African countries must expand and diversify their participation in international trade and global value chains to reduce poverty on a large scale and transform their economies, says a new World Bank book released today.
The continent must go beyond trade in raw materials and link its production and trade to the global economy to take advantage of the unlimited demand and innovation along the supply chain. This requires comprehensive and dynamic efforts that bolster Africa’s export market access and diversifies its markets to new regions and new products while also strengthening regional trade, says the ‘Africa In the New Trade Environment: Market Access in Troubled Times’ book.
“The global economy is a source of growth that African economies cannot afford to ignore. While African exports of goods and services have seen their fastest growth in the past decade, the volumes remain low at just 3 percent of global trade. The time is ripe for policymakers to expand their thinking beyond traditional approaches and traditional markets if they want to play an active role in international trade in the 21st century,” saidOusmane Diagana, World Bank Vice President for Western and Central Africa.
The book notes that unilateral trade preferences have the potential to promote economic transformation through exports and calls for evaluating and re-engineering trade with traditional partners. Utilization rates of many African countries for the existing trade preferences -such as African Growth and Opportunity Act (AGOA) and Everything But Arms (EBA) are systematically low. Evidence on AGOA shows that natural resources, mainly oil, account for the bulk of African exports. There is a need to integrate unilateral trade preferences with other efforts to deepen trade and investment between Sub-Saharan African (SSA) countries and the OECD countries, mainly the US and the EU, the book emphasized. This includes integrating preferences with foreign aid policy instruments to address structural challenges limiting export capacity. Recent initiatives such as Compact with Africa (CwA) with a strong focus on improving the business environment, building infrastructure, and promoting effective regulations and institutions appear to be in line with this comprehensive approach.
The rapidly growing middle class and demand from East Asia, accompanied by rising relative wages, along with the shifting structure of global value chains, offer new market opportunities for Sub-Saharan African countries to strategically diversify trade with Asia. Over the past decades, trade relationships between Sub-Saharan Africa and Asia have expanded, and for some SSA countries their key trading partners are increasingly becoming China, India, and Indonesia, replacing EU, US, especially after 2010.
“Deepening regional integration to scale up supply capacity and build regional value chains is essential to the continent’s economic transformation. The establishment of the African Continental Free Trade Area (AfCFTA) presents major opportunities to boost intra-African trade, strengthen the complementarities of production and exports, create employment, and limit the impact of commodity price volatility on the participants,” said Hafez Ghanem, World Bank Vice President for Eastern and Southern Africa.
“African countries need to undertake bold domestic structural reforms to scale up the supply capacity of the region. This can be achieved by improving digital and physical connectivity, maintaining smart macroeconomic management with stable and competitive exchange rates and low inflation, and increasing the efficiency of regulatory, legal and judiciary institutions,” said Albert Zeufack, World Bank Chief Economist for Africa.
Going forward, the book highlights that the approach to strengthening integration for a successful AfCFTA should focus on:
- improving physical integration – such as cross-border energy and transport infrastructure and connective infrastructure,
- strengthening political cooperation – such as harmonizing customs rules and procedures and sacrificing some level of sovereignty in rule making and implementation in favor of regional frameworks and,
- facilitating business integration – such as regional electronic settlement system, electronic cargo tracking system, one-stop shops and easing restrictions on services trade. The costs of distance and fragmentation can be reduced through intensive investment in these areas.
Finally, the book recommends that the international community could also commit to increasing financial support for growth-sustaining regional infrastructure; shift from bilateral engagements to engagements with “economic areas” that tie together the economic interests of leading and lagging countries in each regional neighborhood. A complementary activity under the World Trade Organization’s (WTO) Aid for Trade initiative could also help bolster investment in sectors other than natural resources, as helping to build up non-resource exports from countries within neighborhoods or regional economic communities is critical.
Authors: Srilata Kammila and Rohini Kohli, UNDP*
This year’s Africa Climate Week brings together governments and key stakeholders from across the continent to “explore resilience against climate risks, the transition to a low-emission economy and the partnerships we need to solve these pressing challenges.”
With so much at stake, it’s clear that we must make substantial investments and coordinated efforts in building transformative climate actions across Africa.
This means advancing integrated holistic solutions that connect the dots between land-use, water management, agriculture and livelihoods, between energy, natural resources, economic growth and social development, and between disaster risk reduction, climate information services and resilience. This is what we call transformative climate action.
A life-threatening crisis
We are in a race against time. And no continent is more vulnerable from the multiplying threats of climate change, poverty, conflict, displacement, and hunger than Africa.
The most recent IPCC Report indicates vast disruptions to economies, lives, food security and livelihoods across the continent. “Africa has contributed among the least to greenhouse gas emissions, yet key development sectors have already experienced widespread loss and damage attributable to anthropogenic climate change, including biodiversity loss, water shortages, reduced food production, loss of lives and reduced economic growth.”
Temperature rises between 1.5°C and 2°C are projected to become widespread, resulting in reduced food production and economic growth, increased inequality and poverty, biodiversity loss, and most concerning increased human morbidity and mortality, according to the report.
While the war in Ukraine, ongoing conflicts and COVID-19 have exacerbated these issues, climate change is pushing million more people to the brink of starvation in Ethiopia, Kenya, Somalia, the Sahel and beyond.
It’s not just a regional problem. It’s not just an Africa problem. It’s a worldwide problem.
But the poorest and most vulnerable will be the ones that will lose their children to hunger. They are the ones that will see crops wilt on the vine as prolonged droughts scourge the continent. They are the ones on the frontlines. And we must empower local action, national action and global action to rise to the truly devastating consequences of climate change.
A pathway forward
The pathway forward starts with people, but also requires resources, political will, policies and coordination to deliver the type of transformative action we need.
UNDP is accelerating adaptation planning and investments in Africa through a number of cross-sectoral solutions across the key domains of adaptation policy and planning, resilient livelihoods, food security, ecosystem-based adaptation, water resources and coastal management, and climate information and early warnings.
In Zambia for instance, a project funded through the Green Climate Fund and delivered in partnership with the government by UNDP, FAO and WFP is building climate-resilient food security and poverty reduction measures for close to a million people. The project has introduced the use of modern technology, sustainable growing techniques, and better understanding of climate change and has already reached close to 200,000 smallholder famers.
In Uganda, we are working to protect vulnerable wetland ecosystems and build resilient communities with support for support sustainable land management practices and reforestation, resilient practices and alternative livelihoods for 4 million people that rely on the wetlands for their livelihoods.
Integrating adaptation into development
Climate risk-informed policy, planning, and investment decisions that maximize development benefits to communities are critical for transformative action on adaptation. A ‘whole-of-society’ approach calls for integration of adaptation at all levels of society from informing national and sub-national policy and budgeting to devolving finance and decision making to local stakeholders for adaptation action.
UNDP’s support to adaptation planning in over 50 countries is building capacity to assess risks and vulnerabilities, measure adaptation progress, identify adaptation priorities and works in tandem with national, sectoral and local institutions for risk informed plans and budgets.
In building united actions, a joint initiative led by FAO and UNDP with funding from the German Federal Ministry for Economic Affairs and Climate Action (BMWK) through the International Climate Initiative (IKI) is scaling up climate ambition on land use and agriculture through Nationally Determined Contributions and National Adaptation Plans across 12 countries worldwide, including five in Africa.
In Uganda, the SCALA Programme is working to build the agricultural, forestry and land-use plans needed to improve production on the farm, reduce emissions, and connect climate plans and policies with climate actions like the wetlands initiative.
In its updated Nationally Determined Contribution to the Paris Agreement, Côte d’Ivoire committed to reducing its greenhouse gas emissions by 30.41% by 2030 relative to business as usual, or 98.95% with international support. The country has also committed to increasing resilience in agriculture, food and land use, water, health, and coastal zones.
As the world’s largest cocoa bean exporter, the SCALA programme in Côte d’Ivoire is building a more resilient cocoa culture to ultimately lower emissions from cocoa production, which has been a major cause of deforestation over the last decade. As the country shifts towards more sustainable agroforestry landscape practices – more forests coverage will help absorb more carbon emissions
Africa driven solutions and partnerships
Locally-led adaptation initiatives connected with globally minded partnerships are key. At the 21st Conference of the Parties (COP) in December 2015, African Heads of State launched the Africa Adaptation Initiative (AAI) to ensure the continent urgently adapts to the adverse effects of climate change in the immediate, short, medium and longer terms. With funding from the European Union and support from UNDP, the programme is enhancing capacity to utilize climate risk information and assess and implement risk transfer mechanisms.
Launched at the Climate Adaptation Summit in January 2021, the Adaptation Innovation Marketplace (AIM) is a another strategic global platform that promotes scaled-up adaptation at the local level, focusing on civil society, non-government organizations, and women and youth innovators. The marketplace crowds in resources, know-how and support to facilitate local access to climate change finance.
The AIM partners include UNDP, the International Centre for Climate Change and Development, the Least Developed Countries Universities Consortium on Climate Change, the Global Resilience Partnership, the Climate-Knowledge Innovation Community, and UN Capital Development Fund (UNCDF).
Currently, there are multiple funding windows under AIM. One funding window supported by the Adaptation Fund and EU (Adaptation Fund Climate Innovation Accelerator) has recently concluded the first round of call for proposals, and seven local partners from Africa were selected for the first round of funding.
In Ghana, the local partner Open Ghana aims to create alternative livelihoods for women, youth and persons with disabilities by establishing dry season gardens across multiple regions. Local community members will be trained on climate change adaptation, and several village savings and loans associations will be formed to develop sustainable business modules using the second-season-cropping production.
In Uganda, our local partner Sample Uganda Aquaculture Association is introducing aquaponics technology through an innovative lease-to-own model to promote aquaponics and horticulture related production, including nursery propagation.
These locally led adaptation solutions with sustainable business models are going to be key for transforming the adaptation practice in Africa.
Investing today for a better tomorrow
Investments in adaptation provide a significant return on investment. It’s good for business, it’s good for our planet, it’s good for our people.
The Global Commission on Adaptation found that investing US$1.8 trillion globally in five areas – early warning systems, climate-resilient infrastructure, improved dryland agriculture, mangrove protection and resilient water resources – from 2020 to 2030 could generate US$7.1 trillion in total net benefits.
There is a rapidly narrowing window of opportunity to enable climate-resilient development and achieve the Sustainable Development Goals (SDGs) and Paris targets. Global leaders must step up to support UN Secretary-General António Guterres’ call to apply 50% of all climate finance for adaptation and adhere to the commitments at COP26 in Glasgow, which called for doubling adaptation finance from US$20 billion to US$40 billion per year, a larger proportion of which is urgently needed for Africa.
Transformation is possible and there is hope with initiatives like the Great Green Wall, low-emission, high-growth strategies in Nigeria, and ground-up initiatives led by women farmers in Ghana will build equality today for a sustainable tomorrow.
Throughout it all, the leaders of Africa must commit to transformative climate actions and coordinated approaches to protect the most vulnerable communities from the unfolding and ever-increasing risks and impacts of climate change
Srilata Kammila is the Head of Climate Change Adaptation at the United Nations Development Programme (UNDP). This position sits in UNDP’s Nature, Climate and Energy Team in UNDP’s Bureau for Policy and Programme Support/Global Policy Network.
Rohini Kohli is the Senior Technical Advisor for Adaptation Policy and Planning in UNDP’s Nature, Climate and Energy Team.
Russia Scrambles for Higher Performance Marks in Africa
Squeezed between Western and European sanctions due to its “special military operation” in Ukraine since late February and its dilapidating effects on Africa’s economy on one side and its decades-old desire to regain part of the Soviet-era influence despite the weak economic presence and negative perceptions at the core among the public especially the youth and middle class, Russia is gearing up for the next traditional African leaders summit.
With preparations underway, Russia would have to begin preparing for and play different attractive rhythms at the second African leaders summit in 2023 at St. Petersburg, Russia. Reports monitored by the author indicate that the modest economic gains are gradually eroding due to Covid-19 these past two years and the situation is turning complicated currently due to the Russia-Ukraine crisis. The Russia-Ukraine crisis has a strong immeasurable negative impact, generating social discontent across large spectrum of the population in Africa. Therefore, African leaders would indiscriminately have cooperate with any foreign investors willing to invest and support their development process. Across Africa, more than 282 million people are food insecured – and that number is rising, according to the estimates by the World Bank.
Throughout Africa, many across the population are displaying discontention and dissatisfaction due to unbearable rising prices for commodities and consumables. This latest food crisis, which did not originate in the continent, is reaching alarming dimensions especially in Africa. In fact, African leaders are confronted with these hurdles and emerging challenges. They are feverishly looking for both short-term solutions to calm down existing tensions among the people, and also long-term strategies to push sustainable development and make pace for growth.
The United States percieves most of the challenges and opportunities with a difference in Africa. It is constantly investing and its private investors are active exploring the continent. The United States is well-connected with its public outreach diplomacy. American institutions and organizations are linking up with the youth, women and the civil society.
After a peak in 2014, foreign direct investment (FDI) in Africa from the United States dropped to US$47.5 billion in 2020. During the pandemic, it provided more than 50 million doses to 43 African countries. It has further given more than US$1.9 billion in Covid-related assistance, for urgent needs like emergency food and other humanitarian support.
President Joe Biden has launched the Emergency Plan for Adaptation and Resilience. The year, the Congress allocated US$3 billion every year by 2024 to finance climate adaptation projects, the largest commitment ever made by the United States to reduce the impact of climate change on those most endangered by it. Through the Power Africa programme, the U.S. has connected more than 25 million homes and businesses across the continent to electricity, 80 percent of which is based on renewables. Development Finance Corporation supports renewable energy across Africa, including a solar project in Nigeria, wind farms in Senegal and Kenya. Nigeria marked a new chapter with the signing of a US$2.1 billion development assistance agreement that supports collaboration in the fundamentals: in health, in education, agriculture, good governance.
And then four U.S. companies are collaborating with the Senegalese Government on infrastructure projects; that’s the Institut Pasteur de Dakar, which is working toward COVID vaccine production with American support and investment; and pushing innivation, technology and entrepreneurship with women and youth groups in Africa. The popular partnership between the United States and Africa is YALI – the Young African Leaders Initiative.
The Prosper Africa initiative aims to increase two-way trade and investment. The Africa Growth and Opportunity Act – known as AGOA – provides duty-free access to American markets, and most African countries have taken full advantage of it. U.S. investors are seriously leveraging unto the African Continental Free Trade Area (AfCFTA). Similarly, China, Japan and South Korea have started localizing production of automobiles and tech gadgets.
Despite some criticism, international development institutions and organizations are ready and offering support. In addition, external countries are stepping up efforts in that direction. The World Bank stands ready. Its latest three-year, US$93 billion global programme – about 2/3 of which will support Africa’s development agenda – delivered through the International Development Association (IDA). The IDA is the world’s largest source of concessional funds, including grants for low-income countries, helping them seize opportunities to reduce poverty and stimulate inclusive growth.
This latest IDA replenishment will enable our support to Africa to increase even more in the years ahead. Africa has become the prime region benefiting from IDA resources – growing more than tenfold its annual program of about US$3 billion in 2000 to well over US$30 billion currently. This support, plus our growing on the ground presence across Africa, is enabling us to work hand-in-hand with governments, with the private sector, and civil society to implement the continent’s ambitious development agenda.
While in Dakar, capital of Senegal, meeting more than a dozen Heads of State from across Africa, Axel van Trotsenburg, World Bank Vice President for Latin America and the Caribbean, said “African leaders have, through the African Union process, articulated clear goals – from digitalization to electricity to education – and we are committed to helping Africa translate these ambitions into strong programmes that can, within a short period of time, improve people’s lives and transform the continent.”
Foreign countries, the United States, European Union, Asian states such China, and from the Gulf and Arab states are, indeed, at the forefront in Africa. In March during the heat of Russia-Ukraine crisis, the United States and European Union supported Africa through the African Development Bank (AfDB), when the bank sought funds more than US$50 billion for curated bankable projects in key priority sectors identified in the Africa Investment Forum’s 2020 Unified Response to Covid-19 initiative.
According to the China-Africa Economic and Trade Relationship Annual Report (2021), while Covid-19 has shaken the global economy, Chinese investment in Africa has been climbing. The report says China invested US$2.96 billion in Africa in 2020, up 9.5% from 2019. The turnover of Chinese enterprises’ contracted projects in Africa amounted to US$383.3 billion in 2020, that is a 16.7% drop from 2019.
In a media release, the U.S. Government’s lead development agency, United States Agency for International Development (USAID), has renewed its partnership with many African countries. Quiye recently, it offered to fund various projects, including investment in health and education, women and youth, and infrastructures in a number of African countries. For instance, in April this year, it gave assistance funding of US$1.5 billion to promote a more peaceful, prosperous and healthy Mozambique.
The economic significance of Eurasian Union for Africa’s development here need not be over-discussed. Members of the European Union such as Britain, France, Germany and The Netherlands are play some visible roles in Africa. The European Union, as a substantial economic power bloc, has long-term working relations with African Union.
With its new Global Gateway Strategy, the EU is demonstrating the readiness to support massive infrastructural investment in Africa. It also seeks to unlock new business and investment opportunities, including in the areas of manufacturing and agro processing as well as regional and continental value chains development. In a document entitled “Toward a Comprehensive Strategy with Africa” – the document sets forth the template of what the EU plans to do with Africa.
Valdis Dombrovskis, Executive Vice-President and Commissioner at the EU Secretariat pointed out that “In this new approach towards Africa, we can build a modern, sustainable and mutually rewarding partnership of equals. Of course, there will be challenges along the way but the EU stands ready to help. We want to share the lessons from our own process of economic integration, and with our new Global Gateway Strategy. We have demonstrated that we are ready to support massive infrastructural investment in Africa.”
That said, African leaders are exploring available possibilities and windows that have been opened after the last EU-Africa summit. The European Union has unveiled €300 billion (US$340 billion) alternative to China’s Belt and Road initiative – an investment programme the bloc claims will create links, not dependencies.
There great rivalry and keen competition among key global players now. And Africa is now seen from different perspectives, but more importantly, it has been described as the last investment frontier due to the current transformations taking place there. During the 35th Assembly of the Heads of State and Government of the AU in Addis Ababa in February, António Guterres argued that Africa was “a source of hope” for the world.
In November 2021, a report prepared by 25 Russian policy experts, titled ‘Situation Analytical Report’ explicitly noted that many external countries are using diplomacy in all ways to support their efforts in Africa. It criticized the inconsistency of Russia’s current policy towards Africa. The intensification of political contacts is only with a focus on making them demonstrative. Russia’s foreign policy strategy regarding Africa needs to spell out and incorporate the development needs of African countries.
While the number of high-level meetings has increased, the share of substantive issues on the agenda remains small. There are little definitive results from such high-level meetings. Many bilateral agreements largely remain not implemented, and many pledges undelivered. It pointed to lack of coordination among various state and para-state institutions working with Africa. According to the report, Russia has to intensify and redefine its parameters as it has now transcended to the fifth stage in its relationship with Africa.
That report was also critical about public speaking. The report lists insufficient and disorganized Russian-African lobbying, combined with the lack of “information hygiene” at all levels of public speaking among the main flaws of Russia’s current Africa policy. In several ways, ideas and intentions are often passed for results, and worse Russia’s possibilities are overestimated both publicly and in closed negotiations.
Several reports monitored by this author show clearly that there has been little approach, in terms of government and institutional public relations, in Russia’s foreign policy in Africa. This author has written a lot about this, emphasizing the seriousness of using media networks – an calculated attempt to build an atmosphere of trust and confidence. Quite obviously, Russians have to devote a great deal of thought to creating strategic communication group that could highlight its diverse performance and practical genuine interests in Africa.
Opening a new stage of relations becomes important especially when analyzing the contradictions and confrontations posed by the Russia-Ukraine crisis and its multiple effects on future relations. Without doubts, African leaders complained bitterly that they have become direct victims of the Russia-Ukraine crisis. Overall Russia’s investment in economic sectors is still staggering there in the continent and comparatively, the fact still remains that the United States, the European Union and a number of Asian and Gulf States are investing heavily in Africa.
The Russia’s Foreign Minister Sergey Lavrov and his Deputy Mikhail Bogdanov, most often show their crosshair of consistent criticism for Western and European dominance and investment in Africa. It lacks strategies for implementing those oftentimes forward-looking policy for Africa. The passion for repeating the same things in different ways in speeches. In a general sense, their repetitive theme of Soviet-era support for political liberation and now efforts to help Africa fight neocolonialism is highly appreciated but Russia has to, in practical terms, show its latest policy achievements in various sectors for the past two decades.
On another side note, Russia most probably needs to design its template of its communication strategy ahead of the 2023 summit, that has to largely win the hearts of African leaders to the emerging New World Order. As already promised, Minister of Foreign Affairs of the Russian Federation, Sergey Lavrov, indicated in a mid-June message that “in these difficult and crucial times the strategic partnership with Africa has become a priority of Russia’s foreign policy. The signed agreements and the results will be consolidated at the forthcoming second Russia-Africa summit.”
Ethiopia: Without immediate funding, 750,000 refugees will have ‘nothing to eat’
UN agencies appealed on Tuesday for $73 million over the next six months to provide food rations to more than 750,000 people seeking refuge in Ethiopia.
The World Food Programme (WFP), UN refugee agency, UNHCR, and Ethiopian Government Refugees and Returnees Service (RRS) made the plea for assistance because without it, WFP will run out of food for the refugees by October.
The impending crisis will leave vulnerable families at risk of undernutrition, micronutrient deficiency, and increased susceptibility to diseases, the agencies warned
“Three quarters of a million refugees will be left with nothing to eat in just a matter of weeks unless we receive funding immediately,” said Claude Jibidar, WFP’s Representative and Country Director for Ethiopia.
Cutting rations has been an issue with which WFP has long had to grapple.
Food rations for refugees in Ethiopia were first reduced by 16 per cent in November 2015, then 40 per cent in November 2021, and finally 50 per cent in June 2022.
The impact of these cuts has been heightened by global limitations on food availability, widespread economic shock, rising food and energy costs, the COVID-19 fallout, and armed conflict.
Impact of cuts
To understand the impact of ration cuts on refugees, WFP, UNHCR and RRS conducted in April, a rapid assessment on 1,215 refugee camps households throughout relevant regions.
The results show that most had coped with food insecurity by reducing the number of meals eaten in a day, consuming less expensive foods, or limiting meal portions.
The joint assessment also revealed that households are going to desperate measures to make up for funding cuts.
Funding cuts have forced refugees to rely on an ever-finite supply of food, which increases the likelihood of resource-based conflicts.
Data shows that many families have been relying on children to generate extra income to afford food.
Other households were forced to borrow cash, relying on friends or relatives for sustenance.
“We have a shortfall of $73 million for refugees’ minimum needs and we are deeply concerned that if funding cuts continue, they may consider returning to their places of origin when it is unsafe,” warned Mr. Jibidar.
More resources must be mobilized to meet immediate food demands, and smart investments should be taken to prioritize sustainable farming.
“The priority for us all must be to restore assistance to at least minimum levels for refugees, all of whom are solely reliant on WFP’s cash and food assistance for survival,” said the UN Country Director.
With an immediate donor response, WFP would be able to buy food available in the region to meet the dietary needs of the refugees and also transfer cash to the refugees, providing them the choice of how to meet their immediate needs and stimulating local markets.
The agencies have established an effective system to identify the food assistance needs of refugees through biometric verification, accountability mechanisms and programmes to grant monthly food and cash assistance.
The trio called on all partners to strengthen efforts to address their immediate and long-term food needs in line with international commitments.
Meanwhile, WFP, UNHCR and RRS will continue to count on donors for extended funding support based on the principle of shared responsibility to implement basic humanitarian life-saving activities.
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