Kenya’s Wind Power

The Republic of Kenya has approved a wind power project that is expected to provide 300 megawatts of electric power by the time the Lake Turkana Wind Power project is fully online in 2012. That would constitute about one-third of Kenya’s total current electric power needs.

The project’s promoters have been aware of its potential since the 1980s, but it was not an economically viable project until the rising cost of crude oil and new efficiencies in wind turbines made the project feasible. The US$760 million project won’t start until July 2011, but its success could open new investment in renewable energy projects in Kenya and other parts of Africa. Kenya particularly has tremendous potential for renewable energy from onshore and offshore wind projects, solar power, coal and geothermal from the Rift Valley.

The one caveat is that wind power traditionally has an effective ceiling of about 20%of a country’s electric generating capacity. Beyond that level, power generating systems incur additional cost because of the need to buy additional equipment because of the variability in winds. During wet seasons, there is less wind, and in dry seasons, there is more. Winds also are variable due to elevation.

That’s why Kenya and other African nations must devise a mixed use system, taking into account all means of generating power, and power pools, such as the emerging East Africa Power Pool, will have to utilize innovation to ensure consistent power for its customers.

The U.S. Agency for International Development, the American Association of Blacks in Energy and the Solar Electric Light Fund provided strategies for enhancing Africa’s renewable energy mix at the Leon H. Sullivan Summit VIII in Arusha, Tanzania, last year, and further renewable energy solutions are being readied for presentation at the next Sullivan Summit in Nairobi, Kenya in July 2010 – about one year before Kenya’s initial wind project is expected to get underway.

Trade Pattern Tells a Story

The pattern of trade between the United States and the countries of Africa tells an interesting tale of mutual needs and of how relationships and economic and logistical forces determine trade’s winners and losers.

First of all, the United States buys about a quarter of total African exports – about US$66 billion out of US$290 billion in 2008. That makes us a significant buyer, but not a dominant buyer. The Europeans buy nearly three times what we buy from Africa, but of course they have a longstanding relationship with their former colonies that we do not have, as well as established transportation routes that make economic sense.

We still have not cracked the agriculture sector in terms of U.S.-Africa trade, even though two-thirds of Africans are engaged in that sector. Aside from oil, diamonds, gold and platinum, the major American imports from Africa are US$2 billion in automotive parts, all from South Africa, and US$1.3 billion in steel, principally from South Africa but some from Zimbabwe. Few African countries can match South Africa in terms of industrial exports, except for clothing. The US$1.2 billion in apparel the United States purchased from Africa came mostly from Lesotho, Swaziland, Kenya, Madagascar and Mauritius, with South Africa, Botswana and Ethiopia contributing smaller amounts.

However, we will never fully realize the goals of the African Growth and Opportunity Act (AGOA) without enlarging our agriculture trade with African countries. Currently, about half our agricultural imports from Africa consist of cocoa from Cote d’Ivoire. There are other significant farm exports that include South African wine, fruit and processed food; Ethiopian coffee and niger seed (often sold as bird seed); Kenyan flowers and tea, and Madagascan vanilla. That isn’t enough to raise Africans out of poverty across the continent.

If we are serious about the Millennium Development Goals and other projects and schemes to “lift all boats” in Africa economically, then the U.S. government, in conjunction with the private sector and civil society, must work to bridge the gaps in AGOA. We know what the gaps are; now we must act on our knowledge.

Africa’s Diplomatic Advocates

Among the many advocates for Africa’s well-being and development are the African-Americans who have served as America’s ambassadors to African nations. Having just come from the African American Unity Caucus retreat, this fact was brought to mind vividly by participants and guests at this event.

One of the AAUC members is Ambassador Shirley Barnes, who served as U.S. ambassador to Madagascar. Her service to our country dates back to the days of Patrice Lumumba in Congo-Kinshasa. Since her retirement from the State Department, she has dedicated herself to the welfare of African Diaspora girls and women, especially in ending their victimization in modern-day slavery.

Ambassador Pamela Bridgewater (Benin and Ghana) was the closing speaker at the AAUC retreat. Her encouragement of education on Africa at institutions of higher learning such as Howard University have expanded American understanding of Africa, and her support for African self-help project have continued to enrich the lives of Africans in the countries in which she represented our nation.

Two prominent African-American ambassadors were guests at the event: Ambassadors Johnny Carson and Howard Jeter. They both provided then-Assistant Secretary of State for African Affairs Susan Rice with perhaps the most Africa experienced staff anyone in her position has had. Ambassador Carson (Kenya, Uganda and Zimbabwe) has served in many vital posts (including Staff Director for the House Africa Subcommittee) and is now himself the nominee for Assistant Secretary of State for African Affairs. Ambassador Jeter (Botswana and Nigeria) served as the President’s Special Envoy for Liberia and played a critical role in the American response to the wars and post-war recovery programs in Liberia and Sierra Leone.

There was a time when the only post an African-American could expect was to an African country. Those were the days of Terence Todman, considered by many to be the “Jackie Robinson” of African-American ambassadors. Todman served with distinction as U.S. ambassador to Chad and Guinea before breaking the Africa-only barrier to serve as U.S. ambassador to Costa Rica, Spain and Denmark. Similarly, Ambassador Ruth Davis (Benin) has held non-Africa high-level positions, including Director General of the Foreign Service and Director of the Foreign Service Institute. Even in their non-Africa positions, Ambassadors Todman and Davis have been able to advocate for a U.S. policy that takes Africa more fully into account.

The work of the pioneer African-American ambassadors has led to the blossoming of opportunities for their successors in countries such as Guinea (Gayleatha Brown), Cote d’Ivoire (Wanda Nesbitt), Gabon (Eunice Reddick), Liberia (Linda Thomas-Greenfield), Namibia (Gail Mathieu), Niger (Bernadette Allen), Nigeria (Robin Sanders), Senegal/Guinea Bissau (Marcia Bernicat), Sierra Leone (June Carter Perry), Swaziland (Maurice Parker), The Gambia (Barry Wells) and Zimbabwe (James McGee). Their presence doesn’t guarantee that African countries get everything they want, but it should and usually does mean that someone is fighting to see that they get what they need.

Battling Somali Pirates

The explosion of piracy off the coast of Somalia has become a front-burner concern to America in light of the near-hijacking of the Maersk Alabama and the capture and rescue of the U.S. captain over the past week, as well as a subsequently unsuccessful attack on another U.S. ship, the Liberty Sun. Now the U.S. government has announced a four-point plan to tackle piracy in the Gulf of Aden region.

According to Secretary of State Hillary Clinton, the United States plan to address Somali piracy involves: 1) sending an envoy to the Somali donors’ conference in Brussels next week to create a plan to improve the situation in Somalia, 2) working with the Contact Group on Piracy Off the Coast of Somalia to expand multinational efforts to contain piracy, 3) pressing the Somali Transitional Federal Government and the regional leaders in the Puntland region of Somalia to take action against pirate from bases in their areas and 4) working with shippers and insurers to address gaps in vessel self-defense measures. Secretary Clinton also urged the international community to consider ways to track and freeze pirate assets.

Action against Somali pirates will be difficult. First of all, according to J. Peter Pham in his article, “The Pirate Economy” on foreignpolicy.com, the Somali pirates are not a ragtag bunch of sailors on small boats, but rather a syndicate operating in coordination with larger “mother ships” operating far offshore. The International Maritime Bureau is reporting a number of such vessels in the Gulf of Aden. Pham quotes United Nations Secretary General Ban Ki-Moon as acknowledging that “these groups now rival established Somali authorities in terms of their military capabilities and resource bases.”

Furthermore, the pirates are providing income to their base communities in Eyl and Xarardheere and portray themselves as being forced into piracy to defend their coastal waters from over-fishing. While that explanation seems hollow now, any attacks that claim the lives of innocents will make them seem like the victims of major powers. The pirates already are pointing out that the Americans and French have been the first to take lives first in their encounters.

Finally, there has been little support for military action in Africa (beyond limited air strikes) by the United States or other Western nations. Since Arab countries have preferred to pay the ransom for hijacked ships and crews and African nations are already challenged to provide sufficient troops for missions in Sudan and elsewhere, any sustained military action against the Somali pirates is unlikely.

One hopes that Secretary Clinton’s plan will have more success than it would seem to offer at this point.

African Exchange Dilemma

It has been a truism among Africanists and saavy emerging market investors that the 23 African countries with stock exchanges often produce higher returns that the world average, but truisms are sometimes doubted for lack of widely examined evidence confirming them. We now have proof that this particular truism is real.

The International Finance Corporation has rated the Nigerian Stock Exchange as the best is the world in terms of returns. The Nigerian exchange thus beat out its fellow emerging market exchanges, such as those in Johannesburg (South Africa), Istanbul (Turkey), Bombay (India), Sao Paolo (Brazil) and Dubai (United Arab Emirates). In fact, the rate of return on investments on the Nigerian exchange beat out the New York Stock Exchange and the London Stock Exchange. Nevertheless, Nigeria still is not the top destination for investor dollars.

The reasons are outlined in a survey whose results were made available by THISDAY, the Nigerian newspaper. According to the survey, fewer than four in ten investors said that surveillance and enforcement of regulation on the Nigerian exchange were fair, and a similar number found the regulatory and tax regime to be fair as well. Three-quarters listed the exchange as less liquid and more shallow than desirable. The Nigerian exchange is nearly 20 times smaller than its emerging market peers, and the value per listed company is 3.5 times smaller than the emerging peer average.

Nigeria is a vibrant, but still stunted economy. Its regulations on the stock exchange can be remedied, and greater investment will help its companies grow. Clearly, there is potential on the African exchanges – not only Nigeria, but also in leaders such as South Africa, Egypt, Ghana and Kenya. The African exchanges now have a chance to grow and avoid the mistakes made by Western investors who have brought down the global economy with their greed. However, such growth must be accompanied by transparent, effective management. That is a challenge Africa can and must meet.

Selling Africa’s Future

The global food crisis, fed by a worldwide economic downturn and a rush to use food crops for biofuels, has caused three dozen nations to require food aid. Some governments have enacted export bans or restrictions to keep staple crops, especially rice, from being exported. However, amidst the concern over feeding one’s people, developing country governments around the world are entering into land deals supposedly to become food self-sufficient, but as Time magazine and others have described them, these deals threaten the economic independence of those governments, as well as the viability of smallholder farmers.

Wealthy nations without the capacity to feed themselves, such as Libya, Saudi Arabia, South Korea, Kuwait and Qatar, are making deals with African and other developing country governments to lease land on which to grow food. These land lease deals are supposed to benefit the developing countries being targeted, yet the impetus for the deals is for the sponsoring nations to be able to produce food for their own people. Moreover, these land deals carry immediate and long-term threats for these countries and their people.

The July 2008 deal between the South Korean company Daewoo Logistics and the Government of Madagascar involved the leasing of more than 900,000 hectares of Madagascar land – more than a third of that island nation’s arable land, according to Time. Not only was this deal a factor in the recent coup in Madagascar, but the new, military-imposed government immediately acted to suspend that deal. Whether that land deal is permanently off or merely being restructured for new beneficiaries remains to be seen.

The non-profit agricultural research organization Grain produced a report earlier this year providing details of an agreement between the Libya Africa Investment Portfolio and the Government of Mali under which 100,000 hectares of land within that African nation’s prime rice producing area would be under Libyan control with infrastructure, technology and hybrid rice seeds to be provided by China. This project will not only push Malian farmers off the land they currently use, but the hybrid rice seeds supplied by China cannot be saved by farmers (who now provide 90% of the seeds used in Mali) and must be purchased annually and worked only with high-tech machinery and a high level of chemicals. When you add in the plans to expand production to tomatoes and livestock, it is clear that Malian farmers are not in the picture for Mali’s agricultural future. When you further factor in the Libyan arrangement for the recruitment of a large number of workers from Bangladesh, jobs for infrastructure workers in Mali may not be plentiful either.

Libya has a similar, but smaller, agricultural land lease deal in place with Liberia, involving up to 17,000 hectares of land from the Government of Liberia, and other agricultural land lease deals may not yet have been discovered or finalized.

Several years ago, Global Witness reported that Angola sold off several years of oil futures in order to gain currency to fund the war against its then-adversary UNITA. During the recent oil boom that saw prices rise to nearly $150 per barrel last year, Angola was unable to fully reap the economic benefits other oil producers realized. Will African countries learn nothing from the Angolan commodity example and auction off their agricultural futures to wealthy nations seeking to solve their own food deficits?