India and Africa: a crucial relationship

Last July, Prime Minister Narendra Modi made an official visit to our continent, meeting with Heads of States in Kenya, Tanzania, Mozambique and South Africa. Notably, his arrival in Mozambique marked the first time an Indian Prime Minister visited the East African Nation in 34 years.

The visit was meant to deepen and strengthen India-Africa partnerships and agreements, in line with the 2015 Third Africa-India Summit, which emphasized the necessity of increased diplomatic relations. This is a very good thing! Let me explain why.

First, India is Africa’s fourth largest trading partner, with trade flows of $70 billion in 2015.  Besides, India and Africa represent one-third of the world’s population and a large majority of them are in their youth. Thus, their partnership can be a source of great strength for each other, both to reinforce and accelerate their respective economic development.

I think that the future of India and Africa can shape the course of this world. Therefore, we need to learn from each other’s experience. For instance, African countries can benefit from India’s approach to guarantee access to higher education to those from poorer homes. India has a great role to play in Africa regarding the development of human resources through education, vocational training and skills development. This, among others, can help Africa upskill its people for its impending demographic challenges.

On the other side, India needs to join forces with our fast-growing African market. Let us not forget that Africa’s development is a huge opportunity for India: Indian companies are more and more numerous in Africa (as an example, Indian firms have invested heavily in natural gas projects in Mozambique and are exploring the potential for others in Tanzania). Also, we should benefit from the considerable progress in agriculture that India made over the last few decades. Indeed, Indian success has taken place in the context of low capital intensity farming and varied biodiversity conditions, which can be of great relevance to our continent. Together, we can address more efficiently emerging challenges: climate resilient agriculture and adaptation to climate change to name a few.

Today, to lead our continent towards a long-term development, I think we need to multiply partnerships with countries and regions of the world that can help us to have a new approach in various fields, and bring investments with them. China is not the only one to be considered. All countries are welcome players and a competitive engagement could be beneficial. Let us open ourselves to the world so as to attract investors and develop win-win partnerships! This is the way we will strengthen our role on the world stage.

 

No Marshall Plan for Africa, Please!

development-is-vital-for-africa-5“Cologne Memorandum” for a Different Development Policy

This is a guest post from a collective of scholars and practitioners of development aid as well as diplomats who have served in Africa. They met at a conference of the Bonn Appeal in Cologne, Germany, to discuss the state of development aid for Africa and the conclusions to draw from it. They agreed on a Cologne Memorandum that includes a list of demands plus explanations.

Among the authors are:

Dr. Hans F. Illy
Dr. Peter Molt
Dr. Franz Nuscheler
Dr. Rainer Tetzlaff
Professors of Political Science and African Studies

Dr. Karl Addicks, fmr MP Bundestag, Liberals, spokesman Development Cooperation. Klaus Thüsing, fmr MP, Bundestag SPD, 15 yrs. Country Dir., German Dev. Serv., in Africa
Volker Seitz, 17 yrs., Diplomat in African countries
Kurt Gerhardt, Bonn Appeal, fmr Country Dir., German Development Service (“DED”) in Niger

It is a more than 50-year-old mistake to believe we could make development policy for Africa. An error with fatal consequences. The rich and the powerful became richer. Poverty grew as a result of population growth. Most African countries became not more independent, but more dependent. A spiral like a drug ring: the more material is offered, the more lethargic and addicted the addicts become. But in this case, the offer does not come from greedy cartels, but from well-meaning governments. And it is not distributed by shady dealers, but by often very dedicated helpers on the ground. In short, a tragedy.

The truth is this: development in Africa can and must only be done by Africans. The African countries need to know what they want, and plan what they can. If they need support from other countries, they must say this and justify it. And if the reasons are good, they will get help. We will no longer regard them as natural “recipient countries” and us no longer as “donor countries.”

It therefore follows that:

  1. A massive increase in the level of government aid will not bring about a significant improvement in living conditions in African countries. Rather, large parts of the additional resources are expected to flow into the wrong channels and the exodus continues.
  2. Overall, development aid has not yet set in motion any fundamental and sustainable economic development in sub-Saharan Africa.
  3. On the contrary, state development aid has strengthened the dependency of the recipient countries and hampered the emergence of economic dynamism.
  4. Despite privileged trading conditions, there are scarcely any produced goods from sub-Saharan Africa on the world market.
  5. The current state development policy has assumed responsibilities that prevent development in Africa.
  6. Development aid has become a machinery that increasingly serves its self-preservation. Africa needs:

– Local and foreign entrepreneurs who build production plants in Africa. They are to be comprehensively supported, because the economic development of Africa is not possible without industrialization.

– Provide practical vocational training as a basis for sustainable economic development.

– Development aid that is provided to reliable organizations on site to promote African self initiative.

“Cologne Memorandum” — Explanations

Plea for a detoxified development aid policy

  1. If development aid had reached its goals, we would be discussing today how to phase it out. But the opposite is the case: it is to be increased. Even a Marshall Plan for Africa is called for.
  2. In spite of all the legitimate disappointments concerning the lack of successive development successes, it should not be forgotten that progress has been made in some areas (health, education, democratic co-determination, advancement of women, computer science and communication). NGOs, political foundations and church development services, among others, played a decisive role in this.
  3. Nevertheless, people’s poverty has remained at a high level for some years (about 50% of the population). States implode; ethnic and cultural conflicts increase in intensity in many places. All approaches to curbing state corruption—Africa’s main problem—have largely proved to be ineffective. State sovereignty is misunderstood and misused as a license to deceive and oppress.
  4. The industrialized countries of the North have a part in this misery: development aid has turned out to be a drug from which the spoiled consumers cannot get enough. Since the intended use of the financial transfer cannot be controlled (e.g. by parliament and judiciary in the recipient countries), it strengthens the illegal, partly criminal activities of democratically poorly legitimated governments that are more interested in privileges for themselves than in effective development policy for the benefit of their population. This complicity between parasitic governments and Western donor organizations is not ethically justifiable: taxpayers’ money is being burned! Development can only come from within.
  5. Therefore, we call for a detoxification of current development cooperation practices and a return to the real concern of development aid: to encourage people in poverty-stricken countries to activate their development potentials for a “good life,” that is, helping to overcome obstacles on the way to a self-determined life through their own work income.
  6. Efforts to understand and reconcile socio-cultural differences would have to be carried out with much greater seriousness.
  7. All practices in trade and economic relations with African countries that are a fatal “job killer,” especially the market-distorting practices of EU agricultural and fisheries policy (production subsidies), should be omitted. One should start with those production systems that are particularly harmful to Africa.
  8. Disincentives in the education system (brain drain) must be stopped. Instead, an increased focus on vocational education and training is recommended, taking into account the local conditions of adapted technologies. In particular, the teaching of MINT subjects, e-learning and “on-site” scholarships should be promoted, as well as the provision of universities through sustainable institution building.
  9. Cooperation with the very active African diaspora is to be encouraged. For example, incentives and assistance would make it possible for the professional staff practicing in Europe to return to their home countries.
  10. The addressees of development aid should not only be the governments of developing countries but also institutions that broaden the social spectrum of aid recipients: selected non-governmental organizations and entrepreneurial elements of the middle class Small and medium sized enterprises so far stifled by a parasitic patronage state. For governments that do not comply with the agreed standards of developmental cooperation (EZ criteria catalog) to the detriment of their populations, developmental transfers should be canceled, and with crass cases of corruption, for the duration of the presidential term. Unchecked “budgets” should be stopped more consistently. We oppose the current tendency to resume development assistance for the sake of foreign-policy reasons for countries that disqualify themselves due to human rights violations.
  11. More resources should, however, be made available for priority areas with a sustainable impact on the development potential of the labor force. There is an urgent need to promote family planning programs in order to limit the strong population growth that is destroying socioeconomic progress.
  12. Support for microcredits to women’s groups according to the criteria of the Grameen-Bank is to be increased.
  13. Stronger support for the German medium-sized companies with greater use of risk capital is required.
  14. For all aid measures, goal-oriented coordination among the donor countries must be demanded for improved consistency.

Towards a development model for Africa based on human capital.

In my previous posts, I have made reference to the facilitation that Nepad is doing to attract investment into African projects. But Africa needs much more than money and infrastructure. In order to transform its economies in a world fuelled by information and driven by knowledge, Africa needs to build on its knowledge capital.

The objective of this post is to articulate the need for growing a knowledge-based economy in Africa, whereby research, knowledge and innovation become central in paving the way to our development. A knowledge-based economy refers to an economy in which the production, exchange, distribution and use of knowledge is the main driver of economic growth, employment generation and wealth creation. Investing in education and knowledge generation and distribution in Africa means investing in human capital.

Universities and higher education have always been part of Africa’s history. The University of Al Qarawiyyin in Fez, Morocco, opened in 859 AD, is considered the oldest university in the world. Al-Azhar University in Egypt, part of the larger complex of institutions associated with Al-Azhar mosque, currently enrolls 2 million students. This legacy is not, however, responding adequately to the challenges of modern Africa in either quantitative or qualitative terms. Unless deliberate and bold initiatives are implemented to reinvigorate higher education, science, technology and innovation on the continent, Africa risks losing out in the new economy.

Here are some worrying statistics based on current offerings. While a child in an OECD country runs an 80% chance of going to university, in Africa, it is only 6%. Limited support to research and development, outdated curricula and limited direct links between science and industry mean that we lack a competitive edge on a global level. Our universities need to produce knowledge, cutting edge research that allows us to solve everyday local problems and improve our lives across the continent.

This stride is in line with the significant shift in Africa’s development paradigm. Our attention is increasingly on Africa’s participation in its own development planning, on Africa’s ownership of its own development initiatives and the capacity building of our professionals. We need to build our own knowledge triangle between education, research and industry. In turn, this will create a solid connect between knowledge generation, its utilization, its transformation (including its products) into economic growth via the production of knowledge-intensive goods and services. This triangle needs, of course, to be supported by frameworks of good governance and appropriate government policies.

In 2017 we will need governments to champion and engage in human capital development, by prioritizing education and making funds available for formal schooling. There is also a key role for private firms and national innovation systems to play in encouraging investments in research and training. The role of intellectual capital cannot be underestimated in the rise of Africa in the 21st Century.

Manifesto for 2017

Dear friends, I was keen to send you, today itself, my very best wishes for 2017. May this year be rich, full of promise and may all your projects be met with success.

This is a pivotal year for our continent, indeed, it will be marked by a change of leadership at the head of the African Union. Heads of African States and Governments will have the task of choosing a new President for the African Union commission during the 28th Summit at Addis Ababa in January. This summit follows on from Kigali where we count a number of success stories, especially the launch of the African passport, decisions taken on the financing of the African Union as well as the free-exchange continental zone. President Kagame has been designated on this occasion to lead reform at the African Union, reform that is indispensable if the African Union is to respond fully to the aspirations of Africans and execute Agenda 2063 in an efficient and poignant manner.

On this basis, I am very pleased that the exchanges among the different contenders have been democratic and transparent. This first televised debate has, in my opinion, reinforced even more the legitimacy of the African Union in the eyes of our citizens by allowing them to hear the perspectives of the different candidates and to form their own opinion. This flows in the spirit of good governance and it is one we can only be very pleased about.

Furthermore, I wish to offer my thanks and congratulations to Mrs Nkosazana Dlamini-Zuma for her leadership and her determination which have enabled a number of matters to evolve very positively. I am thinking, in particular, of the widening of the African Union with the reintegration of a great African country in the midst of Pan-African bodies. This is an event of great importance because, on one hand, Africa needs the input of countries like Morocco to support democratic transitions, promote Human Rights and, in particular, women’s rights on the continent. On the other hand, the input of the sharifian Kingdom will be indispensable to the realisation of the goals fixed in the context of the 2063 Agenda. Let us rejoice, therefore, in this restored unity and let us be confident that this reunion will bear numerous successes.

We must indeed maintain and keep improving on what we have started: I am thinking, in particular, of the Programme for Infrastructure Development in Africa (PIDA) which targets 16 cross-border projects. Today 3 of these projects are at an extremely advanced stage, the two hydroelectric projects in East and West Africa (Ruzizi III and the Sambagalou dam respectively) and also the Gas Pipeline project between Nigeria and Algeria. This is a very positive development and represents an important milestone in reaching NEPAD’s goals. This is, in fact, NEPAD’s very raison d’être: to orientate and render projects viable and define the rules which bring visibility to the investors. NEPAD is the ‘one-stop-shop’ of development.

I would like to remind us all that NEPAD is the first manifestation of the collective will of African countries to take their destiny into their own hands and to bring on development on the continent. Here is an initiative with incredible potential, the more reason to continue to drive and nurture this organisation and to ensure that we no longer allow ideas from without to be imposed upon us.

This is what I wish, therefore, for our continent for 2017 : increasingly ambitious goals for our common future, a future whose script belongs to us and one we will write by our values of unity and probity.

Fighting inequalities in Africa : the role of the State is crucial !

Today, we need to struggle against the biggest disease on our continent: inequality. Indeed, of the 10 most unequal countries in the world, 7 are in Africa. We cannot ignore that anymore: inequality leads to lower and less sustainable growth and thus less poverty reduction (Berg, Ostry and Zettelmeyer 2012). We definitely need to act on these barriers that prevent all people to benefit from the economic growth. As I heard in Côte d’Ivoire: “La croissance ne se mange pas!” (We can’t eat growth!). Let us change that shocking sentence!

The 2015 World Bank Report “Poverty in rising Africa” emphasized the fact that the share of the African population in extreme poverty did decline from 57% in 1990 to 43% in 2012. Nevertheless, the fact that Africa’s population continued to expand rapidly resulted in an increase by more than 100 million of people living in extreme poverty. That demographic expansion is indeed a cause, but we should not forget that inequality in Africa is the product of many forces.

First there are spatial inequalities (differences between urban and rural areas and across regions). They are reinforced by public infrastructures such as schools or hospitals which do not cover efficiently the territories: it can result in huge gaps within a country. Besides, the place where you were born directly affects your future. This is all the more true for people who were born in a rural area, to uneducated parents…and this is unacceptable.

Second, we need to act on concrete things such as corruption and illicit financial flows. Research by the Global Financial Integrity (GFI) revealed that these two scourges have cost African countries as much as $854bn between 1970 and 2008. It is twice the amount that Africa received as official development aid over the same period. Corruption costs to Africa in an economic but also in a social way: how can Africans trust their institutions if each day they can experiment corruption? This is absolutely horrific: such a plague kills Africa day after day !

Today, more than ever, we need to bring back the State inside the debate. I believe the main solution for overcoming inequalities relies on State institutions that operate in the general interest. It is the State which is (or has to be) effective in addressing risk, vulnerability, social exclusion, health and education. This is why we should not reduce public effort and strengthen good governance. It will definitely improve the accountability and capacity of the institutions. Thanks to the State we will be able to “redistribute development”, ensuring that all sectors of the population are socially and politically integrated, that roads and other infrastructure are extended to geographically remote areas and that economic policies emphasize activities that stimulate the creation of jobs. Let’s encourage the African states to take on their responsibilities !

Urbanization should not be a byword for chaos

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Back in 1972, Fela Kuti struck the exact right note when he described the already awful crawl of Lagos’s perpetual traffic jams in his epic “Go Slow” track. The song meaning has never been truer than today and could be even sung in every corner of Africa. Our continent is the world’s fastest urbanizing continent and it is not always a force for good. Nairobi is expanding at rates of more than 4% per year. Lagos, on its own, is the seventh largest economy in Africa. Urbanization is an essential element of a prosperous continent. The gathering of economic and human resources in one place is stimulating innovation, development, technology and industry in an unprecedented way in Africa. Our cities are opening up access to education, health, social services not readily available in rural areas.

We must, however, admit that our growing cities are not always the accessible, connected spaces of equally shared opportunities and benefits that we would have liked. To start with, our cities are unable to accommodate the influx of migrants subject to the pull of the city and the push of rural areas. Lagos alone is injected with 1200 people a day. This migration results in slum and squatter settlements, causing extra stress on the resources of the city. The increase in urban demand for food combined with the loss of agricultural land also puts pressure on a dwindling rural population to produce food. To top it all, those left behind in the rural areas are often the elderly, women and children.

Urbanization has not led to wide poverty reduction and is not the result of industrialization. That means that there is little investment in the infrastructure and governance that would make African cities liveable and productive. The lack of building safety, homeless children, refuse disposal, power deficits, rare formal jobs are just a few of a long list of problems we have yet to solve. Let alone connectivity. In Nairobi, a 5 hour commute is not unheard of. So far only South Africa and Addis Ababa have a light-rail system in place. Dirty second hand cars from Europe and Japan exacerbate the situation, causing air pollution.

 
Source: The Economist

Every historical leapfrog requires that we break through established patterns and invest in innovative approaches. Clearly, there are a number of infrastructural and policy frameworks we must work on. Alternative energy, solar panels, tidal turbines, water harvesting are vital. We will need innovative, safe, affordable housing made from low-cost but durable building materials. We will need financial institutions to help urban dwellers make their way up the property ladder and policies in place to secure property ownership of the citizens. Above all, we will need to provide training to our urban decision makers.

Empowering our people with information is another key to building the cities that we dream of. A five-hour commute to work in Nairobi is neither acceptable nor sustainable. Urbanization management needs to produce open data which will play a crucial role in creating effective solutions to ease commuter pain. The access to centralized transport data will allows users to plan the speediest and most cost-efficient journey to work. Solving the transport issue, in turn, enables many other services and products to succeed.

We have set off on an exciting promising journey and building resilience in African cities will require a holistic approach. It will involve the efforts of Governments, the private sector, NGOs which support the most vulnerable groups. Location management and the management of the interdependent dynamics between town and country are essential. To build resilient African cities, we will need to stay alert, receptive to the needs of our people, and evolve in a spirit of constant renewal and innovation. For this last bit we can at least relax and be inspired by the great Fela.

 

The Future of Africa: Our Youth

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By 2050, Africa will have reached a population of 2.5 billion inhabitants, representing a quarter of the world population. And more significantly, with an average age of 24 years, Africa will be the youngest continent representing the biggest workforce pool in the world. This will represent a huge demographic advantage as much as a challenge that we need to heed to and plan for from now. Within 15 years, 440 million young Africans will seek to enter the job market and under current provisions, only 10% of the young population will be able to find work in the formal economy before the age of 30.

Low levels of education and training, the increasing gap between the rich and the poor, threats to peace and stability are valid preoccupations to our youth but the economic opportunities remain their biggest aspiration and challenge. We are already aware of the trend in parts of Africa whereby those youth who are left behind in rural areas with little prospect of adequate employment are lured by the false promises of clandestine emigration to Europe and terrorism. We cannot afford to lose more of our youth and we must also acknowledge in their acts of desperation a failure of national systems. It is the responsibility of governments to rise to the challenge.

Where do we start? The agricultural sector remains the main employer in Africa (60-70%) but the two main hurdles are the lack of infrastructure and modernization. Investment and renewed effort in a spirit of regional integration will be transformational. This is already starting to happen in the field of Education and Entrepreneurship.

The African Leadership Academy (ALA), tailor-made for the future Africa, on a model that taps into the best that the world can offer while catering to African specificities, needs and ambitions, heralds hope. The ALA aims to create 3 million African leaders through a pan-African suite of 20 universities over a period of 50 years. The first university was open in Mauritius in 2015 and a second is on its way in Rwanda. The emphasis is on developing the entrepreneurship spirit and skills of the students. Social entrepreneurship is not to be neglected, especially with the rising consciousness of the collective impact of entrepreneurship.

As Africa rises to its destiny, we are seeing in our youth a drive to build at home in their immediate and wider communities. There is a spirit of political commitment and innovation in their determination to push through actions which impact positively onto people’s immediate lives. We should provide our young entrepreneurs with a supportive ecosystem that allows their work to be sustainable by connecting them with Impact Investors from within and without Africa, by providing capacity-building, advocacy, and providing them with access to new technologies.

We cannot miss this boat as a continent. Political leadership at country level and the political will to create the right conditions for our young Africans will be all determining.  Planning political succession in a spirit of renewal and evolution, grooming our youth for decision-making roles and demonstrating that there is a place for them in the political arena are further positive signs we will be sending to anchor their energy and creativity here on the continent.

Entrepreneurship in Africa is not a magic recipe !

Today, Africa is showing more than ever that it is a continent of growth and opportunity. However, this should not hide the many challenges the continent is coping with: job creation is one of them, and not the least. This is why entrepreneurship is central to Africa’s future prosperity: the entrepreneur is supposed to identify business opportunities and to bring together the factors of production (such as labour and capital) to create the goods or services and to run the company profitably.

This is why entrepreneurs are really crucial in the process of socio-economic development. Long term investments that create a lasting benefit for communities are critical as they bring vitality, new opportunities, business-oriented problem solving, all of which can help Africa deal with some of its development problems. I truly believe that huge opportunities in the coming decade will come from Africans who start businesses, generate jobs and wealth, and capture growth opportunities.

That state of fact should not hide the reality of entrepreneurship in Africa: this is nothing new. Across the continent, necessity is the mother of invention: it has been the case for a long time as traditional circuits always had difficulties to absorb the unemployed. Reusing and recombining is a way of life and, in many cases, the lack of infrastructure gives these inventive young people a “clean slate” for new solutions, that they have to find by themselves. This is why Africa’s entrepreneurs are creating almost every day cutting-edge products and services, enabling them to leap forward in such fields as mobile and information technology, and to develop innovations in agriculture, transportation, healthcare and other vital fields. We must definitely encourage that creativity which is a fantastic thing for our continent, as it is indeed extremely promising.

However, I should insist on the part governments and public institutions need to play : today, entrepreneurs continue to face significant challenges that impede their efforts, including a lack of access to funding, support services, skills training and infrastructure, as well as administrative barriers. This is the first thing and governments and institutions have to engage themselves to find solutions. But what is also important is the fact that no one should consider entrepreneurship as a magic recipe for Africa’s development. It is a part of it but it will absolutely not replace public investment in education, research and infrastructure. It would be a lie and a mistake to assert that. If we obviously need to help entrepreneurs to make their business grow (as they are creating growth, wealth, and jobs), we should not underestimate the important role of public sector. However, so as to make that role efficient and proactive, the notion of good governance must be applied everywhere, at every level. I firlmy believe that it is the only way we can make it.

Thus, Africa’s development must be based on a combination of all interest, either being private or public. Neither of these two sectors can succeed properly without the other, and it is a condition to Africa’s sustainable growth.

Trading up : African Integration

The first Africa Trade Week opened two days ago in Addis Ababa, urging us to come up with solutions to unanswered questions about the Continental Free Trade Area (CFTA). That initiative aims to bring together 54 African countries with a combined population of more than one billion people and a combined gross domestic product of more than U.S. $3.4 trillion. The objective is to create a single continental market for goods and services, free movement of business persons and investments and expand intra-African trade, among other things. The CFTA is also expected to enhance competitiveness at the industry and enterprise levels on the continent.

It is ambitious but necessary : today, “only 14% of African countries’ exports go to other African countries; in the European Union, by contrast, the figure is 62%”. Thus we can see that trade integration is an important component if we want to develop and integrate Africa. It is an issue that I am quite passionate about as I am certain that it might change the face of our continent.

I encourage you reading that excellent article from the Economist here that synthesizes issues tackled by the Trade Week. And last but not least, I wish you a great day.