FROM THE 2009 U.S.-AFRICA BUSINESS SUMMIT
When you consider investing in stocks, how often do you consider African companies or exchanges? How often does your broker suggest investing on African exchanges? Have you ever checked your mutual funds to see whether there are African companies listed?
The chances are, your answers are: Never or almost never, Never and No.
There are now 20 African exchanges (including a West African regional exchange) with listings from 26 African countries. Some of the listed companies are billion-dollar companies, such as the Nigerian banks created through the recent consolidation of that country’s banking system. There are others, such as South African Breweries, which purchased the Miller Brewing Company in America and is now a global firm with six brands among the top 50 in the world. Ashanti Goldfields of Ghana has showed up on many mutual fund lists, but most investors never realized they had money in an African firm.
Of the 20 African exchanges, South Africa is by far the leader. The Johannesburg Stock Exchange (JSE) has a market capitalization of US$561 billion. The other exchanges have a combined market capitalization of about US$70 billion. Only five of the non-South African exchanges do more than US$1 million in trades daily. The JSE has encouraged African companies to double list on their exchange to increase liquidity. Thus far, a Namibian company has taken them up on this deal, and the JSE expects several others will follow by year’s end.
The JSE also has encouraged other African exchanges to join the World Federation of Exchanges because passing its stringent membership requirements makes investors more likely to see them as world class. In addition to the JSE, the exchanges in Egypt and Mauritius have joined, and the JSE is helping the Nigerian exchange join as well.
Africa is considered by perceptive investors as a largely untapped and promising resource. Just as the Nigerian banks grew suddenly through consolidation, experts believe there is enormous potential from investing in successful African firms that are not currently listed on any exchange, but which offer tremendous potential for growth and profit. The average return on investment ion African exchanges has approached 30% before the recent global economic downturn. Banks have long led the way among successful African companies, followed by breweries. More recently, cement and construction companies, as well as telecoms are drawing favorable investor attention.
At the CCA Summit, one forum examined the viability and attractiveness of African stock exchanges. The panel was full of experts: Kenneth Ofori-Atta of Databank Financial Services, Geoff Rothschild of the Johannesburg Stock Exchange, Stefan Jekel of the New York Stock Exchange and Ashley Bendell of Exotics. All these gentlemen are fluent in the ins and outs of exchanges and understand Africa well. However, as I sat listening to them, in a room full of fellow stock exchange experts, I wondered how often do people such as these, when they promote African exchanges, talk to small investors, who control billions of dollars in disposable funds here in America.
In future, when African exchanges and other investment instruments promote themselves here in America, they might want to talk with the many investment clubs in this country. The late Reverend Leon H. Sullivan started the nationwide Self-Help Investment Program in the 1960s patterned after his “10-36 program” in Philadelphia. Through modest investments among his church members, millions of dollars in property is now owned by the trust established to manage the investment. Similar U.S. investment groups could help smaller African exchanges join the big leagues. American investor clubs might be more interested in an exchange where their money could make a big difference in small, but potentially profitable African companies. Just a thought.
Wednesday, September 30, 2009
Tuesday, September 29, 2009
Stimulating U.S. Trade and Investment
FROM THE 2009 U.S.-AFRICA BUSINESS SUMMIT
Three African countries not well-known for their non-oil trade and investment potential came to the Corporate Council on Africa Summit to acquaint an American audience with their commercial possibilities for U.S. business people. Before the CCA Summit, Tanzanian President Jakaya Kikwete encouraged foreign investors to focus on infrastructure, agriculture, natural resources, tourism and banking services. Angola, Namibia and Ethiopia gave presentations at the CCA Summit that almost mirrored his words.
Angola is the 2nd largest Africa trading partner of the United States, mostly involving oil and natural gas imports. Plagued by an almost 40-year on-and-off cycle of independence war and civil war, Angola has finally achieved peace since 2002. The long conflict decimated infrastructure, and oil futures deals during the war prevented the country from fully taking advantage of the spike in oil prices in recent years. However, Angola has experienced strong growth during the last few years, and according to the International Monetary Fund, its real Gross Domestic Product grew by 16% last year. Starting from a very low level, Angola’s business sector has grown by leaps and bounds, up as much as 21% at one point since 2002. Nearly 200 Angolan business people have come to the CCA Summit this year.
Angola is oil, natural gas and diamond rich, with almost untapped mineral wealth beyond that. The livestock sector is burgeoning, and a country with little infrastructure is expectedly seeing a boom in construction. Foreign direct investment led to US$228.5 million in contracts in 2007, but this was an anomaly from recent years. The 2009 level this far is only US$12.5 million. A complex visa system and an overly active bureaucracy help limit investment in many cases. The country is boosting its tourism now that peace has been sustained. The long conflict obscured the scenic waterfalls, mountains and beautiful beaches that practically beg to be visited.
While Namibia is America’s 9th leading African trading partner, it is not a name that often comes up when U.S. business people discuss possible trade and investment locations in Africa. That may be because of the long-ago disinvestment campaign created to force South Africa to loose its hold on this southwest African country during the apartheid times. Activists were admirably diligent in pressing for state-by-state bans on investment at the time, but after Namibian independence in 1990, no comparable effort was launched to undo the damage. This likely put Namibia out of the picture for many Americans who remembered why not to invest in Namibia with no new picture to replace the one they were quite rightly convinced to accept at an earlier time.
Still, Namibia has had an admirable record of sustained growth at 4-5% in recent years. The budget deficit has been kept to less than 3% of GDP and the last three years have seen a budget surplus. Namibia wants to transform its economy from being dominated by the extractive sector (led by diamonds, uranium and gold) and agriculture to one dominated by manufacturing. Not that they want to abandon agriculture. In fact, Namibians are looking forward to exporting beef, grapes, dates and other food products to America. Like the other two countries we’re looking at, Namibia also wants to promote tourism, promoting its scenery, wildlife and particularly its tourism infrastructure.
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Ethiopia is America’s 19th leading African trading partner on the strength of its coffee and other agricultural exports, as well as leather goods and other manufactured items. However, the Ethiopians hope to increase their cut flower exports to the United States, as well as minerals and energy products. Their foremost hope, according to their presentation at the CCA Summit, may well be an increase in American tourism and U.S. investment in the hospitality sector. Indeed, the country boasts impressive natural and man-made attractions, including the Church of St. Mary of Zion, where the Ark of the Covenant is believe to rest. In fact, there are 10 internationally-recognized historic sites in Ethiopia and several sites of specific attraction to the religiously-inclined tourist.
Unfortunately, the government believes the communist Dergue government discouraged foreign investment in tourism just as other African countries were receiving such funds. That likely is true, but at this point Ethiopia’s main concern for stimulation American tourism has to be convincing U.S. tourists that Ethiopia is safe and has accommodations outside Addis Ababa. Moreover, telecommunications coverage must be broadened so that tourists, who often are businesspeople investigating the terrain, feel comfortable with what they see and experience.
Because of its large and active Diaspora here in the United States, Ethiopia has a distinct and immediate trade advantage over Angola and Namibia. Many Ethiopians are reportedly returning home to start or expand businesses, especially in the hospitality sector. Their linkages here in America should stand them in good stead. Meanwhile, Angola and Namibia, though ahead of Ethiopia in terms of total trade with the U.S. at the moment, could be surpassed if Africa’s second largest population can stimulate its advantages on the ground – in Ethiopia and the United States.
Angola may not be immediately ready to break into the top echelons of African tourism destinations, but their potential in this area is astounding. At some point, foreign investors will tap into this previously neglected sector. As for Namibia, perhaps they need a road show in America to rebrand a country that is arguably one of the best managed – not only in Africa, but also in the world. For all three countries, there is hope for broadened trade with the U.S., even if it takes awhile to be manifested.
Three African countries not well-known for their non-oil trade and investment potential came to the Corporate Council on Africa Summit to acquaint an American audience with their commercial possibilities for U.S. business people. Before the CCA Summit, Tanzanian President Jakaya Kikwete encouraged foreign investors to focus on infrastructure, agriculture, natural resources, tourism and banking services. Angola, Namibia and Ethiopia gave presentations at the CCA Summit that almost mirrored his words.
Angola is the 2nd largest Africa trading partner of the United States, mostly involving oil and natural gas imports. Plagued by an almost 40-year on-and-off cycle of independence war and civil war, Angola has finally achieved peace since 2002. The long conflict decimated infrastructure, and oil futures deals during the war prevented the country from fully taking advantage of the spike in oil prices in recent years. However, Angola has experienced strong growth during the last few years, and according to the International Monetary Fund, its real Gross Domestic Product grew by 16% last year. Starting from a very low level, Angola’s business sector has grown by leaps and bounds, up as much as 21% at one point since 2002. Nearly 200 Angolan business people have come to the CCA Summit this year.
Angola is oil, natural gas and diamond rich, with almost untapped mineral wealth beyond that. The livestock sector is burgeoning, and a country with little infrastructure is expectedly seeing a boom in construction. Foreign direct investment led to US$228.5 million in contracts in 2007, but this was an anomaly from recent years. The 2009 level this far is only US$12.5 million. A complex visa system and an overly active bureaucracy help limit investment in many cases. The country is boosting its tourism now that peace has been sustained. The long conflict obscured the scenic waterfalls, mountains and beautiful beaches that practically beg to be visited.
While Namibia is America’s 9th leading African trading partner, it is not a name that often comes up when U.S. business people discuss possible trade and investment locations in Africa. That may be because of the long-ago disinvestment campaign created to force South Africa to loose its hold on this southwest African country during the apartheid times. Activists were admirably diligent in pressing for state-by-state bans on investment at the time, but after Namibian independence in 1990, no comparable effort was launched to undo the damage. This likely put Namibia out of the picture for many Americans who remembered why not to invest in Namibia with no new picture to replace the one they were quite rightly convinced to accept at an earlier time.
Still, Namibia has had an admirable record of sustained growth at 4-5% in recent years. The budget deficit has been kept to less than 3% of GDP and the last three years have seen a budget surplus. Namibia wants to transform its economy from being dominated by the extractive sector (led by diamonds, uranium and gold) and agriculture to one dominated by manufacturing. Not that they want to abandon agriculture. In fact, Namibians are looking forward to exporting beef, grapes, dates and other food products to America. Like the other two countries we’re looking at, Namibia also wants to promote tourism, promoting its scenery, wildlife and particularly its tourism infrastructure.
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Ethiopia is America’s 19th leading African trading partner on the strength of its coffee and other agricultural exports, as well as leather goods and other manufactured items. However, the Ethiopians hope to increase their cut flower exports to the United States, as well as minerals and energy products. Their foremost hope, according to their presentation at the CCA Summit, may well be an increase in American tourism and U.S. investment in the hospitality sector. Indeed, the country boasts impressive natural and man-made attractions, including the Church of St. Mary of Zion, where the Ark of the Covenant is believe to rest. In fact, there are 10 internationally-recognized historic sites in Ethiopia and several sites of specific attraction to the religiously-inclined tourist.
Unfortunately, the government believes the communist Dergue government discouraged foreign investment in tourism just as other African countries were receiving such funds. That likely is true, but at this point Ethiopia’s main concern for stimulation American tourism has to be convincing U.S. tourists that Ethiopia is safe and has accommodations outside Addis Ababa. Moreover, telecommunications coverage must be broadened so that tourists, who often are businesspeople investigating the terrain, feel comfortable with what they see and experience.
Because of its large and active Diaspora here in the United States, Ethiopia has a distinct and immediate trade advantage over Angola and Namibia. Many Ethiopians are reportedly returning home to start or expand businesses, especially in the hospitality sector. Their linkages here in America should stand them in good stead. Meanwhile, Angola and Namibia, though ahead of Ethiopia in terms of total trade with the U.S. at the moment, could be surpassed if Africa’s second largest population can stimulate its advantages on the ground – in Ethiopia and the United States.
Angola may not be immediately ready to break into the top echelons of African tourism destinations, but their potential in this area is astounding. At some point, foreign investors will tap into this previously neglected sector. As for Namibia, perhaps they need a road show in America to rebrand a country that is arguably one of the best managed – not only in Africa, but also in the world. For all three countries, there is hope for broadened trade with the U.S., even if it takes awhile to be manifested.
Monday, September 28, 2009
On the Frontlines of U.S.-Africa Trade
FROM THE 2009 U.S.-AFRICA BUSINESS SUMMIT
When the Corporate Council on Africa was established in 1993 with the encouragement of the U.S. government, the original concept was that such a grouping of U.S. companies doing business in Africa would make it easier for the federal government to engage in trade discussions without having to speak with individual companies. Since then, that concept has grown into much more than its originators thought at the time.
The combined efforts of former Ambassador David Miller, Percy Wilson and the late David Miller spun that original idea into a powerful trade association that listed among its more than 200 members such major multinational corporations as Coca-Cola, General Motors, Chevron and Pfizer. CCA’s influence on U.S. policy toward Africa ranged from the African Growth and Opportunity Act (AGOA) to the U.N. Convention on Desertification. If America’s Africa policy was being discussed, CCA was at the table.
CCA Summits, such as the one beginning today, attract Heads of State and Government, leaders of international financial institutions such as the African Development Bank and titans of commerce in America and Africa. However, the one area CCA had difficulty successfully addressing was the effort to ensure that American small and medium businesses were fully engaged in U.S.-Africa trade. Getting African companies of all sizes to attend CCA conferences, including the biennial summits, has not been a problem, but getting sufficient number of their American counterparts on board has proved to be challenging. Under current President Steve Hayes, CCA has made continuing efforts to bring small and medium American businesses into the fold – from hiring specialists to sponsoring programs such as the South African International Business Linkages program to supporting trade organizations such as the American and African Business Women’s Alliance.
The latest effort for the 2009 CCA Summit involves the Africa Trade Office of the Prince George’s County (Maryland) Economic Development Corporation (PGCEDC). The Africa Trade Office, which manages the Free Trade Zone encompassing the District of Columbia and suburban Maryland and Virginia, brings its recently developed matchmaking process first used at its November 2008 International Economic Summit. ATO’s manager, PGCEDC Vice President Pat Parker-Sawyer brings to this effort her agency’s special software to schedule meetings, its experience in direct video connections between Maryland-based companies and African companies in Tanzania, Senegal and Cameroon and its trade missions.
CCA and other organizations have struggled over the years to facilitate commercial connections between American SMEs and similarly-sized African companies. Large companies, such as the leading energy giants, bring tremendous revenue to African governments with resources in that sector. However, like economies worldwide, it is small and medium business that creates the jobs necessary for economic development and wealth creation. AGOA was created primarily to connect African and American small and medium enterprises, and the U.S. government has gone about as far as it can to make AGOA benefits more broadly accessed. The private sector, largely through CCA and its partners, must now find a way to successfully facilitate this process.
When the Corporate Council on Africa was established in 1993 with the encouragement of the U.S. government, the original concept was that such a grouping of U.S. companies doing business in Africa would make it easier for the federal government to engage in trade discussions without having to speak with individual companies. Since then, that concept has grown into much more than its originators thought at the time.
The combined efforts of former Ambassador David Miller, Percy Wilson and the late David Miller spun that original idea into a powerful trade association that listed among its more than 200 members such major multinational corporations as Coca-Cola, General Motors, Chevron and Pfizer. CCA’s influence on U.S. policy toward Africa ranged from the African Growth and Opportunity Act (AGOA) to the U.N. Convention on Desertification. If America’s Africa policy was being discussed, CCA was at the table.
CCA Summits, such as the one beginning today, attract Heads of State and Government, leaders of international financial institutions such as the African Development Bank and titans of commerce in America and Africa. However, the one area CCA had difficulty successfully addressing was the effort to ensure that American small and medium businesses were fully engaged in U.S.-Africa trade. Getting African companies of all sizes to attend CCA conferences, including the biennial summits, has not been a problem, but getting sufficient number of their American counterparts on board has proved to be challenging. Under current President Steve Hayes, CCA has made continuing efforts to bring small and medium American businesses into the fold – from hiring specialists to sponsoring programs such as the South African International Business Linkages program to supporting trade organizations such as the American and African Business Women’s Alliance.
The latest effort for the 2009 CCA Summit involves the Africa Trade Office of the Prince George’s County (Maryland) Economic Development Corporation (PGCEDC). The Africa Trade Office, which manages the Free Trade Zone encompassing the District of Columbia and suburban Maryland and Virginia, brings its recently developed matchmaking process first used at its November 2008 International Economic Summit. ATO’s manager, PGCEDC Vice President Pat Parker-Sawyer brings to this effort her agency’s special software to schedule meetings, its experience in direct video connections between Maryland-based companies and African companies in Tanzania, Senegal and Cameroon and its trade missions.
CCA and other organizations have struggled over the years to facilitate commercial connections between American SMEs and similarly-sized African companies. Large companies, such as the leading energy giants, bring tremendous revenue to African governments with resources in that sector. However, like economies worldwide, it is small and medium business that creates the jobs necessary for economic development and wealth creation. AGOA was created primarily to connect African and American small and medium enterprises, and the U.S. government has gone about as far as it can to make AGOA benefits more broadly accessed. The private sector, largely through CCA and its partners, must now find a way to successfully facilitate this process.
Friday, September 25, 2009
Wasting Africa’s Future
Trafigura Beheer BV, a Dutch oil trading company, has agreed to pay more US$48 million for up to 31,000 Ivorians who claimed to have been made sick by toxic waste dumped in Abidjan three years ago. However, the Toxic Waste Victims’ Association says the cost of medicine for those affected exceeds the settlement amount. Meanwhile, the company denied liability and claims the settlement actually vindicates them since they are covering for the actions of Compagnie Tommy, an Ivorian company.
In whatever way you choose to assign blame, 500 tons of toxic waste sent up fumes of hydrogen sulphide, petroleum distillates and sodium hydroxides across the capital city of Cote d’Ivoire. Several people, including two children, died from these fumes. At least 15,000 others had to seek medical treatment for nausea, vomiting and headaches at clinics specially set up to handle the multitude of those affected. If only this were an isolated case.
Over the past three decades, companies in developed nations have used poor African countries as dumping grounds for toxic waste they could not as easily dispose of in their own homeland. Secret deals sent thousands of tons of raw sewage, sludge, incinerated ashes, contaminated oils, chemical compounds, acids and poisonous solvents into countries such as Angola, Benin, Nigeria and Somalia. Of course, they have often used rural areas unlikely to get the kind of coverage the Abidjan incident did. How many Africans have died or developed long-term illnesses from such dumping? No one can say for sure because neither the dumpers nor the government officials that allowed them to do so cared about the consequences for the average African, or they wouldn’t have used these countries in such a cruel way in the first place.
Sixty years ago, toxic waste production generated five million metric tons annually. By 1988, during the peak of toxic waste dumping in developing countries, more than 300 million tons of toxic waste was generated. Regulations in developed countries require treatment of toxic waste and disposal in highly regulated conditions that cost up to US$3,000 a ton. Developed world companies found willing officials to accept untreated waste for as low as US$5 a ton, presumably even with bribes attached. In the late 1980s, international organizations such as the United Nations Environment Program and the Organization of African Unity began taking action to regulate toxic waste dumping and sanction countries that violated international restrictions on international trading in hazardous waste. Illegal toxic waste dumping in Africa reportedly went down, but unfortunately, whenever times are hard and some officials think they can conclude a secret deal for profit, toxic waste trading has continued. By 2001, the United Nations estimated that 8.5 million tons of toxic waste was exported much of it to African countries. As recently as 2005, Greenpeace reported that an inspection of 18 European ports found that 47% of exported waste was illegal.
So what will happen in the Cote d’Ivoire case? Well we don’t know yet how the money for those who have suffered will be apportioned or how long it will take for them to receive it. We don’t know what standard of proof of injury will be used to determine who gets any of the money or how much money they will get. Nor do we know how the Government of Cote d’Ivoire will use the US$198 million it received from Trafigura Beheer BV or how it intends to protect the interest of Ivorians in this matter. Those are questions that need to be answered for the sake of the Ivorians affected and victims in other developing countries.
In whatever way you choose to assign blame, 500 tons of toxic waste sent up fumes of hydrogen sulphide, petroleum distillates and sodium hydroxides across the capital city of Cote d’Ivoire. Several people, including two children, died from these fumes. At least 15,000 others had to seek medical treatment for nausea, vomiting and headaches at clinics specially set up to handle the multitude of those affected. If only this were an isolated case.
Over the past three decades, companies in developed nations have used poor African countries as dumping grounds for toxic waste they could not as easily dispose of in their own homeland. Secret deals sent thousands of tons of raw sewage, sludge, incinerated ashes, contaminated oils, chemical compounds, acids and poisonous solvents into countries such as Angola, Benin, Nigeria and Somalia. Of course, they have often used rural areas unlikely to get the kind of coverage the Abidjan incident did. How many Africans have died or developed long-term illnesses from such dumping? No one can say for sure because neither the dumpers nor the government officials that allowed them to do so cared about the consequences for the average African, or they wouldn’t have used these countries in such a cruel way in the first place.
Sixty years ago, toxic waste production generated five million metric tons annually. By 1988, during the peak of toxic waste dumping in developing countries, more than 300 million tons of toxic waste was generated. Regulations in developed countries require treatment of toxic waste and disposal in highly regulated conditions that cost up to US$3,000 a ton. Developed world companies found willing officials to accept untreated waste for as low as US$5 a ton, presumably even with bribes attached. In the late 1980s, international organizations such as the United Nations Environment Program and the Organization of African Unity began taking action to regulate toxic waste dumping and sanction countries that violated international restrictions on international trading in hazardous waste. Illegal toxic waste dumping in Africa reportedly went down, but unfortunately, whenever times are hard and some officials think they can conclude a secret deal for profit, toxic waste trading has continued. By 2001, the United Nations estimated that 8.5 million tons of toxic waste was exported much of it to African countries. As recently as 2005, Greenpeace reported that an inspection of 18 European ports found that 47% of exported waste was illegal.
So what will happen in the Cote d’Ivoire case? Well we don’t know yet how the money for those who have suffered will be apportioned or how long it will take for them to receive it. We don’t know what standard of proof of injury will be used to determine who gets any of the money or how much money they will get. Nor do we know how the Government of Cote d’Ivoire will use the US$198 million it received from Trafigura Beheer BV or how it intends to protect the interest of Ivorians in this matter. Those are questions that need to be answered for the sake of the Ivorians affected and victims in other developing countries.
Saturday, September 19, 2009
Africa’s Population Exploding
Earlier this year, the world’s population surpassed 6.8 billion, months earlier than had been anticipated, and growth shows no sign of slowing down. According to the United Nations Population Division, humanity’s growth actually slowed during the 1990s from 90 million annually to slightly less than 80 million a year. Despite the slowdown, though, predictions of world population growth by the middle of this century range from slightly less than 8 billion to as high as 11 billion people. No where on earth is this growth more rapid than in Africa.
Approximately 13% of the world’s population now lives in Africa, with a population now believed to be in excess of 800 million people. Because so many Africans either live in rural areas difficult to survey or in urban areas without adequate statistical coverage, exact numbers or even estimates are questionable. Moreover, millions of Africans live as displaced persons in their own countries or as refugees in neighboring countries. Africa’s population continues to grow – despite war and civil unrest, famine and pestilence (HIV-AIDS particularly). An estimated 95% of global population growth is in Africa and Asia, regions that already contain more than three-quarters of the world’s population, and Africa itself is seen as expanding to 1.8 billion by 2050.
Currently, only seven African nations are among the 30 top populations in the world: Nigeria, Ethiopia, Egypt, the Democratic Republic of Congo, South Africa, Sudan and Tanzania. By 2050, nine African nations are expected to be in the top 30: Ethiopia (exploding from number two to number one), Nigeria, the Democratic Republic of Congo, Uganda, Egypt, Sudan, Tanzania, Kenya and Madagascar. Kenya and Ghana have led the way in sex education, contraceptive distribution and other population control efforts, and they have slowed their respective population growth, but with a fertility rate of 38 births per 1,000 people and a mortality rate of only 14 deaths per 1,000, Kenya, Ghana and the other African nations continue to grow despite all man-made and natural impediments to population growth.
If you think this is good news that Africa is surviving and increasing its population against all odds, you have to ask yourself is this really what Africans and their friends want at this pointing history? The continent is unable to feed itself and otherwise provide for the needs of its people now, and with tropical forests being depleted, animal species being systematically eliminated, deserts encroaching on arable land and pollution increasing as urban centers continually expand, a rapidly rising population is definitely not good news for Africa.
Each African country must get serious about estimating what the reasonable rate of population growth is for its own ability to sustain its citizens and enact measures accordingly. That means centuries-old traditions about family life must be reexamined to determine what is reasonable for a 21st century in which growth has its limits if viable lifestyles are to be maintained. Donors, especially the United States, must resolve disputes over contraceptive use; it is not only for HIV-AIDS control, but also is necessary part of population control. The crises we now see can and will be much worse if we don’t jointly act to devise reasonable, ethical means of controlling Africa’s population. African fertility spawned the human race, and if unimpeded, it continues to overcome all obstacles. Still, uncontrolled growth is no longer a blessing; it has become a curse.
Approximately 13% of the world’s population now lives in Africa, with a population now believed to be in excess of 800 million people. Because so many Africans either live in rural areas difficult to survey or in urban areas without adequate statistical coverage, exact numbers or even estimates are questionable. Moreover, millions of Africans live as displaced persons in their own countries or as refugees in neighboring countries. Africa’s population continues to grow – despite war and civil unrest, famine and pestilence (HIV-AIDS particularly). An estimated 95% of global population growth is in Africa and Asia, regions that already contain more than three-quarters of the world’s population, and Africa itself is seen as expanding to 1.8 billion by 2050.
Currently, only seven African nations are among the 30 top populations in the world: Nigeria, Ethiopia, Egypt, the Democratic Republic of Congo, South Africa, Sudan and Tanzania. By 2050, nine African nations are expected to be in the top 30: Ethiopia (exploding from number two to number one), Nigeria, the Democratic Republic of Congo, Uganda, Egypt, Sudan, Tanzania, Kenya and Madagascar. Kenya and Ghana have led the way in sex education, contraceptive distribution and other population control efforts, and they have slowed their respective population growth, but with a fertility rate of 38 births per 1,000 people and a mortality rate of only 14 deaths per 1,000, Kenya, Ghana and the other African nations continue to grow despite all man-made and natural impediments to population growth.
If you think this is good news that Africa is surviving and increasing its population against all odds, you have to ask yourself is this really what Africans and their friends want at this pointing history? The continent is unable to feed itself and otherwise provide for the needs of its people now, and with tropical forests being depleted, animal species being systematically eliminated, deserts encroaching on arable land and pollution increasing as urban centers continually expand, a rapidly rising population is definitely not good news for Africa.
Each African country must get serious about estimating what the reasonable rate of population growth is for its own ability to sustain its citizens and enact measures accordingly. That means centuries-old traditions about family life must be reexamined to determine what is reasonable for a 21st century in which growth has its limits if viable lifestyles are to be maintained. Donors, especially the United States, must resolve disputes over contraceptive use; it is not only for HIV-AIDS control, but also is necessary part of population control. The crises we now see can and will be much worse if we don’t jointly act to devise reasonable, ethical means of controlling Africa’s population. African fertility spawned the human race, and if unimpeded, it continues to overcome all obstacles. Still, uncontrolled growth is no longer a blessing; it has become a curse.
Monday, September 14, 2009
Africa Holds the Key to Unlocking Doha Round
Since its formation in 1995, the World Trade Organization (WTO) has conducted five ministerial conferences that commenced rounds of trade negotiations. The most recent one, held in Doha, Qatar in 2001, was declared the development round because of its focus on ensuring that the multilateral trade system should benefit developing countries, which constitute more than three quarters of WTO members. Since the surprising strength of the street protests against globalization at the Seattle ministerial in 1999, the 38-member Africa bloc has been more aware of its power to halt the preferred consensus decision-making of the WTO.
The two main areas of focus in the Doha Round have been agriculture and trade in services. The failure to acknowledge that the members of the WTO have vastly different economic systems has prevented consensus on action to conclude the Doha Round. For example, a 2005 Carnegie Endowment for International Peace report showed that agricultural liberalization alone would favor developed countries rather than developing countries that would benefit most from liberalization of manufactured goods. The non-competitive agricultural sectors in many developing countries are based on low-productivity, small-scale farming. Such countries would see lower food costs by importing from more efficient foreign producers, but would also see big losses in their own agricultural sectors.
Because the economies of the United States and Malawi, for example, are structured and operate so vastly differently, it would be difficult to come up with a plan that benefits both without special measure for the weaker economies. And there lies the rub. Special Safeguard Mechanisms (SSMs) have been suggested to benefit developing countries by guaranteeing the right of these more vulnerable economies to exempt staples such as maize, rice and wheat from WTO-mandated tariff cuts and permit them to raise tariffs in the case of large or sudden increases in imports that threaten domestic producers. One of the shutdowns of the Doha Round occurred in 2008 when the United States refused to accept the SSMs.
But now the Government of South Africa is participating in the next Doha Round negotiations next year as the champion of the developing bloc of countries. South Africa has pledged to work with other emerging and developing nations to ensure a balance between agriculture negotiations and demands for industrial tariff reductions. South Africa has formed an alliance with the governments of Australia, Indonesia and the Republic of Korea to seek a conclusion to trade negotiations in this WTO round in 2010. South African President Jacob Zuma pledged just that in his State of the Nation address.
African representatives have used their status as the largest regional WTO bloc to stymie action, but with South African leadership, perhaps now those votes can be used to achieve African and other developing economy goals and fulfill the promise of the development round of trade negotiations.
The two main areas of focus in the Doha Round have been agriculture and trade in services. The failure to acknowledge that the members of the WTO have vastly different economic systems has prevented consensus on action to conclude the Doha Round. For example, a 2005 Carnegie Endowment for International Peace report showed that agricultural liberalization alone would favor developed countries rather than developing countries that would benefit most from liberalization of manufactured goods. The non-competitive agricultural sectors in many developing countries are based on low-productivity, small-scale farming. Such countries would see lower food costs by importing from more efficient foreign producers, but would also see big losses in their own agricultural sectors.
Because the economies of the United States and Malawi, for example, are structured and operate so vastly differently, it would be difficult to come up with a plan that benefits both without special measure for the weaker economies. And there lies the rub. Special Safeguard Mechanisms (SSMs) have been suggested to benefit developing countries by guaranteeing the right of these more vulnerable economies to exempt staples such as maize, rice and wheat from WTO-mandated tariff cuts and permit them to raise tariffs in the case of large or sudden increases in imports that threaten domestic producers. One of the shutdowns of the Doha Round occurred in 2008 when the United States refused to accept the SSMs.
But now the Government of South Africa is participating in the next Doha Round negotiations next year as the champion of the developing bloc of countries. South Africa has pledged to work with other emerging and developing nations to ensure a balance between agriculture negotiations and demands for industrial tariff reductions. South Africa has formed an alliance with the governments of Australia, Indonesia and the Republic of Korea to seek a conclusion to trade negotiations in this WTO round in 2010. South African President Jacob Zuma pledged just that in his State of the Nation address.
African representatives have used their status as the largest regional WTO bloc to stymie action, but with South African leadership, perhaps now those votes can be used to achieve African and other developing economy goals and fulfill the promise of the development round of trade negotiations.
Thursday, September 10, 2009
A Ray of Hope in Cote d’Ivoire
After its independence from France in 1960, Côte d’Ivoire (also known as Ivory Coast), became the model of stability in Africa and featured a major African economy. It still is the world’s leading cocoa producer, exporting nearly twice as much as Ghana, the number two cocoa producer. Before relatively recent United Nations sanctions, Côte d’Ivoire was an exporter of diamonds. Since the death of its legendary leader Félix Houphouët-Boigny in 1993, this Africa exemplar has been in decline. However, the recent announcement of progress on new elections provides hope that there could be a turnaround in a nation plagued by civil war, ethnic strife and nearly constant violence.
After Houphouët-Boigny’s death Henri Bédié, then the National Assembly President, succeeded him after a brief power struggle with then-Prime Minister Alassane Outtara. In the 1995 elections, Bédié’s government changed the electoral law so that Ouattara was banned from competing, and his party boycotted the elections, which were then won by Bédié. Due to allegations of corruption and political repression, Bédié was eventually overthrown in 1999 by retired General Robert Guéï, who as himself overthrown in a popular uprising the following year. He was succeeded by Laurent Gbagbo who won the 2000 election, and remains President.
Throughout the succession of coups and manipulated elections since 1993, there has been one constant: Bédié, Guéï and Gbagbo all played the ethnic and religious cards to prevent Outtara from even attempting to win the presidency through elections. The result of their efforts has also been the cleavage of the country, and since 2002, a civil war that has split the country between the north controlled by rebels and the south controlled by the government. A border area between the two regions is patrolled by French and other international peacekeeping forces.
Despite continued efforts to restore the peace and form governments of national unity, violence, assassination attempts and attempted coups persist. Meanwhile, there have been several postponements of presidential elections since Gbagbo’s mandate was initially extended in 2005. Now the UN envoy to Côte d’Ivoire, Y.J. Choi, has said that voter registration for the planned November 2009 presidential election is going well. According to registration figures, more than six million voters – about 70% of the eligible voters – have been registered.
Côte d’Ivoire remains a major U.S. trading partner. Despite the civil war and almost constant violence, Côte d’Ivoire is number eight among Africa trading partners with the U.S. The country’s continued economic influence has been a major factor in the patience the international community has shown for the conduct of elections over the last four years, but patience must finally run out. There does not appear to be further forbearance for election postponements in this West African nation, and if Côte d’Ivoire is to return to its former station as a bulwark of stability in Africa, this election must be held on time and in proper accord.
After Houphouët-Boigny’s death Henri Bédié, then the National Assembly President, succeeded him after a brief power struggle with then-Prime Minister Alassane Outtara. In the 1995 elections, Bédié’s government changed the electoral law so that Ouattara was banned from competing, and his party boycotted the elections, which were then won by Bédié. Due to allegations of corruption and political repression, Bédié was eventually overthrown in 1999 by retired General Robert Guéï, who as himself overthrown in a popular uprising the following year. He was succeeded by Laurent Gbagbo who won the 2000 election, and remains President.
Throughout the succession of coups and manipulated elections since 1993, there has been one constant: Bédié, Guéï and Gbagbo all played the ethnic and religious cards to prevent Outtara from even attempting to win the presidency through elections. The result of their efforts has also been the cleavage of the country, and since 2002, a civil war that has split the country between the north controlled by rebels and the south controlled by the government. A border area between the two regions is patrolled by French and other international peacekeeping forces.
Despite continued efforts to restore the peace and form governments of national unity, violence, assassination attempts and attempted coups persist. Meanwhile, there have been several postponements of presidential elections since Gbagbo’s mandate was initially extended in 2005. Now the UN envoy to Côte d’Ivoire, Y.J. Choi, has said that voter registration for the planned November 2009 presidential election is going well. According to registration figures, more than six million voters – about 70% of the eligible voters – have been registered.
Côte d’Ivoire remains a major U.S. trading partner. Despite the civil war and almost constant violence, Côte d’Ivoire is number eight among Africa trading partners with the U.S. The country’s continued economic influence has been a major factor in the patience the international community has shown for the conduct of elections over the last four years, but patience must finally run out. There does not appear to be further forbearance for election postponements in this West African nation, and if Côte d’Ivoire is to return to its former station as a bulwark of stability in Africa, this election must be held on time and in proper accord.
Tuesday, September 8, 2009
Getting Serious on Climate Change
For the first time, the countries of Africa are sending the signal that they are serious about combating the impact of climate change and stand together in challenging developing countries to do more about a problem Africa did little to cause but which negatively affects it perhaps more than any other region. Africa will field a single negotiating team at the 15th Conference of Parties to the United Nations Framework Convention on Climate Change in Copenhagen, Denmark, from December 7-18.
The Africa team, headed by Ethiopian Prime Minister Meles Zenawi, sent a shot across the bow to the developed world, warning that African nations will no longer be sidelined by their inability to speak with one voice and will no longer stand for being marginalized. “We will use our numbers to delegitimize any agreement that is not consistent with our minimal position,” Zenawi said. “If need be, we are prepared to walk out of any negotiations that threaten to be another rape of our continent.”
Indeed, the Africans must wage a strong battle for their future on climate change. The continent suffers from various climate-caused ills, including deforestation, desertification, erosion of coastlines, loss of soil fertility, rising air pollution, water pollution and drought. Some of these ills are exacerbated by human actions that African themselves must address, such as crop rotation to maintain soil quality and effective waste disposal to prevent water pollution from sewage. However, the lack of effective technology transfer makes combating air pollution more difficult for African governments, and global climate change trends are the cause of desertification and coastal erosion.
There continues to be a vigorous debate about the impact humans have in climate change. Still, when one examines the record on carbon emissions, the contribution of Africa as a whole to global carbon emissions is miniscule. China is the world leader is total carbon emissions with more than 6 billion metric tons of carbon dioxide annually, followed by the United States, the former leader, at 5.9 billion metric tons. The closest African nation in carbon emissions is South Africa, with 443 million metric tons. Egypt is second with 151.6 million metric tons. Only Nigeria tops 100 metric tons (101 metric tons). Most of the rest of the Africa countries produce less than 50 million metric tons of carbon dioxide annually. Africa’s total carbon emissions just about equal that of the state of Texas.
While climate change may not be completely of their making, African governments must contribute to combating its affects and not depend solely on developed governments and international financial institutions to save the day. The majority of African countries are dependent on rain-fed agricultural production. Consequently, it is imperative that Africa must guarantee its own survival through international negotiations and internal action to break the drought-flood trends that currently plague regions such as East Africa, as well as the longer term effect of climate change.
The Africa team, headed by Ethiopian Prime Minister Meles Zenawi, sent a shot across the bow to the developed world, warning that African nations will no longer be sidelined by their inability to speak with one voice and will no longer stand for being marginalized. “We will use our numbers to delegitimize any agreement that is not consistent with our minimal position,” Zenawi said. “If need be, we are prepared to walk out of any negotiations that threaten to be another rape of our continent.”
Indeed, the Africans must wage a strong battle for their future on climate change. The continent suffers from various climate-caused ills, including deforestation, desertification, erosion of coastlines, loss of soil fertility, rising air pollution, water pollution and drought. Some of these ills are exacerbated by human actions that African themselves must address, such as crop rotation to maintain soil quality and effective waste disposal to prevent water pollution from sewage. However, the lack of effective technology transfer makes combating air pollution more difficult for African governments, and global climate change trends are the cause of desertification and coastal erosion.
There continues to be a vigorous debate about the impact humans have in climate change. Still, when one examines the record on carbon emissions, the contribution of Africa as a whole to global carbon emissions is miniscule. China is the world leader is total carbon emissions with more than 6 billion metric tons of carbon dioxide annually, followed by the United States, the former leader, at 5.9 billion metric tons. The closest African nation in carbon emissions is South Africa, with 443 million metric tons. Egypt is second with 151.6 million metric tons. Only Nigeria tops 100 metric tons (101 metric tons). Most of the rest of the Africa countries produce less than 50 million metric tons of carbon dioxide annually. Africa’s total carbon emissions just about equal that of the state of Texas.
While climate change may not be completely of their making, African governments must contribute to combating its affects and not depend solely on developed governments and international financial institutions to save the day. The majority of African countries are dependent on rain-fed agricultural production. Consequently, it is imperative that Africa must guarantee its own survival through international negotiations and internal action to break the drought-flood trends that currently plague regions such as East Africa, as well as the longer term effect of climate change.
Wednesday, September 2, 2009
China the Mineral King
African nations have long been recognized as the source of abundant minerals on which our modern society relies. Nearly 80 percent of the strategic minerals we need originate in Africa. An estimated 97 percent of the world’s platinum is from Africa, as well as 90 percent of the cobalt, 80 percent of the chromium, 64 percent of the manganese, half the world’s gold reserves and as much as a third of all uranium. In recent years, the mineral coltan (columbite-tantalite), largely coming from Africa, has enabled the development of computers, cell phones and other electronic devices. We would be hard-pressed to construct jet aircraft, automobile catalytic converters or iPods without the minerals found in Africa, and in some cases, almost nowhere else in the world. And this is not even taking into account oil and natural gas from African producers, who are steadily gaining a global market share.
However, China, which has increasingly attempted to lock up much of the supply of strategic minerals from African countries, is now the leading producer of what are known as rare earth elements or rare earth metals. These are 17 chemical elements in the periodic table, which are used in various technological devices, such as superconductors, electronic polishers, refining catalysts and hybrid car components. As time goes on, these minerals will increase in importance in the 21st century economy.
As it happens, South Africa used to be the world’s leading source for these minerals. South Africa still produces some rare earth concentrates, but its production is dwarfed by what China produces, which now represents 95% of rare earth supplies. Chinese production often releases toxic wastes into the general water supply, and that would tend to discourage increased South African production absent what could be expensive environmental safeguards.
Yet another issue tends to discourage South Africa or other foreign attempts to compete with Chinese rare earth production. China has instituted export quotas to limit the amount of rare earths sent abroad. This has shifted the knowledge base since companies like General Motors are now forced to move staff and production facilities to China. Thus, most of the research and extraction expertise is flowing to China and not South Africa or other rare earth producers.
These developments make it all the more important for Africa to maintain control over what rare earths it does produce, as well as the strategic minerals it currently produces and any future discoveries of new vital mineral products. Along with its current stranglehold over rare earths, Chinese monopoly over supplies of African strategic minerals would be an alarming development – not only for Africa, but for the global marketplace as well.
However, China, which has increasingly attempted to lock up much of the supply of strategic minerals from African countries, is now the leading producer of what are known as rare earth elements or rare earth metals. These are 17 chemical elements in the periodic table, which are used in various technological devices, such as superconductors, electronic polishers, refining catalysts and hybrid car components. As time goes on, these minerals will increase in importance in the 21st century economy.
As it happens, South Africa used to be the world’s leading source for these minerals. South Africa still produces some rare earth concentrates, but its production is dwarfed by what China produces, which now represents 95% of rare earth supplies. Chinese production often releases toxic wastes into the general water supply, and that would tend to discourage increased South African production absent what could be expensive environmental safeguards.
Yet another issue tends to discourage South Africa or other foreign attempts to compete with Chinese rare earth production. China has instituted export quotas to limit the amount of rare earths sent abroad. This has shifted the knowledge base since companies like General Motors are now forced to move staff and production facilities to China. Thus, most of the research and extraction expertise is flowing to China and not South Africa or other rare earth producers.
These developments make it all the more important for Africa to maintain control over what rare earths it does produce, as well as the strategic minerals it currently produces and any future discoveries of new vital mineral products. Along with its current stranglehold over rare earths, Chinese monopoly over supplies of African strategic minerals would be an alarming development – not only for Africa, but for the global marketplace as well.
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