Africa has made remarkable progress in recent years, a phenomenon popularly known as “Africa rising”, but in the short-term the continent faces a demographic bomb as more young people enter into the work force then it can possibly provide jobs. This together with climate change disasters and vulnerabilities which risks the long-term sustainability of Africa's economic development.
By 2030, it is expected that 6 of the world’s 41 megacities will be African and the African Economic Outlook 2016 predicts that Africa could see its slum population triple by 2050. The infrastructures in the African cities, with some exceptions, like the planning of smart cities in countries as Rwanda, Kenya, or Ghana, is largely not yet ready to respond to the transformation the continent is seeing.
Yet, local governance often concentrates on construction without focusing first on sustainable transportation and decent housing. For megacities this will mean many problems in the near future, from sewages to pollution, from transportation to communication. Therefore, for its development, besides energy supply and industrialization, Africa will need urbanizations that are sustainable, adapt to businesses, and at the same time able to give a decent living to the people, while typical urban resident in Africa still lives in a slum or an informal settlement, and lacks access to basic services.
The international community is not yet well aware of this urgent need. There is not a real support yet by Europe for example, the continent that colonized Africa in the last centuries for its interests and that now is still sleeping at economic level, with few projects of development, even if is present at security level with its military operations. But as the security-development nexus explains, there is no security without development, the two legs go together to make the continent walk towards its future. China in this sense is awakening and concentrating on Africa, building infrastructure on the continent. As are Arab countries like UAE. But there are also some European countries that are investing for development with different goals.
There are in particular some Italian projects worth noting. I am currently in Ethiopia where Webuild, former Salini Impregilo construction firm, is building a gigantic and fundamental project for the future of the Horn of Africa: the GERD, the Grand Ethiopian Renaissance Dam. The primary purpose of the dam is electricity production to relieve Ethiopia’s energy shortage and for export to neighboring countries. The dam will be the largest hydroelectric power plant in Africa when completed. Filling the reservoir began in 2020 and will take few years, depending on hydrologic conditions and agreements reached between Ethiopia, Sudan, and Egypt.
These infrastructures show how Italy could, with excellences such as Webuild, but also together with the European Union for supporting good governance and urban planning, help build smart cities in Africa, given the urgency of the situation, and much more efficient than what China does, given the fact that China is interested mostly in expanding its market and economic growth, even if making African countries dependent on her loans and at risk of default or building things inefficiently (the railway infrastructure between Addis Ababa and Djibouti is an example of it, with few trains arriving very far from the cities and so not accessible or useful to the populations). There are also some examples that could be taken as model for Africa, like the smart cities which are currently built in the Gulf, where there are various projects including NEOM-The Line, the city in Saudi Arabia made by a line of 170 KM of small urban communities connected by fast and sustainable transport. But in Africa there are problems at government level, with incapacities to make real efficient urban planning, with an endemic corruption that together with the foreign attempt of easy gains make the rest, now that investments in this sector are at an all-time high. In Addis Abeba for example different Chinese and Emirates companies are transforming the city in a “jungle of concrete” with a fast real estate speculation that are useless as often left empty because people cannot afford them. And there is instead a lack of investment in infrastructures, transportation in particular, making the diplomatic capital of Africa (being the HQ of African Union) impossible to cross in decent time.
Hopefully, smart working will arrive soon in Africa, making city transportation less needed, but the path towards this doesn’t seem there yet. So, could Africa be able to pull the strings and make a future sustainable urbanization for the benefits of its population that will be almost half of humanity by the end of the century? Future will say but decisions by bold visionary leaders need to be taken fast as constructions need decades to be realized. The first problem therefore is to elect, where possible, such type of leaders.
The global pandemic can only partly explain Zambia’s recent economic misfortune. Energy insecurity in Zambia has constrained cyclical upswings, dampened industrialisation, and exposed the economy disproportionately to the impact of climate events. Before the withering blow of the pandemic, two severe droughts in five years, in an economy heavily dependent on hydroelectricity, had their part to play in setting the course towards fiscal crisis and default.
Last month, Zambia became the first African country to default on its foreign debt since the outbreak of the pandemic.
An outstanding coupon payment of US$42.5m on eurobonds was left unpaid for successive deadlines, triggering a technical default notice on November 14th. An update then followed, from Fitch Ratings, of an official downgrade on Zambia’s long- and short-term foreign currency notes, from C to ‘Restricted Default’ (RD).
Word of a potential default was in the wind back in 2018. Analysts alluded to an escalating pressure on sovereign liquidity and a series of downgrades were driving high debt-service commitments. Economic growth was at its lowest three-year average for a decade, while total external government debt as a percentage of GDP grew from 34 percent in 2017 to 48 percent in 2019. In September of 2020, before the Eurobond default, investors at the London Stock Exchange spoke to Finance Minister Bwalya Ng’andu to get to the bottom of the situation. The Minister cited ‘foreign currency arrears incurred by state-owned enterprises’ as among the big-ticket items. “The aggregate amount at the end of June 2020 was approximately US$1.29 billion” he said, nearly 6 percent of gross domestic product in 2019. This balance comprised of guaranteed and non-guaranteed sums, mostly incurred by the state-owned power company, ZESCO, through arrears on power purchase agreements.
Unfortunately, news of financial ill-health in one of Africa’s state-owned utilities comes as no surprise. Officials at ZESCO, like their regional counterparts, face pressure to cap consumer tariffs, while poor revenue collection processes undercut their ability to recover the cost of supplying electricity. Further out of reach are the funds to upgrade aging plants or install additional capacity to meet growing demand.
Only 31 percent of Zambia’s 7.2 million households enjoy access to electricity, according to data from the USAID’s ‘Power Africa’ programme.
The technical grid losses that occur with dilapidated transmission infrastructure only magnify the problem. Additional electricity generation is required to compensate for losses, increasing the likelihood of power outages, which disrupt economic activity and reduce industrial competitiveness.
A hard drought
A severe drought in 2015 shook Zambia’s fragile economy and threatened the financial sustainability of the energy sector.
In 2000, 95 percent of the country’s installed capacity was large hydro. That figure is closer to 75 percent now, with power being produced at one of the world’s largest dams, Kariba, which sits on the Zambezi basin and straddles the border with Zimbabwe.
During the worst of the drought, local reports had the electricity supply deficit at 1000 MW, more than half of peak demand. The government’s response was to reach out to neighbouring South Africa for emergency power imports. These cost the exchequer $6 million, and the country increased borrowing to cover commitments against its mounting liabilities. ZESCO’s debt levels grew by a staggering 47 percent between 2014 and 2015 and macroeconomic factors worsened the burden. The company’s financial accounts show that, in the same period, the local currency also depreciated by an average of 72 percent and inflation reached 21 percent, from 8 percent the year earlier. By 2017, with only marginally better hydrological conditions, Zambia’s state-owned power supplier, had breached seven loan agreements with banks including the Bank of China Ltd. and Standard Chartered Plc.
A worse drought hit in 2019 – one of the worst in three decades. ZESCO’s precarious finances made it more difficult to arrange an interim solution.
Large outstanding balances (circa US$ 70 million) with Mozambique’s state electricity supplier made overtures in that direction futile. This time, Eskom, South Africa’s integrated utility, demanded US$20.5 million for one month of power imports, in addition to $6.5 million in respect to the arrears for power supplied in 2015.
Caution to the water
The Zambian economy entered 2020 on unstable footing and still feeling the impacts of a prolonged drought. The pandemic dealt a blow its liquidity position has not been able to withstand. Bilateral debts to China are more than $3 billion, with a further $12 billion owed to international creditors, according to the Financial Times. Now, following its default, the outlook is likely one of painful fiscal consolidation if the country is to come in line with the IMF’s stringent debt-to-GDP thresholds (35 percent) and become eligible for the Fund’s official assistance. The austerity comes as governments around the world face added pressure to sustain their economies through the Covid-19 economic crisis. Fiscal policy has been a critical lever for many, but meanwhile Zambia’s finance ministry has identified total budget cuts worth 34 percent, next year versus this, and US$1.38 billion worth of capital projects to ‘re-scope’ or cancel. Neither of these measures are enough to bring the ratio (currently above 90 percent) down sufficiently.
Zambia’s experience should have alarm bells ringing. The nation’s structural challenges, of aging and poorly maintained power infrastructure combined with strained budgets unable to finance new capacity, recur across several of Africa’s developing economies.
Power outages are all too common in the region and limit industrial growth by disincentivising investment and reducing competitiveness. A 2016 study by the World Bank found that across electricity utilities in 39 sub-Saharan African countries, only the Seychelles and Uganda were achieving full operational and capital cost recovery, and only 19 countries were covering operational expenses.
The impact on growth and employment is a material one. In Zambia’s case, even before the 2015 drought, power outages accounted for 5.5 percent of revenue for a sample of manufacturing firms surveyed by the World Bank. Zambia’s lack of energy diversification has been an exacerbating factor, exposing the economy to climate-related weather shocks at a time when government finances have no buffer. This situation could well play out in a number of cases: Of the eleven sub-Saharan African countries with a more than 50 percent dependency on hydro (Fig 1), ten are classified as least developed economies, according to the United Nations Development Programme classification. Their average public external debt payments as a proportion of revenue is 17.5 percent, 3 points higher than the mean unweighted average for governments in the ‘global south’ (and the average among BRICS is 4.6 percent). Modelling shows that for a handful of hydro-dependent nations, use of emergency power due to drought – obtained by expensive short-term lease – can increase utility deficits by more than 1 percent of GDP in certain scenarios.
More than green, sustainable
Experts have noted for a while that electricity supply among a cluster of southern African nations is over-exposed to the variation in water levels in the Zambezi basin. More troubling, is the forecast published in 2014, that large parts of southwestern Africa can expect harsher and more frequent droughts in the coming decades. Adapting vulnerable economies to the risks of climate change must involve addressing over-dependence on singular energy sources for generation, particularly hydroelectricity. Current evidence would suggest that these warnings are not being heeded, as in eastern and southern Africa, more than 40 large-scale (> 50 MW) hydropower projects are planned up to 2030. Significantly, 89 percent of southern Africa’s new hydro capacity is planned for the Zambezi basin, according to a policy brief from the Grantham Institute. One hopes policymakers and investors might reconsider.
If Zambia’s experience can inform a number of better regional policy choices in the coming years, it will not have been in vain. For the energy sector, it demonstrates the electricity-security risk arising from climate change, hydropower-dependency, and weak fiscal balances, which is multiplied to devastating effect when these factors co-occur.
They say money doesn’t grow on trees. Well, sometimes it’s just under your feet! A community of Mozambican migrants in Carletonville, in the South African province of Gauteng, found gold dust in the soil of the informal settlement of Xawela.
A long and complicated process allows the zama zamas (informal miners) to produce and sell pure gold without leaving their home. A day of hard work is enough to feed a family for a week, fuelling the informal economy of the township.
A nifty operation
The process begins at dawn, when some adolescents of the informal settlement start sweeping the streets of Xawela. “They need to bring 15 barrels of soil to make around one gram of gold,” explains John D (42), the marshal of the operation.
The youths sweep the precious dust early in the morning, before preparing for school. Neo (20) and Zweli (18) work tirelessly to gather the loot for their seniors. “This is our life, but our education is also important,” admits Neo. One day, they will also be zama zamas. Born and bred in the settlement, they have already enrolled in the Delta, the local gang which runs surface and underground mining in the area.
While the boys are gathering the raw dust in an unforgiving soggy day, another group is setting up the sieve. On the outskirts of the settlement, they dig large pit holes which they use to extract the mineral.
“Out here is the wilderness,” comments LSG, a general in the Delta gang. “Sometimes we find buffalos, antelopes or hyenas roaming around. When there is no food at home, people will go out there and hunt.”
Next to each pit hole is a ramp, covered with cloths where the gold will stick. The miners placed a large bucket made into a sieve on top of the ramp and started filling it with the metal dust. A hose pipe inside the container provides running water throughout the process.
From dust to grof
After some hours spent processing the soil under the pouring rain, the cloths on the ramp glitter with gold. The operation now moves into John D’s home and spaza (convenience) shop, where the men are sitting around a fire and having drinks. While John D washes the mineral from the cloths inside a bucket, West, Castro, Samson and Metlo burn some soil with a high concentration of gold.
One last step, then the precious loot is ready for moulding. John D drops some mercury in a plate and then starts sieving the water full of the shining dust. “You can find the mercury in any pharmacy or hardware store,” he says.
The liquid element is a useful magnet, which starts turning yellow as it incorporates the gold. He puts aside the bigger grains mumbling “point one gram... point two grams...”
Once the sieving is done, one last capable move separates with a cloth the liquid mercury from the solid gold.
Inside a shack, John D lights a blow torch to mold the metal inside a plate. He knocks it with a spoon to make it into a small nugget. “Here is the grof,” he demonstrates proudly. The grof (Afrikaans for “coarse”) weighs approximately one gram.
“In town, we can sell it for seven, eight hundred rand [just under $50] if we’re lucky,” concludes John D.
“Here is the big deal!” exclaims in excitement West (37), while pouring some beer on the grof. The men amass around the raw nugget to witness the result of their hard work.
The golden legacy
The township of Xawela is in the outskirts of Carletonville, a mining town located on the north-western part of the Witwatersrand Gold Reef. Mining operations in the area began in the late 1800s, when settlers from the Cape laid the first stone of Ferreirarsdorp, the oldest suburb in Johannesburg.
Not far from the South African metropolis, Carletonville was built in 1937 in a location considered as the richest gold-mining area in the world. Mining companies such as Anglo Gold, Sibanye and Impala scrambled for a piece of land, digging in the depths of earth to extract the precious mineral.
The gold rush attracted migrant labor from across southern Africa. Shortly, informal and illegal miners began plundering gold-rich soil and ore from the shafts.
The oldest residents of Xawela remember a time when smugglers hid huge quantities of gold in the township. They looted nearby mines with some inside help and used Xawela as a hideaway.
“I made a lot of money with gold in my youth,” said Virginio (53) from Maputo. “I used it to support my family and start my panel beating business.”
Many years later, a generation of young migrants found gold nuggets inside pit toilets and discovered a concentration of gold dust in the soil under their shacks.
A journey to hell
While the community of Xawela feeds off the gold deposits hidden in the soil, the group of zama zamas also works underground.
To reach the tunnels of the buried city, an abandoned wing of an old mine, they climb down a 300-meters deep shaft with a complex system of ropes and pulleys.
“There are strict regulations in place to avoid illegal mining in active shafts, but it’s almost impossible to keep zama zamas away,” admits Nyko, an employee of the National Union of Mineworkers. Furthermore, the companies have no interest in preventing illicit activities in abandoned shafts.
Hundreds of people cooperate in the underground tunnels, using military hierarchy and martial law to maintain order.
As one of the generals of the Delta gang, LSG oversees the appropriation of gold, platinum, and copper cables in mines where his subjects spend up to three months without seeing the light of the sun.
“The Shangaan people from Mozambique are the most skilled gold diggers,” he says. “Instead the baSotho [from Lesotho and the Free State province in South Africa] are the guardians of the shaft. Some of them are vicious, in smaller shafts they would take advantage of the zama zamas, make them work like slaves, rob them and even rape sometimes.”
Many of the illegal miners are skillful former mine contractors. They know the tunnels inside out and carry out blasting operations and routine geological checks with professional precision. The refining of the gold happens directly underground, where wealth is diffuse and goods sell in out-and-out underground stores at ten times the market price.
Nonetheless, accidents disrupt the operations from time to time. During an interview, a general picks up the phone. After a heated discussion, he explains: “somebody broke his leg in a blast. They’re taking him out tonight”.
Far West, far South
One of the gangsters pulls out of his pocket two large pieces of raw gold. “This one is about 20 grams, this is 15,” he remarks. Some of the miners sent them up from the shaft. After selling them, the gang will deliver a share of the proceeds to the miners’ families.
“When the zama zamas come back to surface,” laughs LSG, “the whole township is abuzz. People have a lot of money and the parties last for days.”
In the shacks of Khutsong, a larger township near Xawela, gangsters hide explosives, guns and AK-47 rifles. Several gangs contend illicit markets regulating smuggled gold, copper cables, drugs, prostitution, and firearms.
“Our gangs are different from the ones you find in jail,” elaborates LSG. The main criminal clans of Carletonville are called Delta, Casanova, Vandal and Creature. Their rivalry accounts for several murders and regular shootouts over control of drug and prostitution hotspots. The law enforcement may stop the most striking incidents, but generally colludes with the gangsters to maintain peace in town.
Jail time is a temporary punishment for serial murderers and mobsters. Somebody in the gang reminisces of his time behind bars, after a heist at a petrol station: “two people were killed in my cell, right in front of my eyes. But there is a code, you won’t speak up otherwise you’ll be next. On record, they both committed suicide.”
One of the zama zamas was arrested for house robbery. “I killed a lot of people before coming clean. I have a family to feed back home.” After some years in jail, he decided to give up violence and work in the mines. “You can call this illegal, but for me it’s just a job,” he admits.
When the sun goes down over Khutsong, it’s time for a group of zama zamas to “shoot down” in the mine. They enter the shaft, buckle up and leap into darkness. Their game is on.
Alessandro Parodi is a Johannesburg-based reporter with a passion for cultural studies and urban ethnography. He is a regular contributor to the Italian-South African weekly publication La Voce del Sudafrica and the travel magazine Nomad Africa. (Twitter: @apnews360)
Manash Das is a freelance photojournalist based in South Africa and India. His work mainly focuses on humanitarian issues, conflicts, and daily life. (Twitter: @manashdasorg)
South African wines won multiple awards at the Decanter World Wine Awards which were held this past week under strict COVID-19 preventative measures. South Africa’s wine industry provides roughly 290,000 jobs directly and indirectly to South Africa's economy. The $2.6 billion dollar industry contributed some $400 million excise and VAT tax revenue to the South African Revenue Service in 2019.
Now in its 17th year, the 2020 competition saw South Africa performing well against classic wine producing regions Classic regions in France, Italy, Spain, California, and Australia once again performed well.
South African winemakers have much to drink to given the results. South Africa improved its medal haul 16% compared to 2019. The Rainbow Nation's vineyards took home one "Best in Show" award, as well as four Platinum, 31 Gold, 364 Silver and 136 Bronze awards.
Rustenberg Five Soldiers Chardonnay 2018, hailing from South Africa’s well-known Simonsberg-Stellenbosch wine producing region won "Best in Show". Indeed a third of the wines that won medals in 2020 hailed from this region.
However, other wine producing region in South Africa won accolades in 2020 as well. Cape Agulhas, a small wine-producing region on the southern tip of South Africa was also well represented. All seven of its entries won medals including one Platinum for the Ghost Corner Wild Ferment Sauvignon Blanc 2018. This quiet coastal region is located roughly 170km from Cape Town.
South Africa’s other three Platinum medals came from a variety of different regions across South Africa’s Western Cape region. Notably Klein Constantia Vin de Constance 2016, a 100% Muscat de Frontignan, won one of only 22 Platinum medals given to sweet wines in 2020.
The event was also notable for the very strict measures to prevent the spread of COVID-19 put in by the hosts. All staffs and judges wore Personal Protective Equipment (PPE). All visitors had their temperatures checked at the door, and even disposable spittoons with antibacterial powder that solidifies with liquid were deployed. Attendees were also wore proximity tags worn on lanyards that vibrate when they came within 2 meters of another attendees.
“The Decanter World Wine Awards really helps producers to raise their profile internationally. It can do the same for wine-producing regions and nations, too. Our judging system - including re-tasting of all Golds, with possible promotion to Platinum - is something we are very proud of. We explain it as often as we can. So, when consumers see a DWWA sticker on a bottle, be it Platinum, Gold, Silver or Bronze, they can be reassured that the wine in question has been judged by regional experts and specialists before receiving its medal. We discuss, we argue, we fight it out...that's all part of the judging fun. Even with social distancing! But that's also how you get the results which have made the DWWA an international wine benchmark,” said Andrew Jefford the events co-chair in a media statement.
South Africa's wine know how is spreading across the continent as well. Last year a Western Cape wine company, La RicMal, announced plans to open a bottling plant for wine in Ghana.
President Donald Trump has instructed U.S. Secretary of State, Mike Pompeo to pull back from a commitment to provide $100 million in security related aid to Ethiopia, a leading developing nation on the African continent. According to the New York Times, the State Department indicated this would be a “temporary pause” on some aid in response to “Ethiopia’s unilateral decision to begin to fill [its] dam before an agreement was reached…” This action by the Trump administration is more than an outrageous encroachment of Ethiopia’s sovereignty. It is an assault on the right of emerging nations to take actions to improve the living conditions of their people.
In response to the decision by the State department, Eyob Tekalign, Ethiopia’s state finance minister said correctly, “We don’t think that the U.S. has thought this through carefully…We are hopeful that they will reconsider because Ethiopia is doing what is absolutely right and in all senses of the word legally, morally as well.”
The Ethiopian people have funded the $4.6 billion Grand Ethiopian Renaissance Dam (GERD) themselves. This fulfills a bold vision to develop their nation with the 6,200 megawatts (MW) of electricity that the dam will generate when completed. Ambassador Fitsum Arega aptly expressed the desire of the Ethiopian population, when he tweeted, “we will pull Ethiopia out of the darkness,” which is literally and metaphorically true.
All indications are that President Trump acted on the insistence of Egyptian President el Sissi, who has claimed “historical rights” to the Nile River. In truth he is asserting “colonial rights” to the Nile bestowed on Egypt by the British Crown.
At the end of 2019, at the request of President el Sissi, President Trump instructed U.S. Treasury Secretary Mnuchin to act as an independent broker in discussions with Sudan, Egypt, and Ethiopia. Over four months, several meetings of the three Nile riparian nations were held in Washington DC discussing the “fill rate” of the GERD. There are legitimate concerns about how much water would be withdrawn annually in the next several years to fill the GERD’s reservoir of 74 billion cubic meters (bcm) of water. Technical issues like the rate of which water should be withdrawn from the Nile to fill the reservoir should be resolved by the three nations with the understanding that a functioning GERD will benefit all the people living in the Horn of Africa.
The heavy rains at the beginning of Ethiopia’s rainy season this summer have already filled the GERD with the required 4.5 bcm of water to test two turbines. This was accomplished without any reduction in the flow of the Nile.
As the tripartite discussions, with the US Treasury and World Bank in attendance continued into February 2020, it became clear that the US was “putting its thumb on the scale” for Egypt, in the words of retired US Ambassador David Shinn. By the end of February, Mnuchin secured an “agreement” regarding the Nile with Egypt, without the participation of Ethiopian representatives. On February 28, 2020, an official statement from the US Treasury Department praised Egypt’s “readiness to sign the agreement,” and instructed Ethiopia that “final testing and filling should not take place without an agreement.”
Eventually, the unresolved issue of the Nile shifted to the proper venue for African nations to settle disputes, the African Union. The dialogue has continued under the personal supervision of South African President, Cyril Ramaphosa, Chairperson of the African Union.
The GERD is built in Ethiopia on the Blue Nile River, which supplies 85% of the Nile when it joins the White Nile north of Khartoum, Sudan
Bringing Africa Out of Darkness
What President Trump does not understand; is that his “pause” in aid is not only harmful to Ethiopia, but it is detrimental to the entire African continent. Whether he is aware of it or not, is establishing a dangerous precedent in foreign policy, and not just for Africa.
Ethiopia, with a population approaching 110 million, has made a commitment to eradicate poverty. To that end, Ethiopia has embarked on erecting significant infrastructure projects in roads, railroads, and hydro-electric dams. The GERD has the potential to generate over 6,000 MW of power, doubling Ethiopia’s present capacity, and placing Ethiopia only second to South Africa in energy production in sub-Saharan Africa (SSA). Ethiopia would also become an energy exporting nation potentially providing electricity to neighboring South Sudan, Sudan, Kenya, Somalia, and Tanzania.
The root cause of virtually every crisis that African nations are facing today, including ethnic conflicts, can be traced to underdevelopment. This is especially true when one examines the dearth of hard infrastructure in SSA with a population nearing 1.5 billion that is projected to reach 2.5 billion by 2050. Electricity for SSA is estimated between 100,000-130,000 MW. This level of output is criminally deficient for a population over 1 billion, with 600 million Africans having no access to online electricity. The lack of electricity is literally a death sentence for millions of Africans.
Without abundant and accessible electricity Africa will not progress at the level necessary to provide for its present, much less its expanding population. Energy is the sine qua non for economic growth, and to eradicate poverty. It is required for; agriculture, producing fertilizer, pumping water, cleaning water, transportation, lighting hospitals, vaccine production and storage, shipping food in refrigerated cars, powering industry, constructing and lighting modern homes, schools and libraries. For Africans to enjoy the same access to electricity 24×7, as we experience in modern nations, Africa needs a minimum of 1,000 gigawatts or 1 million megawatts of electricity.
What Roosevelt Would Do?
Rather than being threatened with cuts in aid, Ethiopia should be supported in its bold efforts to build and operate the GERD. A thoughtful US policy would be assisting all African nations in addressing the enormous multi-trillion dollar infrastructure deficit, with long term-low interest loans to finance massive investments in life saving infrastructure. Instead of President Trump and his advisors hurling geo-political condemnations against China, it would be far better for the US to join China’s Belt and Road Initiative, which is building vitally necessary infrastructure in Africa and around the world.
Both the Democratic and Republican Party, including President Trump himself, from time to time utter fond references of President Franklin Roosevelt. However, I have found that no leader in either party has any comprehension of the genius of President Roosevelt’s economic policies. FDR as he is known, understood the importance of infrastructure. This was abundantly evident in his New Deal, his creation of the Tennessee Valley Authority (TVA), and his Good Neighbor policy.
During the war he sternly reprimanded Winston Churchill for his imperialist policies in Africa. FDR treated the King of Morocco and other African leaders with the respect he would treat any national leader. President Roosevelt intended to end the Europe's political and financial control in the world. I can assure you, that President Roosevelt would have championed and aided any developing nation that embarked on energy production.
Sadly, in the seventy-five years following the death of President Roosevelt, the only President, who had shown enthusiasm for the economic development of Africa, was John F Kennedy.
Let the Trump administration pause to rethink a policy that not only violates Ethiopia’s sovereignty, but undermines a strong US ally in East Africa. Let us recognize Ethiopia’s endeavors to improve the living conditions of its citizens, and pause again to ask, how would President Franklin Roosevelt respond. His TVA harnessed the power of the mighty Tennessee River generating electricity to transform the lives of millions of poverty stricken Americans living in seven undeveloped southern States. Is it not in the strategic interest of the US to support nations working to eliminate poverty in Africa using Rooseveltian methods?
Lawrence Freeman is a political-economic analyst for Africa who has been involved in economic development policy for thirty years and a former civilian advisor to U.S. Africa Command. He is the creator of the blog lawrencefreemanafricaandtheworld.com. The opinions contained in this article are his own.
President Emmerson Mnangagwa of Zimbabwe announced an agreement had been struck with the Commercial Farmers’ Union to compensate farmers whose land had been seized during former president Robert Mugabe’s agriculture reform efforts in the early 2000s. He said Zimbabwe would pay US$3.5 billion in compensation for infrastructure but not for the land itself. He did not give details about the amounts to be paid to individual farmers or their descendants, nor how the country will be able to afford this large sum of money considering its dire socio-economic situation.
The Mugabe regime evicted 4,500 white farmers and redistributed the farms to black families as part of a land reform program to redress colonial imbalances.
Two days after Mnangagwa’s announcement, his administration deployed security forces to close down the capital Harare and arrest several dozen activists in response to mass demonstrations on July 31. The protest action, organized by the Zimbabwe Congress of Trade Unions, was planned to coincide with a general strike against the deteriorating socio-economic conditions in the country. Internationally acclaimed novelist Tsitsi Dangarembga was among the protesters who were arrested.
Resolving the land question was a precondition placed on Mnangagwa by Western powers in 2017 in order to lift crippling sanctions and reintegrate Zimbabwe into the global community. This could explain Mnangagwa prioritizing compensation for expropriated farms while maintaining the same hardline approach against dissent as his predecessor, who also used military force to quell civil disobedience.
Ninety-six Ugandan women, mostly children and youth, were stopped at Jomo Kenyatta International Airport in Nairobi in January en route to the United Arab Emirates (UAE) for work opportunities. The girls, who lacked proper employment papers, were victims of a well-established human trafficking ring in East Africa, headquartered in Kenya and operating under the guise of employment agencies.
This wasn’t the first such interception. Almost every month, Kenya’s Directorate of Criminal Investigations reports at least one interception involving victims not only from Uganda but also from Burundi, Rwanda, and to a lesser extent Tanzania. Most of East Africa’s trafficking takes place in and through Kenya.
Human trafficking routes from East Africa to the Middle East
The Trafficking Value Chain
Traditionally, the value chain of this criminal network has comprised three links. First are regionally based recruitment brokers who ferry people from their respective countries to Kenya. Second are the Kenyan-based links who “receive” the people and act as the country’s employment agencies. They move victims from Kenya to the host country. Third are the counterparts who often pose as foreign employment agencies. They are stationed in the host country and “receive” people sent from Kenya.
Recent cases and new research by the ENACT organized crime project suggest a shift in the workings of the trafficking value chain as far as the third “link” is concerned. There is evidence that the trafficking of women and girls from East Africa to the Middle East is now being carried out entirely by East Africans.
Interviews with victims revealed that they were received in the foreign country by “familiar faces”. In February 2020, fifty Kenyans, each of whom paid about US$2,000 to supposed employment agencies, were trafficked to the UAE and enslaved in a house by a “Mombasa agent” who has operations in Mombasa and Dubai. The victims said there were many such trafficking houses run by Kenyans in Dubai, housing other East African nationals such as Ugandans and Tanzanians. Most of East Africa’s trafficking takes place in and through Kenya.
A specific case revealed to Lucia Bird, senior analyst at the Global Initiative Against Transnational Organized Crime, highlights the multinational and regional interconnections. A Ugandan girl was trafficked to Kenya by a Ugandan family friend. A Kenyan national then flew with her to Oman, where she was collected at the airport by an Ethiopian national before being driven to her Omani employers.
Similarly, Angelo Izama, a human trafficking consultant who volunteers on a project for trafficked victims at a church in the UAE, told ENACT of a Ugandan girl recruited to be a receptionist. She was received by a Ugandan in Dubai and forced into sex work.
Regional trafficking networks appear to want to control the entire value chain
While the links in a criminal value chain work together, there is also competition, with operators vying for a greater share of the more profitable elements in the chain. Regional trafficking networks appear to want to control the entire value chain, from sourcing to recruiting victims, trafficking them out of East Africa and receiving them in the foreign country. This well-coordinated and continually shifting transnational crime process is difficult to police and prosecute.
Speaking on condition of anonymity, a police officer specializing in human trafficking in East Africa told ENACT that the problem has engulfed the region. This affirms a 2018 United Nations Office on Drugs and Crime (UNODC) assessment report that shows an increase in human trafficking in East African countries.
The officer also notes that policing the crime is becoming more difficult. As an example, the officer referred to a joint initiative in 2017 between the Kenyan and Ugandan governments that appeared promising in its anti-trafficking measures. It failed, however, due to a lack of proper intelligence on the criminal value chain and inconsistent engagement between the two countries.
Better Migration Management
Regulating the labor exporting sector is also complicated. As with Kenya, Uganda imposed a ban on labor emigration to the Middle East in 2016, and then lifted it a year later. Ugandan civil society organizations working to counter human trafficking said the ban and its lifting had little impact on trafficking dynamics. They questioned the benefits of exporting labor and highlighted the failure to safeguard those undertaking labor migration.
Regional bodies such as the International Organization for Migration, UNODC, and the European Union have often called for a stronger regional approach to trafficking. The latest is the Better Migration Management program, which advocates for the prevention, protection, and prosecution of human trafficking in East Africa and the Horn of Africa.
East African countries appear to lack power in negotiations with Middle Eastern countries on trafficking issues. This is because of gaps in their domestic legislation and regional trafficking strategies. Yet other regions that export labor to the Middle East have shown that this can be done.
The Philippines, for example, has twenty-three bilateral agreements with seven countries, most of which are in the Middle East. This allows authorities to oversee the protection and safety of workers and prevent them being exploited by trafficking networks and employers in destination countries. The labor export sector makes up a significant portion of the Philippines’ gross domestic product, yet it also comes with challenges and is not an economic cure-all.
East Africa needs to learn from approaches elsewhere that prevent trafficking and protect workers. Until more robust responses are in place, trafficking and exploitation are likely to grow in the region. This perpetuates the vulnerability of poor women and girls, and undermines the prospects of labor exportation as a livelihoods option.
Mohamed Daghar is a researcher with the ENACT project in Nairobi.
This article was first published by the ENACT project. ENACT is funded by the European Union (EU). The content of this article is the sole responsibility of the author and can under no circumstances be regarded as reflecting the position of the EU.
Muslims around the world were dismayed to learn that they would be unable to partake in the hajj, a pilgrimage to the holy site of Mecca, this year due to Saudi Arabia’s closure of its borders in response to the COVID-19 pandemic. Every Muslim is required to make at least on hajj in their lifetime if they are physically and financially able to do so.
For Somali Muslims, the closure of Mecca’s gates is not only a spiritual loss but also a significant economic one.
Crops and livestock make up 75 percent of Somalia’s total GDP and 93 percent of total exports as of 2018, most of which linked directly to livestock sales in the months leading up to the hajj. In normal years, livestock breeders would travel north to port cities in Somaliland or Puntland to sell their animals, which would then be shipped to Saudi Arabia to feed the millions of pilgrims descending on the remote desert town of Mecca. Forced to sell only domestically, many Somalis’ have had to lower their prices drastically.
The price of camels has dropped by nearly half
The humanitarian organization Action Against Hunger reports that the price for camels has dropped by nearly half, from US$1,000 a head to US$500. The prices of goats, sheep and cattle are similarly affected. All told, Somali livestock traders are likely to lose revenue of about US$500 million this year because of Saudi Arabia’s border closure.
As access to Internet services grows across Africa, the continent is realizing the potential economic benefit from taxing the multinational tech companies that provide digital services. The only problem is that there is very little existing legislative framework to do so.
Although Africa remains a very small slice of the total market that technology-based service providers cater to, companies like Uber, WhatsApp, Spotify, and Facebook are positioning themselves to capitalize on Africa’s expected population boom and rapidly growing youth population. Recognizing this trend, Kenya and Nigeria have begun to take steps to put legislation in place that would allow them to earn tax revenue from digital services.
On June 30, Kenyan president Uhuru Kenyatta enacted the Finance Act 2020, which introduced a tax of 1.5 percent on the gross transactional value of income derived from digital trade and services, set to go into effect in January 2021.
And the Nigerian Finance Act 2019 that passed into law earlier this year makes provision for taxing non-resident companies with a “significant economic presence”, which includes businesses using digital transactions or providing local services without a bricks-and-mortar address in the country.
An aggressive tax policy could ultimately prove to be counterproductive
A potential downside to these laws is the prohibitive restraints it places on African tech start-ups, as some face the risk of being doubly taxed or unable to compete against Silicon Valley juggernauts that can weather such tax policies. And although Africa is in dire need of increasing its tax collection capabilities, an aggressive tax policy could ultimately prove to be counterproductive. It could be a disincentive to investment by global tech companies, which might prefer to rather invest in countries with much more favorable tax laws or those that lack any such legislation.
Good ocean policies can unlock new sources of wealth and transform Africa’s security, development, and governance prospects. A new study commissioned by the High Level Panel for a Sustainable Ocean Economy shows that investing in oceans yields benefits five times higher than the initial outlay.
Over the next thirty years, the report says, these actions could provide net global returns of between US$8.2 trillion and US$22.8 trillion – as long as they are underpinned by blue economic principles and values.
The value of the blue economy concept is that it provides a way to sustainably develop ocean resources while ensuring the health of maritime ecosystems. This is why the idea has rapidly found favor in Africa and globally. The blue economy is now an integral part of the sustainable development discourse and has acquired significant political importance.
The African Union (AU) recognizes this vast potential. Since 2015, it has marked the African Day of Seas and Oceans on July 25 each year, promoting the oceans as the next frontier for the African Renaissance. Urgent action is now needed to accelerate economic growth and realize its benefits for the continent.
African states struggle to individually secure their seas enough to attract additional investments
Blue economic policies are globally recognized as an anchor for resilience and economic transformation. The United Nations Environment Programme recently suggested that including Sustainable Development Goal 14 on ocean resources in recovery policies can help future-proof global recovery from the dire impact of COVID-19.
To reinforce this message, Africa and the AU need to focus in 2020 on moving from plans to action. The continent has many maritime strategies, but implementation is lagging. Capacity constraints are part of the problem, and they could worsen as pressures to address COVID-19 intersect with enduring challenges such as the effects of climate change on the oceans.
This intersection is arguably creating a “perfect storm” for African decision makers. They need to decide how to transition to blue economies while buffeted by unfavorable political, economic, and environmental conditions.
The United Nations Conference on Trade and Development World Investment Report 2020 shows that the amount of foreign direct investment into Africa has rapidly contracted. There’s an increasing probability that the remaining flows will target established activities that deliver higher returns on investment. This will arguably privilege traditional and lucrative industries over emerging and sustainable ones associated with blue economies.
The AU should ensure that member states’ blue economic commitments continue to receive funding
Historical examples of post-recovery policies such as those from the 2008–2009 global financial crisis are also cause for concern. For instance, the rapid growth in carbon dioxide emissions tracked in its aftermath is indicative of a systemic preference for traditional industries and energy sources in which costs and harms are externalized and only apparent in the future. Most investments would then flow into shoring up these battered industries and getting them back on an even keel.
The AU aims to support states in their maritime endeavors, and AU reforms include setting up a dedicated blue economy office in 2021. There is no need, however, to wait until then for work to begin. Postponements cannot be afforded, for two reasons.
First, the ocean space available for African blue economy projects is constrained and becoming increasingly insecure. African initiatives not only have to compete spatially with established industries such as offshore oil and gas extraction, but might also suffer the consequences of mismanagement or accidents such as oil spills.
Second, the ocean spaces around Africa are perceived as increasingly insecure as transnational maritime crimes grow more sophisticated. African states are struggling to individually secure or govern their seas to a level sufficient to attract additional investments needed to anchor long-term economic recovery and growth.
Maritime collaboration is essential, because African countries’ individual bargaining power is weak
What is required is dedicated coordination and encouragement from international partners such as Norway, which hosted the last Our Oceans Conference in 2019. The AU, backed by its member states, should ensure that national commitments made at such events continue to receive funding.
These undertakings were given when there was consensus that the oceans should be prioritized. At the time, states didn’t envisage disruptions like COVID-19 that demand a focus on salvaging established interests. The AU must also help facilitate the enacting of innovative environmental regulations, such as creating marine protected areas, so that implementation remains on target.
The AU Commission could convene a series of virtual coordination meetings between member states, regional economic communities (RECs) and its departments, and specialized agencies. These include the Inter-African Bureau for Animal Resources—which drafted the African Blue Economy Strategy—and the AU Development Agency-New Partnership for Africa’s Development. This can help deal with challenges such as states seeking economic recovery from COVID-19 by over-exploiting their maritime resources.
A division of labor between the RECs, the AU, and its agencies is also required. Regional bodies are key to blue economy strategies, and some, such as the Southern African Development Community, are already taking action. A consultative forum of RECs, member states, and other maritime organizations could boost momentum and share best practices and negotiation tools for collective bargaining about maritime regulations with states, regions, and at the UN.
Maritime collaboration is essential, because African countries’ individual capacity and bargaining power on the global stage is weak. Their leverage rests in numbers, and a common African position and negotiation strategy would increase their collective influence.
Commendable maritime precedents already exist. Between 1973 and 1982, the Organisation of African Unity coordinated state actions during the third UN Convention on the Law of the Sea. It’s also taking place at the ongoing UN negotiations on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction.
With the economic and governance setbacks brought on by COVID-19, the leadership of the AU is key. Prompt, determined action is needed to reap the benefits of the blue economy and stimulate Africa’s renaissance.
Timothy Walker is a maritime project leader and senior researcher, and Denys Reva is a research officer, both at the Institute for Security Studies, South Africa