Africa’s Investment Drive Gathers Pace

Africa Investment Forum 2018

By Farhana Haque Rahman
ROME, Oct 18 2019 – Headwinds are blowing amid IMF warnings of a “synchronised slowdown” in global economic growth, yet Africa’s investment drive is still gathering pace, supported by intense international competition in development finance.

Despite the global slowdown, 19 sub-Saharan countries are among nearly 40 emerging markets and developing economies forecast by the IMF to maintain GDP growth rates above 5 percent this year. Particularly encouraging for Africa is that its present growth leaders are richer in innovation than natural resources.

While Akinwumi Adesina, president of the African Development Bank, admits to sleepless nights over the “headwinds” to African growth – primarily the US-China trade war – he remains excited over the continent’s prospects as the AfDB gears up for its annual Africa Investment Forum.

The November 11-13 gathering in Johannesburg follows major milestones achieved in 2019, notably the coming into force of the African Continental Free Trade Agreement, described by Adesina as a “phenomenal development”.

In May, 54 of Africa’s 55 countries became signatories to the initiative which aims to eliminate 90 percent of tariffs on goods and significantly reduce non-tariff barriers. The free trade area means to integrate Africa into a unified market with a population of over one billion and output of $1.3 trillion.

The AfDB does not gloss over the enormous challenges ahead, however, noting that 120 million Africans remain out of work, 42 percent of the population live below the $1.25 poverty line and about one in four in sub-Saharan Africa are undernourished. Africa is also most vulnerable to the global climate crisis, although it is the world’s least contributor to carbon emissions.

Akinwumi Adesina

Under Adesina, appointed in 2015 and backed by his native Nigeria for a second term, the AfDB has responded to such challenges by scaling up investment in five priority areas dubbed the High 5s: electricity and energy; food; industrialisation; integration, and improving the quality of life.

At the UN climate crisis summit in September, Adesina announced the AfDB would double its climate financing to emerging economies to $25 billion from 2020-2025. Half would be aimed at helping governments adapt to the impacts of climate change, such as droughts and rising sea levels.

“Poor countries didn’t cause climate change, they shouldn’t be holding the short end of the stick,” the AfDB president said.

The bank will invest $20 million to help fund the Sahel’s new Desert to Power solar scheme, with Adesina seeing renewable energy as a driver of economic development and replacing all of Africa’s coal-fired power stations.

During his term the bank has increased the renewable power share of its energy portfolio to 95 percent from about 60 percent. Off-grid solar-powered energy is seen as key to connecting the 50 per cent of African households without access to electricity.

Last year’s inaugural Africa Investment Forum generated $38.7 billion in “investment interest” in infrastructure projects, and the multilateral lender is setting a target of $60 billion this year to close what it sees as Africa’s “infrastructure gap” amounting to $108 billion. As an investment marketplace which attracts heads of state, the AfDB says it will work at the Forum in conjunction with all commercial banks across Africa, as well as development finance institutions, global sovereign wealth funds and pension funds.

China’s presence at the Forum is sure to come under close scrutiny given Beijing’s focus on Africa, with President Xi Jinping’s flagship Belt and Road Initiative pledging $60 billion in financing for projects across the continent. China’s trade with Africa has soared over the past 20 years from about $10 billion to close to $200 billion. In a reflection of shifting balances of power, an analysis by Quartz found that nearly twice as many African leaders attended the Forum on China-Africa Cooperation in Beijing in September than the UN General Assembly in New York two weeks later.

Not to be outdone, Russia has invited over 50 African leaders to its first Russia-Africa summit in Sochi in late October, the culmination of a strategic push that marks Moscow’s re-entry into the continent, with its focus on military deals and oil and gas contracts. With trade and investment replacing aid, US and European multilateral lenders are also directing more funds towards Africa.

The Africa Investment Forum may also enjoy the glow of more favourable headlines for the continent in recent weeks: Mozambique held relatively peaceful presidential elections in mid-October, which followed the signing in August of a peace deal between the ruling Frelimo party and former civil war rivals Renamo; and Ethiopian Prime Minister Abiy Ahmed was awarded the Nobel peace prize for his role in resolving the border conflict with Eritrea, as well as promoting peace and reconciliation in Ethiopia and the wider East African region.

Farhana Haque Rahman

Mozambique sees itself on the brink of substantial investments following its discovery of huge gas reserves while, as commentators noted, Abiy’s first official state visit outside Africa after coming to office last year was not to the traditional western capitals or even Beijing, but to Riyadh and Abu Dhabi, major investors in his ambitions to transform Addis Ababa.

With foreign investors and multilateral institutions gathering at the door, the AfDB’s president is addressing fears that Africa is piling up debt and mortgaging its future.

“What’s important is that African countries get into deals that are transparent with terms of engagement that are clear,” he told Bloomberg in September.

“If there were cases where some folks got away with deals in the past because others aren’t around the table to help negotiate well — that’s changing. I don’t think any African nation should trade away its future for immediate gains. We want fair and transparent transactions.”

Farhana Haque Rahman is Senior Vice President of IPS Inter Press Service; a communications expert, she is a former senior official of the United Nations Food and Agriculture Organization and the International Fund for Agricultural Development.

Displaced by the Desert: An expanding Sahara leaves Broken Families and Violence in its Wake

An aerial view of settlements in the middle of the desert in the surrounding area of Timbuktu, North of Mali. Courtesy: UN Photo/Marco Domino

By Issa Sikiti da Silva
BAMAKO, Mali/COTONOU, Benin , Oct 18 2019 – Abdoulaye Maiga proudly displays an album showing photos of him and his family during happier times when they all lived together in their home in northern Mali. Today, these memories seem distant and painful.

“We lived happily as a big family before the war and ate and drank as much as we could by growing crops and raising livestock,” he tells IPS.

“Then the war broke out and our lives changed forever, pushing us southwards, finally settling in the region of Mopti. Then we went back home in 2013 when the situation stabilised,” Abdoulaye explains.

In 2012, various groups of Tuareg rebels grouped together to form and administer a new northern state called Azawad. The civil strife that resulted drove many from their homes, with communities often fleeing with their livestock, only to compete for scarce natural resources in vulnerable host communities, according to the United Nations.

  • In Mali, three-quarters of the population rely on agriculture for their food and income, and most are subsistence farmers, growing rainfed crops on small plots of land, according to the Food and Agriculture Organisation (FAO) of the U.N.

After the security situation began to improve in 2013, many returned home to rebuild their lives and livelihoods.

But soon it was the turn of the expanding Sahara Desert, drought and land degradation that became the next driver of their displacement.

“As time went by, the land became useless and we found ourselves having no more land to work on. Nothing would come out that could feed us, and our livestock kept dying due the lack of water and grass to eat, ” Abdoulaye recalls.

“Drought across the Sahel region, followed by conflict in northern Mali, caused a major slump in the country’s agricultural production, reducing household assets and leaving many of Mali’s poor even more vulnerable,” FAO says.

“We used to move up and down with our livestock, looking for water and grass, but most of the times we found none. Life was unliveable. The Sahara is coming down, very fast,” Abdoulaye says emotionally.

In the end, the Maiga family had to leave their home and broke up; Abdoulaye and his brother Ousmane heading to Benin’s commercial capital Cotonou in 2015, after a brief stint in Burkina Faso, as the rest of their family headed for Mali’s capital, Bamako.

Malian girls stand in the shade in Kidal, North of Mali. Photo MINUSMA/Marco Dormino

Threatened with creeping desertification …

The U.N. says nearly 98 percent of Mali is threatened with creeping desertification, as a result of nature and human activity. Besides, the Sahara Desert keeps expanding southward at a rate of 48 km a year, further degrading the land and eradicating the already scarce livelihoods of populations, Reuters reported.

The Sahara, an area of 3.5 million square miles, is the largest ‘hot’ desert in the world and home to some 70 species of mammals, 90 species of resident birds and 100 species of reptiles, according to DesertUSA. And it is expanding, its size is registered at 10 percent larger than a century ago, LiveScience reported.

The Sahel, the area between The Sahara in the north and the Sudanian Savanna in the south, is the region where temperatures are rising faster than anywhere else on Earth

The cost of land degradation is currently estimated at about $490bn per year, much higher than the cost of action to prevent it, according to UNCCD recent studies on the economics of land desertification, land degradation and drought.

Roughly 40 percent of the world’s degraded land is found in areas with the highest incidence of poverty and directly impacts the health and livelihoods of an estimated 1.5 billion people, according to the U.N.

In a country where six million tonnes of wood is used per year, reports say Malians are mercilessly smashing their already-fragile landscape, bringing down 4,000 square kilometres of tree cover each year in search for timber and fuel.

Lack of rain has also been making matters worse, especially for the cotton industry, of which the country remains the continent ’s largest producer, with 750,000 tonnes produced in the 2018 to 2019 agriculture season. Environmentalists believe Mali’s average rainfall has dropped by 30 percent since 1998 with droughts becoming longer and more frequent.

… and conflict for resources

Paul Melly, Chatham House Africa consultant, tells IPS that desertification reduces the scope for agriculture and pastoralism to remain viable.

“And of course, that may lead a few disenchanted members of the population, particularly young men, to be attracted by alternative livelihood options, including the money that can be offered by trafficking gangs or terrorist groups,” he says.

Ousmane echoes Melly’s sentiments, saying: “The temptation is too much when you live in desertification-hit areas because you don’t get enough food to hit and water to drink.

“That’s where the bad guys start showing up on your door[step] to tell you that if you join them, you will get plenty food, water and pocket money. The solution is to run away, as far as you can to avoid falling into that trap.”

Consequently, Ousmane and Abdoulaye sold the few remaining animals the family had so they could leave the country.

In Burkina Faso they hoped to find work in farming. 

However, they were not always welcomed.

“We could feel the resentment from locals, so I told my brother we should leave before it gets ugly because there were already some tensions between local communities over what appeared to be land resources,” he says.

Chatham House’s Melly confirms this: “There is no doubt that the overall context, of increasing pressure on fragile and sometimes degrading natural resources, is a contributory factor to the overall pressures in the region and, thus, potentially, to tension.”

 Like elsewhere on the continent, severe environmental degradation appears to be among the root causes of inter-ethnic conflicts.

Using the Darfur region as a case study, the Worldwatch Institute says: “To a considerable extent, the conflict is the result of a slow-onset disaster—creeping desertification and severe droughts that have led to food insecurity and sporadic famine, as well as growing competition for land and water.”

What is being done?

Projects such as the U.N. Convention to Combat Desertification’s Land Degradation Neutrality project aimed at preventing and/or reversing land degradation are some of the interventions to stop the growing desert. 

  • Another large that aims to wrestle back the land swallowed by The Sahara is the Great Green Wall (GGW), an eight-billion-dollar project launched by the African Union (AU) with the blessing of the UNCCD, and the backing of organisations such as the World Bank, the European Union and FAO.
  • Since its launch in 2007, major progress has been made in restoring the fertility of Sahelian lands.
  • Nearly 120 communities in Burkina Faso, Mali and Niger have been involved in a green belt project that resulted in the restoration more than 2,500 hectares of degraded and drylands, according to the UNCCD.
  • More than two million seeds and seedings have also been planted from 50 native species of trees.

Everyone, including terrorists are equal in the face of the expanding Sahara

But there remain gaps and many in Mali still remain affected. 

Community leader Hassan Badarou spent several years teaching Islam in rural Mali and Niger. He tells IPS Mali has a very complex situation.

“It is not easy to live in these areas. People there face double threats. It is double stress to flee from both armed conflict and desertification. And such people need to be welcomed and assisted, and not be seen as a threat to locals livelihoods.

“That is why we used to preach tolerance and solidarity wherever we went, to avoid a situation whereby local communities would feel that their meagre resources are under threat from newcomers. There should be a dialogue, an honest and frank dialogue when communities take on each other over land and water resources,” he advises.

Against the expanding Sahara, all are equal. Fadimata, an internally displaced person from northern Mali, tells IPS that climate change is affecting everyone in the Sahel, including terrorists.

“I saw with my own eyes how a group of heavily-armed young men came to a village, looking for food.

“They said they wanted to do no harm, but wanted something to eat. Of course we were very scared, but the villagers ended up putting something together for these poor young men. They sat down and ate, and drank plenty of water and left afterwards. I think it is better that way than to kill villagers and steal their food, livestock and water.”