Publisher’s Category Porch
Ken Giami The debate on the benefits of intra-African trade has indeed been prominent in the last decade. There is a consensus among experts that intra-African trade has the greatest potential for building sustainable economic growth and regional integration on the continent as higher volumes of trade among countries in the continent will provide access to bigger markets, new opportunities and a larger pool of human capital. Needless to say, Africa is however yet to reach its full potential in terms of intra-regional trade. In 2016, intra-African exports hovered around 18 percent, compared to 59 for intra-Asia, 69 percent for intra-Europe exports, and 35 for Latin America. In the same vein, trade between African countries accounts for only 7 percent of the continent’s GDP according the available statistics. African countries over the years have adopted a number of Regional Trade Agreements (RTAs) intended to promote trade among themselves, such as the Protocol on Free Movement of Persons and Right to Residence and Right to Establishment, as well as the Single African Air Transport Market (SAATM), which is a flagship initiative of the African Union AU Agenda 2063, adopted to create a single unified air transport market, to liberalize civil aviation in the region, improve intra-African air connectivity, catalyze the economic transformation of the continent, and enhance the impact of International Civil Aviation Organization (ICAO)’s “No Country Left Behind” programme aimed at driving the sustainability and benefits of aviation in all global regions including Africa. SAATM which models the European Single Air Transport Market and the liberalized air transport markets in Latin America (Chile, Costa Rica and Brazil), is key to opening and connecting Africa’s markets, facilitating trade and enabling African firms to link into global supply chains, as a survey by IATA suggest that if just 12 key African countries opened their markets and increased connectivity an extra 155,000 jobs and US$1.3 billion in annual GDP would be created in those countries. Relatedly, African leaders in an Extraordinary Summit in Rwanda in 2018 adopted the Africa Continental Free Trade Agreement (AfCFTA), which is set for immediately implementation as the minimum number of 22 countries required to ratify the agreement has been met with the recently ratification made by the Gambian parliament. The Africa Continental Free Trade Agreement (AfCFTA) exceeds that of a traditional free trade area as it brings together all 55 African Union member states, covering a market of more than 1.2 billion people and a combined gross domestic product
Intra-African Trade: Beyond Rhetoric and Political Commitments (GDP) of more than US$3.4 trillion, with a commitment to removing tariffs on 90 percent of goods, progressively liberalizing trade in services, and addressing a host of other non-tariff barriers. The UN Economic Commission for Africa (UNECA) says that If all 55 African countries join a free trade area, it will be the world’s largest by number of countries since the establishment of the World Trade Organisation (WTO), covering more than 1.2 billion people and a combined GDP of $2.5 trillion, estimating that AfCFTA has the potential to boost intra-African trade by 52.3 percent by 2020. However, Africa’s significant drive towards intra-African trade comes at a time when the benefits of intra-trade are actively contested. The world is currently witnessing an unprecedented movement, such as the process of the withdrawal of the United Kingdom (UK) from the European Union (EU), in which global powers that traditionally promoted intra-trade as a crucial driver of growth are now calling into question the very tenets of same. In the same vein, it is pertinent to note that experts and key stakeholders have also raised concerns that threaten the implementation and realization of the benefits of AfCFTA and other complementary initiatives in the continent. For instance, Vera Songwe, Under-Secretary-General of UN, opined that poor infrastructure across the continent is one major barrier to development and trade in Africa and is likely to be a challenge in implementing AfCFTA. Songwe also said that the agreement may also pose challenges for governments in promoting competition in local markets as some local companies that are taking advantage of economies of scale may grow faster than others and capture dominant positions in markets. Also, Louise Mushikiwabo, chairperson of the AU Executive Council and Rwandan foreign minister, says “if African countries want to significantly increase intra-African trade, they must address practical issues such as streamlining regulations, improving access to finance by the private sector, infrastructure networks and simplification of customs processes”. Hence, in line with Africa Leadership Magazine’s mandate of promoting innovation, entrepreneurship and development on the continent, the Magazine is set to host the 3rd edition of The Africa Summit in London, United Kingdom, come 27 July 2019. The event which is organized in partnership with the Centre for Economic and Leadership Development, CELD, is designed to host business, political and diplomatic leaders. It is also set to have in attendance, policy makers and think-tanks on Africa and Africa related issues.With the theme set as: Intra-African Trade: Beyond Rhetoric and Political Commitment, the 3rd Edition of the African Summit- London 2019, is an important and a timely contribution to the on-going debate on the benefits of intra-regional trade and the realization of the full implementation of the African Continental Free Trade Agreement and other RTAs in the continent. www.africanleadershipmagazine.co.uk
CONTENTS For Africa, Going Green Is Not a Luxury
COVER STORY Anti-Corruption in Nigeria: The Possible Impossible
Africa - A Continent Unruffled
Finance in Africa’s Frontier Market
56 Rural Financial Inclusion & Poverty Eradication: Challenges and Gaps
Africa Needs Traditional Media
Based Violence 32 Gender (GBV) Nigeria’s 40 Evaluating counter - insurgency efforts Renewables 50 Making a Viable Option
44 54 60
Islamic Finance in Africa: Opportunities and Challenges Helping Africa’s Smallholders Feed the World Bridging the Digital Divide
...A Publication of African Leadership (UK) Limited
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...Promoting Innovation, Entrepreneurship & Development In Africa
Cover Story Category
Africa A Continent Unruffled The continent escaped the global decline in foreign direct investment, while the continent-wide trade agreement bodes well for future investment in Africa
As the world battled a global decline in foreign direct investment, Africa has remained unruffled. According to a report by the United Nations Conference on Trade & Development, UNCTAD, FDI’s into Africa rose to US$46 billion in 2018, an increase of 11% on the previous year. Growing demand for the continent’s commodities and a corresponding rise in their prices, as well as the growth in non-resource-seeking investment in a few economies underpinned the rise. While FDI in some large economies on the continent – such as Nigeria and Egypt – contracted, this was outweighed by a surge in flows to others, most significantly, South Africa.
The Frontier Market
Effective democracies are powerful because the people have a direct stake in the government, and the people in charge know that they have to be transparent and accountable if they hope to stay in office.
In the generic classification of frontier markets, we look at a group of markets that are classified within the broad frame of the emerging markets. The markets are seen in countries with earlystage economic development, but an underlying fundamental is the presence of a viable stock market and investable, state-owned financial securities. The markets make way for high return on investment and explosive profit-making as compared to the advanced markets. Foreign direct investment (FDI) has boomed in Africa over the last decade - with record-breaking $46bn worth of FDI flowed into Africa, an 11 percent increase compared to 2017 - and this revival looks set to continue. Africa’s challenge is to seize this opportunity to help boost domestic productive capacities, enabling broader economic and human development over the long term. FDI should be used to create as many virtuous linkages as possible with the domestic economy, by encouraging infrastructure development and skills transfer and by facilitating domestic employment and enterprise generation, in addition to earning export revenues.
Last year’s revival of FDI inflows suggests that Africa has moved into a new position on investors’ radar screens. But the continent’s share of global flows is still low and the distribution rather uneven - ten countries receive almost 90% of the total. What’s more, foreign investment has been concentrated in minerals, oil, gas, and other commodities. A relatively small proportion goes to more labor-intensive activities, where investment is also needed. Key sources of inflows are increasingly diverse, with rising investment from elsewhere in the South - led by China, India, the Republic of Korea, Malaysia and Taiwan Province of China. This, along with the phenomenal growth in Asian-African trade, may benefit Africa if these trends allow Africa to develop muchneeded infrastructure and to diversify its options. Africa has been the focus of direct investments with remarkable economic performance since the turn of the twenty-first century despite the ripple effect of the global financial and economic crisis. Africa’s growth has circled around the 5 percent mark per annum over the last decade, outperforming global economic trends. Contrary to the notion that growth in Africa can be attributed to a boom in global demand for natural resources, the resources sector only contributed about a quarter to the impressive post-2000 economic expansion. According to a 2014 report by the McKinsey Global Institute, the hinge of Africa’s growth has been a revisit of the need for an improvements in governance and macroeconomic management, rapid urbanization and increasing domestic demand, increasing investment and trade ties with traditional and new partners, expanding regional markets and consistent, though slow, diversification of production and exports, which, in turn, spurred growth in, for example, the wholesale
and retail, transportation and telecommunications, manufacturing and broader service sectors . Indeed, the rapid growth occurred alongside a decline in conflicts, improved institutional and regulatory quality, and the emergence of increasingly accountable and democratic Governments. It is a given that the frontier markets are less developed than the emerging markets, with economic metrics set down to like areas with several investment risks, the growth of governance and democracy have debunked these long-held beliefs and myths around the concept of political risk. Some countries have established political systems that the citizens are happy with and that has worked for a long time. While other countries are less settled about democracy, of course, even when a political situation is stable, the economy can have problems. When that happens, politicians
like to have someone to blame, and ideally, that isn’t someone who can vote for them. Investors from overseas sometimes fit the bill! And that, emerging-market investor, maybe you. With many frontier markets come discussion around liquidity. Trading in most frontier markets is thin, as the traders like to say, which means that few people are buying and selling securities on a regular basis. When you want to buy shares, for example, you may have to pay a high price in order to get the current owners to sell to you. When you need to sell, you may need to accept a discount in order to entice a buyer. In some cases, countries have structured policies that limit the number of currency people can take out of the country, to prevent what is known as capital flight. which means you may be able to sell your investment but you may be prohibited from taking the cash home with the only option available being the reinvestment of such monies.
8 | African Leadership | September 2019
Foreign direct investment (FDI) has boomed in Africa over the last decade with record-breaking $46bn worth of FDI flowed into Africa, an 11 percent increase compared to 2017
Additionally, apart from currency restrictions, some nations may restrict who can invest and who can sell. You may not be allowed to sell your interest or not allowed to sell all your shares at one time. You need to know the laws of the country in which you invest and react accordingly. The intricacies of investing in frontier come to play when the legalisms that complicate foreigners’ participation in these markets are considered. Africans have raised concerns about the continental free trade agreement ratified by African countries which gives the right to Africans to trade across the African countries. In its originality, the pact brings a lot to benefit to Africans but the sensibilities of Africans are not numb to the urgent demands for seamless trade negotiation and activities. African countries are fraught with the challenge of the legitimacy of ruling governments as well as the maintenance of the rule of law. A lot of these countries are largely called autocracy. The autocratic government which is an ensemble characterized by the rulership of a single person, autocracy is a fancy way of saying dictatorship. (A dictator is a person who wields absolute power in a country.) When power is concentrated in a single person, the quality of decisions depends on the quality of the person in charge. Autocracies are more common in frontier markets than in emerging markets, although many countries such as Russia and Saudi Arabia have elements of autocratic rule in practice. From an investor’s perspective, autocracy can be a good thing if it makes the country stable. However, unless the rule is benevolent, the result is often simmering civil unrest that can make it difficult to get business done. And if the autocrat dies or is forced out of power, investors may face a great deal of risk if the country doesn’t have a system of an orderly transition.
Political systems often operate in combination with one another, as most countries are blends of different systems. In a democracy, the citizens vote on their representatives in government. Effective democracies are powerful because the people have a direct stake in the government, and the people in charge know that they have to be transparent and accountable if they hope to stay in office. But democracies can also be messy, with the people unable to reach a consensus or accept hard truths about reality. Democracy isn’t synonymous with capitalism. Some frontier markets are democracies, but they don’t make the list of frontier markets because of their investment climate.
Africa has been the focus of direct investments with remarkable economic performance since the turn of the twentyfirst century despite the ripple effect of the global financial and economic crisis.
Africa Needs Traditional Media Adewunmi Emoruwa
Where independent media are silenced, coerced, or captured, the public has few options for gaining any information beyond the narratives pushed by governments and special interests.
While social-media platforms offer speed and accessibility, a credible free press – committed to finding the truth and informing the public – remains vital to support accountability in places where it is often hard to find. To fulfill their role, however, independent news organizations need sufficient funding. ABUJA – In June, Senegalese President Macky Sall’s brother, Aliou Sall, resigned from his post as the head of a state-run savings fund, following public outrage over allegations (which he denies) that he was involved in corrupt oil and gas deals. That outrage was expressed
10 | African Leadership | September 2019
via social media and on the streets of Dakar. But it was investigative journalism, carried out by the BBC, that triggered it, highlighting traditional media’s enduring power to effect change. So far, with his flashy lifestyle, the US president has been a resounding inspiration to many consumers and investors. But his personal narrative is unlikely to survive an economic downturn, because people pull back during such periods and reassess their views and the stories they find believable. While social-media platforms get a lot of attention for their
themselves. In Nigeria, “brown envelope journalism” – when reporters are paid by individuals or organizations to publish favorable stories – is commonplace. Where independent media are silenced, coerced, or captured, the public has few options for gaining any information beyond the narratives pushed by governments and special interests. Social-media platforms can play a role, but their main strength – their democratic nature – is also their fatal flaw. They have proved ideal for spreading fake news, which taints public debate and erodes trust in both facts and institutions. speed and accessibility, a credible free press – which does not simply parrot the official line of governments or special interests, but rather seeks the truth – remains essential to strengthening accountability in places where it can often be hard to find. And independent investigative journalists in Africa have often exposed high-level corruption, abuse of power, and shady business deals. For example, in Kenya, a leading local newspaper reported that Philip Kinisu, former chairman of the Ethics and Anti-Corruption Commission, had received suspicious payments from the National Youth Service. Further investigations into the NYS revealed more corrupt deals, spurring Kenyans to take to the streets in protest. But those with power know how to fight back – and they do not pull their punches. As a result, in many African countries, the free press is being compromised, suppressed, and even dismantled. The most extreme example of media suppression in Africa is found in Eritrea, where Reporters Without Borders estimates that at least 11 journalists are languishing in prison. The country has only one independent and non-partisan news outlet – a radio station
run by exiled journalists, based in Paris – and its signal is often jammed. But attacks on African news media’s already-tenuous freedom are proliferating. They often come in the form of violence against independent journalists. Last year, two journalists in Nigeria were assaulted by security operatives attached to the president. In January, an undercover journalist in Ghana was fatally shot, after a politician called for retribution against him for publishing an exposé on corruption in the country’s football (soccer) leagues. Governments also attempt to assert control over media outlets, even if it means shutting them down. In Tanzania, President John Magufuli’s government has suspended newspapers and banned radio stations critical of his administration, using pretexts such as “sedition” and “national security threats.” News organizations have been pressured – in at least one case, by armed men – to publish stories favorable to the ruling elite. Independent media are squeezed further by chronic underfunding. Journalists not only lack resources to support their work; they are often so poorly compensated that they become vulnerable to corruption
This dynamic was on stark display during Nigeria’s last election campaign. Fake news stories – including the claim that President Muhammadu Buhari had died and been replaced by a lookalike – went viral on social media. Millions of Nigerians were convinced, with some even carrying out killings in retaliation for made-up
While social-media platforms get a lot of attention for their speed and accessibility, a credible free press – which does not simply parrot the official line of governments or special interests, but rather seeks the truth – remains essential to strengthening accountability in places where it can often be hard to find.
violence. Recognizing the power of these stories, figures close to political parties began to invent and circulate claims that would benefit their candidates, severely distorting the election campaign. Independent traditional news outlets do not just avoid this problem; they are the key to addressing it, because only they can credibly verify the news being circulated on social media. That is why Facebook and Google have collaborated with traditional media organizations to combat the spread of fake news on their platforms in Nigeria, South Africa, Zambia, Kenya, and Zimbabwe. But if traditional independent media are going to fulfill their essential role, they need resources. In places where governments are placing constraints on press freedom, Western donors should step up to provide the necessary funding. Given the importance of a credible free press to both development and democracy, it is undoubtedly a sound investment. Adewunmi Emoruwa, an investor in African media startups democratizing access to information, including thescoopng. com and The Election Network, is Lead Strategist at Gatefield, a public strategy group.
Social-media platforms can play a role, but their main strength – their democratic nature – is also their fatal flaw.
12 | African Leadership | September 2019
may 2019.indd 71
Cover Story Category
The High-Growth Promise of an Integrated Africa Landry Signé , Ameenah Gurib-Fakim
In recent years, Africans have been working to reclaim the narrative, highlighting their countries’ remarkable progress and the continent’s vast potential, in order to attract investment and deepen regional and global engagement.
Integrated economies, powered by innovative and high-growth businesses and strong private investment, are the key to a prosperous future for Africa. Initiatives like the recently launched African Continental Free Trade Area are an important step in the right direction. At a time when the United States, once a standard bearer of multilateralism, is embracing protectionism, Africa has taken a bold step in the opposite direction, creating the world’s largest free-trade area since the establishment of the World Trade
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Organization in 1995. The African Continental Free Trade Area (AfCFTA), which came into force on May 30, includes nearly every country on the continent. And it proves, yet again, that Africa is on the move. So far, with his flashy lifestyle, the US president has been a resounding inspiration to many consumers and investors. But his personal narrative is unlikely to survive an economic downturn, because people pull back during such periods and reassess their views and the stories they find believable.
In recent years, Africans have been working to reclaim the narrative, highlighting their countries’ remarkable progress and the continent’s vast potential, in order to attract investment and deepen regional and global engagement. They have much to boast about. In recent years, Africa’s average annual GDP growth has consistently outpaced the global average, and is expected to remain at least 6% until 2023. Six of the world’s ten fastestgrowing economies are in Africa; for the period 2014-2050, PwC projects that Nigeria, South Africa, and Egypt will remain in the top ten. Africa will owe much of this growth to its large workingage population and growing consumer markets. Throughout the twenty-first century, Africa – the youngest region in the world – will be the source of the vast majority of global labor-force growth. This implies massive potential for increased production and savings, which could sustain an economic boom that supports rapid poverty reduction. In 2050, the richest 10% of Africans – some 250 million people – will drive as much as a five-fold increase in demand for consumer goods and services.
Of course, such outcomes are not guaranteed. If the continent is to reap the productivity and growth benefits of its growing workforce, its governments will need to ensure that people have the right knowledge, skills, and opportunities. Fortunately, Africa’s governments are working to develop the required infrastructure and institutions. Across the continent, efforts are underway to improve education and foster a culture of innovation. Moreover, political leaders are implementing reforms aimed at improving business conditions. In the World Bank’s 2019 Doing Business Index, five of the ten mostimproved countries are in Africa, and one-third of all recorded reforms occurred in Sub-Saharan Africa. Already, returns on investment and entrepreneurship are rising fast. Over 400 African companies now boast annual revenues of $1 billion or more, and 700 more report revenues of over $500 million. An assessment of 360 companies from 32 African countries reveals an impressive average compound annual growth rate of 46% in 2019, up from 16% last year. Lucrative investment opportunities are available in sectors like energy, agriculture,
water, and mineral processing. Agriculture (including agribusiness), projected to be a $1 trillion industry in Sub-Saharan Africa by 2030, is attracting a growing amount of privatesector investment. Africa is also expected to receive almost $2 trillion in investment in natural resources by 2036. But Africa’s economies are not seeking to cling to past growth strategies. Instead, the growth and revenues brought by investments in resources like oil will enable them to diversify – including by developing technology-enabled nonmanufacturing industries, like information and communications technology-based services – and deepen regional integration. Such integration was advanced last November at the African Development Bank’s inaugural Africa Investment Forum, where business and government leaders closed 49 deals worth over $38 billion. It has now been accelerated by the AfCFTA, which promises to deliver major gains to all countries involved. The AfCFTA could increase the value of intra-African trade by 15-25% by 2040, and boost economic output by $29 trillion by 2050. This would enable companies to take advantage of economies of scale, while
Africa has also pursued partnerships with emerging economies like India, Indonesia, Russia, and Turkey.
supporting the diversification of industrial sectors and driving growth in manufacturing value added. If governments create the right conditions, this could spur job creation and lead to significant poverty reduction. African countries’ cross-border trade and investment ties are hardly confined to the continent. Trade with the advanced economies (particularly the European Union and the US) remains high, though it is declining. Among the emerging economies, China has been particularly proactive in deepening its links with Africa, including by investing in the continent’s industrialization, agricultural modernization, and infrastructure. With China projected to shift 100 million labor-intensive manufacturing jobs offshore by 2030 – jobs that Africa’s large and young workforce could easily fill – this relationship could be a game changer. Africa has also pursued partnerships with emerging economies like India, Indonesia, Russia, and Turkey. This is broadly good news, though African governments must be aware of both the benefits and drawbacks of new trade deals and loan agreements with emerging economies, including China. At the same time, policymakers must continue to foster a vibrant innovation culture, including by strengthening intellectualproperty protections. Innovations in mobile finance, such as Kenya’s M-Pesa, have already improved financial inclusion on the continent. Similar innovations can help countries to expand access to quality education, develop their human capital, and much more. Africa’s political leaders, businesses, and citizens increasingly recognize that integrated economies, powered by innovative and high-growth companies and strong private
investment, are the key to a prosperous future. Now, they must each do their part to drive progress on all of these fronts, including by continuing to embrace initiatives like the AfCFTA.
Ameenah Gurib-Fakim, the first female president of the Republic of Mauritius, is a distinguished adviser at the Global Network for Africa’s Prosperity, and author of her autobiography, Ameenah GuribFakim: My Journey. Landry Signé, Founder and Chairman of the Global Network for Africa’s Prosperity, is a David M. Rubenstein fellow at the Brookings Institution’s Global Economy and Development Program, Distinguished Fellow at Stanford University’s Center for African Studies, and the author, most recently, of African Development, African Transformation: How Institutions Shape Development Strategy.
16 | African Leadership | September 2019
The AfCFTA could increase the value of intra-African trade by 15-25% by 2040, and boost economic output by $29 trillion by 2050.
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Development Category Issues
MSMEs contribution to Africa’s Growth Undervalued John B. S. Davies is the President and Chief Executive Officer of the Liberia Bank for Development and Investment, President of the Liberia Bankers Association and the current President of the West Africa Bankers Association.
In terms of milestones we can say that Liberians are now owning commercial real estate in the commercial districts of Monrovia thanks to support from the bank
He is Business professional with over twenty years of professional experience spanning areas in executive management, accounting, treasury management, information technology and enterprise resource & planning systems, internal auditing and customer service in the banking industry. Other areas include public financial management, lecturing positions in Advance Accounting, Financial Accounting, Systems and Control and Auditing, business process consulting and non-for profit accounting for churches, schools and charities. In this interview with the African Leadership Magazine, he discusses the structure and operation of the Liberian Bank for Development and Investment. As Liberia’s leading bank, in the areas of consumerism and development, what’s the level of commitment to the development of the Liberian economy and your milestones so far? The Liberian Bank for Development and Investment has consistently being a strategic partner in the development of our country. The bank continues to demonstrate this commitment in the major sectors of the economy whether in infrastructure, manufacturing, agriculture, service and trading. We have established a vibrant mortgage program which continues to be the vehicle for housing financing for public sector and private sector employees. A good number of roads are being constructed thanks to fixed and working capital financing provided to contractors. We have also provided financing to tree crop farmers and continuously remain the go to bank for lending to the rubber sector. In terms of milestones, we can say that Liberians are now owning commercial real estate in the commercial districts of Monrovia thanks to support from the bank. We led the domestic effort by the banking sector of Liberia in supporting the AGENDA for TRANSFORMATION and continue to do the same under the current Economic Policy Program commonly called the Pro Poor Agenda for Progress and Development. We can point to the fact that
several factories in the Liberia Manufacturing Sector are existing thanks to financing from LBDI. In Africa and Asia particularly, the MSMEs contribute largely to the economic growth and strength of the regions. Credit management and risk assessment in lending is one discussion that comes to the fore regularly. How has LBDI managed this effectively with respect to the volatile Liberian business environment? We have managed this process by first recognizing that we must work with smaller entities and organization which are more capable in providing the collaboration that makes MSME lending impactful. We have identified a number of MSME organizations that we work with in the urban and rural areas. We are looking to expand that collaboration to include more robustly the marketing associations and the rural community financial institutions of course subject to the applicable risk assessments. We try as much as possible not to do it all by ourselves. We also recognize that the use of digital financial tools is a critical success factor in deepening financial intermediation especially at this level. That why we are significantly upgrading our banking and customer service systems to give us the added capacity to do more for MSMEs.
measures which can be taken to stimulate lending by ensuring the availability of credit in the midst of this situation may include the following; a) Banks should avoid liquidity mismatches in the lending process. In essence lend to borrowers in the currency you are most assured of receiving payments. b) We should also focus more on the usage of credit guarantees to suppliers and where arbitrage may be an issue work with the central bank to put in place appropriate hedge instruments to protect all businesses including the small scale ones c) Small businesses as well as large ones need the support of a properly structure and well-regulated financial market that provides mitigating options to market participants. This was identified as a constraint during the crafting of the financial sector development implementation plan. We can make good progress by increasing our collective focus on concluding core aspects of this plan which will help small businesses deal with this challenge more confidently.
Liberiaâ€™s inflation is in double digits with a complimentary interest rate this poses a challenge to the businesses on the lower rung of the ladder. What are measures to stimulate lending by ensuring the availability of credit to the smallscale businesses? Firstly we must recognize that inflation is an implied tax on our citizenry especially those at the lower echelon of the economic ladder and all must be done by monetary policy actors, banks included to find a remedy to this situation. However we believe that some of the short term
20 | African Leadership | September 2019
The Liberian Bank for Development and Investment has consistently being a strategic partner in the development of our country.
Still on credit extension to farmers and those in the informal sector, in August 2018, you spoke about the need for value addition to the rubber industry, calling for a robust and innovative rubber sector in Liberia. How much has changed since then and how has rubbed off on others? So, in 2018 we hosted the rubber sector consultative forum bringing together processors and farmers. In partnership with the Agriculture Non-Governmental Agency GROW we have taken two strategic actions. Firstly the research in rubber yields and applicable clones have been significantly enhanced. Secondly some of the farmers in the strategic rubber regions of the country have been identified for value addition interventions. We now have additional Rubber Smoked Sheets (RSS) facilities being constructed and more are being contemplated. This is stage one value addition. We have additional Technically Specified Rubber (TSR) Facilities being constructed with bank support. In economic policy terms, the Government of Liberia has also made available additional support through the establishment of a rubber stimulus fund that is helping to support rubber farmers in boosting productivity. So yes there is some change which is helping to improve the outlook for rubber farmers in Liberia but we all can agree that that is not enough to shift the paradigm. Currently, we are placing emphasis on small rubber holder and the big issue that keeps impeding that progress is the fact that title ownership for land being cultivate has still not passed the litmus test for acceptance by financial institutions. The Rubber Planters Association and the Land Authority are making efforts to conclude the resolution of this issue and we are monitoring it robustly. We can also say with some confidence that we are not very far from concluding the stage one value addition effort
and moving to stage two which is finished products. Liberia is one of the few African countries that have quite a long-dated trade relationship with the US government. With the ratification of the AfCFTA by member countries, what’s Liberia’s outlook on intraAfrican trade? We are member of the Mano River Union, ECOWAS and the African Union. Our membership imposes on us an important responsibility to explore avenues for fostering intraAfrican trade whether in the Mano Rive Union Basin, the West African Sub-region or the continent. As a country we will continue to work with the framework provided under these organizations to not only source imports but also expand and boost exports. The agencies facilitating trade dialogues among member nations such as for example as in the case of ECOWAS the West African Monetary Zone (WAMZ), West Africa Bankers Association (WABA) and the Chambers of Commerce have all identified regional trade as a value proposition option which must be pursued. At WABA we undertake to ensure that we elevate this collective concern to the top of our priorities. We must however underscore the fact that as a country with very strong ties to the United States of America, these initiatives will not mean that we will ignore the historic and active economic relationship we currently have and has been mutually satisfactory. We have to find a balance in making sure we work well with all stakeholders. The Invest in Africa Summit is a symposium with laser focus on critical issues affecting Africa. As Africa’s Industry Person of the year, how do you feel receiving this award and leading this discussion? I am honored and humbled by my recognition for such an important award. My deepest appreciation goes to the African
Leadership Magazine for the honor, our bank is truly grateful to have been placed on such a high pedestal and my family is filled with immeasurable gratitude.
In economic policy terms, the Government of Liberia has also made available additional support through the establishment of a rubber stimulus fund that is helping to support rubber farmers in boosting productivity.
Trade & Investment
Rural Financial Inclusion & Poverty Eradication: Challenges and Gaps Angela R. Hansen
According to the World Bank, financial inclusion means that “individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.”
— Ajay Banga, President and CEO, MasterCardi
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As the year 2020 enters our line of sight, the topic of financial inclusion and the commitments made to it are pertinent. Equally pertinent and perhaps more possible to achieve are the commitments made to the 2030 Agenda for Sustainable Development. This paper offers practitioner’s perspective on progress toward these agendas, leveraging my personal experience working in and adjacent to the topic of financial inclusion as an international development strategist with a focus on agriculture and food security. As my expertise is
derived from my work, and my work has primary taken place on the African continent, the focus of this paper is Africa, though it is hoped that some insights contained are relevant globally and to the UN ECOSOC preparations for the seventyfourth session of the United Nations General Assembly in September 2019.
Definitions and Goals The multiple facets of Inclusion According to the World Bank, financial inclusion means that “individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.” Discussions aiming to define the universe of discourse for financial inclusion are broadening to allow for measures and classifications of inclusion that go beyond access as the determinant of a binary assessment that results in individuals and business simply being in included or not. Most recognize the need for a richer definition; such definitions generally include reference to access, usage and quality about financial services. BHAG: The Development Community’s Big Hairy Audacious Goals for Financial Inclusion In 2013, The World Bank and a multisectoral group of stakeholders announced ambitions “to provide universal financial access to all workingage adults by 2020.” While the Center for Financial Inclusion at Accion has led a great deal of dialogue on the importance of this goal as a unifying agent, there has long been concern among experts of the viability of the goal.
a viable one at the outset, it is commonly believed to be true that financial inclusion will be a critical enabler of several the Sustainable Development Goals. It s not surprising then that, from the perspective of the international development community, financial inclusion has become a meaningful investment line item for public and private investors alike. A 2019 CGAP report building off the results of a survey of funders of financial inclusion highlights positive trends in overall investment. CGAP analysis suggests that funders committed $42B to financial inclusion in 2017, with public funding exceeding private for the first time in five years . Two interesting examples of investment in financial inclusion by seemingly non-aligned institutions will be discussed in the presentation, namely: •
financial inclusion as the central theme of MasterCard’s corporate strategy; the credit card giant is leading with ID programs in Nigeria and South Africa financial inclusion as a major component of the
Complex challenges such as those facing the rural poor cannot be addressed by a single technology, actor or coalition.
Whether or not the 2020 goal of full financial inclusion was
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body of work conducted by International Livestock Research Institute (ILRI); the publicly funded research center is innovating in indexbased risk mitigation in Ethiopia. While MasterCard and ILRI might seem like odd bedfellows, their shared interest in the advancement of financial inclusion, especially for Africa’s poorest and most vulnerable, is notable. Few development priorities have similar crosssectoral appeal and this feature of financial inclusion could be one of its greatest assets. Rural Realities in Financial Inclusion The rural dimension of poverty heightens its intractability; tools such as technology are necessary but unfortunately insufficient to overcome it. Basic considerations such as distance from a bank is a commonly cited barrier to basic financial inclusion – measured as simply in this instance as having a deposit account – for adults living in rural areas. When it comes to inclusion in more complex credit markets, the financing gap is most acute in rural areas. It is also acute among women, who benefit from only 10% of the credit to small farmers and less than 1% of total credit to agriculture. Most Africa’s rural poor are smallholder farmers. These farmers live in a risky world. As a result, they place a high value on support that offers them flexibility, familiarity and tangibility to ensure that they can use their own preferred strategies to increase their resilience. Designing appropriate financial services for clients with these types of priorities coupled with a low ability to pay can make sustainable business models illusive. While this may present a challenge to financial services providers, a growing body of research proves that it is worth it, at least to the those that are newly included in the financial
system. Evidence suggests that when poor people – even those in rural areas - have better tools to manage their money, their income and consumption improve. The following two vignettes from CGAP are offered for consideration in this regard; • Kenya: women-headed households with access to mobile money services increased their savings by more than 20 percent. • Malawi: farmers with earnings deposited into a savings account spent 13 percent more on farm equipment and their crop values rose by 15 percent. Financial inclusion is a key enabler for reducing poverty and for achieving the rest of the United Nations’ Sustainable Development Goals including improved education, better health, food security, access to clean water in rural areas. Recent Perspectives In the 2013 book Financial Inclusion in Africa, published by the African Development Bank, I contributed a chapter taking stock of financial inclusion for rural areas and agriculture in Africa. My contributions included predictions that new models based on value chain funding and technology would have a transformative role in expanding financial inclusion for agriculture and rural areas in Africa. These predictions, though by no means prophetic, seem to be coming to pass. A favorite example of value chain funding is the Farm to Market Alliance (FtMA), highlighted blow. FtMA is a public-private sector consortium of eight Agri-focused organizations formed to make markets work better for farmers. FtMA empowers smallholders to become reliable market players through access to four integrated pathways: (p) redictable markets, (a)ffordable finance, (t)echnologies and quality inputs, and (h)andling and storage solutions. Source: World Food Programme
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Additionally, there is a great deal of interest and enthusiasm for technology enabled financial services (now loosely referred to in the industry as fintech), however there are also a great number of concerns for how the realities of rural life will interact with the expectations of a radical fintech-driven transformation. More on this topic will follow. My 2013 policy recommendations and proposed actions included the need to institute protection for farmers by securing their land tenure, develop pilot buyer and food company led value chain efforts, build transparent pricing platforms, and strengthen largescale cooperatives. The above mentioned FtMA is also a fine example of these efforts, and the Land Policy Initiative, called out below, rounds out the notable action in this area. The Land Policy Initiative is a joint programme of the tripartite consortium consisting of the African Union Commission (AUC), the African Development Bank (AfDB) and United Nations Economic Commission for Africa (ECA). Its purpose is to enable the use of land to lend impetus to the process of African development.
In 2013, The World Bank and a multisectoral group of stakeholders announced ambitions “to provide universal financial access to all working-age adults by 2020.”
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Present and Forward-Looking Perspectives As previously mentioned, there is a great deal of interest in the potential of fintech to “solve the problem” of financial inclusion. The reality is, most of the world’s poor still depend on cash. Fintech has yet to provide a transparent, scalable and resilient bridge to connect the digital world with its cash analog. In a recent essay, CGAP’s CEO warned “Beware the hype of the fintech revolution; it could lead us to forget about the needs of the poor in pursuit of innovation or shiny technology.” Complex challenges such as those facing the rural poor cannot be addressed by a single technology, actor or coalition. A critical mass of decision makers across the financial system as well as in adjacent systems such as the food system need to skill-up on and utilize more collaborative approaches to problem solving. Two such approaches are proposed for further consideration and elaborated upon in the presentation: •
Futures Foresight: This brand of research “applies scientific rigor, artful skill, and practical imagination to predict, forecast or anticipate possible futures.” Foresight methods include economic projections, complex systems modeling, scenario building exercises, participatory workshops, and other approaches. Systems Thinking: This approach focuses on identifying and strategizing around sets of elements that are coherently organized and interconnected in a structure that produces a characteristic set of behaviors, often classified as a function or a purpose.
Angela R. Hansen, Strategic Advisor PhD Candidate, University of Cape Town
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Finance in Africa’s Frontier Market David Nellor
are immersed in a wide range of financial activities, including domestic bond and foreign exchange market instruments. Financial technology is more complex too. Financial markets gradually became more sophisticated and complex over the past 25 years. Today, however, financial technology is transferred to African emerging markets more or less simultaneously as it is developed in sophisticated markets— although lack of market depth and infrastructure does inhibit its application. That means that the second-generation emerging markets in Africa face significant immediate challenges to which their predecessors could adapt over a quarter century.
Several African countries, with developing financial markets that are likely to attract institutional financial investors, are promising candidates to become part of a second generation of “emerging market” countries. The same crucial developments that presaged the arrival of institutional financial investors in emerging markets in the 1980s are taking place in parts of subSaharan Africa today— growth is taking off, the private sector is the key driver of that growth, and financial markets are opening up.
The global environment has played a key role. The search for yield, triggered by significant global financial market liquidity, has encouraged investors to expand their horizons. But the new generation faces a more complex, more integrated global environment than did emerging markets of a quarter century ago. Then, institutional investors accessed emerging economies largely through equity markets and, in some cases, foreign currency debt issues. Today, these investments are but a part of the picture. Investors
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Emerging markets is used here to identify countries in subSaharan Africa that have financial markets and attract investor interest.
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For one, maintaining financial sector stability will be challenging. With most of the financial flows intermediated through domestic banking systems, Africa’s central banks have to strengthen considerably their supervisory capacity to manage the sophisticated financial activity that has emerged almost overnight. At the same time, policymakers have less scope to manage these activities. For instance, prudential-based approaches to manage capital flows, such as taxes on short-term flows, can be bypassed more easily because of the availability of derivative transactions that were not used in emerging markets a generation ago. This article identifies subSaharan African countries, beyond South Africa, that offer institutional investors the prospect of good returns and a means to diversify risk through investments in financial markets. It recognizes how the changed global environment affects policy and raises issues investors are thinking about as they move into these markets. Identifying emerging markets The compilers of emerging market indices decide whether a country is an emerging market by assessing the nature and sophistication of
the stock market in relation to the degree of development of the economy. Recently, Standard & Poor’s— which in 2000 took over the emerging market financial indices from the International Finance Corporation (IFC)—has used the term “frontier markets” to describe countries with markets that are smaller and less liquid than those in the more advanced emerging markets. Many of the emerging markets in the 1980s might have been called frontier markets under today’s classification. The term emerging markets is used here to identify countries in sub-Saharan Africa that have financial markets and attract investor interest. The broader usage of the term emerging market in this article suggests that a positive response to several questions helps establish membership in the emerging markets group: • • • •
Has there been a takeoff in growth? Is that growth led by the private sector, and has public policy embraced market-led growth? Are there financial markets in which to invest?
Eight sub-Saharan countries that meet these criteria and are headed toward emerging market status are benchmarked against the founding members of the Association of Southeast Asian Nations (ASEAN), which were among the early emerging markets identified by the IFC.
A growth takeoff Emerging markets are attractive to investors because they offer rates of return that are high
Prudential-based approaches to manage capital flows, such as taxes on short-term flows, can be bypassed more easily because of the availability of derivative transactions that were not used in emerging markets a generation ago.
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relative to mature markets and offer opportunities for investors to diversify risk. High GDP growth signals that there are opportunities for investors to “buy” into the country’s overall prospects or seek out opportunities by identifying undervaluation in specific sectors. Growth prospects in emerging market countries are likely to be based on technological catchup, significant output gaps, young populations, and faster population growth than in mature markets. The processes that bring about growth may differ by country, but a track record of solid growth is common to emerging markets. The potential for risk diversification might arise at the country level when growth trends are not synchronized with mature market economies. Attitudes toward Africa’s growth prospects are influenced by Asia’s experience of export-led growth. Analysts argue that export-led growth is critical if African countries are to sustain high growth and ask whether there is scope for export-led growth, particularly in the non-resource sector. Although the export-led growth model might not be as viable today as when growth was taking off in the first-generation emerging markets, Africa has potential for significant growth through import substitution and intraregional trade, as well as through traditional export markets. Two tests could be used to determine which countries have reasonable prospects of establishing the preconditions for growth—one for resourcerich and one for resource-scarce countries. Africa’s resource-rich countries have a poor long-term track record for macroeconomic performance. When commodity prices were high—particularly for oil—governments spent more than their economies could absorb and exchange rates strengthened and choked off their non-resource sectors.
today, compared with previous episodes of high commodity prices. Is there anything to suggest that this time their performance after the boom could be different? The best emerging market prospects would be resource producers that have installed sound economic institutions to avoid the boom-bust cycle of the past. The key to this good performance is that fiscal policy has been set with an eye on the ability of the economy to absorb the domestic demand consequences of spending booming oil revenues. Use of a budget oil-price rule, which allowed spending of oil revenues in line with absorptive capacity and saving oil revenues above this budget price, was effective in breaking the link between growing oil prices and budgetary outlays that led to booms and busts in the past. If this fiscal rule can be sustained, the prospects for ongoing growth are strong. Africa’s resource-scarce countries have also had to deal with macroeconomic stress: the significantly higher commodity prices they must pay. Which countries have nevertheless performed well? Some countries have seen high prices for their own commodities offset the high oil prices they must pay,
But when commodity prices fell, the non-resource sectors failed to revive. The recent boom in commodity prices offers a laboratory experiment on growth prospects for African resource producers. How are they coping with the macroeconomic stress imposed by sustained high commodity prices? The high prices of resources in recent years have no doubt contributed to higher growth rates, but this could be a false signal; growth in these countries could again deteriorate when commodity prices turn down—the wellknown resource curse. One way to assess the prospects for these countries is to examine how they are performing
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Identifying emerging markets The compilers of emerging market indices decide whether a country is an emerging market by assessing the nature and sophistication of the stock market in relation to the degree of development of the economy
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but certainly not all. An ability to sustain growth demonstrates not only economic resilience but also a break from the past. Several countries whose terms of trade turned negative—that is, the overall prices of their exports fell relative to imports— nonetheless have recorded solid growth. This is because their better policy frameworks have helped them adjust to the higher import prices. Also, because they have built significantly higher international reserves, the countries have had a cushion while this adjustment is taking place. While recognizing that policy challenges are mounting, the track record so far signals both better policies and an economic flexibility that augurs well for growth prospects.
Private sector–led growth Successful emerging market countries feature the private sector as the engine of growth, irrespective of their form of economic organization. Institutional investors want to have confidence that policy will continue to support private sector development and that private property rights will be protected; here they share the interests of foreign direct investors. Africa generally fares poorly in measures of the attractiveness of the business environment, and this makes the continent a less attractive destination for investors. Stronger performance in this area is likely to be well rewarded with additional investment. The first-generation emerging markets used policy actions to help establish them as emerging markets, and some African countries are doing likewise. Indonesia, for example, offered an extensive range of tax breaks as one indicator of its interest in investment. By the early 1980s, having established its credentials, it eliminated these benefits and adopted a conventional tax structure while continuing to sustain its
competitiveness through its macroeconomic policy. In Africa today, Mozambique, which came out of a lengthy conflict, has restored private sector confidence by such actions as providing attractive fiscal arrangements for mega projects, including the massive Mozal aluminum operation. Having demonstrated a track record of strong economic performance and respect for private sector rights, Mozambique is establishing a balanced-tax environment that, along with macroeconomic stability, makes it an increasingly attractive investment destination.
Investing in financial markets Only recently have Africa’s financial markets attracted significant interest from institutional investors. Just as first-generation emerging markets welcomed institutional investors to their equity markets, African countries are doing so now. African equity market capitalization was about 20 percent of GDP in 2005, comparable to the level reached by ASEAN in the late 1980s.
The same crucial developments that presaged the arrival of institutional financial investors in emerging markets in the 1980s are taking place in parts of sub-Saharan Africa today—growth is taking off, the private sector is the key driver of that growth, and financial markets are opening up.
By 2007, Africa’s equity market capitalization had surged to over 60 percent of GDP. Africa’s domestic bond markets are attracting interest in a way not seen in first-generation emerging markets. Trading of domestic and foreign debt in the international markets has accelerated rapidly. Emerging Markets Traders Association data showed that trading in Africa’s debt markets (excluding South Africa) more than tripled in 2007, reaching about $12 billion. Nigeria, as the largest country in this group, dominates the trade. During 2005–06, Nigeria received Paris Club debt relief and bought back much of the remainder of its external debt. Since then, trade in Nigerian debt has been mainly in domestic issues. Nigerian debt trading ranked 21st globally at the end of 2007; this is equal to or exceeds many firstgeneration emerging markets. Using a variety of investment vehicles, Nigeria’s banks raised about $12 billion in capital over 2006–07, much of it from offshore investors. The criteria for an emerging market set out here—growth, private sector–led growth, and investible markets— can be identified in eight subSaharan African countries: Botswana, Ghana, Kenya, Mozambique, Nigeria, Tanzania, Uganda, and Zambia. Together these countries account for about 40 percent of the region’s population outside South Africa and almost one-half of its GDP.
The new frontier and the old This group of African countries compares favorably with the ASEAN countries of 1980. ASEAN was already experiencing strong economic growth in 1980 but, in many other areas, the ASEAN countries looked quite different than they do today— and the African candidates perhaps have lower vulnerability and greater economic stability than the ASEAN countries had in 1980. Growth in sub-Saharan Africa is strong, as it was in
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Asia. Unlike the high ASEAN inflation in the 1980s, inflation in Africa is single digit. High international reserves and low debt-to-GDP ratios—the result, among other things, of debt relief—characterize the African countries relative to the ASEAN countries of 1980. Government, however, comprises a larger share of the African countries than it did in the ASEAN countries.The macroeconomic policy challenges for the African markets are similar to those faced by the ASEAN countries in the 1980s. African markets tend to use monetary aggregates as the basis for achieving inflation goals, supported by a managed float exchange rate policy. With financial liberalization and other structural changes, the stability of money demand and relationships between monetary aggregates and inflation becomes problematic. As questions arise about their credibility, central banks look for more effective ways to meet their needs. In Africa today, a goal of some central banks is to move to inflation targeting. Some ASEAN countries adopted inflation targeting for much
Mozambique, which came out of a lengthy conflict, has restored private sector confidence by such actions as providing attractive fiscal arrangements for mega projects, including the massive Mozal aluminum operation.
the same reasons, but not until after the Asian financial crisis of the late 1990s. Because market participants seek to exploit differences in market valuations, it is crucial that investment destination countries meet market tests for consistency of policy. The experience of the ASEAN countries during the 1990s Asian crisis shows that artificial exchange rate stability along with independent monetary policy encourages destabilizing short-term investment flows. Investors perceive a stable exchange rate (or a one-sided risk to appreciation in the oil economies) and look to benefit from interest rate differentials; this so-called carry trade characterized Asia in the late 1980s and 1990s and is already moving into Africa. The fear of letting exchange rates float (which allows this carry trade) is driven by concern that exchange rate volatility will complicate business planning and, in the oil economies, that a currency that rises and falls with oil prices will be a permanent drag on nonoil growth and employment. A tension between macroeconomic stability and permitting exchange rate flexibility is likely to become even more evident as countries target inflation. Complex financial instruments are already being introduced in African financial markets. These markets have not had the opportunity to mature gradually in the way that their predecessor emerging markets did in the 1980s. In 1980, investors in equity markets generally followed a conventional buyand-hold strategy—portfolio flows were relatively long term and sovereign debt issues were traded in global financial market centers. In contrast, institutional investors are entering Africa’s markets through a variety of instruments—equity and local currency fixed income, as well as in both physical and derivative instruments. The technology transfer from emerging markets elsewhere into
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Africa’s nascent emerging markets is limited only by market depth and regulatory and market infrastructure. African central banks must give adequate weight to financial sector stability against a tradition in the region that has long focused on financial sector development. The banking system is the main conduit through which foreign inflows are intermediated, and so bank capital and risk management practices must be monitored carefully. However, the challenges for central banks go well beyond assessing the capacity of the capital base of a commercial bank to absorb the kinds of shocks that lead to more nonperforming loans. Links between various parts of the financial markets, such as banks and the stock markets, must be assessed, as must the foreign exchange market implications of macroeconomic-driven shifts in bank balance sheets. The learning curve for central banks
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today in terms of implementing effective risk-based and consolidated supervision is much steeper than for the firstgeneration emerging markets. And, for some first-generation emerging markets, such as the ASEAN countries during the 1990s Asian crisis, this proved to be a challenging task.
A tremendous opportunity The rise of some African countries to emerging market status gives them a tremendous economic opportunity. Access to capital markets is a key ingredient to high and sustainable private sector–led growth, and this access had long seemed out of reach for Africa; it is now a reality. Evidence is already mounting that financial flows are being translated into growth in financial intermediation in these countries. To help ensure sustained growth, the countries must ensure that macroeconomic policy and capital account prudential policies are tailored to avoid the traps of volatile
short-term flows, and that supervision promotes financial sector stability and effective intermediation. David Nellor is a PhD economist with extensive management and international experience.
A 24-year career with the International Monetary Fund (IMF) focused on emerging markets especially in Asia. He advised Minister’s of Finance and central bank governors and led teams negotiating and implementing financial and policy arrangements. He developed technical assistance programs and delivered advice on tax policy. Since leaving the IMF he has been based in Indonesia where he has advised the Minister of Finance and other Indonesian government officials and worked with Indonesian and multinational companies in South East Asia and China. Earlier he was an investment manager in global and Asian emerging markets. Strategy development and facilitation are other areas of expertise.
Africa’s equity market capitalization had surged to over 60 percent of GDP. Africa’s domestic bond markets are attracting interest in a way not seen in first-generation emerging markets. Trading of domestic and foreign debt in the international markets has accelerated rapidly.
Health & Well being
Gender Based Violence (GBV) Vivian Ozoemena
Entertainment communication through sessions of storytelling, traditional music, dances, local performances in remote villages on GBV issues has also led to some behavior change and opportunity also, to explore social ideas about masculinity.
GBV is becoming a thing of concern. It can be committed by anyone, a father, a mother, a care provider, a boss, a friend, a spouse or partner, a humanitarian worker and the list go on. Institutions like the world bank and other organizations are committed to addressing this epidemic through investments, research, learning and collaboration with stakeholders around the world.
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So, what is Genderbased violence? Gender-based violence (GBV) is a term that is constantly being “updated”. We mainly need to understand that GBV is not necessarily linked to the scenarios that first come to mind. For example, sexual abuse is just one type of GBV. Genderbased violence (GBV) is violence that is directed at an individual
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based on his or her biological sex OR gender. It includes physical, sexual, verbal, emotional, and psychological abuse, threats, coercion, and economic or educational deprivation, whether occurring in public or private life. The World bank for instance, supports over $300 million on development projects aimed at addressing GBV. Hundreds of organizations including the private sector, multilateral agencies, governments, and NGOs including UN Women, USAID and more focus on ending violence against women. Organizations and NGO’s like The YALI Network launched by the former president of the United States of America, Barracks Obama with the aim of supporting young African leaders have set up stringers with the aim of curtailing the issue and finding permanent solutions to the problem. According to the United Nation’s Population Fund, 1 in 3 women have experienced physical or sexualized violence in their lifetime. That is not including emotional, financial, or verbal abuse. Despite being so prevalent, gender-based violence is largely under reported because of stigma and lack of access to resources and support systems. GBV can impact anyone regardless of their geographical location, socio-economic background, race, religion, sexuality, or gender identity. While women and girls are the most at risk and the most affected by gender-based violence, boys, men, and sexual and gender minorities also experience gender-based violence. GBV can have serious physical, mental, economic, and social repercussions. For example. sexualized violence can lead to unwanted pregnancies, unsafe abortions, and STI transmission, as well as isolation and depression. It can also prevent survivors from achieving economic prosperity because of stigma or physical and psychological trauma caused by
What are the Possible solutions to curbing GBV? Prevention of GBV should start early in life, by educating and working with young boys and girls promoting respectful relationships and gender equality. Working with youth is a “best bet” for faster, sustained progress on preventing and eradicating gender-based violence. While public policies and interventions often overlook this stage of life, it is a critical time when values and norms around gender equality are forged. Therefore, raising awareness, which is the most common and easiest remedy; disseminating information on gender-sensitive human rights methodologies, media and communications campaigns and extensive efforts directed towards building non-violent, gender-sensitive curricula in high school and other tertiary educational institutions.
GBV can impact anyone regardless of their geographical location, socio-economic background, race, religion, sexuality, or gender identity. While women and girls are the most at risk and the most affected by gender-based violence, boys, men, and sexual and gender minorities also experience genderbased violence.
Using affirmative administrative communication involving the county administration, the court system and the community. Communication initiatives like civic education can also be channeled through mass media outlets. Working with the national media to sensitize journalists (and the public), to the causes and consequences of GBV to improve reporting. Also, entertainment communication through sessions of storytelling, traditional music, dances, local performances in remote villages on GBV issues has also led to some behavior change and opportunity also, to explore social ideas about masculinity. Other solutions can be to create laws and enforce existing laws that protect women from discrimination and violence, including rape, beatings, verbal abuse, mutilation, torture, “honor” killings and trafficking. Promoting the peaceful resolution of disputes by including the perspectives of women and girls. Strengthening women’s ability to earn money and support their households by providing skills training for them. Sensitizing the public to the disadvantages of early and forced child marriages. Encouraging women to participate in the political process and educate the public about the value of women’s votes. Raise public awareness of the poor conditions some women face, particularly in rural areas. It is also essential to teach men about women’s rights and their responsibility in defending those rights including preventing GBV. This idea is grounded in the idea that women and men are partners who should work hand-in-hand to achieve gender equality. Miya Yamanouchi quoted in her piece, Embrace Your Sexual Self: A Practical Guide for Women “Self-respect by definition is a confidence and pride in knowing that your behavior is both honorable and dignified. When you harass or vilify someone, you not only disrespect them,
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but yourself also. Street harassment, sexual violence, sexual harassment, gender-based violence and racism, are all acts committed by a person who in fact has no self-respect. -Respect yourself by respecting others.” Therefore, with the right mix of appropriate multiple communication approaches, we can foster individual and social change, and a possible end to GBV.
It is also essential to teach men about women’s rights and their responsibility in defending those rights including preventing GBV.
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* beauty, * education, * entrepreneurship
For Africa, Going Green Is Not a Luxury Carlos Lopes
How can Africa realize economic prosperity without contributing further to climate change? The solution lies in a kind of Green New Deal – a comprehensive strategy for achieving sustainable growth, including through coordinated, large-scale investment in renewable-energy deployment. Earlier this year, Tropical Cyclone Idai tore through southern Africa, killing hundreds, injuring thousands, and displacing even more. In Mozambique, as much as half of all annual crops and critical infrastructure were destroyed. In total, over three million people in the region were affected. It was a stark reminder of Africa’s vulnerability to the intensifying consequences of climate change. So far, with his flashy lifestyle, the US president has been a resounding inspiration to many consumers and investors. But his personal narrative is unlikely to survive an economic downturn, because people pull back during such periods and reassess their views and the stories they find believable. Cyclones are nothing new, but as climate change progresses, they are becoming increasingly common: the Indian Ocean has an average of three cyclones per cyclone season; yet in this season alone, there were seven.
The same goes for other kinds of weather events. In Zimbabwe, more than two million people are now facing an acute water shortage as a result of climate change-induced drought. But even as Africa faces new challenges from climate change, it also has major opportunities to expand its economy and reduce still-pervasive poverty. The combined GDP of African countries vulnerable to climate change is on track to rise from $2.45 trillion in 2019 to $3.46 trillion in 2024.
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Can Africa secure this economic progress without contributing further to climate change? The solution lies in a kind of Green New Deal – a comprehensive strategy for achieving sustainable growth, much like the one being championed by some Democratic politicians in the United States. A pillar of such a plan would involve making largescale investments in renewableenergy deployment. Whereas an American Green New Deal would focus on shifting away from fossil fuels, the
infrastructure for which is already in place, an African strategy would be delivering energy (and energy infrastructure) from scratch. About 60% of the people worldwide who lack access to electricity live in Africa. Yet in 2018, Africa received less than 15% of global energy investment. And much of those limited funds are still going toward yesterday’s technologies. Between 2014 and 2016, nearly 60% of Africa’s public investment in energy went to fossil fuels – $11.7 billion, on average, each year. This approach is not only environmentally irresponsible; it also makes little economic sense. Renewables are already outcompeting fossil fuels globally, and bold action on climate now promises to bring major economic benefits – to the tune of $26 trillion globally through 2030. Given this, the European Investment Bank – a longstanding source of energy investment in Africa – should approve an existing proposal to halt all lending for fossil fuelreliant energy projects by the end of 2020. As for Africans, they are already promoting sustainable development. The African Union’s Agenda 2063, created in 2013, set an ambitious blueprint for attaining sustainable and inclusive growth over the subsequent half-century. The African Renewable Energy Initiative (AREI), founded in 2015, focuses on drastically increasing the use of renewables, while expanding overall energy access.
In East Africa, households equipped with solar systems saved an estimated $750 each on kerosene and eliminated 1.3 tons of carbon dioxide over the first four years of use. What a Green New Deal must do is bring such innovations to scale, through coordinated public and private investment in wind- and solar-power generation – both on- and off-grid – and support for the deployment of cleancooking solutions. This should be integrated with broader efforts to foster green industrialization and entrepreneurship. Substantial funding is already on offer. Earlier this year, the World Bank announced plans to provide $22.5 billion for climate adaptation and mitigation in Africa for 2021-25. The African Development Bank, for its part, recently invested $25 million in a renewable-energy equity fund that plans to add 533MW of installed energy-generation capacity in Sub-Saharan Africa. This initial public investment is expected to mobilize an additional $60-75 million from private investors.
Africa faces new challenges from climate change, it also has major opportunities to expand its economy and reduce stillpervasive poverty.
But, if a country hopes to be a recipient of that private investment, it must have strong energy planning and an
On the ground, solar mini-grids are delivering cheap renewable energy to communities across Africa, increasingly at competitive prices (relative to comparably sized dieselpowered grids). Solar home systems and clean-cooking solutions (which use cleaner, more modern equipment and fuels) are also providing costcompetitive clean energy access.
effective regulatory regime, which is crucial to functioning clean-energy markets and the emergence of project pipelines. That is why African countries must integrate climate action into all their economic and development planning. To this end, a coalition of African countries, supported by the United Nations Economic Commission for Africa and the New Climate Economy, is working to facilitate meaningful, coordinated action that puts the entire continent on a more inclusive and sustainable growth path. Partnerships with national finance and planning ministers, relevant developmentfinance institutions, and the private sector will support this process. Overcoming the formidable challenge that climate change poses to Africa will depend on moments of collective focus and clarity. The UN secretary-general’s climate summit next month should be just such a moment, with countries committing to step up their emissions-reduction targets under the 2015 Paris climate agreement, so as to reach net-zero emissions by midcentury. Given their heightened vulnerability, African countries have every incentive to set the bar high, thereby putting pressure on others to ramp up their own contributions. Only with concerted global action will we have any hope of averting climate catastrophe.
Solar home systems and clean-cooking solutions (which use cleaner, more modern equipment and fuels) are also providing cost-competitive clean energy access.
38 | African Leadership | September 2019
Carlos Lopes, a professor at the Mandela School of Public Governance at the University of Cape Town, is High Representative of the African Union for partnerships with Europe post-2020 and a member of the Global Commission on the Economy and Climate.
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Evaluating Nigeria’s counterinsurgency efforts Joshua Kayce-Ogbonna
The Nigerian government-led war on terrorism and societal insecurity has become the defining attribute of General Buhari’s presidency. It is likely to remain, directly or indirectly, one of the central issues facing the country , no less effect the the rising poverty rate, and the mindless banditry in the northwest for at least this decade, if not longer. Repeated government administrations might have covertly denied culpability in the build up to the insecurity in the far northern borderline states but inaction of the past has rolled out these like the domino effect. The Buhari presidency did not seek this war, rather, it was
thrust upon an administration that, like its predecessors, came into office planning to manage more conventional problems of international politics and global terrorism. On election in 2015, after a tightly contested election, President Buhari vowed to take the battle to the insurgents. He flayed the debauchery in the military, the low morale of a military presided over by depraved leaders who had ran the country’s till aground without let. The country’s principal, the Soviet Union, had grown wings, took enclaves beyond the desert Northeast, it besieged the country’s administrative headquarters, Abuja, and
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Repeated government administrations might have covertly denied culpability in the build up to the insecurity in the far northern borderline states but inaction of the past has rolled out these like the domino effect
fenestrated Kano, the country’s major centre for the production and export of agricultural products, with spates of bomb blasts . By and large, this state of affairs was judged to be both deleterious for a nationstate and undesirable for its citizenry. A pre-Buhari candidacy was the supposed tonic for an unprecedented opportunity to create a durable peace that would provide order and stability nationally, while permitting its citizens to enjoy the “peace dividend” that could only be dreamt about during their struggle with the military regime. Looking at the logic of the administration’s effort to consolidate Nigeria’s primacy, reviews the record of achievement in this regard, and examines how it shifted gears to deal with the threat of terrorism given its original interest in reorienting Nigeria’s grand strategy to deal with the rising Boko Haram’s influence. Also an evaluation of Nigeria’s performance thus far in the war on terrorism. Finally, the conclusion highlights some long-term consequences of the confrontation with terrorism for Nigeria. Although it became clear, in retrospect, that the most
dangerous transnational terrorist group ever to threaten Nigeria —Boko Haram— set about organizing itself and developing roots in over 4 countries during this period, neither its activities nor the extent of the threat it posed to Nigeria’s security was clearly envisaged by the mainstream politicians at the onset. Boko Haram, founded by Mohammed Yusuf in 2002, the group has been led by Abubakar Shekau since 2009, had evolved from a rag tag group whose actions were nonviolent to a radically extreme, well-coordinated militia. Their main goal was to “purify Islam in northern Nigeria”. Despite the violent previews of Boko Haram capabilities provided through the bombings of UN Headquarters in Abuja and the infamous kidnap of 273 secondary school girls in Chibok, a satelite town off the Borno state’s headquarters, Maiduguri, Nigeria’s security policy for much of the last decade of the twentieth century focused primarily on managing the unglamorous problems of national security such as humanitarian crises, ethnic conflict, minor interstate rivalries, and the ongoing regular farmersherders conflict—which, although occasionally onerous, did not
threaten the country’s survival. For the most part of the counterinsurgency war, the challenges facing Nigeria’s security and foreign policy at this time seemed to revolve around mastering a novel strategy: a near-perfect continental order that didn’t survive the most remarkable power transition in modern history—the collapse of a Libya, the Arab Spring and a consequential deterioration of security in the Arab and Maghreb.
For the most part of the counter-insurgency war, the challenges facing Nigeria’s security and foreign policy at this time seemed to revolve around mastering a novel strategy.
The Buhari government has had to battle with growing restiveness within the state. Many acts of occasional roguery have been branded with ethnic togas. This is not helped by the country’s multicultural makeup. Rather, the government has had to contend with the prospect that it had to confront the prospect that the multipronged security challenges represented years of zero-government presence in the society. That in the relentless cycle of rising and falling efforts by the government to tackle the issues leading the decline , Nigeria’s fragility was already becoming a magnet attracting dissatisfied state and non-state actors, the larger processes of economic growth, the diffusion of scientific knowledge, and the spread of dual-use and dedicated military technologies were creating new denizens like Boko Haram and the marauding kidnappers that could over time challenge the preeminence of the state. In the case of the hydra-headed banditry and kidnapping in the northwest, it was a ticking time bomb. The decades of neglect of social security and dereliction of the political leaders had come to bear. The AbujaKaduna expressway has become impassable with the railway the near-safest means of traversing the major artery that leads to the northwestern part of the country. These realities implied that Nigeria’s hegemony, far from being permanent, turned out to be merely a transient period in the march of history since it was not carefully tended and buttressed as part of a conscious grand strategy.While Nigerian elites, especially the political may argue among themselves about what the goals of primacy or the best ways of preserving it might be, there is no serious disagreement about the desirability of preserving Nigeria’s preeminence. This should not be surprising because the essentially competitive nature of politics ensures that a distribution of power favoring a particular state is unlikely to be
rejected by that state, no matter what its national or ideological ideals in respect to power politics might be. Although the record of the past four years suggests that the Buhari administration did not pay as much attention to building the international consensus that might have helped minimize its imperial burdens, it nonetheless understood that maintaining Nigeria’s dominance indefinitely would be a major, consequential task demanding considered preparation. Since it could not be an outcome that it would obtain automatically, the administration set out to preserve Nigeria’s preponderance through a multidimensional effort that involved, inter alia, the following components: •
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Increasing the heavy handed strategy in order to minimize the incentives of other state and non-state actors to acquire these strategic equalizers, while simultaneously working to through a new approach that emphasized smaller, nonproliferation, counterproliferation, and strategic defense Revitalizing traditional alliances like the incorporation of the
civilian Joint Task Force (among other ways through enlargement) to deal with both the traditional problems of international security and a range of new challenges The regional Multinational Joint Task Force created new partnerships with key countries that, despite not being formal allies of Nigeria, would collaborate with the state through various “coalitions of the willing” to deal with emerging threats to peace and security;
In the case of the hydra-headed banditry and kidnapping in the northwest, it was a ticking time bomb. The decades of neglect of social security and dereliction of the political leaders had come to bear.
Enlarging the liberal international economic order through greater economic integration and access to new markets in order to increase national prosperity, wealth, and power through a steady outward shift of the global production possibility frontier.
Nigeria has incurred heavy losses since the inception of the decade-long war but it is incumbent on the country to address the likely post-war issues even before the battle is won. How would the internally displaced persons be resettled? What is the fate of millions of growing unschooled and unskilled youths in these region? What wold be the nuance between a largely conservative traditional and religious society in the face of growth? Is there a place for national integration among the primary actors in these affected areas? These questions must provoke deep thoughts. They cannot be concealed under the facade of religionism and masked deprecatory cum pretentious (tribal) sentiments that often tinge topical and pivotal issues. If the time starts now, we had better begun running.
Nigeria has incurred heavy losses since the inception of the decade-long war but it is incumbent on the country to address the likely post-war issues even before the battle is won
Category Trade & Investment
Islamic Finance in Africa: Opportunities and Challenges
Africa, in particular, is a region in which Islamic finance could and, indeed, should thrive. The continent has a Muslim population of approximately 636 million, representing almost 53 percent of Africans.
Debashis Dey, Xuan Jin
Although Islamic finance assets still represent less than 1 percent of global financial assets, and growth slowed somewhat in 2017, the global Islamic asset base grew from approximately US$200 billion in 2003 to an estimated US$2 trillion at the end of 2016. It is projected by some industry experts to surpass the US$3 trillion mark by 2020.1 Unsurprisingly, Islamic banking and finance assets have concentrated historically in the Middle East and Malaysia. These markets currently account for more than 80 percent of industry assets. In the past five years though, stakeholders from traditionally non-Islamic majority jurisdictions—including Europe and East Asia—have also entered the Islamic finance market or indicated their intention to participate in Islamic finance transactions. Africa, in particular, is a region in which Islamic finance could and, indeed, should thrive. The continent has a Muslim population of approximately 636 million, representing almost 53 percent of Africans.2 The Muslim population in sub-Saharan Africa is projected to grow by nearly 60 percent from 242.5 million in 2010 to 385.9 million in 2030.3 Furthermore, a vast infrastructure development deficit creates financing needs, towards which Islamic finance could make a significant contribution. Some African countries have already started taking steps to support the local uptake of this financing mechanism. Among others, South Africa, Nigeria, Kenya, Senegal, Djibouti, Uganda and Morocco have all introduced legal and regulatory frameworks to promote the development of Islamic finance products in their respective jurisdictions. Examples include recent changes to Kenya’s stamp duty and VAT regulation to create a more level playing field between Shari’ahcompliant and conventional products. Nigeria, Tunisia and South Africa are now home to Islamic banks and takaful (Islamic insurance) companies. Several traditional banks across the continent have also started to offer Shari’ahcompliant banking products through “Islamic windows.”
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Trade & Investment Category
Also, in the public sector, regional governments have either started issuing international or domestic sukuk or “Islamic bonds” (such as South Africa, Senegal, Nigeria, Côte d’Ivoire and Togo) or have at least commenced preparatory work for their debut sovereign sukuk issuances (such as Tunisia and Morocco). These developments are also encouraging from a macroeconomic perspective generally. Islamic finance presents African nations with a unique and (to date) relatively underutilized mechanism to help address two of the most prevalent development issues pervading the continent: the needs to increase financial inclusion among the domestic population and to bridge the funding gap required for needed infrastructure. Regarding financial inclusion, The European Investment Bank estimates that in 2017, as many as 350 million Africans did not have formal bank accounts.4 Therefore, the development of Islamic finance products— both together with and as an alternative to conventional banking and insurance offerings— could significantly increase Africa’s financially underserved population’s access to finance. That members of Africa’s Muslim communities may be reluctant to accept financial services provided by conventional banks, on religious grounds, makes the need for Shari’ah-compliant financial products even more pressing. Regarding Africa’s infrastructure gap, foreign and domestic investments through Islamic finance provide significant opportunities to diversify the sources of funds to meet the African Development Bank’s projected requirement of US$130-170 billion per year until 2025.5 Sukuk issuances tied to tangible assets and projects— such as roads, bridges, water and sanitation works and hospitals— provide cost-efficient means for African governments to address
this infrastructure development demand. As can be seen in, Islamic Finance is essential for unlocking investment from the Middle East but it also attracts investors from other parts of the world. They also increase these governments’ ability to tap the significant pools of liquidity held by Islamic investors based in the Gulf Cooperation Council (GCC) countries and Asia who are looking for viable investment opportunities in Africa. Despite the above legislative and practical steps taken towards growing Islamic finance in Africa and the relatively untapped macroeconomic opportunity it represents, Islamic finance is still some way from being a mainstream form of finance across Africa. Here are some of the underlying structural issues that pose challenges to Islamic finance in Africa. These are not country-specific, but rather permeate the entire continent’s markets, to a greater or lesser degree.
REGULATORY GAP The existing laws of most African countries were not designed to cater to interestfree financings based on the sharing of economic risks and rewards, and achieving returns by reference to the performance of Shari’ah-compliant assets. These principles are fundamental to Islamic finance. The need to create economically viable structures that do not rely on interest makes Islamic finance arrangements more complex than their conventional/ non-Islamic equivalents, and they tend not to fit neatly within existing civil or common law frameworks. For example, while African governments may regularly issue local currency treasury instruments, these are typically conventional interestbearing instruments. Structural amendments required to make these instruments acceptable to Islamic institutions and investors
need to be carefully designed to avoid conflict with domestic tax rules and to maintain equality with traditional treasury instruments. Similarly, general considerations for unsecured sukuk financings (which do not arise in conventional unsecured bond issuances) include: How the laws of the relevant jurisdiction (including any foreign ownership restrictions) treat asset transfers, especially where onshore assets are to be contractually sold to foreign special-purpose vehicles Whether the tax code (and any exemptions and reliefs laid out therein) of the relevant jurisdiction applies to sukuk issuances in the same way it does to bonds If the tax code does not apply to sukuk issuances in the same way it does to bonds, how the regulatory treatment of sukuk (or other Islamic finance products for that matter) can be afforded equivalence to its conventional/ non-Islamic counterparts under the applicable laws
Among others, South Africa, Nigeria, Kenya, Senegal, Djibouti, Uganda and Morocco have all introduced legal and regulatory frameworks to promote the development of Islamic finance products in their respective jurisdictions.
Category Trade & Investment
Without amendments to existing tax codes, the asset-based nature of Islamic finance may trigger various tax payment obligations from country to country that are not involved in conventional financings. These could include registration tax/ stamp duty land tax, VAT, capital gains tax and withholding tax. Regulatory consideration is required to harmonize these issues. Clarity is crucial regarding the legal enforceability of Islamic finance products. And the increased costs of funding due to taxes need to be mitigated. Without these, it will likely prove difficult to reach the critical mass necessary for Islamic finance to flourish. Public sectors will continue to borrow using traditional debt products. Commercial banks will find the legal risk and potential additional costs of Islamic finance unappealing. The establishment of specialist Islamic banks and other financial institutions will not be viable.
Islamic finance presents African nations with a unique and (to date) relatively underutilized mechanism to help address two of the most prevalent development issues pervading the continent: the needs to increase financial inclusion among the domestic population and to bridge the funding gap required for needed infrastructure.
Overcoming these challenges requires that African governments continue to promote change in their regulatory systems to facilitate Islamic finance products and enhance their attractiveness to domestic and international stakeholders alike.
KNOWLEDGE GAP Islamic finance remains poorly understood across many markets, not only in Africa. With some validity, it is frequently considered to be more challenging to implement than conventional/non-Islamic finance techniques. Traditional aspects of modern commercial banking and capital markets practices have existed for many decades, but modern Islamic finance is—in relative terms— very new and niche. It comes as no surprise that potential endusers of Islamic finance, both in the public and private sectors, when given a choice, will often favor conventional over Islamic financing, just because it is more familiar. Knowledge gaps are often a consequence of the applicable regulatory framework (or lack thereof) in the relevant jurisdiction. So, they can be bridged by the introduction of the relevant regulations, as certain African governments are now doing. Standardization of products, documentation, business practices and the question of what is and is not Shari’ahcompliant will also inevitably improve awareness of Shari’ahcompliant products and also increase the efficiency with which they can be deployed to meet public and private sector funding needs. This type of standardization is already present in other regions where Islamic finance is more widely used, such as the Gulf Cooperative Council states and Malaysia. To some degree, it will be a natural byproduct and facilitator of the growth of Islamic finance in Africa.
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ACCESS TO BANKING The relatively low penetration of formal banking services across Africa represents a barrier to entry for conventional and Islamic financial institutions offering Shari’ah-compliant banking products—such as Shari’ah-compliant personal loans, mortgages and takaful.
Trade & Investment Category
might present a tremendous opportunity for innovation in the sector. Africa is already well known as a hotbed for pioneering microfinance products and non-banking financial institutions. For example, M-Pesa is a mobile phone-based microfinance provider launched by Vodafone and Kenya’s Safaricom in 2007 in Kenya and Tanzania, which has since then expanded to South Africa, Afghanistan, India, Romania and Albania and is currently used by more than 30 million customers globally. Sub-Saharan Africa, in particular, exemplifies mobile money’s potential to foster financial inclusion. According to the World Bank, while the share of adults in sub-Saharan Africa with a formal financial institution account barely moved between 2014 and 2017, the share of adults with a mobile money account almost doubled to reach 21 percent by the end of 2017 (in every other region, mobile money penetration is lower than 10 percent). It stands to reason then, as Islamic finance products and institutions become increasingly mainstream across the continent, that Shari’ah-compliant African microfinance products and institutions will also be developed to service unbanked (or underbanked) Muslim communities. Already, Gulf African Bank and Safaricom have announced the launch of M-Sharia, a Shari’ahcompliant banking service through M-Pesa. Moreover, it is possible that such Shari’ahcompliant microfinance products Much of Africa’s population is accustomed to informal arrangements (such as loans from friends and family) and may be uninterested in or even actively resistant to transitioning to banking with formal financial institutions. On the other hand, this limited financial penetration in Africa
and providers will, in turn, extend their reach from Africa into other jurisdictions, such as Southeast Asian countries, with large Muslim populations that cannot access the formal banking system due to low and irregular household incomes or poor credit records. In this context, Africa has a chance to be a true innovator for the Islamic finance industry. The above challenges are not new. The lack of access to banking may be considered a uniquely African problem only in terms of scale. Lessons from how this and other challenges were overcome in other parts of the world—from the United Kingdom to Hong Kong to the Middle East—are profoundly applicable in Africa. Regulatory and knowledge gaps in Africa will take time to address, but positive trends are already evident. Shari’ah-compliant regulatory frameworks are emerging in more and more African countries. African policymakers and endusers have also engaged with more developed Islamic finance markets to help them up the learning curve. Some African financial institutions and governmentrelated entities (such as the Kenyan Capital Markets Authority) have become members of the Islamic Financial Services Board (IFSB), a multilateral body based in Kuala Lumpur. Among other things, the IFSB issues, and facilitates the implementation of, global prudential and supervisory
The development of Islamic finance products—both together with and as an alternative to conventional banking and insurance offerings— could significantly increase Africa’s financially underserved population’s access to finance.
Category Trade & Investment
standards and other initiatives that foster knowledge sharing and cooperation among its members. For instance, since 2008, Bank Negara Malaysia has run more than 300 Islamic finance programs and study visits7 for more than 25 African countries, including Nigeria, Sudan, Tanzania and Kenya. The Islamic Corporation for the Development of the Private Sector (ICD)—the private sector arm of Islamic Development Bank (IDB) and the largest Shari’ah-compliant multilateral development bank in the world— also continues to play a role in developing Islamic finance in Africa by arranging local sovereign sukuk issuances. How governments, organs of state and the people of Africa respond to the challenges of Islamic finance and the extent to which they adopt Islamic finance as a financing tool could have a significant impact on the macroeconomic development of the continent in the foreseeable future.
Raising stakeholders’ awareness and understanding of Islamic finance products and practices and the additional financing options they present can spur public and private sector demand for Islamic finance and the regulatory reforms required to meet this demand. Bridging the regulatory gap can, in turn, help address Africa’s financial inclusion deficit by encouraging the growth of—and innovation in—Shari’ah-compliant products, thus increasing the range of financial institutions, products and services available to the populace and, accordingly, increasing financial inclusion. Moreover, providing African governments, companies and individuals with greater access to finance can play a major role in bridging Africa’s infrastructure gap and promoting economic growth and social prosperity across the continent. Considerable work is still required to overcome the challenges standing in the way of Islamic finance flourishing in Africa, but clearly, the rewards
will outweigh the effort.
Debashis Dey is a partner at White and Case LLP and Global Head of Islamic Finance, with extensive experience in securitisation, covered bonds, project bonds and Sovereign and corporate debt capital markets, including conventional as well as Islamic finance. Xuan is counsel in the Capital Markets practice who is currently based in the UAE. Xuan specialises in debt capital markets and Islamic finance, with a focus on the Middle Eastern financial institutions and corporates sectors. He has experience working across a number of jurisdictions, including the GCC, Malaysia, China, the UK and continental Europe, advising local and international clients (both on the issuer and dealer sides) on conventional and Islamic finance capital markets, as well as structured finance, transactions.
Bridging the regulatory gap can, in turn, help address Africa’s financial inclusion deficit by encouraging the growth of—and innovation in— Shari’ah-compliant products.
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may 2019.indd 19
Making Renewables a Viable Option Leslie Mawuli Aglanu
Without access to modern reliable energy sources,economic development is not possible. Renewable energy is therefore key to sustainable development and has a high potential of servings as the modern reliable energy sources.
Diffusion of policy innovations have become of great significance with reference to renewable energy innovations worldwide. Generally, globalisation is seen as a hindrance to national sovereignty and has hence created the need to find a new framework to describe and act in the international arena. This theoretical problem is linked to the practical and political problems of how to legitimize political action in a post– nationstate world. Until recently, governments around the world have prioritized the creation and adoption of policies to promote the development and use of renewable energy innovations.
This is evident in many countries where policy-makers are considering renewable energy policies as a global governing political vocabulary “to legitimise political interventions”. Empirical research has shown that policy diffusion has affected a wide range of issues. Albeit international regimes and treaties on environmental protection gaining prominence, the diffusion of policy innovations and the factors influencing this process has not been adequately examined. The central challenge of diffusion research is that it often neglects national policy making process, limiting its potential impact. One of the most side-lined fields in diffusion research is renewable energy innovations. Without access to modern reliable energy sources,economic development is not possible. Renewable energy is therefore key to sustainable development and has a high potential of servings as the modern reliable energy sources. Many energy dissemination programmes however, concentrate on the supply and technology sides without adequate attention to the overall context of community life. To ensure an effective diffusion and adoption of renewable energy innovations the process need to holistically integrate national energy systems. There is hence the need to include micro and meso-level perspectives of national policies in diffusion research.
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Efficient energy supply within the framework of good governance is an asset to building the needed infrastructure for sustainable development. This is inherently depicted in the interrelationship between energy use, industrialization, economic growth and standard of living; reflecting the direct correlation between economic growth and electricity supply. In recent times the need for clean, economical and sustainable energy sources has become one of the world’s major concerns in tackling climate change and promoting sustainable development. Sub-Sahara Africa has been the main region bedevilled with significantly underdeveloped power sector resulting in countries in this region struggling to sustain GDP growth.
Renewable energy technologies are evolving and becoming increasingly more efficient. Unfortunately, these innovations are centred in developed countries with a rather complicated diffusion process to developing countries where there are acute energy deficits. Adequate technical skill and managerial knowhow is required during the selection and transfer of these technologies. The process is highly delicate and costly. As a result, much time and effort is required before and during the selection and transfer phase. Many multilateral environmental declarations and agreements have over the years moved to support a generalized obligation of states to co-operate in transferring environmentally sound technologies to developing countries. Enhancing renewable energy technology transfer to developing countries will allow Sub-Sahara Africa to gain technological capabilities appropriate to its own regional needs and promote sustainable development. Diffusion provides the needed process for such transfer by strengthening the capacity of developing countries to identify appropriate renewable energy technologies and pursue their development through trade, investments and technical assistance. As
To ensure an effective diffusion and adoption of renewable energy innovations the process need to holistically integrate national energy systems. There is hence the need to include micro and meso-level perspectives of national policies in diffusion research.
the world urge developed countries to create push factors, developing countries also need to create favourable conditions, thus pull factors, to attract the needed technology and initiate the transfer process. For this to be effective, barriers such as information bottlenecks, capital constraints, trade and policy restrictions, high transaction costs, institutional weaknesses and business limitations such as risk aversion which bedevils many developing countries, particularly Sub-Sahara Africa, need to be resolved. Developing countries consequently need to devout more attention to developing the needed policy innovations which will serve as the foundation and create the enabling environment for appropriate technology transfer. With the high cost associated with conventional sources, such as environmental and climatic consequences, health hazards, effects of foreign policy vulnerabilities on imported fuels and other adverse economic effects, renewable energy innovations have been identified as key to advancing sustainable development whiles meeting the challenges of the ever increasing demand for energy. To achieve this, there is the need to diffuse
modern renewable energy policy innovations especially in developing countries where there are acute energy challenges. Although international debate on climate change propels the diffusion of renewable energy policy innovations,the demand side focuses on the initial capital investment and how low the unit generation cost is. To make renewables a viable option, cumulative generation need to increase to a threshold of triggering exponential reduction in the unit cost of generation. Instead of using political and economic pressures to coerce the adoption of such policy innovations, enticing voluntary approaches will create an appealing interest and promote sustainability in the long run. This will propel further diffusion as benefits will become more observable. Potential adopters will subsequently be more comfortable and willing to establish bilateral cooperation and relations with forerunners and other social systems or international actors who are making considerable progress in the sector. This scenario instills confidence and trust by promoting a “power with” relationship.
Category Climate Discuss
Even though there are many renewable energy policy innovations available, attributes such as relative advantage, compatibility, complexity, trialability and observability of their effectiveness cannot be overlooked. These attributes are the initial factors that lay the foundation by raising interest and attracting potential adopters. The major hindrances thwarting many African countries from adoption renewables are the lack of technical know-how, substandard/inadequate grid infrastructure, unfavourable policy and regulatory mechanisms and lack of financial resources needed to procure modern renewable energy technologies.
therefore essential in promoting development. Currently, effort are being made worldwide to improve energy efficiency. But without new technologies and policies, particularly in the renewable energy sector, energy efficiency will be difficult to attain.
In order to attract investments, real efforts need to be made towards the promotion of efficiency, transparency and consistency in the management of energy generated and supplied from renewable energy sources. With the growing energy demand and uncertainties about emerging energy technologies, the future of renewable energy technology standards and the acceleration of energy technology innovation and policies are becoming increasingly important and nations need to make strategic policies to develop the sector and exploit its potentials.
Understanding the long-term patterns of innovation in energy technologies is therefore critical for technology forecasting and public policy planning. The diffusion of these policies and innovations into Sub-Sahara Africa is critical to meeting energy demand while mitigating climate change globally. Although many literature are showing increasing interest in studying the innovation processes of technologies and policies in the energy sector more attention need to be directed towards renewable energy innovations and its diffusion and adoption in Sub-Sahara Africa.
Understanding renewable energy innovation processes more fully in Sub-Sahara Africa could yield considerable benefits. To achieve an effective renewable energy policy innovation diffusion the process should be considered as an institutionalization of policy innovation transfer by establishing networks of effective communication flow where all actors involved will be permitted full access to information in a free atmosphere. Energy plays a dominant role in the sustainable well-being and the social prosperity of all economies. Maintaining uninterrupted and efficient energy supply is
Innovation in energy technology is hence becoming more active throughout the energy industry and has seen major investments and activities in recent times. The sector is continuously witnessing an increasing attention being given to energy research development with the aim of developing new cleaner and more sustainable sources of energy as well as sustainable policy regulations.
In order to adequately support the development and diffusion of eco-friendly technologies into the region, insight into their specific innovation trajectory is necessary as longterm patterns in the process and focus of innovation differ across technologies as well as locations. Since innovation in technology is heavily affected by government policies such as technology standards, environmental regulations and subsidy schemes, the voluntary diffusion and “power with” approach presents a flexible mechanism that will allow governments to tailor regulatory strategies towards individual
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energy technologies to enhance the diffusion and adoption of appropriate renewable energy policy innovation.
Leslie is currently a Research Officer with the African Research Network for Neglected Tropical Diseases (ARNTD) at the Kumasi Centre for Collaborative Research in Tropical Medicine (KCCR) in Kumasi, Ghana. Leslie is also a graduate of the Albert Ludwigs University – Freiburg, Germany, with a Master of Science degree in Environmental Governance. His career has principally been involved in providing environmentally sound solutions and policy interventions for sustainable development through research, advocacy and project management.
Enhancing renewable energy technology transfer to developing countries will allow Sub-Sahara Africa to gain technological capabilities appropriate to its own regional needs and promote sustainable development.
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Industry Focus Category
Helping Africa’s Smallholders Feed the World Usman Ali Lawan
Sustainable Development Goal 2 – which aims to end hunger by 2030 – is achievable. But it will require a commitment from both governments and the private sector to help rural farmers shift to sustainable – and profitable – agricultural practices.
This is still true of about 80 million rural farmers in Nigeria. Across Sub-Saharan Africa, as much as 50% of fruits and vegetables, 40% of roots and tubers, and 20% of cereals,
In the rural village of Kura in Kano State, Nigeria, where I grew up, my grandfather would lose more than half of his tomatoes after each harvest. He was not a bad farmer. But bad roads made it difficult for him to get his tomatoes to market, and he had never learned modern methods of preserving them. In an effort to salvage some of his produce, he often dried his tomatoes on the sand. So far, with his flashy lifestyle, the US president has been a resounding inspiration to many consumers and investors. But his personal narrative is unlikely to survive an economic downturn, because people pull back during such periods and reassess their views and the stories they find believable.
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legumes, and pulses harvested are lost before they reach a market. Less than a half-mile away from a major tomato-paste factory in Kadawa, Kano, Nigeria, some 200 rural farmers dry over 40 trailerloads of fresh tomatoes in the sand every week.2 This lack of knowledge and resources among rural farmers contributes substantially to global food insecurity. After all, in the developing world, rural smallholders – most of whom own less than four hectares of farmland – comprise the majority of all farmers. In fact, rural people produce three-quarters of the world’s food, yet they constitute 80% of the world’s poor. Delivering enough food to feed the world’s population requires farmers to overcome a series of oftenunpredictable challenges, related to factors such as climate change, water scarcity, lack of access to extension services, and armed conflict in agricultural areas. As a result of these challenges, millions of people have been driven from their homes, prevented from working their fields, unable to get their products to markets, or cut off from
Across Sub-Saharan Africa, as much as 50% of fruits and vegetables, 40% of roots and tubers, and 20% of cereals, legumes, and pulses harvested are lost before they reach a market.
supplies of improved seedlings, fertilizer, and financial services. And the challenges continue to escalate. The number of food emergencies – when disasters such as drought, floods, or war lead to food-supply shortfalls that demand external assistance – has risen from 15 per year, on average, in the 1980s to more than 30 per year since 2000. The result is widespread food insecurity. According to the Food and Agriculture Organization, more than 820 million people worldwide lacked access to sufficient food in 2017; more than two billion people experience deficiencies of key micronutrients; and more than half of the people living in lowincome countries are not sure where their next meal will come from. If current trends hold, the amount of food being grown will feed only half of the world population by 2050. But these trends can be changed – and Africa is a good place to start. As Akinwumi Adesina, President of the African Development Bank and winner of the 2017 World Food Prize, has put it, “Africa in the future should not only feed itself but it must
contribute to feeding the world.” Any strategy to boost food security must emphasize increasing productivity and reducing post-harvest losses. To that end, governments and agro-processing companies should each be doing their part to advance cost-effective measures that take advantage of new technologies, strengthen infrastructure, and offer training and support to rural smallholders. Governments, through their various agricultural programs, can help rural farmers to form cooperatives, where they can leverage their collective strength. Private firms, for their part, can provide those farmers with extension services and inputs, and serve as major bulk buyers of produce. This is a proven approach. In Kebbi State, Nigeria, the Anchor Borrower scheme for the Rice Farmers Association of Nigeria – implemented in collaboration with the Central Bank of Nigeria and a government loan program – has boosted rural farmers’ output and incomes, by helping them to form cooperatives, providing training and inputs, and guaranteeing a buyer.
When designing any such scheme, policymakers must make sure to promote sustainable farming practices that minimize agriculture’s use of natural resources, including soil and water. All governments should commit to ensuring that their agriculture, food, and nutrition policies are aligned with modern dietary guidelines, which emphasize variety and sustainability in largely plantbased diets. The international community’s goal of ending hunger by 2030 is achievable. But success will require a commitment from both governments and the private sector to help rural farmers shift to sustainable – and profitable – agricultural practices. If that happens, then not only will we end food insecurity; Adesina’s prediction that “the next generation of billionaires in Africa will be farmers” may come closer to being realized.
Usman Ali Lawan, an Aspen New Voices fellow, is CEO and Chief “Farmer in Suit” at USAIFA International Limited.
Anti-Corruption in Nigeria: The Possible Impossible David Adekwu
Corruption can generally be defined as dishonest or illegal behavior, especially of people in positions of authority. It is, perhaps, one of the most commonly used terms in Nigeria and the major reason the country is today known as the poverty capital of the world. At the risk of churning out an unnecessarily lengthy article, I will have to cover the topic in a long and nitty-gritty appraisal of corruption and anti-corruption in the Nigerian society.
1. Corruption is almost always the cause of a society’s stunted growth and eventual collapse. It is no surprise that four out of the five most corrupt countries in the world faced violent conflict in recent years.
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Corruption is almost always the cause of a society’s stunted growth and eventual collapse. It is no surprise that four out of the five most corrupt countries in the world faced violent conflict in recent years, which Transparency International suggests is related to corruption. This is so because corruption fuels and perpetuates the inequalities and discontent that lead to fragility, violent extremism, and conflict. According to Transparency International, 79 percent of the 7.6 billion people in the world live in countries with corrupt governments, with most countries scoring less than 50 in the Corruption Perception Index. Ironically, despite her reputation, Nigeria isn’t one of the top 10 most corrupt countries in the world, but the country has been synonymized with corruption as a result of how much the act has pervaded the everyday structure of Nigerian society. Despite Nigeria’s miraculous absence in the top-10 list, the country has not been spared her fair share of conflict, poverty and societal rot.
No greater act of corruption has been perpetrated against the Nigerian state than that which has seen the country debased and devalued by political leaders who were trusted and empowered by the people.
For far too long, Nigeria has been under the gripping claws of corruption and, consequently, the prevailing political situation in the country has boiled over and reached a point at which Nigerians have all but lost hope in the country’s political leadership. No greater act of corruption has been perpetrated against the Nigerian state than that which has seen the country debased and devalued by political leaders who were trusted and empowered by the people. The Nigerian people have a penchant for falling for the eye-service approach of anti-corruption employed by our political leaders, while they - politicians and public office holders - continue to plunder the country with reckless abandon. Contrary to popular belief, Nigeria’s resilience in the face of everything being thrown at it is not inexhaustible. At our current trajectory, and not especially brilliant, the Nigerian people will continue tolerating this eye-service approach, thereby enduring the fallout of corruption until our nation collapses under its weight. It is commonplace for the average Nigerian like me to
engage in finger-pointing and ascribe the corruption menace to the greed of public officeholders. Although this is not entirely unfounded, it is also important for each of us to look in the mirror, in considering the matter; it would surprise us to see a large chunk of the problem staring back at us. It, after all, takes two to tango. It is safe to say that all Nigerians living in Nigeria are, in one way or another, either outrightly corrupt or complicit in encouraging its prevalence. It is commonplace to expect petty corruption in the streets, our workplaces and government institutions. It is almost impossible to live, work and conduct business in the country without engaging in or turning a blind eye to corrupt practices. In the government agencies, you are expected to “sort” someone out before being rendered any form of service. In the schools, parents make financial “contributions” to the schools in exchange for admission or more favorable treatment of their wards. The students themselves engage in exam malpractice; as a result, our educational system continually churns out unemployable graduates who, in order to
become gainfully employed, have to “sort” someone out. As can be seen, the very foundation of our country is laid on an unending cycle of corruption. It is essential to the survival of the average Nigerian. Nigerians do not generally lack the propriety of citizens in other corruption-free countries, neither are we ignorant of the fact that things could be better. We are this way because we have few options, and for many people, corruption is simply a means to an end - survival. With limited options and nothing to serve as a deterrent, we will naturally always choose the corrupt way, as it benefits us more. I believe it is groundless to expect the average Nigerian - faced with the difficulties of being a Nigerian - to obey the law in this regard, no matter how good it might seem, at the expense of their survival.
The Politricks Grand corruption has had an adverse effect on the country’s well-being and is found at the highest levels of governments that lack adequate policing of corruption. Graft - as it is commonly called - is defined by
The extent to which corruption has pervaded the Nigerian system is limitless and it would be an injudicious use of time to analyze them all. What government and the citizens must focus on at this point is the proffering of solutions
the Cambridge dictionary as the obtaining of money or advantage through the dishonest use of power and influence (especially in politics). As a result of her chronically weak institutions, Nigeria suffers from systemic corruption that allows acts such as inflated contract costs, abuse of security votes, bribery, embezzlement, impunity and the government’s recalcitrance to prosecute certain corrupt persons. In Nigeria, political corruption goes largely unchecked as a result of past successive governments’ lack of political will to combat graft. This is not completely unrelated to the fact that the political parties and elections that brought most political office holders into power were funded by proceeds of corruption. Corruption cases like the GandujeGate, IkoyiGate, GrassGate, among others, are exemplars of typical Nigerian corruption cases. The accused individuals in these cases consider themselves above the law because, despite incontrovertible evidence
alluding to the guilt of these individuals, the cases are yet to see diligent investigations, prosecutions and convictions. After all, Babachir Lawal, the former Secretary to the Government of the Federation who was accused of sharp practices in expending the funds meant to alleviate the sufferings of persons displaced by the Boko Haram insurgency, in response to State House correspondents who had enquired about his reported suspension from office, retorted “Who will dare take such a decision behind my back? I am the Presidency and I have just held a meeting with the VP. You reporters don’t know anything. You are telling the Presidency that the Presidency has suspended him from office?” His attitude to the suspension is typical of the average Nigerian politician who with all the powers and influence in his custody believes that he reigns supreme over all, constitution and law inclusive.
Upon assumption of office, in 2015, the government of President Muhammadu Buhari “hit the ground running” with its anti-corruption agenda, in tandem with their campaign promises to Nigerians. At the time, it was no doubt cheering news to Nigerians that the new Buhari government had launched a renewed campaign against corruption. Four years down the line, at the dawn of its second tenure in office and despite many gyrations, the Buhari administration is yet to record substantial success in its fight against corruption. This hardly comes as a surprise, after all, times flies when your president spends almost 500 of his 1,477 days in office, flying around the world at the expense of good governance. The legislature must not be spared its share of the blame; over the past four years, lawmakers have busied themselves with fighting the executive arm of government and making and jettisoning laws.
Hypocrisy is the audacity to preach integrity from a den of corruption. - Wes Fesler
The past 4 years have been marked by the weaponization of anti-corruption against political
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opponents of the ruling party. The current administration is notorious for brazenly using its anti-corruption agenda to witch-hunt political opponents. It happened with Senator Bukola Saraki, Atiku Abubakar, Governor Fayose Ayodele, Senator Dino Melaye and a host of others. The extent to which corruption has pervaded the Nigerian system is limitless and it would be an injudicious use of time to analyze them all. What government and the citizens must focus on at this point is the proffering of solutions. One of the solutions the Buhari administration has come up with is the Whistleblower Policy which promises pecuniary benefits to individuals who volunteer information that leads to the seizure of assets from corrupt persons. This policy has yielded little success, primarily because it does not guarantee immunity to persons with privileged information and the government has done little to ensure the security and safety of whistleblowers. One does not fight corruption by fighting corruption. - Daniel Kaufman
deterrence in their effort to dissuade potential wrongdoers and ensure credibility. The Economic and Financial Crimes Commission must ensure that all corrupt persons, regardless of political affiliation, are diligently investigated, prosecuted and convicted by the relevant government agencies. The above will not be possible without the legislature playing its role. The legislature must pass and implement legislation such as the Proceeds of Crime Bill and the Whistle Blower Protection Act which would ensure that whistleblowers are protected from dismissals, suspensions, harassment, discrimination and intimidation. •
Moving Forward Although corruption is now deeply rooted in our society, eradicating it is not an impossible task. The fight against corruption requires a combination of political will and the commitment of citizens to act as whistleblowers while holding the government accountable. In order to mitigate the pernicious effects of corruption in Nigeria, we must do the following: •
Build efficient, transparent, and accountable institutions and utilize technology to design and implement anticorruption programs. Such programs must first focus on mitigating and detecting potential risks, as well as addressing weaknesses in the various government institutions. Institutions must employ
Inaugurate the National Procurement Council as provided in the Public Procurement Act. Abolish the secrecy in the allocation of oil and gas licenses to individuals and companies. Dealings in the oil and gas industry must be made more transparent. Ensure accountability in the defense and security sector. Going beyond the parliamentary oversight structures which precedence and current happenings have shown to be extremely lacking, oversight by the people is needed. Be that as it may, budgetary and procurement processes must be strengthened and the legislature must strengthen its mandate in legislation, representation and oversight in the sector. Civil society actors should influence accountability in various sectors by encouraging the creation and empowerment of institutional checks and balances, and by ensuring inclusiveness in the development of government policies.
In addition to the above, to really make any progress in our effort to significantly mitigate
corruption, we must focus on providing Nigerians with a sustainable alternative to corruption. As long as people remain hungry, they will always make the choice that guarantees their survival. A more prudent use of the resources currently being expended in political witch-hunts would be to focus them on laying the infrastructural groundwork for new markets that would boost the economy, create more jobs, and give Nigerians the opportunity to make progress and make a living for themselves and their family.
It is commonplace for the average Nigerian like me to engage in finger-pointing and ascribe the corruption menace to the greed of public office-holders.
David Adekwu is an architect, entrepreneur and occasional writer. You can find David on Twitter here: @DavidAkondu.
Bridging the Digital Divide Carole Kamaitha
Carole Kamaitha is the Vice President, Sales Africa, SES Networks. With over 13 years of sales and marketing experience and more than a decade working in the field of Satellite Communications in Africa, Carole is responsible for SES Networks business throughout Africa. The company is a the worldleading satellite operator and the first to deliver a differentiated and scalable GEO-MEO offering worldwide, with over 50 satellites in Geostationary Earth Orbit (GEO) and 20 in Medium Earth Orbit (MEO). SES focuses on value-added, end-to-end solutions in two key business units: SES Video and SES Networks. The organization aims to connect and enable broadcast, telecom, corporate and government customers, and enrich the lives of billions of people worldwide. In this interview with African Leadership Magazine, she addresses several issues related to the operations, service delivery of the firm, and the growth of technology on the internet. Exerpts. SES is the largest satellite operator and has been delivering services in sub-Saharan Africa for nearly two decades, what has been your experience working on the continent? SES has been operating in Africa since 1999. We are present in various locations, including Nairobi, Accra, Lagos and Addis
Ababa â€“ to name but a few â€“ and provide satellite communications solutions to both video and data customers, such as internet service providers, mobile and fixed network operators, businesses and governments across the continent. We provide coverage over Africa via ten Geostationary Earth Orbit (GEO) satellites and the fleet of twenty O3b Medium Earth Orbit (MEO) satellites, which bring low-latency fibrelike connectivity. In addition, our upcoming next-generation terabit-scale MEO constellation called O3b mPOWER will allow even more flexibility and scalability. The system will serve Africa, among other regions, and we look forward to bringing this
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revolutionary capability to the market. It is important to note that there is no one-size-fits-all approach to doing business in Africa. This is a vast continent; home to 54 countries and over 1.2 billion people living in diverse geographies with immensely different needs â€“ no two countries are the same. Furthermore, Africa is a very dynamic market that is constantly evolving, which is what makes it such an exciting market to operate in. Africa is also open to adopting new technologies and global trends. Mobile, for example, has rapidly become the preferred
mode of access to connectivity, with users increasingly shifting away from only voice and SMS communication, adopting the internet via new 3G and 4G / LTE networks. With this, enterprises are digitising their remote operations, mining sites become more secure and productive, remote education continues to gain momentum. All of these and other positive changes create a vibrant, favourable environment for business innovation and improve the socio-economic landscape. Our mission in Africa is to help both businesses and governments to develop their respective markets and meet the continent’s growing demand for bigger and better connectivity and video content. We are honoured and humbled to be an enabler of the continent’s digital transformation, and importantly, to help accelerate it. Just one satellite beam can reach millions of people, making satellite-enabled solutions very commercially attractive, particularly when compared to the costly roll out of terrestrial infrastructures. A 2018 report by the ITU shows that only a quarter of the African continent have access to internet; as a major stakeholder
in the industry, what in your view can be done to increase connectivity on the continent? Connectivity, as an enabler and accelerator of access to information and communication, creates an incredibly positive impact on communities’ and countries’ socio-economic development. That being said, bringing this connectivity everywhere, especially to the most remote locations, is not a trivial challenge. It is commonly recognised that due to geographical and economic obstacles, fibre will not reach all areas in Africa. Currently, as much as 50% of the Sub-Saharan African population live out of reach of operational fibre-optic networks. There are, however, solutions to provide high bandwidth to all parts of the continent, and in a quick and costefficient way. Orbiting high above Earth, beyond physical obstacles, satellites can provide connectivity to all corners of the world, and can respond swiftly to evolving conditions. Putting in place reliable ICT infrastructures, and enabling business, governments and citizens with the necessary connectivity and applications
is vital. This not only boosts critical sectors like healthcare and education, it enables job creation. In our opinion, the most effective way to ensure connectivity for all of Africa is to integrate satellite connectivity into terrestrial networks. Such a model, utilising a combination of infrastructures that operate seamlessly together to reach the last mile, will broaden digital access and further business development.
Africa is also open to adopting new technologies and global trends. Mobile, for example, has rapidly become the preferred mode of access to connectivity.
We have many examples across Africa of how we work with local businesses and governments, and jointly make a difference in the market. One of our customers, an internet service provider in Chad called Presta Bist Telecoms, is delivering high-availability broadband to consumers and companies across the country, pioneering high-throughput, low latency connectivity over O3b MEO satellites. The service quality they have been able to provide thanks to O3b MEO has been a major driver of economic development for the company and its customers, enabling them to extend the reach of internet in the country. Another customer went for an innovative solution that is based on our multi-orbit capabilities we have over Africa: today we are able to deliver a fully managed satellite backhaul driven by both GEO and MEO - helping telcos / MNOs extend their reach to unserved and underserved territories. A gigabyte of Data in Zimbabwe will cost you about $75, making it the most expensive country for data in the world; how do we balance high speed internet with affordability in Africa? Once again, this is where comprehensive solutions that leverage a mix of infrastructures, boosted by innovative satellite technologies and new business models, are required. This is why we are working closely with everyone down the value chain. As a starting point, satellite technology has evolved considerably in recent years, enabling higher bandwidth and more flexibility. This is an area that SES has been pioneering with our MEO, and we are proud to say that customers in Africa are open to adopting this technology. Our standardsbased approach has also enabled seamless integration of the satellite into the networks environment. There is no need to solely rely on terrestrial technology anymore; satellite can easily complement fibre or serve as a backup. This is
particularly revolutionary for landlocked countries or in cases of fibre or sub-marine cable outages. In addition, close collaboration between satellite operators and local ISPs, Telcos and MNOs can have a positive impact on their customers and end users. Sharing assets lowers costs and increases returns, resulting in mobile operators, for example, lowering their network deployment cost and consumers having more choice in terms of network providers, even in the most remote locations. To summarise: the more countries and companies that open up to satellite technology, the quicker highspeed connectivity will come to underserved and unserved areas. A resultant consequence of this will be more choice and affordability for everyone involved in the value chain, and ultimately for the end consumer. Africa is home to the world’s largest reservoir of young people, with 60% of the population within the ages of 16-25; how can ICT be deployed as a tool for empowerment for this demography; considering the rising case of unemployment and its attendant effect to the continent’s security, as well as
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the issue of migration? Modern and accessible ICT infrastructure is key for sustainable development and innovation throughout key domains. This is the foundation for everything, and also an investment in the future. For example, think of the education opportunities it enables, as well as improvements in healthcare and better services to citizens. Sustainable ICT infrastructure is one of the greatest investments a country can make to serve current and future generations.
Thousands of new sites need to be deployed in order to reach rural Africa and bridge the widening digital gap.
such as the development of innovative business models, financing schemes and effective, transparent regulation.
There are three key components required to ensure effective deployment of ICT to bridge the digital divide. Firstly, projects that support e-government, e-health and e-education deliver a specific social benefit and promote inclusivity. For example, with e-education, new opportunities are opening up for youth by connecting teachers and students with remote resources and worldclass teaching material. Burkina Faso is a great example of how governments leverage O3b MEO to modernise and extend ICT infrastructure for critical e-applications throughout the country, including e-governance, e-education, e-healthcare. The second component that is vital for success, is to foster strong local partnerships. Local partners have the practical know-how and insight to cater effectively to a local audience. Finding the right local partner, that can provide internet services backed up by infrastructure operators such as SES, is therefore a critical component of ensuring the sustainability of a project. Lastly, there needs to be a direct connection to local businesses that want to leverage these next-generation tools and gain access to the digital marketplace.
This applies to all budding businesses that could thrive from gaining access to Pan-African connectivity and global sales distribution channels. In Africa, Micro, Small and Medium Enterprises (MSMEs) provide 80% of jobs and represent 90% of all companies. Because of their weight in the African economy, there is a strong need to foster their inclusion in activities and programmes that aim at improving skills among workers as well as awareness in terms of digital rights, safety and security. Aside from providing access to connectivity and content, the satellite telecommunications industry itself also contributes to direct and indirect employment. SES runs several successful programmes which illustrate how we can empower young Africans, whether living in rural or urban areas. How can Africa be best positioned to benefit from the 4th Industrial revolution? To benefit from the 4th industrial revolution, governments and regulators need to continue to work together to drive a collaborative ecosystem and lay the foundation for several important fundamentals,
Thousands of new sites need to be deployed in order to reach rural Africa and bridge the widening digital gap. This is where satellite-enabled solutions come in as a highly effective, cost-efficient vehicle to provide connectivity beyond the reach of terrestrial transmission networks. By implementing a comprehensive approach, based on a mix of technologies including satellite, mobile, Wi-Fi and emergent technologies, we could collectively reach a significantly higher number of cost-effective sites in each country, ensuring coverage for all. In addition, for Africa to be best positioned, she has to offer opportunities for the youth in the continent to be digitally skilled and knowledgeable and to participate effectively in the changing economics. SES runs the Elevate Program that strives to equip young people with technical satellite and business skills that are relevant in their markets to create employment opportunities.
Close collaboration between satellite operators and local ISPs, Telcos and MNOs can have a positive impact on their customers and end users.
Last, but not least, innovative business models and publicprivate partnerships will allow for long-term sustainability. For example, public funding could incentivise the private sector to continue developing a connectivity infrastructure network. Today, SES’ MEO satellites alone deliver more than 10Gbps satellite connectivity across Africa, and the demand for both GEO and MEO is growing. As an industry leader and a business operating in Africa, we encourage investment in connectivity infrastructure to accelerate 4G deployment in West Africa. This will make a huge difference to how people experience connectivity. As part of our commitment to supply reliable, cost-efficient connectivity everywhere, SES will launch its next-generation system O3b mPOWER, which will bring terabit-scale capability to meet the growing needs of our customers. This is an incredible solution that can be used for a wide variety of applications within governments and businesses looking to embrace digital transformation, as we enter the cloud-scale era. The satellites have already been procured and are being built, and we can’t wait for them to be up in orbit in 2021. I’m absolutely thrilled by the opportunities Africa will have with this revolutionary system. Exciting times for all of us!
Aside from providing access to connectivity and content, the satellite telecommunications industry itself also contributes to direct and indirect employment.
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A Military Affair It was a gathering of Nigeriaâ€™s military top brass as well as leading lights in business, politics, and diplomacy as Major General & Mrs. Peter Dauke joined friends and families in witnessing the wedding of their son, Flight Officer Kingsley Tabatwuat Dauke. Kingsley, an Air force officer, got married to Kasham William Maisaje in a well-attended ceremony in Abuja, Nigeria. We bring you the event in pictures:
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Buratai, Counter insurgency: Winning the War? Okanga Agila
1. The general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom.
A lot has been said about the exploits of the Nigerian Army in the fight against terrorism in Nigeria. While some have questioned its operational effectiveness, some have also praised it to high heavens. In my opinion, those that have had reasons to question the operational efficiency of the Nigerian Army did so on reasons best known to them. Also, those that have praised the operational effectiveness of the Nigerian Army did so based on what it is they have seen by making a comparison with what it was in times past and what it is now. I belong to that school of thought that is full of praises for the Nigerian Army not just in the
fight against terrorism in NorthEast Nigeria, but for how it has been able to handle its military operations simultaneously across the country. In the North and the East, South, and West, the presence of the Nigerian Army is felt. This brings to the issue of leadership and the critical role it has played in the fight against terrorism and other militant groups in Nigeria. According to one of the celebrated war strategist of all time and author of the book ‘Art of War’ Sun Tzu, “the general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom.” This is one attribute of the Chief of Army Staff, Lt. Gen. Tukur Buratai that I have in numerous forays tried to bring to the front burner for Nigerians to indeed understand and appreciate the sacrifices that have gone into winning the war against terrorism and other militant groups in Nigeria. He is indeed the jewel of the kingdom because if the territorial integrity of Nigeria is questioned, then there would be no country. For me, no matter what anyone thinks, there has been a substantial difference in the fight against terrorism in Nigeria since 2015. This much was corroborated in many quarters
and also coupled with the fact that no Nigerian territory is under the control of Boko Haram terrorist anymore. How was this possible you might want to ask? It’s simply leadership. We must admit the role of sound leadership in all human endeavours. And the operations of the Nigerian Army are not an exception to the impact or effect of good leadership in its operational outcomes. Just like Sun Tzu, stated, ‘the general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom’ and this is the case of Lt. Gen. Tukur Buratai if you ask me. He has been bold to admit and strategize at the same time. He is not one that would only churn out commands. He is involved most times in the execution of these commands as evident in the numerous instances where you can’t but find him in the trenches, either reviewing with his commanders or feasting with his soldiers
The way and manner Lt. Gen Tukur Buratai has carried on since 2015, military historians in Nigeria are dutybound to document his exploits to serve as reference material in the future.
in an attempt to provide that psychological boost that they require to keep the fire burning. I recall on one of the occasions of an event where Lt. Gen. Tukur Buratai spoke extensively about his vision and mission for the Nigerian Army. He was concise in his words and also sincere in its delivery. I recall that three years down the line, he has been able to match his words with action. The promises he made has been religiously fulfilled to the extent that I wondered how he was able to do some of the things he does. However, again, I am reminded by Sun Tzu that ‘thus we may know that there are five essentials for victory: (1) He will win who knows when to fight and when not to fight. (2) He will win who knows how to handle both superior and inferior forces. (3) He will win whose Army is animated by the same spirit throughout all its ranks. (4) He will win who, prepared himself, waits to take the enemy unprepared. (5) He will win who has the military capacity and is not interfered with by the sovereign.” All of these have been systematically incorporated in the operations of the Nigerian Army I must add, and the number three quote says it all about how Lt. Gen. Tukur Buratai has been able to turn a once disillusioned Nigerian Army notorious for making retreats instead of advancing in the fight against Boko Haram terrorist to a robust and strategic Nigerian Army that has indeed taken the battle to the Boko Haram terrorist. This is because the same zeal and commitment exhibited by the Chief of Army Staff are the same displayed across the ranks in the Nigerian Army which has ultimately translated to what is now recorded as the successes of the Nigerian Army in the fight against terrorism and other militant groups in Nigeria. We must admit that since 2015, the successes recorded by the Nigerian Army has conformed with the promise made by the Chief of Army
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Staff that never again would the territorial integrity of Nigeria be threatened. The question is, has he kept this promise to Nigeria? The answer is yes. This is on the heels that since the present administration came on board in 2015 and the subsequent appointment of the service chiefs, Nigerians have indeed had a reason to sleep well, especially those of us resident in the federal capital territory, who were once under constant attack from Boko Haram terrorist. It is instructive to state that since 2015, the federal capital territory has not experienced any Boko Haram threat. This is no mean feat; it just tells of how the Chief of Army Staff has been able to match words with actions and how he has been able to carry all along in the quest to keep Nigeria safe and secured. This, in my opinion, is explained by a quote by Sun Tzu, wherein he stated that ‘regard your soldiers as your children, and they will follow you into the deepest valleys; look upon them as your beloved sons, and they will stand by you even unto death.’ This has been one of the strategies employed by the Chief of Army Staff, and it has yielded tremendous success as regards the war against terrorism in Nigeria. Also, it is instructive to add that Boko Haram terrorist has not been able to spread their tentacles to other parts of Nigeria; instead their remnants have been confined to the fringes of the Lake Chad Basin region. I think at this point and with the way and manner Lt. Gen Tukur Buratai has carried on since 2015, military historians in Nigeria are duty-bound to document his exploits to serve as reference material in the future. For me, the summation of Lt. Gen. Tukur Buratai’s leadership of the Nigerian Army is that of a promise kept and still counting. Okanga Agila is a traditional warrior and writes from Benue State Nigeria
Samuel Jibao: Sierra Leone’s Revenue Czar of Finance and Economic Development on Revenue and Tax Policy. His rise within the NRA reflected a key intelligence and deeply held commitment to honesty and public service. His ethical approach to tax and economic policies has been applauded by some of the best in the field. Dr. Jibao is a research Fellow at the International Centre for Tax and Development at the University of Sussex, Brighton United Kingdom, and at the African Tax Institute in the Department of Economics, University of Pretoria
Samuel Jibao joined the National Revenue Authority (NRA) in 2003. He is a Public Policy Analyst with a professional experience spanning over fifteen (15) years in tax policy and administration, macroeconomic modelling, forecasting and economic management. He possesses an advanced experience in forecasting and econometric modelling of the twenty first century. He has served the National Revenue Authority (NRA) as Principal Collector from September 2003 to December 2006, Deputy Director Monitoring, Research & Planning from January 2006 to November 2011. Until his appointment as the Commissioner General of the National Revenue Authority (NRA), Dr. Jibao had served as Revenue Advisor to the Ministry
Dr. Jibao is an impeccable academic with a knack for research and writing and has done so excellently by contributing to a number of academic Papers, Reports and Book chapters on Tax and Tax Reforms in Africa and beyond. Dr. Samuel S. Jibao is recently featured in a 2018 publication on “Taxing in Africa/ Coercion, Reform and Development” a book published by MICK MOORE, WILSON PRICHARD AND ODD- HELGE FJELDSTAD. In this book, Dr Jibao articulated tax systems with specific focus on formal laws, institutions and the experiences of tax payers and tax collectors. Dr. Jibao is widely travelled and has done quite some training with esteemed organizations like the IMF in Washington DC, Chr. Michelsen institute in Norway, OECD in France, the ministry of Commerce Beijing, African Tax Institute in South Africa, Kenya, Nigeria and others.
Dr. Samuel S. Jibao has increased revenue collection from an epileptic 12% to 14% in one year. All targets set for the institution by the government of Sierra Leone and the IMF were all exceeded. Dr Samuel Jibao is an administrative expert with impeccable methods to proving leadership to public institutions. He has not just changed the vibe around a rather drowsy institution but has also restored Integrity thereby increasing public confidence and international goodwill. He has successfully situated the NRA as one of the most competent public institutions in the Country. In a very short time, he has filled over 70% of senior management positions which was non-existent before he took oversight of the institutions. He has re-established the damaged relationship between the NRA and its supervisory ministry- the Ministry of Finance, strengthened collaboration with Anti-Corruption Commission, Directorate of the CIO, NATCOM, and now working on MOUs with NCRA, FIU, NMA, NASSIT etc. He has successfully commenced the revenue enhancement projects that will completely overhaul revenue collection in Sierra Leone. When completed, the Integrated Tax Administration System (ITAS) and the Electronics Cash Register (ECR) and the ASYCUDAWORLD will forever change the tax systems in Sierra Leone. He is married to Mrs Bintu Monica Nyanda Jibao with four Children. They live in Freetown Sierra Leone.
Because of his professional approach to revenue collection,
70 | African Leadership | September 2019
Business & Economy
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