holds the potential to drive economic development in Africa. It creates a ripple effect, which improves R&D, promotes innovation, and increases intellectual property assets – which also becomes a source of wealth creation.
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Category Trade and Investment
remained the most attractive amongst investors attracting a significant 39.7 percent of total funds raised.6 In its 2017 Annual Limited Partner Survey, the African Private Equity and Venture Capital Association (AVCA) listed Nigeria as the most attractive country for Private Equity investment in Africa over the next three years, with Kenya and Ethiopia coming behind it.7 Majority of Limited Partners identify Consumer Goods, Financials and Healthcare as the top three sectors for investment in Africa.8 The United States, which has the most developed and sophisticated venture capital industry in the world, has largely benefited from the tremendous benefits of VC funding. Over the past 20 years, VC backed companies, such as Amazon, Google, and Apple, have been a prime driver of both economic growth and private sector employment.9 Reports show that in 2008, venture capital-backed companies employed more than 12 million people and generated nearly $3 trillion in revenue.10
groups are expected to grow by 100 million.12 Africa's 1.1 billion population is expected to have doubled in 2050 and quadrupled in 2100.13 This significantly increases the consumer population and makes Africa a rapidly expanding market that attracts investors. Despite these projections, the African continent is palpably not ready. A fact reflecting this is the ease of doing business in many African countries which is at an all-time low, albeit slowly improving. In the World Bank's Doing Business 2019 report, South Africa, Kenya, and Nigeria are ranked at 82, 61, and 146 respectively on the ease of doing business. The ranking measures the ease of starting a business, getting a location, accessing finance, dealing with day-to-day operations, and operating in a secure business environment.
Venture capital certainly holds the potential to drive economic development in Africa. It creates a ripple effect, which improves R&D, promotes innovation, and increases intellectual property assets – which also becomes a source of wealth creation. Venture capitalists provide not only financing but also mentorship, strategic guidance, network access, and other forms of support. The frontiers of Africa are gradually opening to venture capital investment and responsibility is placed on African governments to strategically create policies and the right investment environment needed to attract increased funding of the private sector. Based on current trends, Africa's population is projected to double in size by 2050. Lagos leads this exponential population explosion as the fastest growing city in Africa, growing at 77 people per hour.11 By 2030, Africa's middle- and high-income
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In recent times, Nigeria has increasingly attracted venture capital investments. Within the period of 2012-2017, Nigeria accounted for 73 percent of the US$10.7 billion value of private equity funding in the West African region
Other significant obstacles facing African economies are lack of financing14 and the absence of effective business regulations needed to create an economic environment that fosters entrepreneurship and innovation. The private sector, which holds the key to an economic reawakening in Africa, has become a victim of these. Strategic financing can be key to developing key sectors in Africa's economy. Through the provision of mouth-watering incentives targeted at private equity investors investing in certain key sectors of their economies, African countries can create a strategic flow of private sector financing that will have a positive impact on other sectors and the economy as a whole. Furthermore, this will create alternative financing options for SMEs. African governments should also create a unified legal and policy response to the increasing interest of private equity investors in Africa.
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