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  • Africa needs China for its digital development – but at what price?

    Africa needs China for its digital development – but at what price?

    Author: Stephanie

    PhD Candidate, University di Bologna

    First Published: February 27, 2024 4.08pm SAST

    Digital technologies have many potential benefits for people in African countries. They can support the delivery of healthcare services, promote access to education and lifelong learning, and enhance financial inclusion.

    But there are obstacles to realizing these benefits. The backbone infrastructure needed to connect communities is missing in places. Technology and finance are lacking too.

    In 2023, only 83% of the population of sub-Saharan Africa was covered by at least a 3G mobile network. In all other regions the coverage was more than 95%.

    In the same year, less than half of Africa’s population had an active mobile broadband subscription, lagging behind Arab states (75%) and the Asia-Pacific region (88%).

    Therefore, Africans made up a substantial share of the estimated 2.6 billion people globally who remained offline in 2023.

    A key partner in Africa in unclogging this bottleneck is China. Several African countries depend on China as their main technology provider and sponsor of large digital infrastructural projects.

    This relationship is the subject of a study I published recently. The study showed that at least 38 countries worked closely with Chinese companies to advance their domestic fibre-optic network and data centre infrastructure or their technological know-how.

    China’s involvement was critical as African countries made great strides in digital development. Despite the persisting digital divide between Africa and other regions, 3G network coverage increased from 22% to 83% between 2010 and 2023. Active mobile broadband subscriptions increased from less than 2% in 2010 to 48% in 2023.

    For governments, however, there is a risk that foreign-driven digital development will keep existing dependence structures in place.

    Reasons for dependence on foreign technology and finance

    The global market for information and communication technology (ICT) infrastructure is controlled by a handful of producers. For instance, the main suppliers of fibre-optic cables, a network component that enables high-speed internet, are China-based Huawei and ZTE and the Swedish company Ericsson.

    Many African countries, with limited internal revenues, can’t afford these network components. Infrastructure investments depend on foreign finance, including concessional loans, commercial credits, or public-private partnerships. These may also influence a state’s choice of infrastructure provider.

    The African continent’s terrain adds to the technological and financial difficulties. Vast lands and challenging topographies make the roll-out of infrastructure very expensive. Private investors avoid sparsely populated areas because it doesn’t pay them to deliver a service there.

    Landlocked states depend on the infrastructure and goodwill of coastal countries to connect to international fibre-optic landing stations.

    A full-package solution

    It is sometimes assumed that African leaders choose Chinese providers because they offer the cheapest technology. Anecdotal evidence suggests otherwise. Chinese contractors are attractive partners because they can offer full-package solutions that include finance.

    Under the so-called “EPC+F” (Engineer, Procure, Construct + Fund/Finance) scheme, Chinese companies like Huawei and ZTE oversee the engineering, procurement and construction while Chinese banks provide state-backed finance. Angola, Uganda and Zambia are just some of the countries which seem to have benefited from this type of deal.

    All-round solutions like this appeal to African countries.

    What is in it for China?

    As part of its “go-global” strategy, the Chinese government encourages Chinese companies to invest and operate overseas. The government offers financial backing and expects companies to raise the global competitiveness of Chinese products and the national economy.

    In the long term, Beijing seeks to establish and promote Chinese digital standards and norms. Research partnerships and training opportunities expose a growing number of students to Chinese technology.

    The Chinese government’s expectation is that mobile applications and startups in Africa will increasingly reflect Beijing’s technological and ideological principles. That includes China’s interpretation of human rights, data privacy and freedom of speech.

    This aligns with the vision of China’s “Digital Silk Road”, which complements its Belt and Road Initiative, creating new trade routes.

    In the digital realm, the goal is technological primacy and greater autonomy from western suppliers. The government is striving for a more Sino-centric global digital order. Infrastructure investments and training partnerships in African countries offer a starting point.

    Long-term implications

    From a technological perspective, over-reliance on a single infrastructure supplier makes the client state more vulnerable. When a customer depends heavily on a particular supplier, it’s difficult and costly to switch to a different provider. African countries could become locked into the Chinese digital ecosystem.

    Researchers like Arthur Gwagwa from the Ethics Institute at Utrecht University (Netherlands) believe that China’s export of critical infrastructure components will enable military and industrial espionage. These claims assert that Chinese-made equipment is designed in a way that could facilitate cyber-attacks.

    Human Rights Watch, an international NGO that conducts research and advocacy on human rights, has raised concerns that Chinese infrastructure increases the risk of technology-enabled authoritarianism.

    In particular, Huawei has been accused of colluding with governments to spy on political opponents in Uganda and Zambia. Huawei has denied the allegations.

    The way forward

    Chinese involvement provides a rapid path to digital progress for African nations. It also exposes African states to the risk of long-term dependence. The remedy is to diversify infrastructure supply, training opportunities and partnerships.

    There is also a need to call for interoperability in international forums such as the International Telecommunications Union, a UN agency responsible for issues related to information and communication technologies.

    Interoperability allows a product or system to interact with other products and systems. It means clients can buy technological components from different providers and switch to other technological solutions. It favours market competition and higher quality solutions by preventing users from being locked in to one vendor.

    Finally, in the long term African countries should produce their own infrastructure and become less dependent.

    SOURCE

    The Conversation 

     

  • Niger and Russia are forming military ties: 3 ways this could upset old allies

     

    1. Senior lecturer in Politics and International Relations, Leeds Beckett University

    Published: January 29, 2024 3.08pm SAST,The Conversation

    In July 2023, Niger’s military took over in a coup just two years after the country’s first transition to civilian power. The coup has brought into sharp focus the role of foreign countries in Niger’s politics.

    Before the coup, France and the US were the main security allies of Niger. But the coup leaders, led by General Abdourahamane Tchiani, were open about their antagonism to France, the country’s former colonial ruler, and ordered the French military to leave.

    Now the attention of many people in Niger has shifted to Russia.

    Since the coup, several analysts have highlighted the role of Russia. Some analysts and regional experts believe Russia might have played a role directly or indirectly in the military takeover.

    Others (including myself) argue that Russia is increasing its grip on the country and actively seeking to benefit from the coup. This was evident when Russia and Niger recently agreed to develop military ties.

    Although the details of this partnership are still sketchy, Russia promised to increase the “combat readiness” of Niger’s military. In addition, there are discussions to partner in the areas of agriculture and energy.

    I have been researching the security dynamics of the region for over a decade. The Niger junta’s romance with Russia has potential implications for peace and security in the region and beyond.

    I have identified three main potential implications for Niger and other allied countries:

    • escalation of tensions between Niger and France
    • discontent between Niger and its regional allies
    • likely disruption of a US$13 billiongas pipeline project from Nigeria to the European Union through Niger.

    Russia in the region

    After the 2023 coup, France and the regional economic bloc Ecowas threatened to use force to reinstate the deposed president.Russia warned against such a move.

    The military junta then expelled French soldiers. France responded by closing its embassy in Niger.

    The US also reduced its military and economic cooperation. Washington cut aid to the country by more than US$500 million and removed the country from its duty free export programme.

    The European Union also instituted sanctions. Niger then cancelled its security and migration agreements with the European bloc.

    Ecowas sanctioned Niger. Another major ally, Nigeria, cut electricity and instituted further sanctions.

    The sanctions, coupled with an increase in insecurity, weakened and isolated Niger.

    Rather than budge, the junta looked for alternative partners – like Russia and China. It also recently joined Mali and Burkina Faso to announce a withdrawal from Ecowas.

    For its part, Russia was positioning itself as a reliable ally. In December 2023, a Russian delegation visited Niger and in January 2024, Niger’s Prime Minister Ali Mahamane Lamine Zeine visited Moscow to discuss military and economic ties.

    Russia is no stranger to the region. Over the last three years it has set up security arrangements with the juntas running Niger’s neighbours: Mali and Burkina Faso. This has been done through the Wagner group, a private security company supported by Russia, whose operations in Africa were renamed Africa Corps in early 2024.

    Russian military advisers have been operating in Mali since 2021. In addition, the Wagner group has 400 mercenaries in the country. Russia also delivered military hardware to the country in 2022.

    Implications

    There are three main potential implications for Niger and other allied countries.

    First, a potential escalation of tensions between Niger and France. This will happen if Niger grants Russia uranium exploration rights that affect French companies with existing licences. Niger has suspended new mining licences and is currently auditing existing ones. This could affect French companies. France has vowed to protect its economic interests in Niger.

    It depends on how the partnership between Russia and Niger develops, in particular how Niger intends to pay for its share of any military cooperation. If this involves the Wagner group, as is the case in security partnerships between Russia and Burkina Faso and Mali, the issue of mining concessions will come into play. Mali and Burkina Faso have paid for Wagner’s involvement by offering mining concessions in return for arms, ammunition and mercenaries.

    Second, any security tie involving the Wagner group would create further discontent between Niger and its regional allies, especially Nigeria, Chad and Cameroon.

    Following the coup, Niger announced it was leaving the G5 Sahel, which was set up to coordinate security operations in the Sahel. This has turned attention to the country’s participation in the Multinational Joint Task Force.

    Both institutions were set up to fight insurgency in the region and Niger has been an active contributor. The other countries in the joint task force, such as Nigeria, Chad, Cameroon and Benin Republic, will be wary of working with Niger if it is in active partnership with Wagner, which is notorious for human rights abuses.

    The third likely major fallout from Russia’s involvement revolves around Niger’s relationship with the EU. The EU is currently constructing a US$13 billion gas pipeline from Nigeria to the bloc through Niger. The pipeline project was designed to reduce the EU’s dependence on Russian gas.

    Based on Russia’s animosity with the EU, I believe Russia could use the security alliance to disrupt the project in order to secure its gas delivery to the EU.

    The junta can use the pipeline project as leverage against the EU by demanding major financial concessions, putting the delivery of the project at risk and strengthening Russia’s position.

    Migration is another area of contention when it comes to the EU. Niger now allows mass illegal migration through its territory for onward journey to Europe. This will create more problems for the EU.

    The active presence of Russia in Niger could change the security and economic landscape of the region and affect all parties.

    I maintain my initial position that rather than use force, the Niger junta should be encouraged to restore democracy as soon as possible. At the same time, some of the sanctions should be lifted to encourage dialogue and reduce the influence of Russia.

    SOURCE 

    The Conversation 

    Disclaimer: Opinions expressed in the article are solly that of the author and shall not in any way be taken to mean the official position of the Eco-Enviro News,Africa magazine.

     

  • COP28: The Good, The Bad And The Ugly Of The Global Stock-Take Text

    COP28: The Good, The Bad And The Ugly Of The Global Stock-Take Text

    Okereke is the Director of the Centre for Climate Change and Development at Alex Ekwueme Federal University Ndufu-Alike, a Professor of Global Governance and Public Policy at the University of Bristol and a Visiting Professor at the London School of Economics, UK

    The 28th Session of the Conference of the Parties (COP28) to the UN Framework Convention on Climate Change (UNFCCC) took a significant step by unveiling a bold Global Stocktake (GST) draft that underscored the imperative for nations worldwide to steer away from the use of fossil fuels; marking a fundamental departure from the status quo, along with a call to massively scale up renewables and energy efficiency this decade.

    COP28’s outcomes reflect the good, the bad, and the ugly of the COP process in particular, and multilateralism more broadly. Let us explore how, beginning with the good outcomes.

    Top on the list of “the good” is that despite the blooper by President Sultan Al-Jaber over his claim that there is “no science” behind calls for a phase out of fossil fuels, he was able to secure a landmark agreement for the world to transition away from fossil fuels. This was, in a way, an enormous feat for a COP that was brimming with over 2,000 oil and gas lobbyists, and a welcome win for climate defenders.

    Although the language is not as strong as the “phaseout” many wanted, the GST text succinctly called for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.”

    The United Arab Emirates’ (UAE) establishment of the groundbreaking ALTÉRRA investment fund for transformative climate partnerships to finance the much required energy transition, in emerging markets and developing economies (EMDEs) in the Global South was a good announcement in the right direction. The ALTÉRRA fund, with a $30 billion commitment from the UAE, positions itself as the world’s leading private entity for climate change action.

    The fund, possessing inaugural launch partners such as finance juggernauts BlackRock, Brookfield and TPG, aims to mobilize $250 billion by 2030 to help Least Developed Countries (LDCs) and Small Island Developing States (SIDS) finance climate solutions.

    It is also good that the GST text emphasized the link between climate action and development and explicitly reaffirms that climate action should be undertaken in the context of sustainable development and poverty eradication. It also reasserted important concepts like international equity, the rights to clean air, and the concept of common but differentiated responsibility. The text, in many places, underscored the importance of global cooperation and solidarity to effectively tackle climate change.

    The commitment to triple renewable energy capacity globally and doubling energy efficiency by 2030 presents “a good” outcome and indeed one of the biggest wins from Dubai.

    Outlining the immediate need for a rapid transition, more than 125 countries committed to the tripling of renewable energy, working together to boost clean energy capacity to at least 11,000 GW by 2030, and an average annual rate of energy efficiency of 4.1%. In a way, for Africa, I see this commitment as more important than the headline statements on phase down on fossil fuel because the immediate need of the majority of the people is access to energy.

    Last year, the International Energy Agency’s (IEA) Net Zero Roadmap released a report showing scaling up renewable energy as an important way to attain global climate goals.

    The IEA report projected that a speedy rollout of significant clean energy technologies will lead to a decline in the demand for coal, oil and natural gas this decade, even without any new climate policies. Hence the best route to phasing out fossil fuel is to supply people with clean energy.

    However, this is where it gets tricky. Developing countries and emerging markets face myriad problems such as high initial costs of finance for the acquisition and installation of renewable energy technologies. Therefore, they require extensive international support, which is essential for amplifying investments in renewable energy, a key solution to addressing the challenges faced by developing nations in the Global South.

    There is a need to scale up renewable energy financing especially for Africa, which in 2022 only received 2% of global investments in clean energy. Sub-Saharan Africa, where 600 million people live without access to electricity, has more than 1,000 times as much renewable potential as energy demand, according to the International Renewable Energy Agency (IRENA).

    Hence the fact that the COP text included a general mention on tripling renewable energy generation without making specific commitments on the increase in allocation to African and other developing countries is a major source of concern. This oversight by the parties at COP28 in the GST must be swiftly addressed at COP29, laying the groundwork for renewable energy sources development to be easily accessible by developing countries who are most severely affected by accelerating climate change.

    In addition, 123 countries signed the Global Renewable Energy and Energy Efficiency Pledge at COP28 to triple global renewable capacity and double global energy efficiency improvements by 2030 and expand financial support for scaling renewable energy and efficiency programmes in emerging markets and developing economies.

    An essential highlight of the pledge’s text is that it acknowledges the role of “transitional fuels” in preserving energy security temporarily.

    Although gas as a transitional fuel is climate-friendly and not ideal, in developing countries, it remains a healthier and less polluting alternative for home cooking and heating compared to burning wood or other biomass.

    This is particularly impactful for developing countries like Nigeria whose Energy Transition Plan (ETP) aims to utilise gas as transition fuel. Regardless, it is important to establish a timeline for the phased transition away from transitional fuels.

    Unfortunately, China and India, two of the world’s leading countries in the uptake of renewable energy, refused to sign the pledge. The contention for both countries centred around the initiative’s calls for phasing down of coal and “ending the continued investment in unabated new coal-fired power plants.”

    It is well-known that while China has embarked on a significant expansion in renewables in the past few years and is projected to account for more than 80% of the global solar manufacturing capacity through to 2026, but it continues to burn more coal every year than the rest of the world combined.

    Similarly, while India is the world’s third-largest producer of renewable energy, with 40% of its installed energy capacity coming from non-fossil fuel sources, coal is an important part of India’s energy needs, and the country depends on coal for 73% of its energy needs. In fact, India is working to add 17 gigawatts of coal-based power generation capacity to meet a record increase in power demand.

    The problem is that while big countries with technology and domestic finance are able to fend off international pressure to limit their expansion of fossil fuel generation, poor countries in Africa who have much stronger moral, energy-security and climate-related arguments for using transition fuel in the medium term are made to suffer from a carbon–embargo imposed by foreign countries and investors.

    The COP text and outcomes show the gap between proclamations and action when it comes to tackling climate change and putting money where their mouths are. We have known for a long time now that the pledges made by countries will not get us to where we want to be by 2030. Most countries are not on course to fulfilling their pledges. Yet, over and over again, countries gather annually for climate conferences, make commitments only to fail to act on them to assist poor countries at the frontline of the climate crisis to build climate resilience.

    Developed and high-income countries most responsible for global warming had committed to raising $100 billion every year by 2020 to fund climate action in developing countries. However, climate finance provided by developed countries for climate action to developing countries only reached $89.6 billion in 2021, according to the Organisation for Economic Co-operation and Development’s (OECD) sixth assessment of progress and $100 billion goal.

    Although the final text emphasised that finance alongside capacity building and technology transfer are critical enablers of climate action and urged developed country parties to fully deliver on the $100 billion per year goal through 2025, there was no specifics on whether or how to make up the shortfall. There is an undeniable need to go beyond words and act urgently on climate change and to do so in the context of sustainable development.

    It’s been revealed that adapting to the climate crisis could cost developing countries anywhere from $160-$340 billion annually by 2030. That number could increase to as much as $565 billion by 2050 if climate change accelerates, according to a UN Environment Programme’s (UNEP) 2022 Adaptation Gap Report.

    It is equally distressing that climate finance, especially for adaptation, has been decreasing instead of growing at a time of worsening climate crisis. And while the operationalisation of the Loss and Damage Fund is a welcome development, failure to scale climate finance for mitigation and adaptation in poor countries represents a big letdown for the climate equity and justice to which countries pay lip service.

    Currently, the UN Environment Programme (UNEP) approximates that the adaptation finance requirements for developing countries are up to 18 times greater than the present influx of public finance from developed countries.

    This brings us to the ugly in the outcomes of COP28 – the hypocrisy of the West who are either expanding or at least not reducing their fossil fuel exploitation in their jurisdictions but seem to have no qualms in asking developing countries with severe energy poverty to commit to phase out fossil fuels. In the United States, President Joe Biden’s administration has continued to approve more permits for oil and gas exploration and extraction in its first two years – over 6,900 permits – a number higher than Trump’s in the same period.

    China has been developing nine new oil and gas fields, including the significant discovery of a major oil field in the Bohai Sea last year. Notably, twenty of the world’s largest fossil fuel companies including BP, Chevron, Saudi Aramco, Shell, and TotalEnergies – are projected to collectively invest over $930 billion by 2030 in expanding oil and gas production.

    COP28 ended with some noteworthy strides in the right direction. Since the agreement and pledges are not legally binding, all eyes, as always, will be on how far all parties take their pledges for an intentional, actionable, sustainable and impactful approach to climate change.

    Parties must align national climate plans, with ambitious timelines for emissions reductions and backing them with tangible implementation strategies before the next Nationally Determined Contributions (NDCs) submission ahead of COP30 in Brazil, with a timeframe for implementation till 2035.

    They must translate the UAE Consensus, a collective response to the GST into their updated NDCs and developmental domestic legislation and policies, including increasing renewables, fossil-free transport systems and decreasing production and consumption of fossil fuels. Azerbaijan’s COP29 needs to provide breakthroughs on prickly and fundamental questions about finance for a just transition.

    Developed countries should refrain from self-deception and perform genuine efforts for a globally inclusive and systematic energy transition. It is crucial to address the equity gap by boosting financial and technological assistance to developing countries, allowing them to partake in the clean energy revolution. This requires innovative financing methods, technology transfer initiatives, and capacity-building programmes to empower all nations toward a shared and sustainable future.

    SOURCE 

    Centre for Climate Change & Development,Nigeria

  • Ghana wants to make importing food like rice and tomatoes more costly: expert explains why it’s a bad idea

    Published: January 22, 2024 4.19pm SAST

    Associate Professor, Agri-Food Trade and Policy, University of Guelph

    Ghana, like many other developing nations, relies heavily on imports of food and consumer goods to feed its population. For instance, Ghana imports 55% of the rice that is consumed locally. The country’s import dependence is primarily a consequence of the production of low-value primary products without substantial value addition.

    To forestall over-dependence on foreign goods, the government has proposed a trade restrictive policy via a legislative instrument on 22 major items. It has justified the policy on the grounds that it wants to reduce Ghana’s dependence on foreign goods by making locally produced goods more attractive from a price perspective. In turn, the idea is that this will drive up domestic production.

    The list of items includes essential food products such as rice, offal, poultry, cooking oil, fruit juices, noodles and pasta, fish, sugar and canned tomatoes. All are commonly consumed in most Ghanaian households.

    But imposing constraints on these food items has the potential to escalate food prices, as set out in my recent paper, prompting concerns about potential threats to food security. Restricting imports without ensuring high-quality and competitive domestic products will not lead to consumer preference for locally made goods. What Ghana’s industries need are fewer production constraints and more incentives to compete domestically.

    Opposition to the instrument

    Opposition to the proposal emerged from various quarters, including civil society organisations, trade associations and the minority in parliament.

    Opponents of the proposed policy contended that its restrictive nature would lead to severe economic and food security repercussions for Ghana. They argued that domestic producers might struggle to meet local demand for the specific items the government aims to restrict. For example, 90% of Ghana’s total poultry consumption relies on imports.

    The government consequently suspended the proposed mechanism in December 2023 for broader consultation.

    The reasons

    The ministry wanted the restriction for two main reasons.

    First, to curb the depreciation of the Ghanaian cedi. A surge in imports of the products in question increased the demand for US dollars, putting pressure on the local currency. In 2022, Ghana imported food products and related goods worth an estimated US$2.6 billion.

    Second, the aim was to foster industrialisation in Ghana. According to the ministry, import restriction was a strategy to reduce competition for local producers, fostering increased local production and making Ghana less reliant on foreign countries to meet domestic demand.

    But there are a number of concerns about the potential impacts of the proposed restrictions. Among them are food security, government revenue, trade distortions, and the cost of doing business.

    The likely impact

    Food insecurity: Data from the Food and Agriculture Organization shows that there were 21 million severely food-insecure individuals in 2021. Constraints on imports of commonly consumed foods, leading to scarcity and thus an increase in food prices, would reduce food security further.

    Producers might benefit from selling at higher prices but consumers would not.

    Revenue loss: There is the potential for revenue loss, particularly from customs and import duties. Many developing countries, including Ghana, depend heavily on import duties for government revenue. Recent statistics from the World Bank’s World Development Indicators for 2020 indicate that customs and import duties accounted for 12.4% of Ghana’s tax revenue.

    Trade rules: Ghana is a member of the World Trade Organization (WTO), which expects countries to align their trade policies with the relevant globally agreed provisions and rules.

    The WTO allows a member country to set conditions for importing certain products. This is known as import licensing. But the WTO stipulates that import licensing should not distort and impede trade.

    Ghana may face retaliation from other countries if the restrictions harm their interests.

    Take import licensing. This is an administrative procedure requiring the submission of an application or other documentation (other than those required for customs purposes) to the relevant administrative body as a prior condition for importation of goods. This is permissible under WTO rules. But challenges arise in its implementation, particularly the allocation of quotas. Successful implementation requires thorough consultation with importers and importing countries.

    The initial opposition within Ghana suggests a lack of serious consultation by the government.

    Import licensing can introduce rent-seeking activities in a country like Ghana. Establishing a committee to grant licences to importers opens avenues for bribery and corruption. Transparency International and the World Bank rank Ghana higher in the corruption index than other developing countries.

    For instance, the World Bank Enterprise Survey indicates a high percentage of firms in Ghana are expected to pay bribes to obtain licences, government contracts and business permits. When businesses resort to bribery, it leads to inefficiency and a higher cost of conducting business.

    The answers

    Restraining imports without alternative domestic production and supply mechanisms is economically unsound. Policies that drive industrialisation and position Ghana as a net exporter are needed.

    That’s not happening. The recently presented 2024 budget revealed a negative 2.2% growth rate for the industrial sector.

    To drive industrialisation, the government should focus on reducing production constraints such as inadequate power supply, lack of capital, and high cost of farm inputs, and providing incentives that give Ghanaian producers a competitive advantage in the domestic market. Closing borders to international trade or restricting imports contradicts the objective of promoting industrialisation. It is not a sustainable approach.

    SOURCE

    The Conversation

     

     

     

     

     

  • Can South Africa Win Its Case Against Israel?

    Can South Africa Win Its Case Against Israel?

    South Africa’s application to the International Court of Justice (ICJ) seeking to have the court declare Israel’s military assault on Gaza a genocide will be heard starting on Thursday in The Hague.

    Israel has called the allegations “baseless” and accused South Africa of “cooperating with a terrorist organization.”

    States including Turkey and Jordan have backed the case. Malaysia publicly offered South Africa its support. Malaysia’s Foreign Ministry described the proceedings as a “timely and tangible step towards legal accountability for Israel’s atrocities.”

    Israel finds it is having to defend itself against arguments based on a convention that was drawn up in part to prevent a repetition of the Holocaust, which killed 6 million Jews.

    The application asked the ICJ to take interim measures to immediately suspend Israel’s military operations in Gaza and “take all reasonable measures” to prevent genocide. In its 84-page brief, South Africa cites alleged incitement by top Israeli officials, including the defense minister, Yoav Gallant, who referred to Palestinians in Gaza as “human animals,” as well as Prime Minister Benjamin Netanyahu’s comparison of Palestinians to the biblical story of the Amalek nation, which God ordered the Israelites to destroy.

    Pretoria argues Israel’s military assault violates its obligations under the 1948 Genocide Convention, which defines genocide as “acts committed with intent to destroy, in whole or in part, a national, ethnical, racial, or religious group.”

    The application condemns Hamas’s killing of 1,200 Israelis and foreign citizens and hostage-taking of around 247 people on Oct. 7 but argues that no attack can justify the killing of more than 22,000 Palestinians, including over 7,000 children—the number of dead at the time it was written.

    Unlike previous cases at the International Criminal Court, which Israel has boycotted because it does not recognize that court’s authority, Israel has no choice but to appear in front of the ICJ as it is a signatory to the Genocide Convention and subject to the jurisdiction of the ICJ, the United Nations’ top legal body. Both sides are sending some of their best lawyers to The Hague. Pretoria is sending South African international law expert John Dugard, a former U.N. special rapporteur on human rights in the occupied Palestinian territories. Meanwhile, Israel will be represented at the ICJ by the British lawyer Malcolm Shaw, an expert on territorial disputes.

    Israel is also sending Aharon Barak, a retired Israeli Supreme Court president who is a Holocaust survivor and a fierce critic of the Netanyahu government’s judicial reform plan—which adds to his credibility in the eyes of Netanyahu’s critics.

    The application also raises possible reputational damage for the United States. As the International Crisis Group’s Brian Finucane argues “U.S. officials risk complicity if Israel uses U.S. support to commit war crimes.” The United States is increasingly isolated as one of the few countries that has stood resolutely behind Israel since the Oct. 7 Hamas attack and subsequent Israeli offensive in the Gaza Strip amid growing international criticism over the dire humanitarian crisis in Gaza.

    “We find this submission meritless, counterproductive, and completely without any basis in fact whatsoever,” White House National Security Council spokesperson John Kirby said last Wednesday.

    Israel and South Africa’s animosity has deep roots. After Israel was founded, the country’s leaders cultivated close ties with newly independent African states while often condemning apartheid in South Africa. However, relations with most African nations soured after the 1973 Arab-Israeli War, while Israel’s ties with South Africa grew stronger as it began to sell large quantities of arms to the apartheid regime. Israel became a key ally and defense partner for the white supremacist government during the 1970s and 1980s, even as other countries began to impose sanctions on Pretoria. In November, South Africa’s Parliament voted to suspend diplomatic ties with the country until a cease-fire agreement in Gaza is reached.

    The South African government, faced with domestic issues at home, has tried to assert itself as a moral beacon in the world, calling out the hypocrisy of the West over the war in Ukraine and campaigning for a multipolar global order where poorer nations have a voice.

    While it is easy for some analysts to dismiss South Africa’s case, any ruling could set legal precedents since Pretoria is basing its petition in part on Gambia’s proceedings against Myanmar in 2020, in which Gambia successfully argued as party to the Genocide Convention that it has an obligation to act to prevent genocide against the ethnic Rohingya population in Rakhine State and therefore had standing. Myanmar had tried to argue that Gambia was not an “injured” party and therefore could not bring a case.

    Since the war began, Israel has restricted the entry of medicine, water, and fuel to Gaza’s population of 2.3 million people, except for limited aid through Egypt that U.N. workers say falls far short of what’s needed with famine and disease around the corner.

    By not seeking a definitive ruling—but only provisional measures under Article 74 of the ICJ rules—the threshold of what South Africa has to prove is lowered. The court could decide it does have jurisdiction to proceed with the case as in The Gambia v. Myanmar. It could also choose to impose some of the interim measures requested by South Africa without making a decision that Israel’s conduct in Gaza amounts to genocide.

    Although ICJ orders are binding, they’ve not been enforceable. Russia has defied the court’s judgment to suspend military operations in Ukraine. Regardless of the ICJ’s eventual decision, Israel is becoming more isolated on the world stage.

    SOURCE
    Foreign Policy’s Africa Brief
  • Economic uncertainty is impacting Africa’s real estate market attractiveness

    Economic uncertainty is impacting Africa’s real estate market attractiveness

    Tilda Mwai (first Published 3 weeks ago)

    The real estate sector in Africa, often touted for its potential and growth opportunities, has been grappling with a myriad of challenges, notably macroeconomic and political uncertainty, along with the repercussions of global tensions. These factors have converged to create a landscape where the attractiveness of real estate markets is increasingly influenced by core macroeconomic…

    The real estate sector in Africa, often touted for its potential and growth opportunities, has been grappling with a myriad of challenges, notably macroeconomic and political uncertainty, along with the repercussions of global tensions.

    These factors have converged to create a landscape where the attractiveness of real estate markets is increasingly influenced by core macroeconomic indicators, leading to a noticeable decline in market activity across the continent.

    In this article, we highlight the top real estate markets based on macroeconomic performance as well as key market nuances to watch out for.

    • Botswana and Morocco rank at the top of the real estate market attractiveness index

    The real estate market attractiveness index seeks to rank countries based on their relative stability. The index has incorporated six different core indicators that include currency changes, a country’s debt to GDP ratio, credit rating, inflation, construction costs and GDP growth rate.

    These indicators were then assessed across 17 of the major economies in Africa with a spread across East, West, North and South.

    Notably,  Botswana and Morocco ranked at the top of the real estate market attractiveness ranking. This has been underpinned by the relative currency stability, low inflation rates and lower construction costs.

    For example, Botswana and Morocco recorded inflation rates at 3.1% and 4.3% respectively which is significantly low compared to Egypt’s 35.8% and Ghana’s 35.2%. In addition, Morocco’s construction costs per sqm are estimated at an average of US$ 600 compared to the all country average of US$ 1,366.

    On the other hand, Ghana and Angola ranked as the least real estate attractive countries for 2023. Ghana’s performance has been impacted by its heightened inflation estimated at 35.2% effectively ranking as the second highest after Egypt, lower GDP growth rate and above average construction costs.

    Angola’s performance has been impacted by high currency depreciation rate with currency changes in the year to December 2023 estimated at 67% as well as a higher debt to GDP ratio estimated at 111%.

    Interestingly, Nigeria also ranked as the third last market due to heightened currency changes (83.66% YTD), high inflation rate (27.33%) and high construction costs estimated at USD 1,700 per sqm.

    • Currency changes remain the single most important impacting factor on performance

    There is no doubt that currency performance is most often a great indicator of a country’s economic stability.However, investors currently have a reason to be jittery. With inflation already on the rise, increasing debt levels and potential default,countries are already seeing a cut back in investment preference.

    So far, Nigeria’s Naira has recorded the highest rate of depreciation in the year to December 2023 with a 83% decline on the official rate.This has been followed by Angola’s Kwanza recording a 67% decline during the same period. Interestingly, historically stable markets such as Tanzania have also recorded a 7.5% decline during the period under review pointing to the continued stress in the macroeconomic environment across board.

    However, Morocco has emerged as an outlier, ranking as the only country whose currency has appreciated against the dollar by up to 3%. This has been underpinned by a stronger macro economic environment pointing towards an overall recovery in different sectors including real estate driven by increased foreign investments and trade.

    Generally, this currency performance is set to impact on commercial real estate leasing activity especially for retail and office sectors as well as green field investments financing especially for social infrastructure such as Affordable housing.

    Already, financing allocation, often influenced by Development Finance Institutions, is primarily dollar based. Continued local currency depreciation means that such debt will be expensive to undertake. With a limited domestic capital raising landscape, we are likely to see limited development pipeline in the majority of the markets with the only developments undertaken being previously negotiated ones.

    A bright spot to this has been the development of alternative financing methods. Although still in their nascent stages, countries such as Kenya and Nigeria are actively championing the development of alternative domestic financing for real estate. Notably, this has led to increased momentum in Kenya’s REITs market. So far, three out of the four authorised REITs entities in the market have been listed over the past two years since 2013 when the first REIT was listed.

    While in Nigeria, this  alternative financing landscape has been reflected through an income fund shift. Institutional investors such as Actis have sought to raise capital through its inaugural West Africa income funds

    • The  subdued macro environment is impacting on the logistics sector growth.

    Logistics warehousing ‘hype’ has cooled off across the continent with new development announcements at record lows during 2023. This has been attributed to the ensuing macroeconomic challenges that have seen drivers such as e-commerce and manufacturing slowdown.

    This has led to market exits by key manufacturers such as GSK in markets such as Lagos and Nairobi with a refocus on their business model while occupiers such as Twiga Foods in Kenya have had to consolidate their operations by shutting down over ten distribution centres earlier on in the year.

    As a result, the markets are seeing limited new take up with the majority of the activity being driven by lease renewals. As such, the majority of the logistics developers are expected to continue offering market incentives in a bid to attract potential occupiers even as existing occupiers reassess their portfolios.

    Interestingly, while there is a slowdown in demand, grade A warehouse rents have remained stable in markets such as Kenya at approximately US$ 6 psm. Still, currency depreciations are seeing developers record losses especially in the absence of dollar based leases. Additionally, occupiers are opting for shorter and flexible lease terms as a mitigating strategy to the subdued macro economic conditions

    • Hospitality market remains the most active real estate sector

    Interestingly, the hospitality market has remained the most active sector in terms of transaction volumes and development pipeline across the continent. In Kenya for example approximately USD 44.4 million has been expended in the sector between 2021 and 2023 through existing acquisitions such as three City Lodge hotels acquired by Actis in 2021, and Crowne Plaza Hotel by Kasada in 2022  and pipeline transactions such as Safari Club Hotel set to be acquired by Swiss-Belhotel International in Q1:2024.

    Market activity has also been underpinned by a vibrant development pipeline. According to W Hospitality Group, approximately 482 hotels are set to be developed across the continent in 2023 compared to 447 in 2022. Egypt, Nigeria and Morocco rank as the leading countries in terms of development activity accounting for 103, 42 and 46 hotels respectively.

    Despite their relatively subdued macro economic environment, Egypt and Nigeria have continued to record considerable hotel investment interest.

    This trend is expected to continue as developers seek to formalise the hospitality market as well as meet existing demand from international and domestic markets.

    SOURCE

    Estate Intel News

  • Africa’s Natural Gas Sector is Building Momentum in 2024

    Africa’s Natural Gas Sector is Building Momentum in 2024

    By NJ Ayuk, Executive Chairman, African Energy Chamber

    The recently signed liquefied natural gas (LNG) development project in South Africa’s Mpumalanga province is a promising step on the long road to Africa’s just energy transition.

    The project, being jointly developed by Kinetic Energy of Australia and the Industrial Corporation of South Africa (IDC), a national development finance institution, will capitalize on Kinetic Energy’s recent 3.1 billion cubic feet natural gas discovery in Amersfoort, Mpumalanga. The project is expected to produce 50 megawatts (MW) of equivalent energy and eventually expand to 500 MW.

    The project, which Kinetic Energy describes as South Africa’s largest onshore LNG project, exemplifies natural gas’ potential to grow the country’s economy and meet domestic energy needs.

    This all comes about as South Africa works to expand its oil and gas operations in order to curb its reliance on coal and help pave the way to eventual decarbonization.

    South Africa is not alone, either. As the African Energy Chamber (AEC) covers in our recently released “The State of African Energy 2024 Outlook Report,” natural gas production is on the rise both globally and in Africa. Even more promising, our report notes that “upstream operators are now revising their strategies and aligning their future investments more in line with energy transition, and natural gas is being looked at as transition fuel.”

    The African Energy Chamber will support the Invest in African Energy Conference in Paris this year organise by Energy Capital and Power. African Energy Week will definitely be the home of Natural Gas investment in Africa.

    Gas: A Logical Transition Fuel

    I find it heartening that, despite calls by environmental organizations and wealthy countries to cease investment in African oil and gas projects, many of the companies actually operating in Africa appear to recognize natural gas’ value as a transition fuel. Too long has the solution to the climate crisis been oversimplified: Decarbonization is not a goal that can be reached overnight nor without first building up the infrastructure required to support development of renewables.

    Such a task is relatively simple for Western countries, which have spent centuries building their economies and infrastructure off the backs of fossil fuels. The same cannot be said for African states, which have long lacked these same development opportunities and must now play catch-up at an accelerated pace.

    Even worse, we are told to play this game of catch-up with our hands tied: to leave our natural resources in the ground while the developed nations of the world continue to exploit their natural non-renewable wealth. We are expected to jump straight to building wind farms, solar farms, and hydroelectric dams while hundreds of millions of Africans are still living without access to electricity.

    Where will the capital for such a miraculous development come from?

    Who will build the foundational infrastructure needed to support it?

    Developed nations are quick to promise, “We will!” but reticent to follow through on their promises. What’s more, their foreign “aid” has frequently focused more on alleviating the symptoms of Africa’s economic and energy poverty rather than resolving the source.

    With all this in mind, it is clear to me who must provide the lion’s share of capital and build the infrastructure: Africans ourselves. And we cannot do that without tapping our own natural resources, natural gas being the most vital among them. Its properties that burn cleaner than oil and coal, its abundance, its ease of storage and transport, and its applications in manufacturing and synthesis make natural gas the best option for Africans to establish energy security and achieve decarbonization.

    Companies Leading the Way

    So, again, it is encouraging to see that the AEC is not alone in our stance that natural gas production makes sense for Africa — and for energy companies. More and more energy companies describe policies that call for pursuing energy transition measures for tomorrow while providing the natural gas to power the world today.

    Look at French major TotalEnergies, which is responsible for much of the upstream activity in our continent. Following the discovery of two huge gas fields in South Africa in 2019 and 2020, TotalEnergies is continuing its exploration and production efforts there, despite environmentalists’ efforts to block further activity. TotalEnergies also is driving the Mozambique LNG project, considered one of Africa’s most important hydrocarbon developments.

    Then there’s German independent, Wintershall Dea, which is increasing its participation in the Reggane Nord natural gas project in Algeria by 4.5%. The company is acquiring interest from Italian utility company Edison in the project. Wintershall Dea, which has a strong presence in North Africa, also announced first gas with its partners (Cheiron Energy, INA, and the Egyptian Gas Holding Company) at the East Damanhur block in the onshore Nile Delta earlier this fall.

    I love what Wintershall Dea’s CEO and Chief Operating Officer Dawn Summers wrote about natural gas in a November opinion piece, released just before the 2023 United Nations Climate Change Conference (COP28).

    “At first glance, it would seem that the gas and oil industry is merely part of the climate problem — but it will also be part of the solution,” Summers wrote. “If gas were used instead of coal, CO2 emissions would immediately go down — by almost half. Already today, we are decreasing the environmental impact of our activities worldwide by drastically reducing our methane emissions. In addition, with technologies such as CO2 storage and H2 production, we are helping other sectors to decarbonise, and we aim to harness our expertise to ensure that the future energy system is more sustainable. In short, the oil and gas industry can, must and will be part of the solution to the climate problem.”

    Well said! Africa’s gas industry is part of the solution as well. And, as our report notes, the forecast for continued natural gas projects in our continent is looking good.

    Africa’s Tremendous Natural Gas Potential

    Our report finds that Africa continues to hold immense natural gas potential and is positioned to not only increase its outputs but also capitalize on the underserved LNG market and meet Europe’s ongoing demand. Our estimates show an increase from Africa’s 2023 natural gas output of about 265 billion cubic meters (bcm) to over 280 bcm by 2025.

    North Africa currently drives the majority of the continent’s output, although its production is expected to remain flat throughout the rest of the 2020s. Production ramp-up is expected through the second half of this decade as Mozambique increases its LNG output. As new-gas start-ups across the rest of the continent come online, this trend in increased output will become further pronounced.

    Nigeria and Algeria, meanwhile, are expected to drive an increased focus on LNG exports, with additional flows coming from Egypt, Equatorial Guinea, Mozambique, and waters off Senegal- Mauritania.

    Africa’s natural gas sector stands poised to prepare the entire continent for eventual decarbonization, as do many of the companies operating here.

    The goal of a continent fueled by renewable power cannot be achieved, however, unless the developed world also recognizes this and allows African states to transition on their own schedule, not one imposed on it by others.

    Download the AEC’s 2024 outlook report here.

  • Saudi Arabia and UAE officially join Brics: What will it mean for the bloc?

    Saudi Arabia and UAE officially join Brics: What will it mean for the bloc?

    Fareed Rahman

    Jan 01, 2024

    The expansion of the Brics bloc to include Saudi Arabia and the UAE is expected to offer new investment opportunities for the Arab world’s two largest economies while boosting the group’s influence globally, analysts said.

    Saudi Arabia along with the UAE, Egypt, Iran and Ethiopia joined Brics on January 1, doubling its membership to 10, with Brazil, Russia, India, China and South Africa the original members.

    “Expansion of the Brics multilateral bloc to include Saudi Arabia and UAE augurs extremely well amid ongoing geopolitical and economic challenges confronting the world economy,” Ullas Rao, assistant professor of finance at Edinburgh Business School of Heriot-Watt University in Dubai, said.

    “Both Saudi and the UAE as [among] the richest countries on per capita and home to the biggest sovereign wealth funds, create enormous growth opportunities through investments, trade and commerce.”

    Saudi Arabia and the UAE have continued to post economic growth despite global uncertainties including high interest rates, inflation and geopolitical tensions as they focus on diversifying their economies.

    Saudi Arabia’s economy, which grew by 8.7 per cent in 2022, the highest annual growth rate among the world’s 20 biggest economies, is expected to expand by 0.8 per cent in 2023, according to the International Monetary Fund.

    The kingdom is also focusing heavily on its non-oil economy as part of its Vision 2030 diversification agenda.

    Meanwhile, the UAE’s economy is expected to grow 3.4 per cent in 2023 with oil GDP growth projected at 0.7 per cent and non-oil GDP at 4.5 per cent, backed by a strong performance in tourism, real estate, construction, transport, manufacturing and a surge in capital expenditure, according to a recent report from the World Bank.

    The Arab world’s second largest economy is signing trade deals to strengthen its ties with countries around. It is working towards signing 26 comprehensive economic partnership agreements as it seeks to attract more investment and diversify its economy.

    “The image of Brics in the past was of a financially vulnerable group, beholden to the global political superpowers. The financial power of Saudi and the UAE as net exporters of capital to the rest of the world will substantially change that perception,” Gary Dugan, chief investment officer at Dalma Capital, said.

    “Also as a collective, we expect Saudi Arabia and the UAE to be afforded easier access to the growth markets of the Brics countries on favourable terms.”

    The addition of two major oil exporters to the group “will reinforce their bargaining power and influence in Opec+ while also offering the space for them to align their strategies with other Brics members”, Ehsan Khoman, head of ESG, commodities and emerging markets research at MUFG, said.

    Opec+, which has been playing a crucial role in balancing oil markets, includes some of the world’s biggest crude producers including Saudi Arabia, the UAE and Russia.

    China and India, two key members of Brics, are the second and third biggest consumers of oil in the world with strong energy ties to the Gulf countries.

    New world order?

    Meanwhile, the calls for the overhaul of the international monetary system and the development of an alternative currency to the US dollar are expected to grow as Brics expands, according to Mr Rao.

    “As the world navigates for an alternative to the US dollar, even if less relevant today, the emergence of Brics common currency can act as a major harbinger in diversifying risks away from the stronghold of the dollar,” he said.

    Brics is poised to assume greater influence as a powerful voice to the Global South, he added.

    Ayham Kamel, head of Mena at Eurasia Group, is also bullish about the bloc wielding more influence globally.

    “The prospect of Saudi Arabia, the UAE, Iran and Egypt joining Brics creates new mechanisms that forces a degree of political co-operation by all the countries,” he said.

    “The Arab countries are looking for improving their global geopolitical influence and appear committed to avoiding detachment from the West.”

    SOURCE

    The Nation Business

     

     

  • Africa Must Set the Timing for its Energy Transition, Whether the World Likes It or Not

    Africa Must Set the Timing for its Energy Transition, Whether the World Likes It or Not

    About a year ago, before COP27 began in Egypt, Fiona Harvey and Matthew Taylor wrote in an opinion piece for The Guardian that it was time for gas exploration in Africa to stop.

    “Africa must embrace renewable energy, and forgo exploration of its potentially lucrative gas deposits to stave off climate disaster and bring access to clean energy to the hundreds of millions who lack it, leading experts on the continent have said,” they wrote.

    This is hardly new. For several years now, wealthy nations and environmental organizations have been strong-arming African countries to leave their petroleum assets in the ground.

    The stance of the African Energy Chamber has been consistent: Yes, African oil and gas-producing countries should and will do their part to support global emissions-reduction goals. Yes, the dangers of climate change should be taken seriously.

    However, we refuse to let the world set the timing for when Africa will ease up on oil and gas exploration and production. We are convinced that oil and gas production, when managed strategically, provides a pathway for economic growth and energy security, and we are determined to help Africa realize those benefits.

    This is the message we’re bringing to COP28: African countries have every right to set the timing for their energy transitions. And like nations around the world, African states will be exercising those rights.

    Africa’s Miniscule Contribution

    The world must understand that African countries cannot be on the same energy transition timeline as Western countries. Africa still needs time – time that the Western world has already had and, frankly continues to milk – to resolve energy poverty and industrialize.

    Let’s first address the proverbial elephant in the room: When it comes to global emissions, Africa is NOT the problem.

    In 2021, global CO2 emissions hit 37.12 billion tonnes. China ranked first in contributing 11.47 billion tonnes; the entire continent of Africa contributed 1.45 billion tonnes, only 4% of global carbon emissions. In fact, over the last two decades, Africa’s total contribution to global greenhouse gas emissions has never been above 4% — by far the smallest share in all the world. Africa has the lowest per-capital emissions of all continents, averaging 1 tonne of CO2 emitted annually by each individual. The average American emits as much CO2 in one month as the average African does in an entire year.

    And yet, Africa is disproportionately being punished for the climate catastrophe that, let’s be honest, was initiated and is perpetuated by Western and developed economies.

    “The story of Africa or the developing world is not really an energy transition story, it’s a development story,” Andrew Kamau with the Center on Global Energy Policy at Columbia University said in a recent interview with Energy Intelligence.

    “You hear a lot about all these technologies that are being developed, but where are they at scale?” Kamau asked. “And has somebody industrialized using wind and solar only? I don’t know. We wait to see if it’s possible.”

    Kamau also questioned where all the international funding is. The West has made grand financial promises, but the level of support truly needed to undertake a transition to renewables at the pace dictated by the West has yet to materialize.

    Using the Resources at Our Feet

    While we at the African Energy Chamber agree that it’s important to develop affordable and sustainable green technologies to supply our energy, we strongly disagree with being pigeonholed into accepting the West’s one-size-fits-all timeline.

    I hear from Africans who are skeptical about the benefits of oil and gas because they have seen the problems caused by the energy sector. You could make the same arguments about the Internet, which has been blamed for harming social relationships, decreasing our safety and security, and damaging children’s cognitive development. Yet, used wisely, the Internet does considerable good as well, and I’m not hearing widespread calls to get rid of it. My point is, oil and gas can and does do good (I’ve written whole books on the subject!) — the key is to be smart about how we capitalize on our resources.

    Some 600 million people on the continent still lack adequate electricity access or even clean cooking technologies. These Africans aren’t focused on the fact that reliable energy infrastructure facilitates economic growth by generating jobs, increasing productivity, and reducing the cost of doing business. Most would be elated to have light in their homes after dark or the ability to refrigerate their food.

    But think about Africa’s abundant energy potential!

    By 2050, the continent will be home to 11% of the world’s liquefied natural gas (LNG) market and the second-highest growth supply of gas. By tapping into the vast stores of natural gas at our feet, we can first work to eradicate energy poverty from the continent, and then secure our economic growth as we transition toward renewables.

    I agree with Mohamed Hamel, the Secretary General of the Gas Exporting Countries Forum, in his description of the argument that Africa should not develop its natural gas resources as “misguided.”

    “A prosperous Africa will be more capable to protect its environment. The right of Africa to develop its vast natural resources can be preserved, and its access to finance and technology, facilitated,” Hamel said.

    Turning the Pressure into Partnership

    Around the time of COP27, I made it clear that, while African nations would not be continuing oil and gas operations indefinitely, with no movement toward renewable energy sources, we Africans should be setting the timetable for Africa’s transition.

    “What I’d like to see instead of Western pressure to bring African oil and gas activities to an abrupt halt, is a cooperative effort,” I wrote at the time. “Partnerships, relationships rooted in respect, open communications and empathy. What does that look like? It begins with the belief that when African leaders, businesses, and organizations say the timing is not right to end our fossil fuel operations, we have a point. That when we are discussing our own countries, we know what we are talking about.”

    Clearly, we still have progress to make. Too many outsiders suggest that African leaders are being manipulated or influenced by greed when they work to foster oil and gas exploration and production in their countries. Few seem to believe that, when countries establish and fine-tune local content laws, adapt investor-friendly fiscal regimes, and promote policy that protects human dignity, they are making reasoned, strategic moves to create better futures for their people.

    That saddens me, but it also strengthens my resolve. We will continue to fight for what’s right, for what’s ours. We are not giving up on a just energy transition for Africa — a transition on a timetable that benefits and uplifts Africans.

  • As Conference of the Parties (COP28) Wraps Up, We Must Remember, Aid to Africa Is (Still!) Not the Answer (By NJ Ayuk)

    As Conference of the Parties (COP28) Wraps Up, We Must Remember, Aid to Africa Is (Still!) Not the Answer (By NJ Ayuk)

    JOHANNESBURG, South Africa, December 10, 2023/ — By NJ Ayuk, Executive Chairman, African Energy Chamber (www.EnergyChamber.org).

    There was an era when Africa and Western pop music were closely linked.

    Western entertainers spearheaded a number of internationally renowned events to raise awareness about the plight of starving Africans and generate funds for famine relief.

    In December 1984, the supergroup Band Aid sang about feeding the world, asking “Do They Know it’s Christmas?” Within a year, the group had raised over USD9 million.

    Three months later, USA for Africa released “We Are the World” and banked USD44.5 million after one year for its African humanitarian fund. Then on a hot July day in 1985, the worldwide concert event Live Aid raised more than USD150 million for famine relief in Africa.

    These are just a handful of grand and noble gestures intended to lift Africa out of poverty. And these famous events arguably raised both awareness and funds. Unfortunately, the efforts — and others like them — fall far short of making any real socioeconomic change. In fact, some argue that injecting monetary aid into Africa, time and time again, has actually done more harm than good.

    I acknowledge that stance may sound ungrateful. At first blush, many might counter that starving people have no agenda. Destitute parents still need to feed their children. Turning a blind eye to their plight is inhumane.

    Let me explain why the African Energy Chamber (AEC) continues to push for free-market solutions rather than good-will handouts.

    History of ‘Help’

    Even aid genuinely given to help Africa tends to do more harm than good.

    Since 1960, more than USD2.6 trillion has been pumped into Africa in the form of aid. From 1970 and 1998, when aid was at its peak, poverty actually rose alarmingly — from 11% to 66% — due in large part to this massive influx of foreign aid that counteracted its intended good.

    Aid decreased long-term economic growth by fueling systemic corruption, in which powerful aid recipients funneled foreign funds into a personal stash instead of public investment. Many leaders realized that they no longer needed to invest in social programs for their constituents because of the revenues from foreign donors.

    Large inflows of aid also caused higher inflation, hindering African nations’ international competitiveness in exporting. That resulted in diminishing the manufacturing sector – which is critical in helping developing economies grow — across the continent. And well-intentioned Westerners who saw the economic shrink just kept pouring more and more money at “the problem” — leading to a vicious cycle that furthered corruption and economic decline.

    But here’s the kicker: The World Bank has admitted that 75% of the agricultural projects it implemented to help Africa failed. So why do they and other aid providers continue to fund these failing efforts?

    Examples of Failure

    Across the continent, we see example after example of failed aid projects, with agricultural projects routinely providing little or no benefit to African farmers.

    In Mali, the U.S. Agency for International Development (AID) injected USD10 million into “Operation Mils Mopti” to increase grain production. The government imposed “official” prices on the grain, which forced farmers to sell their crops at these below-market rates and resulted in grain production falling by 80%.

    AID also spent USD4 million to help livestock producers grow the number of cattle in the Bakel region from 11,200 to 25,000 — but ultimately only succeeded in increasing it by 882 head. Another USD7 million was injected into the Sodespt region, but that investment managed to sell only 263 cattle and failed to sell any goats or sheep.

    Then we see example after example of Westerners wastefully “helping” without any understanding of the local situation. Norwegian aid agencies built a fish-freezing plant to improve employment in northern Kenya — a region where the local people traditionally do not fish because of their semi-nomadic pastoralist lifestyle. Couple the lack of fishing experience with the unfortunate reality that the plant required more power than was available in the entire region, and the result was that the brand-new processing plant sat idle.

    The World Bank financed a USD10+ million expansion of Tanzania’s cashew-processing capabilities, which resulted in 11 factories with the capacity to process three times as many cashews as the country was growing on a yearly basis.

    The plants were too efficient for the available workforce and cost so much to run that it was cheaper to process the raw nuts in India. Half the plants were inoperable, and the other half only ran at about 20% capacity.

    I’m not saying that we Africans are ungrateful for the outpouring of heartfelt care. The compassion of the West is certainly real. However, the outcome of said compassion is the concern: The more foreign aid African governments receive, the worse they perform.

    As long as the aid keeps flowing, government leaders and their employees who administer development programs may prosper while the rest of the citizenry continues to suffer the effects of a mismanaged economy.

    Questionable Benefits

    We also must acknowledge that, in far too many cases, aid has also been given to African nations and communities in attempts to manipulate and control.

    “While hungry faces are used on posters and in media reports to sell the virtues of foreign aid, it is the hungry who rarely see any of the funds,” James Peron, executive director of the Institute for Liberal Values in Johannesburg, South Africa, lamented in a piece for the Foundation for Economic Education.

    “Poverty may be used to justify the programs, but the aid is almost always given in the form of government-to-government transfers. And once the aid is in the hands of the state it is used for purposes conducive to the ruling regime’s own purposes.”

    And now we witness the international community talking about aid for African countries as a substitute for our oil and gas activities. Western environmentalists argue that Africa should keep all of its petroleum resources in the ground to prevent further climate change.

    In exchange for that sacrifice, African nations would be compensated and inject that money into other opportunities like developing their sustainable energy technologies.

    I’ve said it before, and I’ll say it again: What a horrible idea!

    I‘m offended by foreign stakeholders feeling that providing humanitarian assistance gives them the right to influence our domestic decisions. With Africa poised to participate in the worldwide energy transition, my fear is that international donors will feel justified to dictate Africa’s policy regarding the lengths to which, and speed with which, our energy transition occurs. This would be a huge step backward in our energy, economic, and even individual independence.

    Aid packages to incentivize giving up our oil and gas operations will be detrimental to Africans. Because let’s be honest: History has shown that this assistance could never replace the oil and gas industry’s ability to create jobs and business opportunities, grow local capacity, open the door to technology sharing, facilitate economic growth, and alleviate energy poverty.

    Instead of continuing a pattern that clearly does more harm than good, why aren’t African nations encouraged to leverage the wealth of resources at our feet?

    During the final few days of COP28 — and beyond — the AEC is determined to make a case for African nations harnessing their oil and gas solutions to help themselves. We will not be bullied, or manipulated with aid, into a path that is not in our best interests.

    Use What We Have!

    One reason why the AEC is an outspoken advocate for Africa’s oil and gas industry is because it represents more than big revenue for African governments. It is a free-market solution that creates pathways for Africans to help themselves. And, ultimately, empowering Africans is our number one goal.

    We endorse an energy mix approach that allows Africa to use and sell our own hydrocarbon reserves to alleviate energy poverty, while at the same time moving toward a future in which renewable energy sources power the continent.

    The energy mix method can help more people more quickly because it takes a practical, people-first approach to helping those who have traditionally been left behind by the energy sector, while moving us toward greener energy sources.

    Natural gas, in particular, can transform African lives and communities. Its potential benefits range from eradicating energy poverty to allowing Africans to develop skills for good jobs to creating hope for our youth.

    Ramping up gas production to help alleviate the lack of access to electricity will create thousands of new employment opportunities in Africa. In addition, the new sources of energy can be exported to Western countries to replace Russian energy.

    Then, as Europe transitions to sustainable energy, a larger portion of Africa’s natural gas can power domestic needs. By the time other countries complete their transitions to carbon-neutral sources, Africa will have a much more expansive and reliable grid system, which will allow for an easier transition.

    And before we argue about the evils of hydrocarbons, let me point out that, although it might seem counterintuitive, it is possible for Africa to make use of its abundant fossil fuels while moving toward a future sustained by renewable energy sources.

    In fact, I believe that African nations must do everything they can to ensure that these two things work in tandem. Considering that 600 million people on the continent have no access to electricity and 900 million people lack access to clean cooking technologies, it’s impossible — if not altogether inhumane — to discuss climate change without looking at energy poverty.

    As I recently wrote in an article published by Medium, we cannot transition from the dark to the dark. We must deliver energy to the people of Africa and then worry about transitioning to environmentally friendly alternatives, just like we have everywhere else in the world.

    This has been our platform at COP28, and we will continue to stand by it in 2024 and beyond.

    Distributed by APO Group on behalf of African Energy Chamber.

    SOURCE
    African Energy Chamber

    Distributed by APO Group
    PS: Opinions expressed in Opinion Pieces  represents that of the authors and doesn’t necessarily  represent the official Opinion of the Eco-Enviro-News Africa magazine.