Infrastructure: the way forward

Considering its role as the Development agency of the African Union, the NEPAD welcomes the Compact with Africa put forward by the G20. First because it acknowledges that the aid model is not the solution to meet our continent’s development challenges. This is not a question of saying whether aid is good or bad. Aid is simply not enough. Just one figure to substantiate this: we believe that Africa needs between US$130bn and US$170bn to develop its infrastructure each year. But the total aid it receives each year does not amount to much more than US$60bn. In this sense, the Compact is in line with Africa’s objective to attract more private investment.

There is one other essential dimension in the Compact with Africa, which is to consider projects on a regional scale. The NEPAD has long been advocating that optimal solutions are found at the regional level and not at the national one. We must think in terms of cross- border corridors, be it in energy or communication corridors. The regional dimension is vital and must get greater attention. Infrastructure covering several countries in the same region is also more attractive to investors (both public and private) because it allows the pooling of costs and promotes integration.

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Interview with African Business

Launched amid much fanfare by President Thabo Mbeki of South Africa and other continental luminaries in 2001, the New Partnership for Africa’s Development (NEPAD) promised a fresh era of progress through a dynamic agency freed from the constraints of Africa’s tired leadership structures. With lofty goals to “eradicate poverty, promote sustainable growth and development, integrate Africa in the world economy, and accelerate the empowerment of women,” the agency capitalised on the excitement of an international community transfixed by the UN’s Millennium Development Goals. “We are essentially saying that surely the time has come that as the African continent we should say [there must be] an end to the underdevelopment of the continent, an end to the poverty and there must be an end to conflict,” Mbeki boldly proclaimed in 2002.

Today, NEPAD’s Planning and Coordination Agency – soon to become the African Union Development Agency – is attempting to carve out a new role for itself in a very different landscape. With Mbeki and other high-profile backers retired from the scene, chief executive Ibrahim Mayaki, a former prime minister of Niger, faces a battle to prove NEPAD’s relevance on a continent where multi-billion dollar infrastructure schemes and the private sector are seen as the crucial drivers of development. 

Full article here

PROMOTING AFRICAN REGIONALISM THROUGH THE DEVELOPMENT OF TRANSPORT

Every year, Africa is slowly but surely moving towards greater political and economic integration. A number of projects are underway, such as the establishment of the Continental Free Trade Area (CFTA) and the Single African Air Transport Market. It must be stated that today the potential for intra-African trade remains under-exploited, accounting for only 12% of Africa’s total trade. And one of the first causes of the weakness of its intercontinental trade remains higher transport costs than those in other regions.

In a recent research note entitled “Regionalism in Africa: Soft and Hard Transport Costs”, the French Development Agency (AFD) rightly illustrates the existence of a a causal link between the level of transport costs and the weaknesses of regionalism in Africa. In terms of tariffs, researchers believe that while African countries have effectively lowered tariffs on the products of their trading partners, the average level remains higher than in the rest of the world. But many other obstacles contribute to these trade costs, such as excessive regulation and delays at the borders and in ports that are harmful to businesses.

This note focuses mainly on the analysis of trade facilitation measures (soft) and logistic performance indices (hard), two distinct dimensions of transport costs. In the Doing Business report of the World Bank, the point of view of companies is presented via their perception of the regulation and the institutional capacities, for example, that constitute the soft indices. Conversely, the Logistic Performance Index (LPI) is based on six aspects that are much more quantitative and concrete (hard), such as the ability to track transport or the frequency with which shipments arrive on time at their correct destination. Combining these different data from the World Bank, the conclusion is the same with regard to both aspects: Africa is at the bottom of the pack, even when compared to other emerging regions.

It is therefore urgent to act on opening up African countries to one another by means of a large number of measures. Our continent has everything to gain from goods “circulating better in a more integrated space” and “value chains” that can “be set up at the African level before joining international circuits”. The importance of the transport sector and logistics performance is therefore critical for enabling Africa to increase the size of its markets and to achieve economies of scale.

At the same time, regional integration needs to take shape at the institutional and regulatory level, in order to decongest our borders and ports by harmonising our customs policies. If it succeeds in closing this gap, our continent will be able to generate a surplus of integration and therefore of economic growth, the gains of which will benefit our populations and improve their living conditions. We the African countries only have to take together the path of regional integration by breaking down the barriers that hinder our commercial relations.

Infrastructure: We must find alternatives to state funding

On October 16 2018, the authorities of the Democratic Republic of Congo announced the signing of an Inga 3 project exclusive development agreement with two consortia (Chinese and Spanish). This is a milestone for Africa. After eight years of studies and discussions, this hydroelectric dam project on the Congo River will finally enter its operational phase.

Inga 3 is a project designed to lead to an extra production of 11,000 megawatts (MW) of clean renewable, permanently available energy that will benefit the entire power grid in the region. The benefits of this project will be felt as far as in South Africa. The China Inga 3, a consortium including Chinese and European companies, plans to invest $14 billion. If all goes well, Inga 3 will be the largest hydroelectric project ever built on the continent. It will also showcase opportunities offered by public partnerships for infrastructure development in Africa, as well as regional integration.

Infrastructure deficit is one of the most serious problems our continent faces. It is most obvious in the  energy sector – although 145 million people on the African continent have been able to connect to electricity since the beginning of the millennium, 645 million Africans are still deprived of it. How can we expect to start a virtuous circle of industrialization if the most basic prerequisite – access to affordable energy – is not fulfilled?

We estimate that the annual investment threshold for Africa’s infrastructure deficit is $120 billion. As of now, annual investment stands at about fifty billion only. The continent now devotes a little more than 4% of its GDP to infrastructure equipment. This is better than ten years ago when it dropped to 2%. But it is still less than in China, where this proportion is up to 14%. There are also major differences between countries and the structure of their economies, depending on their exposure to commodity prices in particular.

This lack of infrastructure carries big costs. When economies are isolated, they become less attractive, since unified markets on a regional scale are difficult to create. Inadequate infrastructure increases production costs, weighs on business’s competitiveness and negatively impacts foreign direct investment. Still, Africa must create 450 million jobs over the next twenty years to absorb its population growth. World Bank studies have shown that infrastructure deficit costs the continent two points of annual growth and generates a 40% shortfall in competitiveness gains for its enterprises.

Having stated the fact, we need to think about solutions. Be it in energy or communication corridors, the regional dimension is essential and must receive the greatest attention. Infrastructure covering several countries in the same region is more attractive to investors (both public and private) because it allows the pooling of costs and promotes integration. In 2012, the African Union set up an African Infrastructure Development Program (PIDA) managed jointly by the NEPAD Agency and the African Development Bank (AfDB). Its roadmap focuses on structuring cross-border projects, numbering 51, for a total package of $360 billion. They are the pivot of the continent’s real economic takeoff.

The approach chosen by PIDA is highly original in that it anchors the projects exclusively on Public Private Partnerships (PPP). Indeed, the real question is not whether to invest more, but rather, who should invest more? Again we say, ‘Africa must first rely on its own means and resources to carry out its development.’ But is this true in the infrastructure domain? The answer is ‘yes,’ but with some reservations. Investment in infrastructure is an absolute necessity, but it must not be to the detriment of other equally important programs such as investment in education, health or agriculture. Therefore, association with the private sector on the one hand, and international cooperation on the other hand, are credible alternatives to state funding. This is the solution that, as the NEPAD Agency, we never stop recommending, and this is the solution DRC authorities have chosen to adopt with the Inga 3 project.

Therefore, the key issue lies in private sector participation in the major PIDA projects, in the promotion of requisite regional integration. In this regard, the NEPAD Agency launched the “5% Agenda” in 2017. This campaign aims to raise awareness and mobilize the African financial sector and encourage African insurance companies and pension funds to invest at least 5% of their investment portfolio to infrastructure. Currently the allocation is only 1.5%. The growth margins are considerable because the amount of assets under management held by African pension funds, insurance companies, and institutional investors stands at $1.1 trillion. In addition to its exemplary nature, the “5% Agenda” realization will act as a positive signal; not only will it reduce the perception of risk on the continent, it will also leverage the private sector and international partners participation in the financing of major African infrastructure. These are more than likely to spur regional integration.

My speech on behalf of the AUC Chairperson to mark the beginning of African Dialogue Series 2018, New York

Ladies, and gentlemen

It is a privilege to address you today on behalf of His Excellency Mr. Moussa Faki Mahamat, the Chairperson of the African Union Commission.

This is indeed an opportune time to take stock and chart the way forward to enhancing strategic partnerships in a context where multilateralism is being attacked, and questions are being raised on our collective capacity to achieve the shared goals of peace, prosperity, sustainable development and human rights for all.

How can the partnership between the United Nations and the African Union, and our strategic partners, as part of the global partnerships context for development, contribute to fast-tracking the implementation of Agendas 2030 and 2063?

The African Union and the United Nations are currently working closely together on reducing risks and vulnerability due not only to political conflicts, and preventing crises caused for instance by violent extremism, economic shocks, intolerance, environmental risks and conflicts, social tensions, droughts and famines. One of the problems is the tension between the need for a long term strategic vision and the reality of short term mandating visions and budget cycles.

Within a context where multilateral frameworks seem to be under attack, this partnership led by the United Nations and the African Union creates a space for institutional innovations that can help build a more Peace and Development for a better world to live in.

The Joint UN-AU Framework for an Enhanced Partnership in Peace and Security, co- signed by the UN Secretary-General and the Chairperson of the AU Commission in April 2017, lay the basis for further improvements in the cooperation and coordination between the UN and the AU.

There is room for additional synergies between the UN’s Agenda 2030 and the AU’s Agenda 2063, and the “Silencing the Guns” flagship project of Agenda 2063.

These agendas and initiatives provide a set of shared principles and objectives that can be used to promote information sharing and coordination, so that through burden sharing and division of work, on the basis of comparative advantage and predictable joint engagement, the UN and AU are both able to improve efficiencies and overall effectiveness.

The implementation of the AU’s financial and organizational reforms, that will strengthen its financial independence and organizational effectiveness, will be an important element in further enhancing the UN-AU strategic partnership. Greater predictability is a key element for this partnership, especially when it comes to joint programming, which involves human and financial resources.

In a globalized world with increased uncertainty, what lessons can the AU-UN partnership offer regarding the need to work collaboratively to solve global problems?

Implementing this AU-UN strategic partnership will be dependent on the following critical conditions:

1. There needs to be enhancements and clarity of the UN-AU- RECs, and Regional mechanisms cooperation. The principle of subsidiarity, as it relates to the UN-AU- RECs and Regional Mechanisms, and in the context of the emerging global peace and security architecture, needs to be defined and structured.

2. National / Local Ownership. It is important there is full endorsement and alignment of all international efforts with the principle of national and local ownership. However, this principle does not negate the fact that the AU, UN and sub-regional, bodies must take into account that not all national and local leaders are committed to sustainable peace. Some are pre-occupied with staying in power, regardless of the negative impact on their countries, people or the economy. Others need help to manage corruption and nepotism, or support to combat terrorism, or assistance to resist state-capture by transnational criminal organizations.

3. The UN and the AU should support transformative processes that not only empower national and local ownership, but also enhance social cohesion and promote the inclusion of all parts of a society, by enabling equity and social harmony. This will require the development of leadership values and skills, both within the UN and AU to support such processes, without becoming prescriptive or otherwise undermining national ownership, as well as the development of a future generation of leaders that put their communities, societies and nations above their own personal interests.

4. There is now growing recognition that the type and pace of institution-building and democratization matters: linear assumptions that more development leads to greater stability, or that good governance defeats insurgencies have been debunked. The standard models of the previous era have been based on sequenced approaches to stability, peace and development. Whilst in most situations the AU and UN are facing today (for instance in the case of the Sahel, or AMISOM in Somalia) there is need to support governance, security sector reform and development initiatives amidst ongoing conflicts.

5. The combination of challenges facing the UN, AU, sub regional organizations, states and communities in Africa require a comprehensive approach. A whole systems approach is needed to align the various dimensions (peace-security, Governance and development) behind a shared political and strategic vision.

6. We must recognize that there is a significant body of knowledge on peacekeeping, but both the UN and AU are increasingly tasked to undertake stabilization operations. There should be an emphasis on learning lessons and identifying best practices in the past, but now this approach is questioned, because of the pace of change, which makes such lessons and practices obsolete, and because it is now recognized that each situation requires its own context-specific response that should be arrived at together with the society in transition.

7. Gradually, we should aim at rationalization and creating greater Coherence on Global partnership commitments regarding Africa’s development: for example, FOCAC, TICAD, EU, USA partnerships, thinking coherently. The foundation for NEPAD in 2000 was motivated by fostering three levels of ownership (local, national, international) that helped feed the design for Agenda 2063. Its implementation illustrates how critical it is to build global coherence by taking advantage of synergetic approaches, and financial, human and institutional resources to reach the stage planning development and sustaining peace for Africa.

In conclusion, excellences, ladies and gentlemen:

1. we should not forget to integrate the role of an emerging private sector in job creation and peace stabilization;  and last but not the least,

2.  integrate gender and youth perspectives into early warning, prevention, mediation, peace operations, and peace building.

These aspects are often poorly connected with the peace, security, governance and even development aspects of planning, and much more needs to be done to integrate these economic and social dimensions into an integrated and coordinated systems approach to achieve the sustainable development goals and realize the AFRICA we want.

I thank you

Infrastructure, agriculture, tuberculosis: a week in New York focused on action

I would like to share with you some impressions from New York, where I went to represent the NEPAD Agency at the 73rd session of the United Nations General Assembly. This week was rich in events and exchanges. My meeting with Rodger Voorhies, Executive Director of the Bill and Melinda Gates Foundation, provided an opportunity to discuss the programme for accelerating agricultural growth in Africa, led by the NEPAD Agency, and to reflect on partnership opportunities around the AATS project (Africa Agriculture Transformation Scorecard – the “evaluation sheets for agricultural transformation in Africa”). The meeting with Dr Andrew Steer, President of the World Resource Institute, which is collaborating with the NEPAD Agency on the AFR100 programme to restore 111 million hectares of arable land in Africa by 2030, provided an opportunity to review the progress of this strategic partnership. Finally, the deepening of the dialogue between the NEPAD Agency and the UNDP Regional Bureau in Africa was at the heart of my warm exchanges with the institution’s new Executive Director, Ahunna Eziakonwa.

Our continent, Africa, received a special tribute in New York. This 73rd session of the General Assembly was dedicated to the memory of our most inspiring leader, Nelson Mandela, whose centenary we were celebrating. After the African Union, which honoured “Madiba” at the Nouakchott summit on 1 and 2 July, it was therefore the United Nations’ turn to invoke the legacy of the father of the South African nation: the General Assembly proclaimed the decade 2019-2028 as the Nelson Mandela Decade for Peace. Mandela has become a universal symbol, transcending borders, continents and times. This is obviously a source of pride for all Africans.

We can and must set an example: against a pessimistic discourse that tends to present our continent as one of crises, how can we not point out that one of the best recent news for peace has come from Africa: the reconciliation between Ethiopia and Eritrea, which have decided to overcome their territorial disputes to put an end to a 20-year-old conflict. This news opens up prospects for the relaunch of regional integration, which has been boosted by the creation of the ZLEC, the Continental Free Trade Area. The ZLEC will be a long process, but it is already emerging as a tangible manifestation of the pan-African ideal. The President of Rwanda and current Chairman of the African Union, Paul Kagame, rightly recalled this in his speech to the UN tribune….

But African integration will require infrastructure and, in this regard, a crucial meeting on their financing was organized at the initiative of NEPAD on 25 September in New York’s Nasdaq. Our agency coordinates the participation of the private sector in the major structuring projects of PIDA (Program for Infrastructure Development in Africa). This meeting made it possible to raise awareness and mobilize the African and international financial sectors. We encourage African pension funds to spend at least 5% of their investment portfolio (which amounts to $1.1 trillion) on infrastructure, including through PPPs. We must be exemplary if we want to be supported by our international partners!

The NEPAD Agency is also fully engaged in the fight against tuberculosis, which killed 2.6 million Africans in 2016. The high-level meeting “United to Stop Tuberculosis: A Continental Response”, which we organized on 25 September, enabled African governments, their partners and major donors to renew their commitment to combat this scourge through multilateral cooperation. We are convinced that only a continental and multidimensional response, closely involving all actors, public and private, and populations, is relevant to finding a solution to this tragedy.

But it is also necessary to be able to respond to emergencies and health crises that transcend borders. This was the subject of the second humanitarian dialogue organized under the aegis of the NEPAD Agency on 28 September in New York, as part of its Move Africa initiative, which aims to establish corridors to accelerate and facilitate the work of humanitarian organizations.

All these initiatives reflect the will of the African Union and the NEPAD Agency to take the most concrete action possible to create the foundations for a better future for our continent. We will come back to this later.

Winning the War on Tuberculosis

Tuberculosis continues to kill millions around the world each year, especially in Africa. Eradicating the disease is possible, but only if African governments begin developing a multi-sector, integrated approach to containing and controlling it.

JOHANNESBURG – The world is finally waking up to the threat posed by one of the most overlooked diseases of our time. Last month, the United Nations General Assembly (UNGA) hosted the first-ever high-level meeting on tuberculosis (TB) to explore options for international eradication efforts. But, as welcome as this new global focus is, the fact remains that the road to beating TB begins in Africa.

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Africa must look to Eisenhower for inspiration

Extraordinary challenges demand radical thinking. The US, home to the world’s most developed road system, had no proper national system of freeways until the 1950s. The only reason the land of free enterprise engaged in road building on such an unprecedented scale was that the state mandated it.

Through the landmark Federal Aid Highway Act of 1956, President Dwight Eisenhower directed massive spending on roads and other infrastructure, giving birth to a transport network that to this day is a cornerstone of the US economy.

Full article on Financial Time here

What to do about infant mortality in Africa?

While infant mortality is declining worldwide, progress in this area still lefts much to be desired, and particularly in Africa. According to the latest joint report by UNICEF, the World Health Organization, the United Nations Population Division and the World Bank, another 6.3 million children died worldwide last year, nearly half of them in Sub-Saharan Africa. This figure should be compared with the 14.3 million child deaths recorded worldwide in 1990 but it only highlights the fact that Africa did not progress much. It reflects the shortcomings that still exist in terms of access to emergency care, to difficult maternity units, to basic medicines and also in terms of compliance with basic hygiene rules.

It is worth noting that in the same period, global GDP in purchasing power parity (in constant 2011 dollars) increased from $47.199 billion to $112.261 billion, representing a 2.37-fold increase in global wealth in 28 years. The correlation between rising living standards and falling infant mortality is a two-way street. Lower infant mortality results in a larger working population and increased national production. This good result also reflects a consistent application of measures to improve people’s living comfort, and is explained in particular by a well-managed demographic transition.

Indeed, there is empirically a higher infant mortality rate in societies with more children, because it stretches sparse financial and medical resources, resulting in less resources for each child. For the same income, the concentration of resources on a smaller number of children allows for more effective care and greater chances for each child to reach adulthood in good conditions. But the key factor in the demographic transition has always been an increase in  living standards, not a controlled reduction in the birth rate, even in China.

In Sub-Saharan Africa, where a vast majority of the population remains dependent on non-mechanized field work – up to 70% – the number of children closely matches the productivity of the family unit. This is why the demographic transition and its benefits in terms of child health are still slow to be felt. This explains why sub-Saharan Africa bore a disproportionate burden of children’s deaths worldwide. While global GDP grew, Sub-Saharan Africa’s GDP grew more slowly, from a constant $1.300 billion in purchasing power parity in 1990 to $3.574 billion in 2017. In high-income countries, one in 185 children died before their fifth birthday, compared to one in thirteen in sub-Saharan Africa.This is all the more unacceptable that solutions to this scourge are well known and “easy” to implement. Most of these deaths would be avoidable with better vaccination, sanitation and access to basic medicines. It is therefore necessary to rethink the entire health and hospital system, from hygiene education to the training of competent doctors, specialists and general practitioners. It also necessitates the completion of the health pyramid with a more effective network of territories with health centres, clinics, regional and national hospitals.

The experience of African countries that have successfully tried such or such solution should be copy-pasted. For instance, the spread of antibiotics in Niger has allowed to cut death rates among infants, perhaps by as much as 25 percent. Beyond technical solutions, it is sometimes the mentalities that still need to change, as illustrated by the Ebola crisis in Guinea, Sierra Leone and Liberia in 2015 where simple changes to death rituals were critical to halt the epidemic.

THE FUTURE BELONGS TO THE RURAL AREA

African Agriculture Facing Challenges of Entrepreneurship. We need to challenge the traditional sources of financing and investment in the agricultural sector and introduce alternative, innovative private sector financing methods.

Not a week goes by without a trade show or newspaper article dedicated to African agriculture. The topics range from the untapped potential of African agriculture and the challenges of rural development to the benefits of introducing agriculture that is better adapted to the impending climate changes. This is a refreshing and significant change of perspective. After all, African agriculture has been suffering for a very long time and is still haunted by the image of stagnation and backwardness. Reinforcing the significance of urban elites and the rural exodus that began in the 1970s and continued through the 1980s have contributed immensely to this image of the backwards African farmer, suggesting that the cities are the future of the continent.

One in four Africans is suffering from chronic malnutrition. This is a truly paradoxical situation given the resources our continent has.

However, the numbers today speak volumes about the importance and potential of African agriculture. The agricultural sector accounts for about 60 percent of jobs within the African continent and amounts to 25 percent of its GDP. At the same time, Africa has over 600 million hectares of arable land, which corresponds to 65 percent of the uncultivated farmland in the world. There is a lot of talk about land grabbing and the impact of large agro-industrial corporations, which should certainly not be underestimated. However, in this context people often forget that in Africa more than 80 percent of the 51 million farms are less than two hectares in size.

Harnessing this potential has become all the more urgent given the fact that Africa imported $35 billion worth of food in 2016. One in four Africans is suffering from chronic malnutrition. This is a truly paradoxical situation given the resources our continent has. Population growth is also forcing rural areas to become central to the development strategy of our continent. It is estimated that approximately 20 million people enter the labour market each year, of which 12 million live in rural areas. In order to integrate this labour force, agriculture and rural development must therefore become priority by transforming rural areas into economically prosperous areas.

The challenge is to create value chains that make it possible for smallholders and farms to build a competitive and sustainable ecosystem, which will lay the foundations for integrative economic growth in Africa. In my book ‘L’Afrique à l’heure des choix’ (has not been published in English, but loosely translates to ‘Africa’s Critical Choices’), I address several possibilities to change and modernise African agriculture, and I stress the importance of emphasising agricultural entrepreneurship.

It is paramount that we explain to our youth that farmers are entrepreneurs like any other. Like every entrepreneur, they have to manage the workflow, financial matters, the role of new technologies, the security and diversification of assets (preparation for set-aside farmland, use of parcels, etc.). However, promoting these jobs requires a massive investment programme to open new agricultural schools. Vocational training programmes need to be enhanced, just as we do for ‘normal’ entrepreneurship.

However, promoting agricultural entrepreneurship would not make sense without simultaneous safeguards and incentives (including legal and fiscal/tax benefits) to motivate farmers to create added value. Generally speaking, we need to challenge the traditional sources of financing and investment in the agricultural sector and introduce alternative, innovative private sector financing methods. Thanks to their holistic, collaborative and strategic approach as well as their multilateral management style, these innovative financing options contribute to increased productivity and agricultural development: Private investments are mobilised and market weaknesses are balanced out.

A reform of the land register and land rights is essential.

At the same time, the meteoric rise in mobile phone usage in Africa offers many opportunities for innovation that can change and improve the financing of rural development. Nigeria and Kenya, for example, were the first countries to introduce a system whereby subsidies for the purchase of fertiliser are distributed directly to farmers. This was made possible by partnering with mobile technology companies and network providers.

Finally, a reform of the land register and land rights is essential. Land titles granted as part of a system of land tenure are all too often a luxury for most African farmers and are also discriminatory against women. Proper introduction of these systems is an incentive for farmers to invest in their production resources and to introduce good work practices. Land ownership is always a hot topic in Africa; hence, protecting the land rights is paramount to building inclusive, resilient and sustainable communities.

Promotion of agricultural entrepreneurship requires deep rethinking and important reforms of our state policies regarding the education and training of young farmers, the reform of the land register, access to new financing methods, and increased use of new information and communication technologies (NICT) in the agricultural sector. This is the agricultural and innovative Africa we hope to see in the near future.

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