Giving meaning to collective action

On the eve of the 33rd Summit of the African Union, which will be held on February 9 and 10 in the presence of all the States of the continent, it is essential to recall the ties that unite us. Reinvesting in our territories, strengthening our economic regions, abolishing customs borders, and freeing ourselves from external constraints are all elements that will enable us to regain the meaning of our actions and stimulate our ability to unite around common values.

A paradigm shift is needed

The new decade that is beginning holds out the hope of a paradigm shift if we respect what we preach. Our continent, whose youth and dynamism are its real wealth, must meet the high expectations of social justice and equity in the distribution of wealth of a population that is increasingly integrated around a globalized conception of economic and political life. We have no choice but to rethink our relationship to ourselves and to the rest of the world. To this end, from now on we have sought to include and involve our youth in the design and implementation of Agenda 2063, our continental vision of socio-economic transformation.

Play as a team

Since its recent establishment, the African Union Development Agency (AUDA-NEPAD) promotes regional economic integration, cross-border projects and aims to strengthen its cooperation with the regional economic communities. The launching of major PIDA priority projects – the North-South or Abidjan-Dakar corridors, the Abidjan-Lagos coastal corridor, the Dakar-Bamako railway lines, the Zambia-Tanzania-Kenya Transmission Line (ZTK) and so many other achievements – is the fulfilment of our wish to work together. Henceforth, the progress of regional integration is moving in the direction of an interconnected continent, obviously transcending borders.

“It is also an opportunity for African political and economic actors to aim for democratic consensus and adopt a common position in international negotiations.”

Facing climate change

Included in Agenda 2063, the protection of biodiversity, the conservation and sustainable management of natural resources, water security and renewable energies are critical strategic choices. Indeed, there can be no sustainable growth without inclusion, and this will be even more true in the years to come. The urgency of meeting the challenges posed by climate change calls for a two-pronged approach: mitigating the causes and adapting to the consequences. Hence the need to focus on development with the highest possible ecological value. This implies planning differently and implementing concrete adaptation measures, building resilience, reviewing our food systems, adopting green economies that are resilient to climate change, improving climate and weather monitoring. It is also an opportunity for African political and economic actors to aim for democratic consensus and adopt a common position in international negotiations.

Breaking down borders for the free movement of people

Unless there is a denial of the obvious, population displacements respond to a need for survival and security. Hindering this movement means running the risk of seeing poor populations trapped in a vicious circle of impoverishment and the most dynamic areas deprived of labour power. Rethinking our borders to allow free movement. We must work to make this possible and in the best possible conditions.

In this context, important steps have been taken on two of the key objectives of Agenda 2063: the creation of a continental free trade area, FTAA, and the creation of a Single African Air Transport Market (SAATM). Indeed, 80% of air traffic in Africa is still handled by foreign companies. A major objective of Agenda 2063, SAATM was launched on 28 January 2018 by the AU Commission. The liberalisation of market access between African States, the free exercise of traffic rights and the liberalisation of frequencies should contribute to the continent’s socio-economic integration and growth. As for the FTAA, which started in March 2018, once in force, it will be the largest trade zone in the world, theoretically expected to increase intra-African trade by 52% by 2022, eliminating customs duties on 90% of goods. Let’s free up our spaces on earth or in the air. This is a challenge.

We are now at a crossroads. We have never been so collectively aware of our material and immaterial resources, of our strengths, of our place to create in this uncertain world. Meanwhile, these uncertainties in the face of major demographic, climatic, political or economic changes are accelerating. At the dawn of this new decade, our responsibility as citizens is to ensure that the hopes of our young people and the dreams of the founding leaders are not in vain.

Why is the proper structuring of major infrastructure projects in Africa a priority?

Financing projects upstream, building partnerships between public and private operators,
AUDA-NEPAD accelerates its efforts to advance the continent’s development. 

Since the Dakar Financing Summit in June 2014 and President Macky Sall’s push to advance high-impact projects across the continent, including those of integrated corridors with a regional dimension, ambitious national and transnational projects have been presented each year. According to the last figures released by the Infrastructure Consortium for Africa (ICA) in 2018, the level of Africa’s infrastructure commitments have exceeded US$ 100 billion, for the first time, a 24% increase compared to 2017. African governments were the main source of infrastructure financing, with US$ 37.5 billion dollars (37% of total commitments), followed by China, which committed 25.7 billion dollars (25% of total commitments). For its part, the private sector only contributed by US$ 11.8 billion (12% of total commitments). Given the high potential for significantly heifer private sector investment, our efforts must be concentrated in structuring infrastructure to meet investment requirements.

The time required to properly develop and structure infrastructure projects is long, in the best case usually between taking between three to seven years before reaching financial close. Moreover, according to an Okan / CEO Forum report, 83% of African Public-Private Partnerships are abandoned, not because of lack of funding, but because they are poorly designed or not commercially viable. Project development costs for large-scale PPP infrastructure projects can account for 5% to 10% of the total project investment.

To avoid this loss of time and money, AUDA-NEPAD and its partners have developed a series of tools to support the preparation and financing upstream of Africa’s regional and national infrastructure projects to enable more effective definition and structuring aligned with investor requirements. Related funding mechanisms are required to cover the costs of project development including project management, transactions advisory, technical studies (pre-feasibility, engineering, feasibility, socioeconomic development, environmental), business plans, financial models, among others.

The high level of technical challenges, from the complexity of the different environments to the the transnational nature of certain infrastructure projects – such as the 330 KV transmission project of Niort Core crossing four countries (Nigeria, Niger, Benin, Burkina Faso) – require a very high level of expertise and the mobilization of many international operators, therefore resulting in additional costs.

Thanks to specific technical assistance mechanisms, such as the SDM (Service Delivery Mechanism), the preparatory studies for the construction of the 1,000 km section between Abidjan and Lagos have mobilized joint financing of US $ 22.7 million from the AfDB and the European Union. A team of experts worked for 18 months during the preparatory phase in Lagos to enable the establishment of the Abidjan-Lagos corridor. This project has led, within ECOWAS, to the signing of a multilateral treaty between the Heads of State and Government of Benin, Côte d’Ivoire, Ghana, Nigeria and Togo, creating a supranational authority, the Abidjan-Lagos Corridor Management Authority (ALCoMA), a first in Africa. ALCoMA will facilitate the management and coordination of the entire project cycle, from preparation to construction, including operation and maintenance.

Following the same inclusive and integrative logical thinking, the LAPSSET megaproject in East Africa, estimated to cost in total US$ 25 billion, is an example of a significant government initiative aimed at establishing transnational partnerships between public and private institutions. Projects in development include Lamu Port in Kenya, a normal gauge railway line linking Juba to southern Sudan and Addis Ababa in Ethiopia, the development of a broad road network, two pipelines in southern Sudan and Ethiopia, an oil refinery in Bargoni, Kenya, three airports, among other projects. This ambitious series of projects involve a cross-section of national and international investors, both debt and equity.

In order to facilitate and deepen the  public-private dialogues required to remove one of the main obstacles to infrastructure development on the continent — the lack of consideration of private sector constraints in the implementation of major projects — the Continental Business Network (CBN) was launched on the sidelines of the World Economic Forum in Cape Town, South Africa, in June 2015. Private sector leaders are systemically invited to share their advice and capacity in order to advance the critical infrastructure projects being advised by AUDA-NEPAD.

It is crucial that we work actively to fill our infrastructure gaps – by addressing the broader issue of integrated approaches to infrastructure development while building partnerships with key stakeholders: the private sector, institutional investors, African governments and willing development partners.

We need to engage together across the public and private sectors in collaborative frameworks to further the development of initiatives such as the 5% Agenda to mobilize funding from African pension funds and the Africa Infrastructure Guarantee Facility to scale guarantees, creating the enabling environments required to attract more private capital to Africa’s infrastructure.

My message at the conference “Rethinking Development in Africa” at Columbia University | SIPA

On 27 September 2019, I had the opportunity to share my opinion and vision on the key issues that will drive the debate on Africa’s development during a conference organized by Columbia University School of International and Public Affairs under the theme: “Rethinking Development in Africa“.

I address covered the following areas: Africa’s transitions versus policies; governance versus policies; global uncertainties versus Africa’s uncertainties, and; reflections on rethinking development.

It is not prudent to continue to view ‘development’ in traditional paradigms, considering that ‘development’ itself requires new thinking in order for real transformation to take place, given the present conditions.

In fact, the critical transitions that are taking place on the continent include demographic, technological, natural systems, climate change, governance systems as well as human development transitions. None of these transitions can be dealt with independently, and moreover, the transitions make it difficult for youths in the development space, who already predominantly have a negative perception on the delivery of policymakers. Therefore, policymakers need to understand these transitions fully and prepare adequately.

Power relations have changed fundamentally, meaning governance systems are inadequate, which cannot be changed in a top down manner. Therefore, the inadequacy of governance systems makes power irrelevant, as it has been shown recently in several countries on the continent.  There is therefore a shift in power from centralised power to more local governance systems and local communities.

Furthermore, governance could strengthen its credibility with renewed and innovative forms of governance as is the case of a country such as Botswana, which has inclusivity as a strong trait in its governance system. Inclusivity is therefore an absolute and essential component in rethinking development unlike was the case years ago.

With regards global uncertainties and Africa’s uncertainties, it was observed that aid, which was a strong component in Africa’s development agendas, is now disappearing, with the role of the multilateral system being questioned. In addition, an agenda on global sustainable development that must be applied by all countries shows that Africa is lagging behind.

However, Africa is now looking at its own regional and internal markets through the African Continental Free Trade Area, meaning that even at the current time of global uncertainty, a great opportunity for Africa exists. The fragmentation of African countries necessitates that the continent implements regional solutions for national challenges, and the strengthening of regional and internal markets to restore credibility of national governments.

Some of Africa’s uncertainties include the fact that in the next eight years or so, most of the incumbent African presidents will no longer be here, paving the way for new leaders who will emerge out of democratic processes. Therefore, the youth will have a stronger role to play in the continent’s new political administrations. However, the uncertainty is whether the new leaders will emerge through sound democratic foundations or through populist solutions, or even whether they will emerge out of an increased level of conflicting scenarios.

In conclusion, I reflected on rethinking development, stating that the best way to include youths in Africa’s development framework, Agenda 2063, is to let them be a part of its design and implementation.

A change of paradigm is there needed in the co-production of public policies. Africa will need to reinvent its governance systems with the empowering of local communities and implementation of regional solutions. In addition, the way people identify with development policy, is the extent to which they feel that their dignity is being upheld. Moreover, rethinking development also means rethinking justice systems.

Belinda Archibong, Assistant Professor of Economics at Columbia University, a discussant at the address, commented that Africa does not really need to develop on aid, but more on trade. She also noted that another critical area is in the closure of the youth participation gap in governance systems.

Akbar Noman, Adjunct Associate Professor of International and Public Affairs at Columbia University, also a discussant said, “The importance of the transitions highlighted by Dr Mayaki, especially the one on demographics, projecting what will be needed in the labour force and its nexus with climate change, is important in answering the question on the generation of employment.”

Here you will find the full video of the « Rethinking Development in Africa » conference at Columbia University | SIPA on Friday, September 27 in New York 

Global warming is at the core of the African Union Development Agency’s priorities

AUDA-NEPAD integrates the fight against global warming into a global perspective of the continent’s economic development.

The latest United Nations Climate Summit highlighted the differences in approach between polluting countries, major industrial powers and countries suffering the consequences, particularly those in Africa. AUDA-NEPAD, in its DNA, has this environmental dimension.

Since its creation, we have constantly integrated into each of our programs, the sustainability and protection of our biodiversity. Since October 2001, with the launch of the Environment Initiative, mechanisms have been put in place to combat global warming, such as combating land degradation, wetland conservation, the sustainable conservation and use of marine and coastal resources, and the cross-border conservation and management of natural resources.

AUDA-NEPAD is committed to the implementation of Agenda 2063, which sets out a common continental strategic framework to promote inclusive growth and support sustainable development. We will not wait 50 years to act. The first deadline is therefore 2023.

“This illustration of the objectives to be achieved by 2023 shows the African Union’s commitment to building environmentally sustainable and climate-resilient economies and communities, as called for in Goal 7 of Agenda 2063.”

The protection of biodiversity, the conservation and sustainable management of natural resources, water security and renewable energies: for each of these challenges, strong proposals have been adopted, enabling States to draw up a clear and quantified roadmap. In concrete terms, by 2023, the proportion of land used in an eco-sustainable manner must reach at least 30% of the total. Transboundary natural resources will now have to be integrated as natural capital in the negotiations. Water security requires better management of rainwater and irrigation, including the promotion of the use of recycled wastewater for agricultural or industrial purposes. In addition, we will support all actions to reduce the share of fossil fuels in total energy production to minus 20% and to increase the share of renewable energies in total energy production by at least 10%.

This illustration of the objectives to be achieved by 2023 shows the African Union’s commitment to building environmentally sustainable and climate-resilient economies and communities, as called for in Goal 7 of Agenda 2063.

To support these initiatives, all public and private funding mechanisms will be involved. At the national level, between 75% and 90% of the financing of Agenda 2063 will be done through the mobilisation of domestic resources. At the continental level, the African Development Bank has already announced a doubling of its financial commitments for climate action, bringing its contribution to $25 billion between 2020 and 2025.

Spending on climate change adaptation measures is not a sunk cost. According to the latest report of the United Nations World Commission on Adaptation, investing $1.8 billion in these measures could generate $7.1 billion in benefits between 2020 and 2030. The United Nations thus confirms that the antagonism between economic development and the fight against global warming is no longer economically justified.

In this regard, the African Union Development Agency continues its efforts by continuing to innovate in strategic growth-generating sectors while meeting its responsibilities in addressing the global challenges of mitigating the effects of global warming and adapting to these changes.

Q&A: The African Union’s first ever Development Agency

Question: Please take us through the journey that the led to the creation of the African Union Development Agency-NEPAD.

Dr Ibrahim Mayaki: The African Union Assembly of July 2018 approved the establishment of AUDA-NEPAD as the technical executive agency and development anchor of the continent with its distinct legal identity and defined by its own statute, to deliver on the development priorities articulated by the African Union. Its establishment is part of the overall institutional reforms of the African Union. 

At the 31st Ordinary Session of the Assembly of African Union Heads of State and Government in Nouakchott, Mauritania, a decision was officially adopted to transform the NEPAD Planning and Coordination Agency into the African Union Development Agency (AUDA-NEPAD).

The vision of AUDA-NEPAD is to ‘Harness knowledge to deliver the Africa we want.’ The mission of the organisation is to provide a platform for African countries in order to ensure the effective and integrated planning, coordination and implementation of programmes and projects aimed economic integration and development, and embracing of AUDA-NEPAD’s principles and values.

Read the full article here.

Positive discrimination in favour of major African companies is needed

What concrete changes will result from the transformation of the New Partnership for Africa’s Development into an AUDA?

The agency has autonomy of execution and freedom to mobilise resources, for example, with advisory services to states and regional organisations. Thus, the African Union Commission is delegated certain tasks of implementing development policy and will be able to focus on political orientation, governance, peace, security [and so on].

Read the full interview on Africa report website.

Diaspora remittances are a key source of financing for Africa’s development

Whether formal or informal, remittances from the diaspora have long been undervalued. However, they characterize a large part of Africa’s financial life. These financial flows between individuals contribute significantly to the economic growth of African countries: between 10% and 20% of the GDP of some countries, from Senegal to Lesotho, thanks to remittances that are sent through formal channels. According to the World Bank, money transfers to Sub-Saharan Africa represent $46 billion for the continent as a whole in 2018. These transfers have become more important than official development assistance.

Donors have been slow to realize the importance of remittances. The first report was published only in 2010 by the World Bank and the AfDB. It estimated that some 30 million African nationals from the diaspora, including North Africa, made “formal” transfers through traditional banking networks. 

Another category of less documented flow, that is crucial in daily life, is the funds that flow between African countries, such as Nigerian operators who source agricultural inputs in Côte d’Ivoire, Somali expatriates who support their families from South Africa or Malian manufacturers who source cement in Senegal, for example. These exchanges do not necessarily involve direct transfers. They are based above all on a form of “relational” economy specific to our continent and is based on trust. (see below the main amounts of remittances in Africa).

We can also note that a significant proportion of money transfers are made through informal means. In reality, this money circulates through ingenious channels, aimed at circumventing exchange control regulations or fees charged on international transfers. A simple call between New York and Dakar is all it takes, through banks managed by the “Modou-Modou”, small traders belonging to the Muslim community of the Mourides. These dematerialized money transfers are based on trusted networks and intermediaries charging small commissions: for example, an informal operator in Morocco will take the money of a Senegalese in Morocco who would like to transfer it home, but keep the cash for a different transaction made by another Senegalese customer in Morocco. 

Commissions are half the amount of the 10% or so charged by some remittance companies that are deeply involved in Africa and are located in every cities from which migrants leave, such as Louga in Senegal or Kayes in Mali. The market is huge, since 80% of African migration takes place within the continent, according to the African Union.

These agencies share a rapidly expanding sector, with 61% of the market share of a $4 billion per year market according to the World Bank. This is a trend coveted by banks (32% market share), post offices (5%) and, increasingly, by mobile phone operators. Some operators, particularly in Kenya, have changed the situation, such as the M-Pesa electronic wallet. This approach has been adopted across the continent.

Two countries are leading by example. Ethiopia launched in 2002, a website, the Ethiopian Diaspora Directorate, which identifies investment opportunities in the country for the diaspora members. They are very involved in their home countries, the Ethiopian diaspora the Ethiopian diaspora has invested more than $56 million in the project to build one of Africa’s largest hydroelectric dams, the Great Renaissance. Rwanda launched the Agaciro sovereign solidarity fund in 2012, which has raised €51.5 million in four years.

In fact, African financial success stories are countless. The Dahabshiil remittance network, founded in 1970 in Dubai by Somali businessman Abdirashid Duale, has grown to the size of a multinational… It has more than 2,000 employees in 144 countries. They have the advantage of receiving declared salaries, with pay slips. A good way out of the informal sector, while taking advantage of the huge contribution of migrants, whether on the continent or elsewhere.

 

 

 

 

 

 

 

 

 

Source : The Global Knowledge Partnership on Migration and Development, 2019

Putting Africa’s Secondary Cities First

With Africa urbanizing faster than any other world region, governments there urgently need to craft national development strategies for harnessing the economic benefits that cities can provide. The key will be to focus not just on rapidly expanding megacities, but also on the intermediary cities needed to achieve inclusive growth.

In the latest Mercer Quality of Living City Rankings, the highest-ranked African city, Port Louis, Mauritius, comes in at 83rd out of 231. That appears to be in keeping with a broader pattern: in terms of the quality of life in its cities, Africa lags behind most other world regions.

African cities’ poor showing is a worrying indictment of urban planning on the continent, particularly given that urbanization there is barreling ahead, regardless of whether its leaders have plans in place to manage the process. According to the OECD, because “Africa is projected to have the fastest urban growth rate in the world,” its “cities will be home to an additional 950 million people” by 2050. Given these trends, African policymakers urgently need to make the region’s cities more attractive to international investors, business people, and tourists, while also ensuring that urbanization remains inclusive.

But there is another key trend that has been neglected: the growing importance of Africa’s secondary cities. Urbanization in Africa is not just about emerging megacities like Johannesburg, Kinshasa, Nairobi, Khartoum, Casablanca, and Greater Cairo, which alone will be home to an estimated 38 million people by 2050. Population is also booming in Africa’s “intermediary cities,” which link remote and rural areas to larger urban centers.

Read full article here

A few advice to the Tutu Fellows…

On 29 April, I travelled to Stellenbosch, in the Western Cape Province of South Africa to hold a discussion with the 2019 Desmond Tutu Fellows. My book, Africa’s Critical Choices, triggered an engaging discussion and I exhorted the Tutu Fellows to diligently try and link technical solutions to political ones in whatever they do. I gave some of the following examples to illustrate this point: If Fellows, for instance, are working in agriculture, their objective could be to strengthen a farmers’ association, or if they are working in the health domain then it could be linked to nutrition in a community.

I also urged the Fellows to create networks beyond their current domains, as this will allow them to create synergies and have greater impact in society. I also encouraged the young leaders by stating that the incremental changes being effected in the short and medium term will contribute to the long term objectives, thus instilling transformation.

I concluded by saying that the value of any democracy lies in its inherent values of dignity, freedom, and equality which are essential for a democratic system in order to avoid the development of conflict.

Q&A: The African Union Development Agency takes shape

As part of ongoing institutional reforms at the African Union, the implementing arm of its development strategy — formerly known as the New Partnership for Africa’s Development Planning and Coordinating Agency, or NEPAD — is transforming into the African Union Development Agency, or AUDA.

AUDA will continue NEPAD’s overall mandate of transforming Africa through enhanced knowledge sharing, partnerships, and resource mobilization, along with promoting high-impact projects that align with the AU’s overall continental development frameworks, but will also expand on this agenda, AUDA-NEPAD CEO Ibrahim Mayaki told Devex.

“Our main focus now as a development agency will be to move to the formulation of development tools that can strengthen the capacity of all African stakeholders to better execute priority development projects,” Mayaki said.

Drafted at the 2018 AU summit as part of larger institutional and financial reforms championed by then-Commissioner Paul Kagame, AUDA officially adopted its mandate and launched at the 2019 AU summit earlier this month. Mayaki said the transformation will allow the Johannesburg-based body to improve its effectiveness and efficiency in delivering AU development policies and programs across its 55 member countries.

Devex spoke with Mayaki to learn more about the ongoing changes.

Read full article here