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A fish market in the Ivory Coast
A fish market in the Ivory Coast<br /> &nbsp;

Trade is an often-prescribed cure for economic diversification and transformation in Africa. However, the COVID-19 crisis has posed unprecedented challenges and according to the World Trade Organization (WTO), trade will shrink between 13% and 32% this year. The added challenge for Africa is that even before the pandemic, the continent was a minor participant in the international trade arena with only 2 per cent of the global trade volumes. With current trade being affected so drastically and the acceleration of international de-globalization, robust global economic recovery is in peril. Africa is not only not immune to these trends, but a subject to them and in danger of being further sidelined. Yet, this does not come to say that trade cannot facilitate economic recovery because it can but it has to be “Trade 2.0”, trade reimagined for Africa’s context-specific scenario.

This new chapter has to be characterized by African countries prioritizing each other, focusing on intra-African trade and placing regional multilateralism above global aspirations, as no country can be competitive internationally until they are competitive regionally. The African Continental Free Trade Area (AfCFTA), to be implemented in early 2021, is the vehicle that has the full potential to deliver on trade’s promises.

It is the most ambitious trade project since the WTO itself and will create a single market for over 1 billion people with a GDP of more than $2.5 trillion, thus, transforming the continent into the largest free trade area in the world. The opportunities are vast since only 18% of the current trade is within Africa, a minor improvement from 10% in 1995, making it the least integrated continent. More than mere trade volumes, one needs to take into account the ability of trade to boost product sophistication, which is particularly important for the major commodity-exporting countries. The fact that 14.8% of global exports are manufactured goods as opposed to 41.9% of the regional ones, signals that product upgrading is more attainable through closer integration of neighbouring countries and can facilitate the long-promised diversification which in turn will allow for economic resilience in the face of shifts in demand. Further benefits from the AfCFTA are the reduced dependencies on foreign partners, especially when it comes to imports, and strengthened regional value chains. Finally, the agreement establishes co-operation and trust as the modus operandi on a very fragmented and poorly linked continent.

For trade to facilitate the post-pandemic economic revival, we need to focus on a few areas that are guided by the rule that what is best for the recovery is what is best for the long-term sustained growth.

First, we need to look beyond the immediate challenges and circumstances and commit to pivoting and perfecting the AfCFTA. Short-term tools such as establishing trade corridors for essential goods are stepping-stones for testing and perfecting the supply chains on which future trade will be based.                                

Second, need to keep our supply chains, which are heavily strained during the pandemic going. The cancellation of passenger flights has been a reasonable response to mitigate the spread of the virus but now that some African countries have been closed for almost 5 months, this has resulted in decreased air cargo availability and at least 30% price spike. Ports with poor automation levels have introduced extra procedures, which additionally slow down the movement of goods and are heavily impacted by the availability of labour. We have to focus on enhanced trade facilitation to keep goods moving.

Third, we need to incentivise investment into infrastructure, as poor trade logistics are the biggest barriers to trade on the continent. By 2040 there will be a 15 billion dollar gap between the infrastructure investment needed and the amount provided and that gap will be wider on continents like Africa where the population of young and fast-growing. When 1% of GDP is invested in infrastructure, economic output increases by 0.4% in the first year and 1.5 by the fourth year; in low and middle-income countries there is a $4 return for every $1 spent on infrastructure. The governments need to work on attracting investors and companies that will build infrastructure that is robust, sustainable and technologically advanced in order to serve as the backbone of trade logistics.

Finally, we must be aware and open to new opportunities. Earlier this month I spoke at the prestigious Dhaka Forum a new “Davos for the Global South” that discussed new opportunities for South-South cooperation between Asia and Africa. Such dialogues will remain important if Africa, and Asia, are to fulfil their development goals through trade.

Gergana Urdarevska is the managing director of Freezone Watch, a consultancy.

Chadian president Idriss Déby
Chadian president Idriss Déby (Photo by Georges Gobet/via AFP)

Late Monday, Chad’s communication minister Chérif Mahamat Zene said that a government measure to slow down internet speed in the country, introduced on July 22, was intended to halt “the dissemination of messages inciting hate and division.” He said the slowdown would be lifted soon, but did not specify a date.

Speaking anonymously, Chadian telecommunications officials allege this most recent blackout was in response to a video circulating on WhatsApp and social media showing a Chadian military officer in a dispute with two mechanics firing point-blank at one of them. The man died of his wounds. Some social media users have pointed out that the soldier was from the same community as President Idriss Déby.

 

The social media shutdown lasted sixteen months

 

This is not the first time Chad has limited Internet access. In March 2018, the government blocked access to social media platforms after protests had broken out over proposed constitutional amendments allowing Déby to remain in power until 2033. The shutdown lasted sixteen months. The official justification was a similar argument of protecting internal security, but civil society organizations claimed the real motive was to suppress public dissent against Déby, who has ruled Chad since he seized power in 1990.

Despite growing smartphone usage in Chad, Internet penetration is only 14 percent and data costs are high.

 

Nuclear power plant cooling towers
Cooling towers of a nuclear power plant in Europe

Kenya has set its sights on joining the club of commercial nuclear power users. The country’s Nuclear Power and Energy Agency has submitted an environmental and social assessment report for a proposed US$5 billion nuclear power plant, which it says is on track to be completed in about seven years. A preferred site has been chosen near the coast in Tana River County, halfway between Mombasa and the Somalian border.

The document is available for public comment before the National Environment Management Authority can issue a license for construction to start.

 

Long-Term Plans

Studies based on the Kenya Vision 2030 development blueprint, introduced in 2008, show that the country will have to generate about eight times as much electricity by 2031 as it currently does to meet the expected energy demand.

With this proposal, Kenya joins nine other sub-Saharan African countries—Ethiopia, Ghana, Namibia, Nigeria, Rwanda, Senegal, Tanzania, Uganda, and Zambia—that are considering or planning nuclear power programs.

 

Eskom
Eskom’s Hendrina power plant in Mpumalanga province came into operation in 1970. (Photo via AFP)

Once a global leader and the continent’s leading energy producer, in a little over a decade South Africa’s electricity public utility has fallen into a pattern of disrepair that was once unimaginable.

The country saw its first blackouts in 2007, at a cost to the economy of just under US$1 billion. By 2019, the electricity lost to load shedding* had escalated to 1,352 gigawatt hours (GWh) and a total of 530 hours, up from the 176 GWh shed in 2007.

Load shedding is structured incrementally, increasing from Stage 1, where 1,000 megawatts (MW) are removed from the grid, up to Stage 8, where up to 8,000 MW would be shed. South Africa hit Stage 6 in 2019, its highest stage yet, with 6,000 MW taken off the grid at a time.

These losses come at a cost. Energy analyst Chris Yelland has calculated that each stage of load shedding cost the South African economy R1 billion (US$60 million) per day, per stage. For example, a day spent at Stage 3 load shedding would lead to a loss of R3 billion (US$180 million) over the 24-hour period. In 2019 alone, South Africa’s electricity instability cost the country somewhere between US$3.6 billion and US$7.2 billion.

 

South Africa still accounts for nearly a third of the continent’s installed capacity

 

The paradox of the South African case is that the country has increased its shortages tenfold over the past decade and increased its energy insecurity, yet it still accounts for nearly a third of the continent’s installed capacity, with about 52 gigawatts (GW). Relative to its local neighbors, South Africa is still doing fairly well with regard to government-provided energy supply. However, that’s not the neighborhood it’s trying to compete in, and that’s also not the system its economy was designed for.

The South African economy was built on an alliance between cheap energy and mining. Eskom’s initial model of operation prioritized the security of energy supply at all costs. This changed in the 1980s when the National Party government removed the organization’s internal capital development fund and increased Treasury’s oversight of new investments. Reforms introduced in the 1990s created further confusion in the decision-making process around new capacity, and the problem remains unresolved more than twenty years later. So, while there has been awareness since 1998 of the impact of Eskom’s ageing infrastructure, to date, no credible plan has been provided to address it.

The public utility is now characterized by ageing, poorly maintained infrastructure and severe delays in the construction of its new power plants.

 

COVID-19 has provided some relief in terms of demand 

 

Eskom started 2020 in poor form: by the end of January, it had already shed 143 GWh, nearly as much as the 2007 total. The COVID-19-induced lockdown, introduced in late March, reduced electricity demand significantly and led to a decline in outages. This trend began to change as the economy started opening up in June, leading to a series of blackouts.

Although COVID-19 has provided some relief in terms of demand, it has also thwarted some of the long-term maintenance plans set out my Eskom. The public utility had previously scheduled to take 2,000 MW off the grid for nine months to do a full rebuild from July 1. However, travel restrictions caused by the pandemic have limited access to scarce technical skills and resources to pursue the detailed maintenance.

In mid-July, the German Embassy, working together with the Ministry of International Relations and Cooperation and the South African–German Chamber of Commerce and Industry, chartered a Lufthansa flight to bring a team of German technical experts to South Africa. The experts, invited by German businesses operating in South Africa, are expected to provide technical expertise that cannot be found locally, such as upgrading high-tech production facilities in the Eastern Cape, and supporting Eskom in the maintenance and upgrade of its power plants.

According to the first issue of the 2020 OECD Economic Outlook—a biannual analysis of major economic trends and prospects—South Africa’s economic trajectory in a post-COVID-19 landscape will be heavily impacted by its ability to address the structural issues of its economy, notably the rising costs and instability of electricity supply.

Over the past few years, Eskom has flirted with a number of technologies in an attempt to stabilize the grid, including nuclear, but it is uncertain where the country’s next major energy investment will be. Thus far, the only independent producers to provide power to the grid are those under the Renewable Energy Independent Power Producer Procurement (REIPPP) program: 6,329 MW of renewable energy has been procured to date, of which 3,876 MW is currently connected to the grid.

South Africa faces a choice in the near future: either feed more power into the grid, or create an economic system less reliant on a centralized electricity provider.

 

* Load shedding describes the process of strategically cutting power to specific areas in order to stabilize the grid when demand outstrips supply.

 

Nchimunya Hamukoma is an economist and policy strategist (@N_Hamukoma).

 

Claude Borna, director of the Sèmè City Development Agency (Yanick Folly/AFP)
Claude Borna, director of the Sèmè City Development Agency (Yanick Folly/AFP)

Benin is set to open Sèmè One, a tech start-up incubator that is part of the larger Sèmè City, envisioned to be a high-tech regional innovation center. Located near the Nigerian border in the commune of Sèmè-Kpodji, this “smart city” was announced two years ago by President Patrice Talon as part of the Revealing Benin development program. The Beninese government aims to turn the country into a West African hub for advanced technology, akin to Paul Kagame’s efforts in Rwanda to transform the capital Kigali into the “Singapore of Africa.”

Planned to be fully operational by 2030, Sèmè City will welcome students and entrepreneurs from across West Africa, who will have access to research centers and laboratories.

Responding to COVID-19, twenty-nine-year-old Donald Tchaou and five friends approached the Sèmè City Development Agency with an idea to develop a mobile app to enforce social distancing and help with contact tracing. Not only were they given access to Sèmè City’s resources, but they also benefited from personalized coaching throughout the development process.

Sèmè City’s director is Claude Borna, a Beninese native who obtained degrees from the University of California, Los Angeles, and McGill University, and worked for Deloitte and Amazon, among other corporate groups, before returning to Benin in 2016.

 

miner zimb
A sign at a Zimbabwean mine makes it clear that firearms are not allowed. (Photo via AFP)

Two Zimbabwean workers at a gold mine on the outskirts of Gweru in central Zimbabwe were shot by their Chinese boss on Sunday, June 21. The incident has rekindled long-standing tensions about Chinese nationals living in the southern African country.

A court affidavit submitted by the Zimbabwean police alleges that Zhang Xuelin shot Kenneth Tachiona five times, reportedly in both thighs, and another employee, Wendy Chikwaira, had his chin grazed by a bullet. Workers at Reden Mine in Gweru had confronted Xuelin over his alleged failure to pay their wages in US dollars, as had been agreed previously, according to the affidavit. US dollars are highly sought-after in Zimbabwe, which has experienced repeated cash shortages and inflation spikes since its currency was effectively abandoned in 2009.

The Gweru case brings to mind a 2010 shooting in neighboring Zambia. Two Chinese mine managers were charged with the attempted murder of eleven workers at the Chinese-owned Collum Coal Mine in Sinazongwe after a protest over pay and conditions became heated. Despite being a decade apart, the two cases demonstrate an ongoing pattern of African workers feeling disgruntled by the systemic imbalance of their relationship with Chinese interests.

 

Imbalance

The number of Chinese nationals in Africa has increased over the past two decades. At least 10,000 Chinese nationals now live and work in Zimbabwe, according to the Brookings Institute. The population in Zambia is significantly higher. Many of these migrants are employed as contractors for Chinese companies delivering extensive infrastructure, construction, manufacturing, and mining projects. This model of investment frustrates African executives, commentators, and workers, who argue that it deprives locals of employment and training opportunities. There is, however, evidence to suggest that Chinese firms employ, pay, and train Africans at similar rates as non-Chinese companies.

That sentiment reflects more deep-seated misgivings about the equity of large deals that African governments sign with Chinese companies. These include loans, construction projects, and extraction rights for natural resources. For example, in April 2019, Chinese firm Tsingshan committed to investing US$2 billion to mine chrome, iron ore, nickel, and coal in Zimbabwe, cementing China’s place as the country’s largest foreign investor. At the same time, Shanghai Construction Group is constructing a new US$140 million six-story parliament building, apparently a donation from the Chinese government. But many Zimbabweans are skeptical of such gestures. Few regard it as unadulterated altruism. And the lack of transparency fuels speculation.

 

Postcolonial Partnership?

China’s extensive leverage in Zimbabwe, and elsewhere, does not look like the postcolonial partnership promised in the 1970s. Indeed, the legacy of racist settler colonialism provides an alarming comparison for Zimbabweans when they hear stories of managers shooting employees or, as happened in Zambia recently, Chinese vendors denying service to black customers.

This is a particularly sensitive time for Sino-African relations. In April, reports of African migrants in Guangzhou, home to China’s largest African community, being targeted for forced testing and quarantine, evicted from their accommodation, and denied hospitality went viral and sparked outrage on social media. Human Rights Watch accused Guangdong authorities of “textbook” discrimination. Many feel that it is one rule for the Chinese in Africa and quite another for Africans in China.

The COVID-19 crisis has also elevated concerns about debt, at a time when economic paralysis is hampering governments’ ability to maintain payments. About 20 percent of African government external debt is owed to China. According to reports, China has offered relief from interest-free loans, but these loans make up less than 5 percent of its total lending.

In a recent interview, former Zimbabwean minister Gordon Moyo, now director of the country’s Public Policy and Research Institute, described China’s lending as “illegitimate” and said the East Asian country was at risk of being “a new imperialist.”

 

Money Matters

Having been shot repeatedly in both legs, Kenneth Tachiona faces the prospect of being disabled for the rest of his life. But with a wife and five children, his concerns are very pragmatic. In an interview with VOA, he said: “Of course I want the law to take its course, but I’m now disabled, and for me, the most important thing is to be compensated adequately.” Money being his most pressing concern reflects the same hard realities facing his government.

President Emmerson Mnangagwa has emphasized the importance of impartial justice in this case. Likewise, the Chinese embassy declared its respect for Zimbabwe’s right to handle the situation “in accordance with the law.” At the same time, however, they asked to see Zimbabwe “protect the safety as well as legitimate rights and interests” of Chinese nationals in the country. President Mnangagwa echoed the sentiment and did not accept the view that the shooting was reflective of “systemic and widespread” abuse by Chinese employers, as some prominent civil society groups have claimed.

With mounting debt, a health crisis, and uncertain support from the West, there is little prospect of Zimbabwe—or any of its neighbors—untangling itself from Chinese interests.

 

Jesse Samasuwo is a London-based analyst writing and researching international affairs, primarily focused on energy, trade, and politics.

 

Nigeria President Muhammadu Buhari attends the fifty-sixth ordinary session of the Economic Community of West African States in Abuja on December 21, 2019.  Kola SULAIMON / AFP
Nigerian president Muhammadu Buhari attends the fifty-sixth ordinary session of the Economic Community of West African States in Abuja on December 21, 2019. (Kola Sulaimon/AFP)

Earlier this week, Nigerian President Muhammadu Buhari announced the launch of the US$2.8 billion Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline project, which he promised would significantly improve power generation for domestic use and gas-based industries. In addition, the pipeline is anticipated to bring both greater infrastructure investment and employment to towns along the pipeline’s route, benefitting the provinces of Kano, Kaduna, Niger, Abuja, and Kogi State.

Nigeria has begun work on the first 200 kilometers of the 614-kilometer-long AKK pipeline route, which forms part of the planned 1,300-kilometer-long Trans-Nigeria Gas Pipeline, a project largely financed by China Export & Credit Insurance Corporation and several Chinese banks.

 

Nigeria formally joined China’s Belt and Road Initiative in February 2019

 

Buhari’s promise of economic prosperity arising from this project underscores Nigeria’s slumping energy industry and regular power outages despite being Africa’s largest oil producer. The COVID-19 pandemic in particular took a heavy toll on the industry: at the conclusion of the first half of the 2020 fiscal year, oil and gas companies listed on the Nigerian Stock Exchange reported a loss of about US$457.8 million.

China’s strong presence on this project reflects its broader infrastructure diplomacy in Africa, enacted through its Belt and Road Initiative, which Nigeria formally joined in February 2019.

 

IAEA
Empty chairs are seen in front of the logo of the International Atomic Energy Agency prior to a meeting in Vienna on August 1, 2019. (Hans Punz/AFP)

Ghana recently completed phase one of a three-part process to develop the infrastructure for producing nuclear power in coordination with the International Atomic Energy Agency. The focus of the first phase was on conducting a series of studies on the rationale for and feasibility of introducing nuclear power to the national and West African energy grid, a tall order considering the steep costs of constructing and maintaining nuclear reactors.

Ghana’s current installed generating capacity of 4,132 MW comprises hydroelectric power (38 percent); thermal power fueled by oil, natural gas and diesel (61 percent); and solar power (1 percent). Actual availability, however, rarely exceeds 2,400 MW due to various factors, including inadequate fuel supplies. To meet the energy demands of its growing population, currently at about 28 million, requires the country to rely on the broader West African energy grid to supplement the shortfall.

Phase Two of the nuclear plan will include meetings with potential stakeholders, developing a government financing scheme and a framework for nuclear waste disposal protocols, and determining suitable sites for construction. Dr. Robert B. M. Sogbadjie, coordinator of the Ghana Nuclear Power Program, confirmed during a press conference that four sites have already been picked out, but did not disclose their locations. Phase two is anticipated to begin in 2024, with construction to be completed by 2030.

 

South Africa has had a nuclear power plant since 1984

 

Should Ghana succeed in this endeavor, it would make it only the second country in Africa to have nuclear power, alongside South Africa, which has had a functioning nuclear power plant—providing 5 percent of the country’s total energy output—since 1984. Furthermore, Ghana’s initiative on nuclear power could incentivize other African nations to do so as well, moving the continent away from fossil fuels while meeting the energy needs of a growing population.

 

River in the Pendjari National Park in the dry-season
A river in Pendjari National Park, Benin, in the dry season. (Photo: Wikimedia Commons)

 

The Beninese government has taken great strides in its goal of expanding access to drinking water to about 4.5 million people living in rural areas. The authorities recently created the National Rural Drinking Water Supply Agency, and on May 20 the cabinet approved the signing of agreements between the agency and the country’s seventy-seven municipalities.

The federal government has set the goal for itself of achieving universal access to clean water by 2021, nine years before the deadline set by the United Nations to achieve the Sustainable Development Goals. Among others, the authorities say six projects are in progress in rural areas, including the sinking of about 200 boreholes, that are expected to benefit more than 220,000 people.

 

Benin has demonstrated some of the more effective water management programs in West Africa

 

Despite regional disparities in terms of access to potable water and a noticeable urban-rural divide, Benin has demonstrated some of the more effective water management programs in West Africa. A 2011 country status overview report from the African Ministers’ Council on Water found that Benin would reach 73 percent total coverage by 2015 (which it ultimately exceeded back in 2012), a marked improvement from 51 percent at the end of 2008.

Whereas access to drinking water has greatly improved, Benin still lags behind in ensuring sanitation services for all its people, which will require greater financial investment from the government and international donors to reach the targets of the Sustainable Development Goals.

 

 

Undersea Cable

 

A multinational consortium of telecommunications companies—including Facebook, China Mobile International, MTN Global Connect, Telecom Egypt, and Vodafone—announced the construction of a new undersea fiber-optic cable that will connect sixteen African countries, Europe, and the Middle East. Named 2Africa, the 37,000 kilometer-long communications cable is scheduled to go live in 2023 or 2024.

 

Africans pay some of the highest data rates in the world.

 

In March, two undersea cables serving Africa experienced breakages that drastically reduced Internet connectivity for days as repairs were made. The addition of 2Africa will help improve Internet access for millions of Africans, and mitigate disruptions should other cables experience failures in the future. Such disruptions are not only frustrating for Africans, who pay some of the highest data rates in the world, but also have a negative impact on the African economy.

A 2017 report by the Collaboration on International ICT Policy for East and Southern Africa (CIPESA) concluded that intentional Internet shutdowns in twelve countries between 2015 and 2017 cost sub-Saharan Africa more than US$237 million. Unforeseen connectivity disruptions naturally can have far greater negative impact on national and regional economies.

 

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