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Sierra Leone’s Macroeconomic Situation Remains Challenging Despite Bold Policy Measures

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Unlocking the bottlenecks to robust and sustained real growth through economic diversification and addressing pre-existing macroeconomic weaknesses will be crucial for building a resilient economy that promotes inclusive growth and reduces poverty, according to the new World Bank Sierra Leone Economic Update (SLEU) launched today in Freetown. The country’s macroeconomic situation remains challenging despite the bold and courageous policy measures taken by the new government.

Growth is still low (3.7 percent), inflation and exchange rate depreciation are high (16.8 and 11.8 percent, respectively), the fiscal and current deficits are high (6.6 and 13.8 percent, respectively), and increasing debt has resulted in the country being downgraded from moderate to high risk of debt distress. However, the medium-term outlook is promising, with growth expected to reach 5.2 percent by 2021, driven primarily by supply side factors, including favorable agricultural output, uptick in mining activities and strong performance of the services sector, the report notes. Key risks to the growth outlook include a deterioration in Sierra Leone’s terms of trade; lower than anticipated FDI inflows and the effects on the exchange rate and prices; fiscal slippages including adverse debt dynamics; and financial sector weaknesses.

The SLEU is an annual publication that reports on and analyzes recent economic developments, reviews regional and global contexts and analyzes the implications for the country, and presents the medium-term outlook and prospects for the economy. The 2019 Update focuses on promoting inclusive growth and poverty reduction, namely ‘Financial Inclusion for Economic Growth and Development’. The target audience for the SLEU includes policy makers, business leaders, development partners and analysts interested in Sierra Leone’s economy.

“There is an urgent need for Sierra Leone to develop a comprehensive strategy for deepening the financial sector and this is required to ensure poverty reduction, job creation, investment and growth in the country,” said Gayle Martin, World Bank Country Manager for Sierra Leone. “Whether Sierra Leone can promote sustained inclusive growth and reduce poverty depends on whether it can modify the structure of the economy to generate more and better-paid manufacturing and service jobs. That could be accomplished by facilitating creation by the private sector of formal manufacturing and services activities and increasing the productivity of the informal sector.”

The special topic of the 2019 Update focuses on deepening the financial sector for inclusive economic growth and development. The report notes that usage of the financial system is low in Sierra Leone with only about 5 percent of adults using formal savings products and about 54 percent saving money within the past year. Access to finance for enterprises is a significant barrier to growth of the private sector with 40 percent of firms indicating lack of credit as their biggest constraint. Only 11 percent of Sierra Leoneans have mobile money accounts compared to 20.8 percent in Liberia, 38.9 in Ghana and 72.9 percent in Kenya.

“The government plays a key role in developing the financial sector through promoting resilience and stability. One of the key functions that needs to be established is an effective supervision and regulatory regime for financial institutions to address market failures like anti-competitive behavior, market misconduct, information asymmetries, and systemic instability, which can negatively impact financial sector development, economic growth, and shared prosperity,” said Youssouf Kiendrebeogo, World Bank Senior Economist and one of the authors of the SLEU.

To address existing macroeconomic weaknesses and enhance economic growth, the Sierra Leone government should maintain the fiscal consolidation path, improve debt policy and management and intensify efforts to clear the large stock of arrears.

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Solar power charges pandemic recovery for indigenous farmers in Viet Nam

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Overcoming adversity has long been the stock in trade of Do Thi Phuong, a 42-year-old mother of two living in a small village in Viet Nam’s lush Lao Cai province. As the primary breadwinner in her family of six, Phuong is accustomed to being a rock for her family in hard times. Years ago, landslides wiped out all but four out of 42 household rice fields in the village, yet Phuong managed to provide.

But COVID-19 has tested her resolve like nothing else.

Phuong’s village has traditionally been home to indigenous groups that farm the land. Many in the community raise chicken and pigs – each household maintains between 1,000-5,000 chickens, from which they derive their primary income.

Over the last few years, livestock production, particularly poultry, has been one of the fastest-growing sectors in agriculture in Viet Nam. And though it accounts for the country’s second-largest share of meat production, 89.6% of poultry production1 is led by smallholder farmers, who are far more vulnerable to climate change, natural disasters and unexpected shocks – like a pandemic.

Viet Nam has recorded just over 1,000 cases of COVID-19, but the economic repercussions of prolonged lockdowns have had a profound impact on rural markets.

Phuong paints a bleak picture: “The village roads that were usually busy with many traders coming to buy chickens, fish and cinnamon products, were empty,” she says.

For her family, this meant an income loss of 60-70%.

Before the pandemic, Phuong’s household would raise a batch of around 3,000 chickens, and at the time of sale, traders would shell out VND65,000 (about US$2.8) per kilogram. Raising three batches a year would net the family about US$6500.

When the crisis hit, travel restrictions and social distancing rules made it challenging for Phuong to sell her chickens. Chicken prices crashed. Phuong returned home every night with barely VND500,000-60,0000 (US$21-26), just enough to cover feed costs for the birds.

Her family’s electricity costs also doubled, with unsold chickens continuing to require food and electricity and the children spending most of their time at home. Their meagre income was stretched to its limits, even after cutting expenses and taking out a loan.

Empowering farmers

The turnaround came via a powerful patron: solar energy. Through UNEP’s EmPower project, Phuong is procuring solar-powered chicken incubation and ventilation equipment. The monthly electricity cost for heating, ventilation and lighting for chicken rearing will be almost zero with the solar system. EmPower and its partner CHIASE are helping Phuong to develop her business plan and to select and procure the most suitable equipment. Phuong is also receiving support to access a loan from provincial Vietnam’s Women’s Union.

It is not only Phuong who has benefitted. The green chicken coops are scalable, bringing in quick cash flows and helping struggling communities bounce back from the economic crisis. EmPower is supporting around 300 women farmers across Viet Nam to harness the benefits of renewable energy and establish new business models for livestock rearing, agro and herbal product processing, and noodles, fish, and fruit drying.

Benefits for indigenous populations

Indigenous women especially are benefitting. While often the primary breadwinners in their households, their voices often remain unheard where policy decisions are being made.

“By giving indigenous women a stake in renewable energy development, EmPower is helping to ensure that their voices are being heard,” says Annette Wallgren, Programme Officer for Gender and Climate Change at UNEP’s Office for Asia and the Pacific.

“Renewable energy livelihoods and enterprises at the local level will be critical to helping communities bounce back from this pandemic. We must also be aware of the needs and solutions that indigenous women can bring to the renewable energy sector, as custodians of the land and change-makers in their communities.”

Some positive progress has been seen on that front. Viet Nam’s updated Nationally Determined Contributions (NDCs) to the Paris Agreement included a section on gender equality and prioritizing the mitigation of risks for vulnerable communities.

For Phuong, the new technology is a sign of hope. “I hope that I can use solar energy to save on the cost of chicken production and I hope it will help my family to recover from COVID-19,” she says.

UN Environment

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‘Reset Earth’: Animation film & mobile game bring Gen Z into protecting ozone layer

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Image: UNEP/Ozone Secretariat

‘Reset Earth’ is an innovative educational platform for adolescents about the fundamental role of the ozone layer in protecting the planet. The platform launches on World Education Day (January 24th) with an original animation film that explores options for collective positive action. The film’s plot continues in a challenging mobile game for Android and IOS (February 10th). The platform is initiated by United Nations Ozone Secretariat to sustain the protection of the ozone layer through the sensitization and engagement of Gen Z.

Ozone-depleting substances (ODSs) like CFCs, HFCs, HCFCs have been widely used throughout the 20th century, mostly for refrigeration, in air conditioners and aerosol sprays. ODSs threaten the earth’s upper atmosphere, drive up temperatures and account for close to 11 per cent of total warming emissions to date. Since the 1980s, the international community has acted to protect the ozone layer by banning or strictly restricting the use and production of such super greenhouse effect gases. Consequently, the Antarctic ozone is expected to close by the 2060s (without action, it might have been 40 per cent larger by now) and other regions will return to 1980s values even earlier.

Meg Seki, Acting Executive Secretary of the Ozone Secretariat, said, “The protection of the ozone layer cannot be considered a done deal. It must be a continuous effort by us and by future generations. If our children learn about the grim consequences of a ruined ozone layer, they will act to keep it only as part of a fantasy game.”

Reset Earth begins a year-long education initiative by the Secretariat to raise awareness and inspire action among adolescents and parents about global ozone protection. Immersive, educational and thought-provoking, Reset Earth conveys a positive message around what can be achieved through collective action and cultivates a sense of environmental responsibility and ownership amongst the youth.

The Reset Earth animation film is set in a dystopian post-apocalyptic world in 2084, where the ozone layer has been completely ruined and human life is under threat from an unstoppable virus called “The Grow”. It is the story of three teenagers who team up in an epic time-travel adventure to save the planet and what’s left of human life. Their mission is to find out what caused the “The Grow”. They travel back to critical historical moments in the story of the mysterious ‘ozone layer”, essential to stopping the virus, and learning as they go about the fundamental role it plays in protecting the health wellbeing of the planet. To save the ozone layer, they must jump back in time to ensure the signing of the Montreal Protocol agreement.

The Reset Earth mobile game is a single player platform game, combining a retro graphics style and hand-drawn artwork and aligned with the film’s storyline. Players – whether adolescent gamers or their parents – switch between characters and utilize their unique abilities throughout four levels of the game. Through unlocking puzzles, players learn about environmental history and the science of protecting the planet.

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Environment

Serving up sustainable food

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Along with a vow to return to exercise, upping personal intake of fruit and vegetables tops the list of New Year’s resolutions for many. But what if this year’s resolution didn’t end with the eating – and extended to reducing the amount of healthy, nutritious produce that gets trashed?

That’s a commitment that the United Nations Environment Programme (UNEP) is banking on to help achieve the Sustainable Development Agenda.

Global estimates suggest that roughly one-third of food produced for human consumption is lost or wasted every year. Those 1.3 billion tons of fruits, vegetables, grains and roots are lost through spillage or spoilage in the harvest-to-market chain, or to spoilage and discard once products hit retailers and, eventually, consumers.

In a world where malnutrition is a contributing factor to roughly 45% of deaths of children under age five in developing countries, and where consumption of highly processed foods is pushing obesity rates ever higher, remaining accountable to those New Year resolutions isn’t just personal – they’re critical for humanity.

They are also critical for the survival of the planet. Food production, consumption and waste – and how they impact the environment – will be a key topic of discussion at this year’s United Nations Environmental Assembly (UNEA-5), taking place online on 22-23 February 2021.

UNEP and partners are developing the world’s most comprehensive data analysis and modelling on food waste, which will be launched at the Assembly. Titled the ‘Food Waste Index’, the document will be released at UNEA-5. It offers new estimates of food waste at household, retail and food service sectors at country level, and provides a methodology that enables countries to measure and track progress on Sustainable Development Goal 12.3, which aims to halve retail and consumer food waste and reduce food loss by 2030.

Food systems for the future

Agriculture and the pressure to produce cheaper, faster commodities are among the primary drivers of biodiversity loss. Resource-intensive food production that depends heavily on the use of inputs such as fertilizer, pesticides and complex irrigation and energy systems means fewer wild spaces for the other creatures we share nature with, whether it’s birds, mammals, insects or microbial organisms. Meanwhile, political and economic structures are pricing farmers off their land.

“The COVID-19 pandemic revealed the obstacles and blockages in our global food system. We have a timely opportunity to build back better and redesign the way we grow, harvest, sell and eat the bounty of nature’s production,” said Clementine O’Connor, from UNEP’s Sustainable Food Systems Programme.

Transforming our food systems will not only help restore biodiversity and habitat but can also strengthen market opportunities for smallholder farmers – many of whom are women on the road to economic self-sufficiency through sustainable production of fruit and vegetables.

A fruitful year?

At UNEA-5, the virtual convening of representatives of UN member states, the private sector, civil society, scientists and other leaders will be an opportunity to share and adopt best practices for transforming food systems. Momentum toward sustainable food production and consumption that is generated by the Assembly will be built upon going forward in 2021, with the historic first-ever UN Food Systems Summit.

The year 2021 has also been marked by the Food and Agriculture Organization of the United Nations (FAO), as the International Year of Fruits and Vegetables 2021 to highlight the role of fruits and vegetables in human nutrition, livelihoods, food security and health.

UN Environment

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