• African Green Revolution Forum 2012
African Economies Capture World Attention
August 1, 2012
Young men and women chat along the glittering corridors of the sprawling shopping complex. With state-of-the-art mobile communication gadgets in hand, they go in and out of the mall’s 65 shops, filling shopping bags with expensive items. There is a large and well-equipped children’s playground at the back. Fully air-conditioned, the mall has 20,000 square metres of retail space, a theatre, restaurants, bars and parking for 900 cars. Welcome to the Accra Mall in Ghana, one of West Africa’s best — and comparable to any mall in the world.
In Ghana, as in many other African countries, young people are living out the continent’s economic growth. They are educated and relatively well-off, as seen in their cars, dress and homes. Ghana’s economy grew by an impressive 14.4 per cent in 2011, while many African economies are expected to be among the world’s fastest-growing in 2012, according to the World Bank. Ghana, Liberia, Nigeria, Ethiopia, the Democratic Republic of the Congo and others will lead the charge.
Undoubtedly Africa is still bedevilled by poverty, with half of its people living on less than $2 a day. However, its economic growth over the past decade has been striking.
A hopeful continent
“There is a new story emerging out of Africa: a story of growth, progress, potential and profitability,” reports Ernst & Young, a US-based business consulting company. Johnnie Carson, the US secretary of state for African affairs, adds: “Africa represents the next global economic frontier.” Investors had better be aware, advises Mr. Carson, who recently led a US trade delegation to Mozambique, Tanzania, Ghana and Nigeria. China’s trade with Africa reached $160 billion in 2011, making the continent one of its largest trading partners.
Ten years earlier, in 2000, The Economist saw no reason for hope. It pronounced Africa “the hopeless continent,” noting problems that included a bloody civil war in Sierra Leone, famine in Ethiopia and political conflict in Zimbabwe. But last December, the London magazine reconsidered: “Since The Economist regrettably labelled Africa ‘the hopeless continent’ a decade ago, a profound change has taken hold.” Today “the sun shines bright … the continent’s impressive growth looks likely to continue.”
Africa’s overall economic indicators have been remarkable. Over the past decade, Africa’s trade with the rest of the world has increased by more than 200 per cent, annual inflation has averaged only 8 per cent and foreign debt has decreased by 25 per cent. Foreign direct investment (FDI) grew by 27 per cent in 2011 alone.
Even though projections for overall growth in 2012 have been revised downward due to the political crisis in North Africa, Africa’s economy will still grow by 4.2 per cent, according to a UN report in June. Sub-Saharan African economies will grow at more than 5 per cent, notes the International Monetary Fund (IMF). In addition, there are currently more than 600 million mobile-phone users on the continent, while increasing literacy and improving skills have resulted in a 3 per cent growth in productivity.
Most foreign investors are still cautious about Africa, particularly because of security and infrastructure problems. But there is a steady increase in intra-African investment, which in 2011 accounted for about 17 per cent of total FDI, according to Ernst & Young. African entrepreneurs are reaping the benefits. The world’s richest black person used to be the US talk show icon Oprah Winfrey, worth $3 billion. Today, Aliko Dangote of Nigeria, referred to by Forbes magazine as a “commodities titan,” has amassed more than $10 billion.
Several factors make Africa an investor’s dreamland. McKinsey Global Institute, a think tank, writes, “The rate of return on foreign investment is higher in Africa than in any other developing region.”
Africa’s economic growth is driven by a number of factors, including an end to many armed conflicts, abundant natural resources and economic reforms that have promoted a better business climate.
More political stability is lubricating the continent’s economic engine. The UN Economic Commission for Africa (ECA) in 2005 linked democracy to economic growth. “Good governance is central to improving economic performance and promoting economic progress in Africa,” argued Abdoulie Janneh, the ECA executive secretary at the time.
Another important factor is accelerating urbanization. While it may strain social services in the cities, it has also led to an increase in urban consumers. More than 40 per cent of Africa’s population now lives in cities, and by 2030 “Africa’s top 18 cities will have a combined spending power of $1.3 trillion,” McKinsey projects. The Wall Street Journal reports that Africa’s middle class, currently numbering 60 million, will reach 100 million by 2015.
Still a long way to go
Africa’s current economic indicators may appear upbeat, but analysts say it is not yet time to celebrate. “I’ll be cautioning against excessive exuberance,” says Donald Kaberuka, president of the Africa Development Bank (AfDB). “A sustained slowdown in advanced countries will dampen demand for Africa’s exports,” adds Christine Lagarde, managing director of the IMF. Europe accounts for more than half of Africa’s external trade, and tourism could also suffer as fewer Europeans come to Africa, denting economies — like those in Kenya, Tanzania and Egypt — that rely heavily on tourism.
The South African central bank also warned in May that the crisis in Europe, which consumes 25 per cent of South Africa’s exports, poses huge risks. And adverse effects on Africa’s largest economy will have devastating consequences for neighbouring economies.
Another flashpoint is the resurgence of political crises. Due to the Arab Spring, economic growth in North Africa nose-dived to just 0.5 per cent in 2011. Recent coups in Mali and Guinea-Bissau could have wider economic repercussions. “Mali was scoring very well, now we are back to square one,” says Mthuli Ncube, the AfDB’s chief economist. Ethiopia, Kenya, Uganda and other countries are militarily engaged in Somalia, which may slow their economies. And Nigeria is grappling with Boko Haram, a terrorist sect in the north of that country.
Africa also faces other headwinds. The 2011 Africa Economic Report
of the ECA and African Union warned of Africa’s “jobless recovery,” noting that investors are concentrating on the extractive sector, particularly oil, gold and diamonds, which produces few jobs.
Another report, the African Economic Outlook 2012
(produced by the AfDB, ECA, Organization for Economic Cooperation and Development and UN Development Programme) reinforces concern about unemployment, adding that about 60 per cent of Africa’s unemployed are aged 15 to 24 and about half are women. In May, UNDP raised an alarm over food insecurity in sub-Saharan Africa, a quarter of whose 856 million people are undernourished.
Talk of a rising African middle class is hasty, the AfDB argues. Defined loosely as those who live on $2 or more a day, most “middle-class” Africans have daily expenditures of no more than $4, notes the bank. Potential economic shocks could easily throw many families into poverty, below the $2 threshold. High income inequality also clouds the picture. In 2008, for example, just 100,000 of Africa’s 1 billion people had a total net worth of $800 billion, equivalent to 60 per cent of the continent’s gross domestic product.
Despite such hurdles, Africa’s economies do not seem set to slow down. Ernst & Young insists that this “story has to be told more confidently and consistently.” But equally important is the need to ensure that the continent’s economic growth also creates jobs and helps rescue millions from poverty.
A Right to Land
Property rights are proving to be a solid foundation for economic empowerment for individuals, corporations and nations, and a potential solution to shore up food security in developing countries. International guidelines adopted earlier this year address this issue.
New international guidelines adopted earlier this year are expected to pave the way for “landowners” to establish clearer rights to land and other resources in developing countries. That seemingly simple act—multiplied many times over in countries across the globe—could have profound consequences for the economies of developing countries, and reverse the trend of speculators snatching land without permission from the people who have historically considered it their own.
Land grabbing, as it is often called, happens every day in the developing world where weak laws and policies allow businesses and governments—through naiveté or outright greed—to latch on to property that belongs to someone else, and to sell or lease it to the highest bidder.
Adopted in May by the U.N. Committee on World Food Security, the 35-page document sets out principles to guide countries in designing and implementing laws that govern property rights over land, fisheries and forests for agricultural and other uses.
As it is officially known, the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security is designed “so that both investors can invest with some kind of certainty that their investments will be secure and, at the same time, those people who hold the resources or the assets—the people who have the land in the countries where we work—will also have some certainty that they will be able to benefit from the investments that are made,” says Gregory Myers, USAID’s division chief for land tenure and property rights and chair of the negotiations for the guidelines.
USAID is keenly interested in the guidelines, not only because of the inherent economic benefits of secure property rights for individuals and communities, but because of what that can mean for the Feed the Future initiative, the U.S. Government’s effort to ramp up agricultural development in food-insecure countries.
“In many ways, that’s really at the heart of our (Feed the Future) strategy—on one hand encouraging the private sector, and on the other hand supporting smallholder farmers,” Myers said.
“Between 800 million and a billion people go to bed hungry at night, and the number is growing,” he explained. “Clearly, we need to do something to promote agriculture … but that means there has to be investment in agriculture. So the bottom line is that we have to find a way to bring private-sector investment into this equation. And the only way that’s going to happen sustainably and in a way that’s not going to lead to a lot of violence or conflict is that we’re going to have to address the issue of property rights.”
Land Deals on the Rise
Today, estimates of land ac-quired for investment in developing countries are between 50 million hectares in a World Bank study and 250 million hectares from civil society organization estimates, both reported in 2011. The range is so large, in part, because many countries where this is happening have dysfunctional record-keeping systems and don’t recognize informal property rights.
An International Land Coalition study published in late 2011 concluded that, of the land deals researchers could track, 78 percent were purchased for agriculture production—mostly for biofuels, not food.
One of the most high-profile and controversial land acquisitions happened in Madagascar when a South Korean company announced it would lease 1.3 million hectares of land to grow products it would export back home. The scheme played a role in the overthrow of the Ravalomanana administration in 2009; his successor canceled the land deal, which would have tied up about half of Madagascar’s arable land for 99 years.
Organizations that monitor the land deals say smaller acquisitions pitting Goliath companies against David landowners occur regularly. There are also disputes that pit legitimate landowners against each other.
“People sell one land to two or three persons and nothing happens to them,” said Banny Minely, who lives in the town of Sedekan in Liberia, one of the places where USAID is helping landowners formalize their property rights. “The Government of Liberia should institute punitive measures to curtail double land sale. People should know their land and property rights.”
Minely says the boundary disputes are many: “Clans versus clans, towns versus towns, and individuals versus individuals. These disputes in some instances turn violent and people die in the process.”
Adds Myers: “It’s one of those human rights issues that can be just as (highly) charged as other kinds of human rights issues—where people disappear all the time when they try to claim their land rights in many of the countries where we’re working.”
Land Grabbing, 21st Century Style
“It’s a phenomenon that’s been going on since time immemorial. But the size, the scale and the quickness with which all this took place was extraordinary,” Myers said of land acquisitions that occurred over the last few years.
It began with the global recession in 2007 and 2008. The economy tanked, leaving many investors broke. For those with substantial sums left to spend, the question became where to invest with the least amount of risk—and the most potential for profit.
“In those years, when the equity markets were bottoming and people were essentially looking for new investment opportunities, a lot of businesses around the world—private companies, sovereign wealth funds—started to look for investments in hard assets, which would be land or agriculture, forests, other hard commodities,” Myers said.
Africa was the epicenter of such buys. The practice became known as land grabbing, a retro name that often led to embarrassment for any companies whose purchase or lease ended up in the press. While some businesses and wealth funds were indeed looking to score big at the expense of small landowners, others found themselves inadvertently at odds with land-rights issues.
“There are also many good companies—and many of them are American—which are caught in this trap,” Myers said, “because they go to a country like Ethiopia or Tanzania or Madagascar or Mozambique or Ghana, and they say, ‘We would like to invest in agriculture and we would like to lease land.’ And the government of that country says, ‘Yes, we own the land, and here’s free land that you can invest in.’
“So the company believes that the government has the rights. But that completely ignores the fact of what’s happening on the ground, that there are people living there who do indeed have those rights to that land.”
At the same time these large-scale land purchases were taking place, several countries were facing food shortages that led to protests and rioting. A few countries began limiting sales within their borders since they needed the land to feed their own people. “And that,” Myers said, “starts to drive up the price of land, which means that more speculators want to come in and try to acquire access to land or to purchase or to lease land.”
The losers in all of this: the residents with no property rights.
Guidelines Point to Solutions
The new guidelines are designed to ensure that doesn’t happen. They took almost three years to complete. The negotiations, at times contentious, involved 96 governments and a number of other groups representing civil society and NGOs, the private sector and farmers’ associations.
Myers calls the guidelines flexible and broad enough to satisfy interests from different parts of the world. Gaining consensus was not easy, but the end result was applauded by several organizations as fair and equitable.
“I think the outcome is that the guidelines created both a technical and a political platform for countries to be able to address these issues in a way which they have not been able to do so in the past,” he said.
Now comes the time to put the guidelines, which are voluntary, into practice. That means urging countries to modify their land-tenure and property-rights laws and to put systems in place to measure and record rights to property. USAID also plans to help countries recognize the financial benefits that securing land rights can bring—for state coffers as well as for their citizens and potential investors.
USAID already has spent $200 million in the past five years on land-tenure issues and hopes to put the new guidelines into practice in at least six countries. “We know in our own programs that there are significant productivity jumps when men and women have secured rights to property,” Myers said.
In Ethiopia, for example, after a USAID program helped people there secure property rights, productivity—as measured by the Ethiopian Government—increased 19 percent between 2005 and 2008. A World Bank assessment of the same program found a 40 percent increase. The result: More people, particularly women, sell more crops and keep more of the profits.
“I think at the end of the day, it creates a more vibrant economic environment where local populations are able to secure a better return on their own investments. And that means that local populations are then contributing to the economic growth of the country,” Myers said.
On the Ground
In Ethiopia, success is also measured in progress for women, who are often marginalized in many aspects of society, including land ownership. That is slowly changing. One older woman told Myers during a recent visit that she was leasing her property to a man and believed him when he said she owned only a quarter hectare. After USAID’s land-tenure efforts, which included measuring her property, revealed she actually owned 1 hectare, the woman started charging the man four times as much. She used the extra money to send a daughter to school.
“And when we talked to other people who had received certificates, we started to hear similar stories about how now they had really much greater economic empowerment as a result of just having information about what they had rights to,” Myers said.
In Liberia, USAID began conducting an inventory of tribal certificates in March, an early step in the registration process, as the country works to reform its land ownership rules. Tim Fella, a USAID land tenure and conflict adviser, explained that traditionally, people would obtain a tribal certificate as a first step in acquiring a property deed, but would not complete the registration process with the government. Once the extent of the tribal certificates is known, the country can better decide how they will factor into its new land tenure laws.
Melvin Pouh, town chief of Sedeken, in Liberia, applauds the government’s and USAID’s efforts to help put land-rights issues in order.
“Our grandparents did not know what a tribal certificate is and, therefore, they were not interested to secure the land. That is why we have these companies taking over our land,” he said, referring to a nearby rubber plant. “All our people knew was that the land is for them. They were born here and died here—no interference until these companies came.”
He said the people in his community are suffering as a result of having nowhere to plant food.
In South Sudan, communities are also organizing around the issue of land rights, said Tidiane Ngaido, chief of party for USAID’s Sudan Rural Land Governance Project. Many residents are clear on the boundaries of their town and individual properties. But disputes are inevitable as returnees find it difficult to reclaim land being occupied by others.
“The state of Jonglei, which was composed of four great communities—Bor, Pibor, Akobo and Pangak—is now divided into 11 counties,” he said. “This process of decentralization will foster many disputes until the various communities agree on their respective boundaries and the rules and regulations governing access and use of these resources.”
Ngaido acknowledges that, in the long term, South Sudan will need public and private investments to exploit its natural resources. The Comprehensive Peace Agreement signed in 2005 that helped usher in the existence of the new country also called for community and individual land registration as well as for community consultation and compensation when land is to be acquired.
“These two provisions will ensure peace and security, and enable communities to be involved in the negotiation processes and receive compensation for the use of their resources,” Ngaido said. “This will facilitate access to land for investors, and preclude many of the problems that they are facing for accessing land.”
Sustainable Investments Profit Everyone
Myers, who has worked on land tenure issues for more than two decades, says the new guidelines should create the conditions for smart, sustainable investments that profit everyone with a stake in the deal.
“We all firmly believe that a fundamental building block of any democracy or market-based economy is the right to property,” he said. “If you don’t have the right to property, you cannot be a member of the economy. You can’t participate in a broader economy or a market system. And you don’t have a say in the political process.
“I believe that, as countries move forward toward recognizing or toward addressing this issue, this will reduce the kinds and the types of investments which we need to make in development, because people will have a greater political standing and greater economic opportunities to be able to do the kinds of things that you and I do here in the United States: to make our own individual decisions about how we best deem to manage our lives, how we want to engage in political decisions or political discourse, and how we want to engage in economic opportunities that will benefit ourselves and our families.”
Water: Prepare to Face Shocks
London, England - August 1, 2012
Is the world ready to face water shocks? For water shocks are certainly coming; water shocks, in fact, are already here.
A meeting of ecologists, policymakers and water professionals gathered recently at London’s Chatham House to contemplate the prospect. Asia, they heard, was the continent where problems were already most acute.
Pavel Kabat of Vienna’s Institute for Applied Systems Analysis told IRIN: “We have been worried about water in other parts of the world - it’s still a very important issue in Africa - but we were forgetting that the because of the economic growth and the population growth, the surge in food demand will come in Asia. Already now the fresh water for agriculture is being consumed at very high rates. Asia is the hotspot… and I would say that the first big issues will have to be faced by 2020 or 2030.”
Seventy percent of the global use of water is for agricultural purposes, and that is where the crisis is likely to show itself. “In India, 75 percent of all irrigation water comes from groundwater,” says Kabat, “and we are kind of assuming that it will stay like this.” But he points to Europe and the USA, which have seen groundwater levels in some areas dropping by as much as five metres a year, and laws have had to be introduced to restrict the lifting of groundwater for agriculture; the same thing, he says could happen in Asia.
There is also the issue of water quality. With reduced flows of fresh water from Asia’s great rivers reaching the coast, and with sea levels rising, the Brahmaputra, Ganges and Mekong deltas are suffering increasing salt water intrusion, with salinity in some places reaching levels at which normal crops will not grow. Some coastal areas of Bangladesh are already unfarmable.
Developed countries are certainly not immune from the impending problems. In some areas of the USA ancient aquifers have been tapped to allow agriculture in naturally desert areas. This “fossil water” is now depleting fast and not able to be replenished. One speaker told the meeting he could see areas where there would soon be no more groundwater, which means no more agriculture, and, since people only settled there because they could grow irrigated crops, no more viability as a populated area - a prospect so alarming that, he said, “it causes policymakers not to want to tackle that problem.”
Across the border in Mexico, it is the capital city which is threatened by an unsustainable situation. Already Mexico City has a serious water deficit and is facing a drop in rainfall of something like 30 percent. The situation has been made worse by the fact that Mexico subsidizes public services in the capital; water is cheaper there than in the countryside, and the population is growing very fast. And once consumers are used to subsidies it becomes very hard to introduce a realistic price.
Polioptro Martinez Austria, director of the Mexican Institute of Hydrology, says water managers cannot solve this problem on their own. “Today there are huge subsidies for water in the area,” he told IRIN, “and as a result, the aquifers are overexploited, and the public awareness of water use is not enough to save water. I believe we need a new policy of urban development if we are going to solve the water problem.”
In India and Bangladesh, the arid areas of the USA and Mexico City, the impression is of a dreadful inevitability, like a slow-motion car crash. And politicians are not good at dealing with this kind of slow onset event. “We know it has to come,” says Kabat, “but there is a general lack of ability of governments globally to look beyond the next election period, I am sorry to say. We have a lot of studies, as scientists, of the scenarios for the next 10, 20, 30 years, but it is simply too far ahead for politicians to act.”
The Chatham House meeting did offer some policy tools that could address water issues. There was discussion of tariffs and the creation of water markets, where water rights can be bought, sold and leased.
A market of that kind is now working quite successfully in Australia’s Murray Darling Basin. There the government “unbundled” land rights from water rights, so that just having water on your land, in the form of a river or groundwater, no longer gives you automatic rights to use it. And allocated water rights can be sold, permanently or on a temporary basis. During the recent severe drought, the result was that farmers stopped growing thirsty but lower-value crops like rice.
They sold their water allocations to growers of higher value, less demanding crops like grapes, and the income they received helped them through the drought period until they could resume their normal farming.
A discussion of tariffs revealed that many countries still do not charge for water at all, and some give a kind of buy-in-bulk discount, so that the more water you use, the cheaper the unit cost.
China, which has traditionally sold water very cheaply, is starting to charge more, and has begun moving to so-called “increasing block tariffs” where water gets increasingly expensive the more you use. With different cities currently using different systems, a recent comparative study was able to show that tariffs did have an effect. Beijing, which now has higher prices and a sharply rising tariff, showed a real drop in consumption, while usage is still rising in some other cities.
At the international level there was some discussion of the fact that water was “everywhere and nowhere”, affecting many other agendas, but with no UN agency dealing with water alone, perhaps reflecting the fact that, while the world has one climate and one atmosphere, it has many separate systems of river basins and aquifers, some of which are severely depleted, while others are well supplied.
But water systems do cut across political boundaries and as water shortages increase, the use of the water will have to be negotiated by both sides. Tariq Karim, Bangladesh’s ambassador in Delhi, is a veteran in negotiating water-sharing agreements with India, but he told IRIN that there had to be a change of approach. “When you talk about sharing,” he said, “you are talking about dividing something up, and whenever you come to dividing up, it’s like dividing the spoils. There is going to be contention. And you can’t physically divide a river, and you can’t manage it in segments. It makes better sense if you talk in terms of managing the river together.
“In Bangladesh our land space is not increasing but our population is, and for 80 percent of our population their source of livelihood is agricultural, so for us this is absolutely crucial.”
FOCAC V Brings Billions More
August 1, 2012
Talk of a 'new type of partnership' was overblown, but Beijing pledged $20 bn. and took first steps toward improving corporate and environmental regulations.
With a crucial leadership handover at the end of the year and growing domestic economic concerns, Beijing hosted the Fifth Forum on China-Africa Cooperation on 19-20 July with the usual dash of multibillion-dollar promises.
Foreign and finance ministers from more than 50 African countries attended, but only a handful of heads of state and government were present, notably South Africa's President Jacob Zuma, Côte d'Ivoire's President Alassane Dramane Ouattara and Kenya's Prime Minister Raila Odinga. However, FOCAC V won a different sort of feather in its cap in the presence of the United Nations Secretary General, Ban Ki-moon.
President Hu Jintao outlined a set of five new pledges to Africa. The first was on finance and includes US$20 billion in assistance to the continent, double the amount pledged three years ago in Sharm el Sheikh, Egypt, in 2009 (AAC Vol 3 No 1, FOCAC meets expectations, FOCAC 2009 brings more promises) . The theme of this year's meeting - to 'build on past achievements and open up new prospects for the new type of China-Africa strategic partnership' - sounded a little tired. Yet, with little competition, China finds it hard to outdo itself every three years at the FOCAC meetings. The politicians continued to proclaim that this FOCAC would bring new initiatives and a deeper strategic partnership, but that did not happen. Ahead of the summit, Zambia's Foreign Minister Given Lubinda advised African countries to form a united front instead of competing separately for attention from Beijing. Despite such calls for unity, the 2012 Beijing Declaration showed no signs of an African united front.
Although no formal audit exists on the fulfilment of China's pledges to Africa at FOCAC, the general consensus is that they have been delivered. According to President Hu, the Chinese government has cumulatively built more than 100 schools, 30 hospitals, 30 anti-malaria centres and 20 agricultural technology demonstration centres in Africa. Beijing has also successfully rolled out US$15 billion in preferential lending, trained close to 40,000 African personnel in various sectors and provided more than 20,000 scholarships to students from African countries. But analysts still argue that FOCAC will be of only limited effectiveness if the institution does not include a monitoring body or engagement and follow-up from the African counterparts.
Africa's largest financier
Chinese loans to Africa do not always count as overseas development assistance because the terms are not strictly concessional, and it is unclear how much of the new loans will contain a large enough grant element to count as such. Nonetheless, in addition to becoming Africa's largest trading partner, these loans will make China Africa's largest financier, ahead of the World Bank and International Monetary Fund. Hu said the move was designed to stop 'the big bullying the small, the strong domineering over the weak and the rich oppressing the poor'.
The loans will go towards supporting infrastructure, manufacturing and the development of small businesses. Yet China Export-Import Bank, the usual instrument for rolling out the Chinese credits announced at FOCAC, is not a micro-financier and the bank's minimum loan amount is far in excess of what most small African businesses can hope to manage, so this presumably refers to Chinese small businesses.
The second pledge this year is training. Beijing will launch an 'African Talents Programme' to train 30,000 people in various sectors and set up vocational training centres. It will also offer 18,000 government scholarships, send 1,500 medical personnel to Africa and continue with the 'Brightness Campaign', which provides free cataract treatment to African patients.
The third pledge is to build infrastructure partnerships. The fourth is people-to-people exchanges. These so-called 'friendship actions' promote exchanges between Chinese and African journalists and researchers, among others. The final pledge relates to security, led by the Initiative on China-Africa Cooperative Partnership for Peace and Security.
While China has maintained its focus on African infrastructure, Chinese Commerce Minister Chen Deming announced that such projects would now be approached from a regional perspective, rather than bilaterally as has been the case. China usually focuses on bilateral ties, leaving Japan to take the lead on multilateral forms of engagement.
Regional integration has been a buzzword in Africa for more than a decade now, but programmes such as the New Partnership for African Development have so far achieved little in advancing this agenda. With China's weight and money behind such initiatives, perhaps more can be done. Although African diplomats universally praised China's moves, the businessman and analyst A.L. Kitenge Lubanda of Congo-Kinshasa's Synergy-Group suggested that the promise to double loans is a small measure and that Beijing could afford to do much more.
Several new deals that will boost China-Africa trade were developed outside of the confines of FOCAC. China Development Bank officials announced in early July that the China-Africa Development Fund, which encourages smaller Chinese companies to invest in Africa, would have an additional $2 bn. to spend after investing its first $1 bn.
Africa's wish list
Before the meeting, Senegalese China-Africa specialist Adama Gueye revealed that African diplomats were disappointed by their inability to influence Beijing's agenda. Establishing more processing and industrial capacity in Africa has long been on the wish list for African policymakers. At the 2012 Africa Mining Congress in July, the China Mining United Fund and Ruukki South Africa announced a private equity joint venture that would target value-added projects in Africa.
Total China-Africa trade for 2011 was $166.3 bn., a three-fold increase since 2006. Despite the worsening financial climate (see Box, Big promises abroad, more worries at home), China has maintained its status as the continent's largest trading partner for the third consecutive year. Bilateral trade is expected to reach $180 bn. by December. Some 2,000 Chinese companies have dealings in Africa, with investments totalling $14.7 bn., according to Chinese Foreign Minister Yang Jiechi.
The deals signed on the sidelines of the conference were disappointing in volume this year, compared to previous FOCAC sessions, and amounted to only $341 million. Chinese investors in Africa have had a rough ride for the last three years, which perhaps explains their uncustomary lack of enthusiasm. The political turmoil in Libya and Egypt took them by surprise: an estimated $4 bn. in deals were suspended in Libya alone.
The need to effectively assess country risk and to safeguard the public image of Chinese companies in Africa has not gone unnoticed by Beijing. A declaration on corporate social responsibility was given at FOCAC's closing ceremony. The code of conduct, which does not appear to have any means to punish those who violate it, was endorsed by entities such as the China Council for the Promotion of International Trade, the China-Africa Development Fund and China Development Bank. They pledged inter alia to respect local customs, pay more tax and protect the environment. China Nonferrous Metal Mining, the largest Chinese investor in Zambia's Copperbelt, was also a signatory. The company's operations have been plagued by demonstrations against poor wages, climaxing in 2010 when a Chinese mining boss shot and killed several rioting Zambian workers (AAC Vol 3 No 12, Shoot first, negotiate later). President Michael Chilufya Sata's election was in part due to his platform on growing anti-Chinese sentiment.
Remarkably, this tone found its way into official speeches. President Zuma reiterated Hu's inferences about Europe's colonial history in Africa. Interestingly, however, he also warned African countries against falling into the same trap with China, describing the trading model of Africa exchanging raw materials for manufactured Chinese imports as 'unsustainable' in the long run. This was unusually outspoken for the South African President and a veritable volte-face when compared to his frequent effusive praise for China-Africa relations (with which much of the rest of his address was admittedly peppered). His predecessor, former President Thabo Mbeki, and his brother, the well-known businessman Moeletsi Mbeki, have both made similar pronouncements to little effect. For years, Pretoria has failed to assert itself in relations with Beijing. In fact, despite heavy international criticism, South Africa has effectively worked in tandem with China at the UN Security Council.
South Africa will have the opportunity to exert significant influence on China-Africa relations in the next few years. FOCAC 2015 will be held in Johannesburg and South African Minister of International Relations and Cooperation Maite Nkoana-Mashabane has assumed the FOCAC co-chairmanship. South Africa now also heads the African Union, with Nkosazana Dlamini-Zuma, President Zuma's ex-wife, assuming the chair from Gabon's Jean Ping. Dlamini-Zuma is likely to solicit support from China for the AU/NEPAD Presidential Infrastructure Champion Initiative, also currently chaired by South Africa. This will combine with the plan of the BRICS (Brazil, Russia, India, China and South Africa) to establish a development bank, which South African intends to direct towards African infrastructure.
Ultimately, the 2012 FOCAC was less about big numbers and more about consolidating a sustainable partnership and improving China's image in Africa. To that end, Beijing and several African diplomatic missions commissioned the World Wildlife Fund to draft proposals for incorporating the concept of 'green economy' into the China-Africa relationship. The move was well timed, as WWF released a report in late July highlighting the Asia-Africa links that threaten endangered species including rhinoceri, elephants and tigers. The invitation to a non-governmental organisation to participate in the main event was unprecedented.
Feeding the Future, Today
Washington, DC - July 27, 2012
From Guatemala to Ghana, Kenya to Tanzania, new food security projects are taking center stage around the world. Designed to raise yields, educate farmers, expand irrigation, and improve nutrition, these projects have more than just agriculture in common; they are all the result of the Feed the Future initiative.
Feed the Future is the product of a three year, $3.5 billion pledge by President Obama following the 2009 G-8 Summit. The intent has been to address global food insecurity using a country-driven approach aimed at creating sustainable agricultural development. Thus far that strategy has built on efforts begun under the Bush Administration and proven to be an effective way of combating the crippling effects of global hunger and its ability to undermine economic growth.
Tanzania is already demonstrating real results from U.S. investments. Last month’s Global Economic Statecraft day highlighted Uwawakuda, a collaborative farmers association whose membership is close to 1,000 and comprised of nearly fifty percent women. The group, with training and support from USAID, has expanded irrigation and cut production costs while more than tripling yields, all in the course of three years. In Kenya, USAID partnerships with Vodafone and TechnoServe are set to expand mobile money transfer systems to improve farmer’s access to market prices, credit, and transaction management.
New projects in Malawi and Guatemala were just announced as well, underscoring the global value and appeal of Feed the Future. Guatemala, which currently has the highest chronic malnutrition rate in Latin America and the fourth highest worldwide, is the target of a $32 million USAID cooperative agreement designed to improve access to health services and prevent malnutrition in infants. Meanwhile the U.S. African Development Program has identified the dairy sector in Malawi as having the potential for substantive increases in production and exports, and has subsequently announced a million dollar investment expected to generate over $3.5 million in new economic activity.
With over one billion hungry worldwide and 3.5 million nutrition related deaths among children less than five years old per year, these food security programs are addressing issues a growingly interconnected world cannot ignore. As USAID Administrator Dr. Rajiv Shah has noted, “Undernutrition robs the developing world of critical human capital and capacity, and undermines other development investments in health, education and economic growth.” As the United States continues to work toward a full economic recovery, it cannot afford to ignore the subversive effect hunger has on the global economy, security, and sustainable development worldwide.
Feed the Future Initiative Gives Boost to Kilimo Kwanza
Tanzania - July 28, 2012
Feed the Future Initiative was launched by Secretary of State, Hillary Clinton during her visit to Tanzania in June 2011. Feed the Future is the US government's global hunger and food security initiative that supports Tanzanian driven approaches to address the root causes of hunger and poverty.
The initiative is in alignment with the Comprehensive Africa Agriculture Development Programme. One of the key elements of Feed the Future is research and development.It did not come as a surprise to witness at the farewell programme for 58 Tanzanian students who will study agriculture, nutrition and related fields at Universities both in the country and abroad, since the US has always been supporting agriculture development among other things in the country since the time of independence.
In her testimony at the farewell party the US Alumni Speaker, Prof Susan Msola praised the US government for supporting teaching, research and extension services at Sokoine University of Agriculture in Morogoro.She is one of the highly respected alumni in the country who had pursued studies in the US from 1982 to 1988. She said that there were 22 projects that were supported by USAID and other US organisation.
In his welcoming remarks at the farewell programme at the US embassy in Dar es Salaam, the Chief of Party Innovative Agriculture Research Initiative, Mr Dave Kraybill said that the objective of the project was to support PhD and Masters degree for 2013-2014.
He added that the project also includes collaborative research on agriculture nutrition. It further covers capacity building at Sokoine University of Agriculture in managerial and administrative system strengthening.
Another area of the project is strengthening Tanzania Research in the teaching institutions..Speaking at the farewell programme hosted by the US ambassador to Tanzania, Mr Alfonso Lenhardt said that the training opportunities have laid the foundation for the agriculture development in the country for generations.
"This is the second batch of trainees sponsored by Feed the Future. Over a five-year period, Feed the future will sponsor 120 Tanzanians for postgraduate studies in agricultural and nutrition sciences," he said.The ambassador said that currently there are six Tanzanian students pursuing either Masters or Doctoral degrees in the US.
"Of the 58 Students sponsored this year, 29 of them will pursue Masters and PhD degrees in agriculture and nutritional sciences at six American universities," he said.These Universities are Ohio State University, Michigan State University, Virginia Tech, Tuskegee University, University of Florida, and Iowa State University.
However nineteen trainees will pursue Bachelors and Masters degrees at Sokoine University of Agriculture, and ten trainees will pursue Masters and PhD degrees at African Universities outside Tanzania.He said that this will only be achieved if the students show their commitment in pursuing their studies.
"In order for the country to achieve agriculture development leading to economic development, the country requires strong leadership, dedication and innovation," he said."But most importantly we need all of you to take this great educational opportunity and come back to Tanzania to accelerate its agricultural revolution," said the ambassador.
"It is upon you trainees to take this great educational opportunity to accelerate development," he said.Even former US president Abraham Lincoln had recognised the role of farmers during the civil war period.The envoy added that the late president Nyerere had also recognised the importance of agriculture and moved to establish the Sokoine college of Agriculture in Morogoro Region which later was transformed to Sokoine University of Agriculture.
He said that building capacity in agriculture was the cornerstone in bring economic development in the country. The ambassador said that the climate change conditions and urbanisation has increased the demand for food supply in the country.He cited the current statistics showing that 33 percent of the country's population was leaving below the poverty line.
He also added that there was physical and mental stunt due to malnutrition to over 38 percent of children below five years.But he explained that Tanzania had the potential to feed itself and the rest of Africa. "There is no doubt that Tanzania will change and become the bread basket for Africa," he said, adding that the trainees should strive to help the country achieve this objective after completion of their studies.
Speaking on the US lead global partnership that was emphasized by the G8 meeting, the ambassador said that President Obama and President Kikwete had endorsed comprehensive framework and new Alliance for Food Security. The alliance intends to lift more than 50 million Africans from poverty.
Speaking at the farewell the Deputy Permanent Secretary, Eng Mbogo Futakamba underscored the importance of agriculture describing it as the mainstay for the countries economy.He said that if the country wants to successfully undertake agriculture it should embark on research.
He also said that less than one percent of land was used for irrigation despite the country having a vast potential land for irrigation.He also underscored the importance of training, saying that the opportunities given to the trainees will enhance self-reliance in agriculture and make the country secured in terms of food.The PS further said that Tanzania was geared towards achieving food security, improving citizens' lives and bringing a comprehensive and modernised agriculture development.
He urged the students to embark on viable research topics that can make them make interventions in agriculture development."Through students interventions along those relevant research topics the country can be transformed into a great bread basket in the region. He also said that the government appreciates the role of US in Sokoine University.
He said that the university was involved in intensification of rice, which needs a lot of understanding and technology."The local production is not impressive right now but we can use alternative methods. He advised the students to be good ambassadors for Tanzania.
"You will need to work diligently. It requires that you take a new dimension in your life. It is upon you to support agriculture by working hard to attain the Millennium Development Goals.In his remarks the Vice Chancellor of Sokoine University of Agriculture, Prof Gerald Monela expressed appreciations to the Ohio State University for its immense support for many years.
"We SUA and the Ministry of Agriculture are the beneficiaries of many US programmes.This, he said, includes postgraduate studies in agriculture and nutrition sciences.He said that the support will go a long way to enable SUA and the Ministry to implement the National Agriculture development in the country.
SUA became a college in 1965 an later it was transformed into a full agriculture University.The Professor further said that agriculture was the mainstay of the country's economy. He added that it has continued to play a greater role in the country since it employs 80 percent of the people."Half of the national income comes from agriculture. It is also a source of food and income which constitute an agrarian society," he said.
In the economy agriculture plays a pivotal role in terms of providing raw materials to industries.But the challenges are many including use of crude tools in agriculture production, he said. He further said that agriculture was still predominantly an occupation for women.Some of the constraints include drought and land degradation which has continued to hamper high productivity which is a prerequisite for development to take place.
He said that through such training opportunities it will help the country to adopting appropriate technology. "This will help us to eradicate poverty and hunger," he stressed."We can only achieve this agriculture development through agriculture education improving efficiency," he said .
Once this is achieved the delivery of extension services will also improve as well as research undertakings, said the Professor.
He also cautioned the trainees not to take up jobs and attempt to remain in the foreign countries where they are going for studying upon completion of their training."You should return home and help in supporting our major policy (Kilimo Kwanza) Agriculture First Initiative.
But all the speakers at the function advised the selected trainees who were chosen on various merits to remain focused while in the US and other universities in Africa and Tanzania pursuing their studies.They all urged them to select research topics that were useful to their countries. "Agriculture production is still low. I believe and hope that your training will help the country improve values chains," one of the professors said.
Speaking on the etiquettes of US universities Prof Msola said that US professors are very friendly and supportive, it all depends on how one conducts himself or herself."You need to make appointments when you want to contact them and keep to time," she said.She also reminded the trainees to be focused and follow the rules and regulations of the US.
"American people are strict when it comes to abiding by the rules and regulations," she remarked.She also said that the US has all the entertainments. However she told them to strike a balance in their social life and academic undertakings.Prof Msola also praised the education system in the US.
"Quality education has made us to be recognised globally. Because of the quality education it has been easy to obtain grants to help farmers in the country to improve their lives," she said.
Should Feed the Future Be the New PEPFAR?
Washington, DC - July 27, 2012
As we have heard during this week’s international conference in Washington, D.C., there has been wondrous progress on the AIDS treatment front since President George W. Bush launched the President’s Emergency Plan for AIDS Relief (PEPFAR)
nearly a decade ago.
At that time, there were only about 50,000 people in sub-Saharan Africa receiving the life-saving drug therapy. By last year, thanks to the work of a global alliance attacking AIDS, that number had soared to an estimated 6.2 million. There is much work still to be done; barely half the people in need of treatment in Africa are receiving it, and there were still more than 300,000 pediatric HIV infections last year. But the progress spurred by PEPFAR over the past decade is a remarkable achievement; it stands as a cornerstone of America’s global health programs and a pillar of the nation’s foreign policy.
Now there is another presidential initiative that holds the potential of achieving another set of remarkable results in Africa. President Barack Obama’s Feed the Future initiative seeks to end hunger through increasing investment in agricultural development, particularly for the vast legion of smallholder farmers in sub-Saharan Africa.
Because of the neglect of agricultural development over the past four decades, these farmers are woefully behind, producing only one-tenth to one-quarter the yields of farmers in the US and elsewhere in the rich world. They are often unable to grow enough to feed their families throughout the year. As a result, they and their children endure the misery of an annual hunger season. Hungry farmers –- what a horrible oxymoron.
Feed the Future aims to reverse this neglect by boosting investment in agricultural development on a wide front –- African governments and donor countries, the private sector and philanthropic foundations and humanitarian agencies -– and across a broad range of endeavors, from seed research to crop storage. Promises to do so have been made from the G8 countries and from the G20 assembly and from a chorus of CEOs. President Obama has called for an “all hands on deck” effort.
Particularly critical is fostering smallholder farmer access to the essential elements of farming that for so long have been beyond their reach: better quality seeds, soil nutrients, training, financing, improved storage facilities. Just as access to treatment has been critical in the fight against AIDS, so is access to these basics of agriculture critical to conquering hunger. Just as with the “Lazarus effect” of AIDS medication, these farming innovations can transform lives from barely surviving to robustly thriving. ONE’s appropriately named Thrive campaign calls on African leaders, donor governments and the private sector to implement smart agriculture and nutrition plans that can move tens of millions of smallholder farm families out of extreme poverty and hunger.
Central to this movement is that Feed the Future and US leadership to end hunger through agricultural development become a cornerstone of American policy no matter who is in the White House or which party controls Congress. Here, PEPFAR’s path to a unity of purpose is instructive.
After President Bush announced his initiative in early 2003, it was embraced and authorized by Congress in an unusual display of bipartisan support. When the president signed into law the United States Leadership against HIV/AIDS, Tuberculosis and Malaria Act of 2003, it was hailed as the largest commitment by any nation to an international health initiative. In 2008, with another burst of political unity, PEPFAR was reauthorized by Congress. And the Obama administration has continued to make it a centerpiece of the nation’s development work.
Feed the Future is worthy of similar bipartisan support and unity of purpose. It can stand alongside PEPFAR as an example of what America does in the face of crisis and great need. There would be no political bickering over agricultural development spending, no calls from budget cutters (as can be heard now) to eliminate the program. It is that important to improving vast numbers of lives in the developing world. And it is that important to all our lives as well, as demands increase on the world food supply, be they from a growing global population or from extreme weather conditions ruining harvests from Indiana to India. It is very clear: If the smallholder farmers of Africa succeed, so might we all.
Then another international conference can convene in Washington to hail the progress on agricultural development: the number of rural families who moved from dire poverty, the decrease in stunting from malnutrition, the emergence of food powers in Africa. The last hunger season would finally be at hand.
Innovative Land Use Will Help Food Security During Drought and Heavy Rains
Ethiopia - July 31, 2012
Source: International Federation of Red Cross and Red Crescent Societies (Allafrica.com
The small town of Ebinat is at the heart of one of the most food insecure and drought prone areas in the Amhara region of northern Ethiopia. The majority of people in the surrounding villages and hamlets are at the mercy of increasingly erratic rainfall and survive largely through subsistence farming. For the last four decades a large part of the population of Ebinat has been chronically dependent on food aid.
The South Gondar branch of the Ethiopian Red Cross Society is currently working with the Netherlands Red Cross Society on a Food Security and Disaster Risk Reduction project in an agricultural area about an hour by car from Ebinat.
In this area, small clusters of villages comprising of houses built from sturdy Eucalyptus branches butt up against fields of sorghum, corn and teff, which is used to make Injera, the staple Ethiopian flatbread.
This area is hot and arid, and drought is significant and constant threat. Over the past 30 years, local farmers have started to notice a change in weather patterns with the dry season lasting for much longer than in the past. "Our key priority is to build up resilience to the impact of climate change and help our small scale farmers to be more self-sufficient," says Mulat Andargay, Project Coordinator for the ERCS South Gondar branch during a visit to one of the organization's water diversion and irrigation projects.
Using the latest technology, a sand dam has been built which allows water flowing under the earth to be collected and stored in a chamber. An irrigation channel which snakes and weaves across farm land for almost a kilometre is then used to channel the water from the collection chamber to irrigate the fields. "This is very important for us," one farmer told us. "Now we have much more water to irrigate our fields, and don't just rely on the rain, which means we can grow more water intensive crops such as onions, garlic and carrots, which we can then sell."
Replenishing the land with trees and crops is also an important aspect of the Ethiopian Red Cross Society's food security and resilience programme. In both North and South Gondar, tree nurseries have been created in which tree, cereal and animal fodder plants can be nurtured, protected and eventually transplanted into fertile land. The organization oversees a team of local workers who water, weed and prune the seedlings.
In the largest plant nursery in Ebinat, almost half a million seedlings have been grown so far, with olives, garlic and a wide variety of cereals amongst the 13 species. Almost half of the seedlings are taken for replanting elsewhere in a bid to counter the growing problem of deforestation. The remainder of the seedlings are given away for free to families who have prepared land for planting in advance.
A similar but smaller tree nursery has been established in the Senbetge village in North Gondar which currently relies on food aid for 60 per cent of the year. Helina Tsegaye, project co-ordinator for the Ethiopian Red Cross Society says: "One of the main aims of our food security project is to move people away from food aid dependency. Right now, local people are more concerned with the rainfall in Canada rather than here! So we're trying to create more self-reliance by repopulating the trees and crops."
Deforestation and soil erosion are also major challenges to the those living around Ebinat and many other parts of Ethiopia. In order to counter this, the Red Cross branch in South Gondar has brought together local teams of workers to build terraces across the hillsides, using simple lines of stones. Terracing prevents the rain washing fertile soil down the hillsides and therefore restores and protects the land for further planting of trees and crops.
"As a former student of agriculture, it's encouraging to see these innovative practices taking root amongst the Ethiopian farming community," says Mulat Andargay with over 200km of land terraced so far, the Red Cross is playing an important role in building up the resilience of local people to drought and food insecurity.
Agricultural Development Empowers Women in Africa
Rome, Italy - July 26, 2012
It's normal to think that food assistance is simply about keeping stomachs full. But, in fact, it's far more complex than that. It's also about empowering and enabling people to support themselves and their communities on a sustainable basis. A couple of weeks ago, I traveled to Zimbabwe and Mozambique to visit development projects supported by the UN Food and Agriculture Organization (FAO) in partnership with local authorities. It was there that I saw what a difference agricultural development efforts can make in people's lives.
Women Take the Lead
It was clear to me that women play the key role in providing food and income to their families in both these countries. In the areas I visited, small-scale farmers are almost exclusively female. Many of the local men have moved to South Africa to work in mines, therefore women are the community leaders and family providers. Because of this, it is critically important that development programs focus on educating and empowering female farmers. Recent studies have concluded that if women in developing countries had equal access to land, seeds, equipment, training, credit, and markets their farm productivity would increase by 20 to 30 percent. Countries' total agricultural production would increase by 2.5 to 4 percent, and 100-150 million fewer people would be hungry. In other words, ignoring women in agriculture comes at the expense of the poor and already food insecure. Not only is leveling the playing field morally the right thing to do, it is imperative for economic sustainability.
In Zimbabwe's Guruve District, I visited the farms of several women who normally plant just enough crops to feed their immediate families. Through an FAO project each woman had been given twenty hens, feed, and a large cage, as well as training on how to care for the animals. These women were beaming with pride as they explained how well they were handling their new businesses. While the eggs not only provided a much-needed source of protein for their families, when the hens were highly productive the women could sell or barter the excess for much needed income. This, in turn, helped these women develop commercial skills that are applicable to any future venture they may pursue. It also gave them the cash to purchase additional seeds and supplies and expand their farming operations. This project showed me, once again, how agriculture assistance programs do far more than just provide food -- they teach recipients new skills and offer opportunities for increased responsibility. I was so impressed with the enthusiasm with which these women shared their knowledge. They were incredibly proud of what they had accomplished -- and rightly so!
A School for Farmers
In Mozambique, I was able to visit a "farmers' field school." Started by FAO some years ago, it is now a "hands on" training center run by the local women farmers. Building on the skills FAO initially taught them regarding how to plant, irrigate, and fertilize their crops, these women added their own experience and knowledge to the curriculum. For example, the women had developed a very precise recipe for home-made fertilizer which they used when they didn't have money to purchase the store-bought variety. I saw how they collectively formed a "water brigade" from the river to the fields in order to irrigate their crops and how the older, more experienced farmers, taught the younger women the important skills they had developed over the years. By "owning" the program, these resourceful women were helping themselves and their fellow women farmers provide sustainable livelihoods for their families and their community. Impressive! To top off the day, we shared a noon-time meal followed by joyful singing and dancing. Canimambo! Many thanks!
This transition from FAO-supported to locally-controlled projects epitomizes what food assistance is all about: eradicating hunger and malnutrition, while building resilience so people will no longer need to rely on food aid in the future.
The CAADP National Multi-Stakeholder Dialogue for Tanzania
Dar es Salaam, Tanzania - July 26,2012.
The main purpose of CAADP dialogue was to ensure multi-stakeholder participation in the development and implementation of agricultural policy This includes Non-State Actors (NSA) such as Civil Society Organisations (CSOs), farmer and producer organisations, researchers, parliamentarians, the private sector and the media.
In his opening remarks, an official in the Ministry of Agriculture Food Security and Cooperatives Mr Mbogo Futakamba said the meeting stems from the fact that Non-State Actors have inadequate awareness of the CAADP process in the country. "The government values and embraces participation of non state actors in the country's development and agricultural sector in particular as a way to ending the woes of poverty in the society," he said.
The main purpose of CAADP dialogue is to ensure multi-stakeholder participation in the development and implementation of agricultural policy. Some of the Non-State Actors (NSA) are like Civil Society Organisations (CSOs), farmer and producer organisations, researchers, parliamentarians, the private sector and the media.
Mr Futakamba mentioned Kilimo Kwanza and the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) as significant initiatives which aim at greater involvement of private sector in the agriculture activities. For example, SAGCOT's objective is to foster inclusive, commercially successful agribusinesses that will benefit the region's small-scale farmers, thus improving food security, reduce rural poverty and ensure environmental sustainability.
The PPP has emerged as a key vehicle to diversify economies, grow agribusiness, ensure food security and thrive. It also stimulates access to finance, inputs and markets for smallholder farmers. (source: All Africa 30 July: Tanzania: Experts Tout for PPP in Agriculture)
Latest AGOA Delay Comes from a Surprising Source
July 27, 2012
, one of us wrote that Congress seemed to have compromised and reached a bipartisan deal to extend the rule (known technically but awkwardly as the third-country fabric rule) that allows poor African countries to export clothing to the United States duty-free under the African Growth and Opportunity Act. We should have known better. This week, Senate Majority Leader Harry Reid (D-NV) was finally ready to bring a package of trade items, including the rule extension, to the floor for passage by unanimous consent when two senators
put holds (subscription required) on it over completely unrelated issues – despite the fact that they actually support the extension.
Surprisingly, one of those senators is Bob Menendez (D-NJ). Senator Menedez sits on the Senate Foreign Relations Subcommittee on International Development and Foreign Assistance, Economic Affairs, and International Environmental Protection and is a well-known champion of development issues. But he is putting thousands of African jobs at risk by using the AGOA rule as leverage to renew a completely unrelated subsidy program supporting 300 jobs at two factories in New Jersey. (The other hold is by Senator Tom Coburn (R-OK) over the budget offset for the package.)
Aside from the bipartisan squabbling that has already held this provision up for months, the real issue here is time. The rule is due to expire in just over two months, and Congress is little more than a week away from leaving town until mid-September (and then they will only be in session for 2.5 weeks until after the election). The procedures for passing this legislation are even more convoluted than usual, thanks to the deep lack of trust between the parties. We won’t go into the details, but it has to be passed first by the Senate, then by the House, and then again by the Senate before it can become law. And even if the provision gets passed before August recess, it’s long past the time when retailers typically place their orders for the next season, meaning that sales have likely already been disrupted.
Time is short to get this done and we find it deeply distressing that such a strong friend of development as Senator Menendez would stoop to using these methods in this way. Even if he eventually gives way and (with Senator Coburn’s acquiescence as well) allows the bill to move forward, this is sad affirmation of the lack of interest in assisting poor countries lamented on this blog last month.
Durbin, Boozman, and Coons Introduce Bill to Increase US Exports to Africa
U.S. Senators Dick Durbin (D-IL), John Boozman (R-AR) and Chris Coons (D-DE) introduced legislation today that will help create American jobs by dramatically increasing the number of U.S. exports to Africa. The bill also aims to improve America’s competiveness throughout the continent by forcing better coordination between U.S. government agencies and departments, establishing comprehensive strategic goals, and marshaling private investments to improve U.S.-Africa business activities.
“Increasingly I am hearing: ‘the U.S. has given up on Africa as a market.’ While the U.S. does important work investing in people through education and health care programs, China and other nations are helping their industries develop infrastructure and expanding markets for their goods. While we’re building institutions, China and others are building markets and we’re being left behind,” Durbin said. “This bill will put the restoration of American competiveness in Africa at the forefront of our business and development goals. It will give American businesses the tools they need to do business in Africa, create jobs at home, and help ensure America is seen as a leader in a rapidly changing part of the world.”
“Free and fair trade is an important component to our state’s economy. Arkansas companies exported $5.2 billion in merchandise to foreign markets in 2010 and that total is bound to increase if we adopt a competitive strategy to tap into Africa’s emerging markets. Arkansas’s exporters are uniquely positioned to capitalize on increased trade with the African continent,” Boozman said. “This bill lets us establish a plan that will allow us to compete with nations like China that are already extremely active in the African markets. The bottom line is that increased trade in Africa will mean more jobs here at home.”
“We need to shift the U.S. mentality toward Africa from aid to trade. In the last decade, Africa was home to six of the world's ten fastest-growing economies in the world," Senator Coons said. "Building strong economic ties between the U.S. and Africa is in our shared interest, and this bill does just that by our government to implement a strategy that connects the burgeoning middle class in Africa with U.S. businesses and retailers. By helping build sustainable models of economic growth in Africa, we will also lessen dependency on foreign aid and provide American goods to the growing number of African consumers."
Africa’s expanding middle class provides a large and growing market for American products and the continent’s increasing urbanization calls for investments in rapidly expanding infrastructure projects. Sub-Saharan Africa alone is projected to be home to seven of the ten fastest growing economies over the next five years. But other nations have beaten us to the punch, aggressively investing in the continent to ensure their businesses have first access to markets.
Between 2008 and 2010, China provided more loans to the developing world than the World Bank -- totaling more than $110 billion. In 2009, China surpassed the United States as the African continent’s largest trading partner and in the next decade it is poised to invest internationally as much as $2 trillion. Members of the European Union and countries like India, Turkey, Russia and Brazil are all expanding their economic presence in Africa, with many also offering concessional (below market) loans, further undercutting American competiveness. All this while the Department of Commerce is cutting staff based in Africa and the Export-Import Bank continues to operate without a permanent presence on the continent.
The U.S.’s continued failure to develop a coherent strategy to compete in Africa is hurting both American business interests, American workers and our political influence in the region.
The tools available to the United States to competitively compete in Africa are scattered, difficult to access, and not effectively coordinated. The Durbin-Boozman-Coons bill will force a coordinated focus on increasing exports to Africa by making the following improvements:
Develop a comprehensive strategy to create American jobs by increasing exports of US goods and services to Africa by at least 200 percent in real dollar value over the next ten years.
Create a Special White House Africa Strategy coordinator to ensure government agencies are maximizing resources to help U.S. companies expand into African markets.
Coordinate the Export-Import Bank, State Department, Department of Commerce, Small Business Administration, Overseas Private Investment Corporation, and Trade Promotion Coordinating Committee efforts to more effectively promote U.S. business exports to Africa.
Establish and or maintain Export Import Bank and Department of Commerce trade staff full time on the African continent to help U.S. businesses.
Formalize training received by U.S. and Foreign Commercial Service officers and Department of State and U.S. Agency for International Development economic officer on key programs and procedures of the Export-Import Bank, the Overseas Private Investment Corporation, the Small Business Administration, and the U.S. Trade and Development Agency.
Raise limits on Export Import Bank loans available to U.S. businesses to directly combat Chinese concessional loans. This proposal is revenue-neutral as the Export-Import Bank is a profitable, self-financing agency.
Further Overseas Private Investment Corporation’s efforts to foster U.S. business access to African markets. This provision is also revenue-neutral as OPIC is a profitable self-financing agency.
A similar bill has also been introduced in the House of Representatives.
The Next Decade of EU Trade Policy: Confronting Global Challenges?
August 1, 2012
In January, the European Commission (EC) launched a new proposed trade strategy - ‘Trade, Growth and Development: Tailoring trade and investment policy for those countries most in need’. It is the first on the topic since 2002, and is intended to set out a direction of travel for the next decade.
This report brings together 18 essays from the world’s leading trade and development experts to discuss the main issues covered.
The communication (a) reviews changes in the world (‘the great reshuffle’), (b) summarises what the EU has achieved over the past decade in terms of trade and investment policy with respect to developing countries, and (c) lays out an agenda to 2020 or so, for the EU itself and within the multilateral context. There is also a short section on what developing countries must do.
In response, the EU Council issued its Conclusions on 16 March, stating that the Council is committed to:
Promoting a multilateral agenda for trade and development (e.g. pursuing the Doha Round and the LDC package);
Promoting market access for developing countries (e.g. the Generalised System of Preferences (GSP), Economic Partnership Agreements (EPAs));
Working towards sustainable development through a green economy (e.g. liberalisation of green goods and services, financing and public–private partnerships); and
Developing more focused, targeted and coordinated Aid for Trade (AfT).
The essays are divided into four separate groups:
General views on the EC Communication on Trade, Growth and Development;
Trade-related instruments to support trade, investment and growth;
Other instruments to support trade, investment and growth; and
Regional views on the EC Communication.
These essays suggest there is much to celebrate in the EU documents, for example:
The identification of a number of global challenges, called a ‘reshuffle’;
The recognition of some major dilemmas, such as (1) whether and how to differentiate in a heterogeneous world, and (2) whether to use trade and investment policy to address climate change and other environmental problems; and
The formulation of good solutions such as targeted AfT and some other possible offers in the Communication, but which are narrowed down significantly in the Council Conclusions.
However, these essays also flag up a series of major concerns, including:
There is a major concern that the EU is moving towards protectionism
There is no clear strategy behind the EU’s approach towards differentiation, which is currently applied largely on an ad hoc basis
The Communication neglects the importance of non-trade policies for developing country growth and fails in its duty to promote Policy Coherence for Development (PCD)
The EU is taking the wrong approach to the role of trade in tackling global problems
Trade policy has little meaning without being embedded in and linked to policies for growth.
Full Report Available Here
Continent Losing Billions Through Multinationals
July 31, 2012
Multinational corporations operating in Africa are involved in illicit transfer of most of the $ 1.5 trillion they make in Africa each year back to the developed countries, hurting African economies in the process, a new report shows.
The report on Illicit Financial Flows from Africa: Scale and Developmental Challenges blames multinational corporations for draining hard currency reserves from the continent, stimulating inflation, reducing tax collection and deepening income gaps.
It faults the multinational corporations for "perpetuating Africa's economic dependence on other regions".
"The depletion of investments and stifling of competition caused by these illicit transfers actually undermine trade and worsen the socio-economic fabric of poor communities in Africa," the report says, calling on countries to strengthen regulatory frameworks.
Some forms of illicit commercial activities include tax avoidance and tax evasion.
These activities basically shift money beyond the reach and appropriate use of domestic authorities.
Richard Tusabe, the Deputy Commissioner General and Commissioner for Customs at Rwanda Revenue Authority (RRA), speaking to The New Times, yesterday, said illicit profit transfers from Africa is indeed a problem, but noted that in Rwanda the tax body "works with organisations advanced in international taxation as part of efforts to mitigate illicit cash transfer."
The report has been circulated among members of the High-Level Panel on Illicit Financial Flows from Africa; an African Union-endorsed think-tank charged with recommending appropriate policies and seek repatriation of the stolen moneys back to the continent.
The panel is chaired by the former South African leader Thabo Mbeki.
The report records great variations between regions, countries and even between sectors of activities.
Two-thirds of the outflows was attributed to only two regions, West Africa and North Africa, with 38% and 28%, respectively.
"Each of the other three regions (Southern, Eastern and Central Africa) registered about 10% of total Africa's illicit financial flows," perhaps because of lack of data and due to the poor quality of available data, the report warns.
The consequences of these illegal transfers on Africa are dire, according to the report findings.
Illicit financial flows, the report says, worsen the socio-economic fabric of poor communities and leads to shorter life expectancy due to limited spending in providing social services such as health care.
On what causes illicit outflows, it points to structural and governance elements, saying they are the leading drivers.
It says "increasing trade openness without adequate regulatory oversight and non-inclusive economic growth essentially may lead to a higher number of individuals that seek to avoid domestic taxes."
The World Trade Organisation estimates that corporations control about 60% of world trade, which amounts to about US$40 trillion.
Tusabe says, "With globalisation, countries can't do away with them [corporations], they come with their challenges, but we try to counter the phenomenon of illicit cash transfers."
Since the early 1960s when multinationals entered Africa, foreign direct investment by the multinationals could have been as high as US$1.5 trillion a year.
It is estimated that Africa lost about US$854 billion in illicit financial flows over the 39 year period (1970-2008).
A yearly average of about US$ 22 billion is lost which is a considerable amount compared to both the external debt of the continent and the official development aid (ODA) received over the same period.
"Indeed, it is equivalent to nearly all the ODA received by Africa during that timeframe a record level of US$46 billion in 2010," the report adds.
"Just one-third of the loss associated with illicit financial flows would have been enough to fully cover the continent's external debt that reached US$279 billion in 2008",
It notes that the trend has been increasing over time and especially in the last decade, with an annual average illicit financial flow of US$50 billion between 2000 and 2008 compared to a yearly average of only US$9 billion for the period 1970-1999.
It contends that a significant amount of illicit outflows have not been recorded in government statistics.
Experts say the report adds a new dimension to Africa's underdevelopment dilemma.
On possible solutions, the report proposes the creation of disincentives to trade mispricing and the strengthening of regulatory frameworks.
"We try to identify the actual transfer prices that these companies charge their subsidiaries and see if they are not over inflating," Tusabe says.
At the regional level, it calls for strengthening of the stolen asset recovery regime; and the development of an effective regional advocacy and sensitisation strategies.
The High-Level Panel on Illicit Financial Flows from Africa was established last year following a resolution of the 4th Joint Annual Meetings of the ECA/AU Ministers of Finance, Planning and Economic Development in Africa in March 2011.
Private Equity: New Cash for Expanding Businesses
August 1, 2012
Africa is growing, and African companies need cash to expand. Investors want in on the action, especially given low returns in many other parts of the world these days. But with few stocks and bonds, and scant liquidity for those out there, how do investors get a foothold? And how do African firms access much-needed cash?
Enter private equity — the purchase by a private investor of a share of a company that is not listed on a stock market. The company can take the money from the sale and use it for expansion or other investments. In exchange, the owner gives up some control, as the new partner gets a seat on the board or, in smaller companies, plays an advisory role. Eventually investors make money by selling their shares or receiving dividends.
In Africa, private equity is all the rage. “If you look at all the opportunities,” says David Jeromin, managing partner of the US-based Golden Mean Capital, it is like the “nightmare” of someone with attention deficit disorder. “There is just so much stuff.”
Announcements of new African private equity funds come regularly. In February the African Development Bank (AfDB) announced that it would chip in US$50 million towards a fund of the US-based Carlyle Group, which plans to invest at least $500 million in sub-Saharan Africa. In May, the Brazilian investment bank BTG Pactual launched a $1 billion Africa-focused private equity fund. In the 15 months from January 2011 to March 2012, eight new funds focusing on East and Southern Africa were launched.
East Africa alone has 16 dedicated funds, out of 53 active in that region. Officials of nearly three dozen funds responded to a survey, released in March by Deloitte, a global consultancy, and Africa Assets, a private research and consulting firm, showing that nearly four-fifths planned to increase outlays in the next year.
The overall numbers are impressive, although a bit volatile. Private equity investment in sub-Saharan Africa jumped from $741 million in 2003 to $1.3 billion last year, with ups and downs in between, according to the Emerging Markets Private Equity Association.
Private equity placements come in all sizes. The biggest in East Africa last year was a $287 million deal by Egypt’s Citadel Capital to invest in Rift Valley Railways, which operates the railroad from Kenya’s Mombasa seaport to Uganda. The AfDB, whose private equity portfolio stands at $1.1 billion, regularly invests in independent funds that make equity placements in Africa. These funds have invested in 294 companies, of which 54 topped $15 million and 163 were under $1 million.
Infrastructure, banking, mining, oil and gas, and other commodities generally attract the heavy hitters. At the other end of the spectrum, venture capital focuses on less mature companies, which are generally small and often headed by a charismatic entrepreneur.
One such company is Cheetah Palm Oil, a start-up in Ghana founded by the well-known economist George Ayittey. Cheetah has backing from Golden Mean Capital. Instead of buying land and growing crops, it will work with a producers’ cooperative to help market products internationally and to ensure that farmers get fair prices, microcredit and agricultural extension services. The project has the potential to encompass 50,000 small growers with farms covering 75,000 hectares of land.
This is not your genteel, Silicon Valley–style venture capital. “You have to rally resources around the entrepreneur and build infrastructure,” says Mr. Jeromin, whose firm is solidly in the venture capital realm. “It takes a heck of a lot of time.”
Venture capital remains a small subset of all private equity operations in Africa, partly because it is so labour-intensive. “There are a lot of people who do not want to get their hands dirty,” Mr. Jeromin complains.
A rutted road
Even for larger investors, the path to profitability can seem more like a rutted dirt road than like a freshly paved expressway. “Private equity is not challenging in terms of finding investment opportunities,” says Larry Seruma, chief investment officer and managing principal of Nile Capital Management, based in the US state of New Jersey. “It is like fishing in a barrel. The problem is with managing the business. Often there is not enough talent to take it to the next level. If you are a minority shareholder, you might not find the right people to represent you on the board, for example.”
On the talent front, Seruma, himself a native of Uganda, finds hope in the return of people who were once counted as drops in the brain drain. “The African diaspora is huge,” he says. “Well educated people are going back. Employment in the developed markets is not that good anymore, and Africa is growing. Local talent is moving back.”
Investors are also worried about their “exit strategies,” a euphemism for how they expect to realize returns on their investments. After all, these are profit-seeking capitalists, not philanthropists.
Venture capitalists like Mr. Jeromin sometimes look to larger private equity firms to buy their stakes as their protégés grow. Another option is known as a “trade sale,” selling all or part of a firm to a muscular multinational company looking to expand. Potential buyers could include major players in neighbouring countries seeking cross-border expansion to take advantage of the liberalized flow of goods and services within regional trade blocs.
Recently the Aureos Southern Africa Fund sold its 49 per cent stake in Zambia’s foremost producer of table eggs, Golden Lay, to the African Agriculture Fund, a private fund managed by Phatisa, which invests in sustainable food businesses across Africa. “This marks a very successful investment and exit for Aureos,” says Ron den Besten, its managing partner. “Golden Lay has made great strides in the last five years. Production capacity has more than doubled as a result of our strategy of investment in new state-of-the-art laying houses, providing the impetus for exponential financial growth during our investment period.”
One popular exit strategy elsewhere, especially in the US, is the initial public offering (IPO), in which an investor sells at least part of its stake when the company puts its shares up for sale on a stock market. But African stock markets tend to be thin and illiquid (see Harnessing African stock exchanges to promote growth
), and so IPOs have been relatively rare, although not unheard-of.
Mr. Jeromin reaches back into US history for another strategy. “If you go back to the 1800s, before there were liquid markets, investors got their money through dividends. You can set up a preferred-share structure,” in which certain shareholders receive privileged pay-outs.
Private equity is not without its drawbacks. Company owners and entrepreneurs will not always be pleased by pressure they might get from their new partners. And investors may lose interest if their exit strategies prove elusive.
But private equity seems to be starting to fill a void that cannot be handled by banks alone. “For most companies in Africa, raising money means going to the bank,” says David Levin, senior managing partner of Nova Capital Global Markets in New York. “We bring in a different level of financing.”
U.S.$13m Boost for Rural Agribusinesses
Zimbabwe - July 25, 2012
The Africa Enterprise Challenge Fund (AECF) has launched the third round agribusiness funding window aimed at encouraging business ideas and agricultural production across the whole value chain and increase rural financial services support.
An estimated US$13 million has been set aside to accelerate pro-poor growth in Zimbabwe, thereby increasing employment, livelihood opportunities and incomes, and reducing poverty.
The Zimbabwe Round Three will co-fund successful applicants with grants and repayable grants of between US$250 000 and US$1,5 million and to qualify the business ideas must demonstrate a positive impact on the rural poor, deliver increased employment and income, reduce costs and improve productivity.
Through the competition, AECF aims to catalyse private sector investment in agribusiness and rural finance and to cause a change in market systems.
Addressing guest at the launch in Harare Finance Minister, Tendai Biti, said the private sector was a key driver, engine and enabler of economic and social development.
"It is the proverbial goose that lays the golden eggs for creating jobs, economic opportunities, paying taxes and investing in innovation," Biti said.
For the smallholder farmers with no access to agricultural financing and markets, AECF has engendered hope for thousands of farmers who had no access to markets and a reliable income from their produce.
"The ability to grow our economy will by and largely be determined by our ability to transform the competitiveness of the agricultural sector," he added.
According to the World Bank, economic growth in the agriculture sector is at least twice as effective at reducing poverty as growth in other sectors.
"I am pleased with the opportunities that this third funding round in Zimbabwe offers in catalysing more private sector and enterprise development across the country leading to increased market access, jobs and incomes," said KPMG director and AECF southern Africa director, Corin Mitchell.
There have been two previous rounds, in 2009, 10 companies were awarded funding and in 2010 nine businesses received funding. Since 2009 when the Fund was launched, the Zimbabwe funding has since grown from an initial budget of US$5 million to a cumulative budget of approximately US$33 million.
In the two competitions, a total of 19 projects benefitting 664 600 households have been funded.
The AECF is a US$150 million private sector fund that stimulates private sector businesses in Zimbabwe to find profitable ways of raising rural incomes by developing markets for products and services that meet the needs of the rural poor.
In Zimbabwe, projects in livestock production, animal health production, processing essential oils and tomatoes, goat marketing, egg production and value addition projects in soya and dried vegetables have been funded.
Sino-Africa Partnership - Beneficial or Exploitative
Zimbabwe- July 25, 2012
The formal involvement in Africa of China cooperation dates back to 1955 when African and Asian nations held a conference in Bandung, Indonesia, to promote economic and cultural cooperation and bring an end to colonialism and reduce developing countries' dependence on industrialised countries. From that date, more and more forums for engagements were initiated such as the Sino and Forum on China-Africa Co-operation (FOCAC).
Recently, the fifth Ministerial Conference of the FOCAC was held on July 19, 2012 in Beijing, under the theme "Building on past achievements and opening up new prospects for the new type of China-Africa strategic partnership." It provided an opportunity for both parties to review their engagement and devise strategies that are mutually beneficial to China as a country and Africa as a continent.
If one analyses the China-Africa relationship, it has evolved over the years, and it is time for African countries to gain greater leverage to ensure that they benefit from it as much as China does. For instance, the benefits from China such as Chinese aid and investment, if managed effectively can complement the social sector focus of most Western aid by strengthening Africa's inefficient infrastructural capacity and untapped private sector.
It is an open secret that most of the continent's infrastructure requires more aid and investment to improve on intra-regional trade as endorsed recently by Africa Union summit held in Addis Ababa and Africa Development Bank in Arusha, Tanzania. China can play an important role in supporting continental and regional initiatives besides building stadiums, parliaments and military bases as the current case.
Conversely, if managed properly, Africa risks Chinese exploitation and missing a prime opportunity to advance its political, economic, and social development. Thus Africa must proactively monitor and review the relationship and ensure that its interests are safeguarded in order for this relationship to provide a win-win solution.
Indeed, evidence suggests that both parties (China and Africa) have benefited from their political and economic co-operation, despite the imbalances that still prevail in terms of geographic distribution of trade and investment.
However, the partnership also carries significant risks, especially for Africa. Unless Africa carefully manages this relationship, it risks becoming the victim of Chinese exploitation.
A closer look at the trade figures between China and Africa reveal an imbalance, mainly concentrated on few nations with oil and minerals. For instance 70 percent of China's imports from the continent come from Angola (34 percent), South Africa (22 percent), Sudan (13 percent) and the Congo (six percent), while close to 50 percent of exports from China went to South Africa (19 percent), Nigeria (13 percent), Egypt (10 percent) and Liberia (seven percent).
A worrying trend is also on product composition on trade which is mainly of more finished good exports from China and primarily raw materials export from Africa to China. A positive development though is that the trend has been changing for the better in the past years but at a snail's pace.
China has become Africa's largest trading partner, and the continent is now China's fourth largest investment destination. The latest data indicate that China-Africa trade has reached a year-on-year growth rate of 30 percent.
The success of China is partly attributed to the economic reforms that were undertaken since the 1970s. We have witnessed China's economy change from a closed centrally planned system to a market-oriented economy that has rapidly growing private sectors. Surely, Africa can use China as a spring board to accelerate its growth.
We Can Improve Climate Information for Africa
August 1, 2012
A collaborative project in Ethiopia that has created climate data and tools can be applied in much of Africa, says climate scientist Tufa Dinku.
Famine in the Horn of Africa is a reminder of how fluctuations in climate can destroy the lives and livelihoods of vulnerable people on the continent, and why the management of climate-related risks is central to sustainable development.
Incorporating climate issues into development policy, planning and practice is crucial. Making climate information available to users such as development practitioners and researchers is an essential step in improving food security, timing public health interventions and reducing vulnerability to extreme events.
But limited systematic knowledge about the climate, its historical variability and likely future trends has so far made this impossible. Quality-assured climate information must be based on quality-assured climate data, and trained staff capable of putting it to good use.
Satellite data fill gaps
Such data have largely been absent in Africa, where meteorological observations from weather stations are a fraction of what the World Meteorological Organization (WMO) considers to be even basic coverage. Where records exist, they frequently suffer from gaps and poor quality, and they are mostly not easily accessible outside national meteorological agencies.
Satellite data have been used since the 1980s to supplement climate station data. While less accurate, they provide complete spatial coverage of variables such as rainfall or temperature on the continent. It is possible to produce complete and good quality climate data by combining surface observations with satellite-derived data.
Making the data and derived products available through the Internet, and then training the user community to demand, understand and use climate information, are the essential steps towards the better management of climate-related risks in Africa.
This approach has been implemented in Ethiopia in a collaboration between the country's National Meteorology Agency (NMA), the International Research Institute for Climate and Society (IRI), Columbia University, in the United States, and the TAMSAT (Tropical Applications of Meteorology using Satellite data and ground-based observations) group at the University of Reading in the United Kingdom.
Funded by Google.org as part of the health initiative, 'Building capacity to produce and use climate and environmental information for improving health in East Africa', the partners produced climate data — ten daily observations for every ten kilometre grid across the country — that covered a period of more than 30 years. They also created online tools for visualising, querying and downloading information from the NMA website. 
Importantly, the training of staff at the NMA, which was part of the project, has been essential to making the work sustainable. Public health professionals — mainly epidemiologists from regional health bureaus — were also trained to understand and use climate information.
Opening up data access
It has only been a few months since the NMA announced the availability of its new data and services, but they are already being accessed from within and outside the country. Data are being used, for instance, by a university researcher to assess water resources in western Ethiopia, and by health professionals for assessing the effect of climate on malaria intervention efforts in the country.
This is significant and unprecedented in Africa. Before now, anyone interested in rainfall data would need a written formal request, pay a small fee and obtain the data in paper format weeks later. In the new system, they will get better information at the click of a mouse by visiting the NMA's website.
The only limitation is Internet access — a critical but diminishing shortcoming on a continent where access to the web, through mobile devices in particular, is expanding rapidly.
The work in Ethiopia is not finished. Users will need further support and training in understanding new and existing climate information products, and they will need more customised offerings. But no other meteorological service in Africa, or in many other parts of the world, provides such services free of charge.
Reaching all of Africa
The work could — and should — serve as a template to improve climate services across Africa. Implementing a similar project in another country will now be cheaper and faster.
As the Ethiopian project is the first of its kind, the team had to obtain and process the raw satellite data spanning 30 years. This took more than a year to complete — but in doing so, data were processed for all of Africa, so this step will not have to be repeated.
The methodologies and computer codes that are used to produce the data can be easily adapted for any other country. And similarly, the data query and analysis facilities, built on the IRI's data library infrastructure  and installed outside the IRI for the first time, can now easily be customised for another country.
To replicate the work, meteorological agency staff need to be trained to organise and assess the quality of their national data, digitising from paper records where necessary; update data management and web capacities for dissemination; and engage in publicity campaigns to ensure potential users are aware of the opportunities available.
This first step has already been made in a few countries, including Tanzania and Madagascar, and plans are underway in others. The project in Tanzania is expected to be completed by the end of August.
But making climate information available is only one side of the coin — user communities need to be encouraged and trained not only to access the data for initial analysis, but also to consider how the data might be customised to serve specific development needs. This is the next challenge for the work that began in Ethiopia, and why scaling up this effort is essential for Africa.
IFPRI-Croplife Project: Facilitating Long-term Investments in Agricultural Technology
July 27, 2012
After decades of declining food prices, recent food, fuel and financial crises have ushered in a new reality. As outlined in the International Food Policy Research Institute’s (IFPRI) 2011 Global Food Policy Report
, food prices rose dramatically in 2007-08 and then again in 2010-11. What’s more, prices of most cereals and meats are projected to keep increasing – fueled by increasing demand for food and energy from a growing population, and exacerbated by climate change-related weather patterns and destructive floods and droughts.
IFPRI’s estimates indicate that if we want to meet the rapidly growing food demand, cereal production will need to increase by 70 percent in the next four decades. Although the challenge is dire, there are reasons for optimism. The international community, governments, and the private sector are increasingly recognizing the centrality of agriculture, not only for human nutrition and health, but also as a basis of economic growth; and are providing much-needed investments in the sector.
A major question we face is how to target these investments. Which technologies have the potential to increase yields, ensure profits for farmers, and reduce environmental impacts, while also increasing resilience to climate change? Decisions over the development and adoption of specific agricultural technologies and practices will affect production, food security, trade and environmental quality in developing countries and across the world for decades to come.
The fact of the matter is that technology options are many, but what is missing is transparent evidence-based information to support decisions on technology adoption strategies. In 2011 IFPRI, in collaboration with Croplife International and other donors, launched a study to address these knowledge gaps and provide some clarity about benefits and risks associated with different options. By modeling technology-induced changes in crop yields for rice, maize, and wheat disaggregated to the pixel level, based on data collected across the globe, we hope to understand how different technologies affect not only productivity, but also food prices, trade flows, as well as calorie availability, especially for developing countries.
A month ago, our team completed some preliminary modeling, testing the effects and effectiveness of a range of agricultural practices, including conservation agriculture, irrigation technologies, integrated soil fertility management, and new crop varieties. Overall, a combination of using drought and heat tolerant crop varieties, as well as integrated soil fertility management (ISFM)—which involves reducing tillage and retaining crop residues, and using both fertilizers and manure—appears to provide the largest improvements in yields globally by 2050 and under climate change conditions. Some of the largest benefits of this approach were observed for Asia.
In our modeling, the adoption of ISFM also significantly reduces projected increases in international prices for maize, rice, and wheat, and lowers the population at risk of hunger, particularly in Sub-Saharan Africa and South Asia.
We are currently subjecting our results to a review and revision process that includes working with experts in crop modeling as well as in agronomy and agricultural economics. These much needed interactions will improve and strengthen our results, while also providing further expert insights at the regional level.
The debate over technological choices is often heated and polarized. With this study, we hope to provide policymakers with clear, evidence-based information on risks and benefits across a range of technologies, thereby facilitating long term investments and strategies.
Innovation Should Be a 'Tool' Not a 'Master'
July 31, 2012
Development projects should diligently build on existing solutions as well as introducing innovative new ideas, argues David Lewis.
Innovation has become central to the work of development organisations and donors, but many development problems need funding and capacity building more than they need new solutions, argues David Lewis, social policy and development professor at the London School of Economics and Political Science in the United Kingdom.
Innovation is a concept that comes from the world of business, notes Lewis, and is often described as a moment of creativity that leads to the production and selling of a product. But "when it comes to development, things are more complicated", he argues, adding that "not all development problems require new solutions."
For example, basic technologies to improve water and sanitation in densely populated urban areas have barely changed over a hundred years. And new efforts can build on existing innovative projects around community-managed sewers, like the work of the Orangi Pilot Project Research and Training Institute in Pakistan.
Lewis argues that innovation should be seen "as tool, not master", and highlights four main problems with the concept of innovation for development. Firstly, it is a buzzword that is often used with no clear definition or meaning. Secondly, innovation implies taking risks, from which people living in poverty should be protected: "Why experiment when we could be getting down to important, useful routine work using proven methods?"
Thirdly, innovation is costly, which is why the private sector establishes clear boundaries in terms of budgets and resources. Finally, emphasising new solutions risks reinventing the wheel, rather than building on what has already been achieved.
There is value in genuine innovation and in ways of working that promote problem-solving mindsets, says Lewis. But "the ubiquity of vague ideas about innovation in development may ultimately serve to devalue it," he argues.
A Science Agenda for Food Security
Washington, DC- July 31, 2012
The world is not merely facing a challenge of sustainably producing enough food to feed a world whose population will exceed 9 billion by 2050, but also confronting the continuous challenge of ensuring that nutritious and safe food reaches needy families, so that every child can have a safe and healthy childhood. Combating this urgent crisis requires a global collaborative effort. According to experts, by 2050 agricultural production will need to increase by 70% to meet increased demand for food, diet changes and additional demand for industrial uses for plants. To help meet this goal, USDA has developed a Global Food Security strategy
, focused on research, development, education and extension. As part of USDA’s Office of the Chief Scientist series of white papers on USDA’s research portfolio
, this plan aligns USDA’s food security research with the goals of President Obama’s Global Food Security Initiative, Feed the Future
In implementing the strategy, USDA will seek and build upon existing partnerships with research institutions at home and abroad, as well as in the private sector. We are very heartened that our colleagues in other countries and donor organizations share our interest. This May, the G8 Leaders announced the New Alliance for Food Security and Nutrition to improve food security in Africa. The G8 Leaders also endorsed the establishment of global platforms to facilitate sharing of reliable agricultural data and information, which is crucial for research, for decision making by farmers and to help connect them to the marketplace. Similarly, the June Rio+20 Summit resolved to enhance agricultural science and improve productivity and sustainability through voluntary sharing of knowledge and good practices and by strengthening international cooperation on agricultural research. These commitments made by USDA, the G8 and Rio+20 have been taken to the next level by the G20 whose leaders recently announced their support for a series of recommendations to sustainably increase agricultural productivity. These steps include strengthening global collaboration and cooperation on agricultural science through a regular meeting of agricultural Chief Scientists (MACS) with the goal of identifying global research priorities and targets and facilitating collaboration between public and private sector organizations in the key areas most likely to drive sustainable agricultural productivity gains.
These developments have a lot of promise for helping coordinate the fight against global hunger. I encourage you to read more about USDA’s food security research and find out about the important role science plays in improving lives around the world.
Tailor-Made Training for Food Processors Launched
Morogoro, Tanzania-July 31, 2012
Small and Medium Enterprises Competitiveness Facility (SCF) launched a tailor made training on food processing to build capacity for SMEs Chief Executive Officers (CEOs).
Speaking at the official opening of the training here, SCF's Business Manager Michael Bulemo said the training that focuses SMEs in Dairy and Sunflower oil processing industries will equip them with business management skills that can assist them to operate competitively in terms of producing quality products at reasonable cost with best marketing strategies.
He said the training will help them to improve their company's internal management competencies, strengthen sourcing and distribution channels as well as introduce the basics of quality and food safety standards requirements by niche domestic and international markets. Sokoine University of Agriculture, department of agricultural economics and agribusiness is conducting the five-day training under the auspices of Sokoine University of Agriculture, Bureau of Agricultural Consultancies and Advisory Services.
Meanwhile, Head of Department of Agricultural Economics and Agribusiness Damas Philips said gaps were identified by SCF in its mapping study that covered 100 registered food processing SMEs during regular business mentoring visits to SMEs. Dr Philips said amongst the gaps in internal skills and competences identified included identification of market opportunities, whereby most SMEs were found able to sell products but at small volumes and uncompetitive prices due to high production costs.
"Adoption of appropriate market positioning, whereby most SMEs attempt to serve all, thereby ending up losing focus and overstretching their resources," leading to unsatisfied customers. "Many SMEs in Tanzania have informal plans to bring their products in the market place, they do not put their operational and marketing plans on paper and they don't work consistently towards achieving the planned goals," said Dr Philips.
Visionary African Plant Breeders Tackle Issue of Better and More Available Seed for Farmers
Nairobi, Kenya- July 24, 2012
Source: Alliance for a Green Revolution in Africa (Allafrica.com
Over 100 African crop breeding experts including World Food Prize laureate Gebesa Ejeta are meeting in Nairobi this week to discuss how to meet smallholder farmers' need for high performing and high impact seed varieties.
"In Africa, farmers have largely not benefited from improved seeds due to a lack of localized crop breeding and efficient, dependable seed delivery system. And so crop yields in most of Africa have remained one-third of those produced by farmers in other developing regions of the worlds. Good seed is not just the driving force behind good harvests and eliminating poverty and hunger, it's the foundation for rapid economic growth," said Jane Karuku, AGRA president.
Speaking during the event, Gebesa Ejeta, World Food Prize laureate, elaborated, "I believe that global food security is the biggest challenge that the world needs to address now and the science of plant breeding is a critical component in that agenda."
"In a country like Ethiopia, farming technology has hardly improved with farmers using outdated farming practices that do not increase their yields or impact on their livelihoods significantly. For farmers to improve their livelihoods and increase their income we need to see simple science available to people, like improved seeds. If we do not get our act together the continent will be left behind," Gebesa Ejeta.
The first step towards farmers accessing simple science is ensuring that farmers have access to improved seeds. This has been a major challenge across Africa, with seed companies not able to meet the demand by farmers, resulting to farmer turning to their grains as seeds.
AGRA's own seed program has begun to address some of these challenges successfully with the majority of farmers targeted accessing the new seed reporting dramatic increases in their harvests. As a result of AGRA's support to many partners, an additional 40,000 MT per annum of hybrid seed, representing 1/3 of the commercially produced seed in Africa, is now reaching smallholder farmers. These seeds have been produced by 60 small, African-owned seed companies launched with capital and strengthened by AGRA - a 100% increase in the number of such companies. In terms of food production, this means an additional 4 million MT of staple crops per annum. AGRA's experts believe that the tipping point to food security with respect to improved seeds is 500,000 MT per annum of high yielding, improved crop varieties.
"So far, AGRA programs have supported the development of almost 400 new seed varieties and the commercialisation of over 200. The challenge now is how to address the gap between the released varieties and the commercialized. If we can get this right we'll be able to make lasting impact on the lives of millions of smallholders in Africa," said Joe Devries, director of AGRA's seed program.
UN Calls for Immediate Action to Avert Humanitarian Disaster
Mali - July 26, 2012
The United Nations today called for immediate action to tackle Mali's current humanitarian crisis which is driven by food insecurity, malnutrition, population displacement and widespread insecurity.
"The humanitarian situation is deteriorating rapidly because of the inadequacy of the response. The situation in Mali is desperate, but not hopeless," stressed the Director of Operations of the Office for the Coordination of Humanitarian Affairs (OCHA), John Ging.
"There needs to be a paradigm shift in the way the humanitarian response is funded. We can avoid a disaster, but only if the opportunities for a quick scaling up of the response are not missed," he added.
In January, fighting between Government forces and Tuareg rebels resumed in northern Mali. The instability and insecurity resulting from the renewed clashes, as well as the proliferation of armed groups in the region, and political instability in the wake of a coup d'état in March, have uprooted more than 420,000 people, according to OCHA, with many fleeing to the neighbouring countries of Niger, Mauritania and Burkina Faso due to insecurity.
These countries, however, are among the most severely affected by the food and nutrition crisis raging across the Sahel region of West Africa, which has put 18 million lives at risk.
During a three-day mission to Mali, Mr. Ging visited displacement camps in Mopti in the north, where he heard first-hand the traumatic stories of violence against women and children who had fled their homes.
In Bamako, the capital, Mr. Ging told reporters that "there appears to be a misconception that without a solution to the security and political crisis in the north of the country, little can be done to scale up the humanitarian response. In fact, 80 per cent of the country's humanitarian needs are in the south, where there is relative stability."
While work is being carried out by national and international organizations in the northern part of the country, Mr. Ging said the lack of funding is hampering the scaling up of activities in the region. Currently, only 42 per cent of the $214 million required for the humanitarian response has been received.
Health, education, water, sanitation and hygiene are the most critically underfunded sectors, Mr. Ging said, adding that this could quickly lead to the outbreak of epidemics like cholera, which is threatening to spread throughout West Africa.
1.6 Million People Will Need Food Assistance Next Year - UN Report
Zimbabwe - July 27, 2012
An estimated 1.6 million people are likely to need food assistance in the coming "hunger season" from January to March in Zimbabwe, according to a new report released today by the United Nations and its partners.
"The UN World Food Programme (WFP) and our partners are gearing up to respond to this large rise in food needs," said WFP's Country Director for the African country, Felix Bamezon. "Our field staff are already reporting signs of distress in rural areas, including empty granaries and farmers selling off their livestock to make ends meet."
The Zimbabwe Vulnerability Assessment estimates national food insecurity levels, and is conducted annually by the Government in collaboration with UN agencies and non-governmental organisations.
The report notes that this year's cereal harvest was 1.076,772 metric tons - one third lower than last year, making it the lowest since 2009. In addition, the number of people in need is 60 per cent higher than the one million who needed food assistance during the last lean season.
Factors that have affected food security in the country this year include erratic rainfall and dry spells, limited access to agricultural inputs such as seeds and fertilizers, a reduction in the planted area, poor farming practices and inadequate crop diversification.
To meet the increased food needs, WFP and its partners will undertake food distributions with regionally procured cereals as well imported vegetable oil and pulses, the agency said in a news release. Cash transfers will also be used in areas where there are functioning markets so that people have the flexibility to choose where and from whom they purchase their cereals. In addition, cereal imports from neighbouring countries will be needed to meet food shortages in the coming months.
The report identifies the regions of Masvingo, Matabeleland North and South, and parts of Mashonaland, Midlands and Manicaland as the worst-affected areas.
WFP said its Seasonal Targeted Assistance programme is due to run until the end of March next year to help address the food shortages. However, while the programme has been budgeted at $119 million, it is currently facing a shortfall of approximately $87 million.
SA Infrastructure Going Green
South Africa- July 31, 2012
South Africa has been making great strides in the construction of green buildings, with the flagship Vodafone Innovation Centre in Gauteng being the first to get a six star rating by the Green Building Council.
This carbon- neutral building blends in beautifully with the landscape, generates its own power with solar panels, harvests and stores rain water, and recycles its waste water. Not surprisingly, it won the recent Mail & Guardian Greening the Future award.
Now South Africa is looking to extend this greening trend to infrastructure such as roads, dams, telecommunications and municipal services.
Last week, the Development Bank of Southern Africa and Consulting Engineers South Africa hosted an exploratory workshop with government and industry players involved in infrastructure development. The idea of a Green Infrastructure Council was mooted, and after some lively debate on its role and structure, was unanimously endorsed. An interim body has been set up to take forward the initiative.
This move is very timely, given the huge emphasis that has been placed by government on infrastructure spending. According to Finance Minister Pravin Gordhan, South Africa will spend more than R800-billion on new power stations, roads, dams, water supply, rail and port facilities over the next few years. This massive level of investment will have a profound impact on the environment - the built environment is responsible for 40% of our solid waste generation, 12% of our fresh water consumption and 40% of end-use energy consumption. If we can find ways of building more sustainably, and lowering the consumption of natural resources and energy, we will leave a much less costly heritage to the next generation.
Other countries have been leading the way with greening infrastructure. The London Olympics has broken records with public transport, green cars, compostable food packaging and reusable facilities. The Australian Green Infrastructure Council has recently released its Infrastructure Sustainability Rating Tool, which is being used to assess and grade infrastructure projects such as roads, ports, railways, communications and electricity infrastructure.
Locally we have the successful experience of the Green Building Council. Launched in 2007, it has focused on market-based solutions, and has built up its membership to more than 1000 companies. This experience combined with our country's engineering know-how puts us in a good position to take greening infrastructure to a new level.