afrique: Une superpuissance en devenir

Taken from African Business Magazine. March-April edition.

Analysis by Bamanga Tukur, Chairman of africapractice group

Pouvez-vous imaginer qu’un jour l’Afrique jouira d’une telle influence que le reste de la communauté internationale devra se ranger à ses opinions sur les questions internationales ? Imaginez-vous qu’un jour l’Afrique soit une superpuissance ? Ce jour pourrait arriver plus tôt que vous ne le pensiez.

Lors de la conférence sur le changement climatique à Copenhague, l’Afrique a prouvé qu’elle savait se montrer unie. Malgré les différences entre les États, les 53 nations ont affiché un front uni, dans une large mesure grâce à la direction de Meles Zenawi ; et la communauté internationale a dû écouter et s’incliner. La conférence de Copenhague pourrait-elle marquer l’avènement d’une superpuissance

internationale ? Plusieurs faits le laissent penser :

• L’Afrique représente potentiellement le plus grand nombre de voix aux Nations unies - 53 voix. Si les gouvernements africains continuent à adopter une position commune comme à Copenhague, ils pèseront dans les décisions.
• L’Afrique possède la plupart des ressources naturelles mondiales, aujourd’hui en déclin. Elle bénéficie aussi d’un avantage dans le domaine des nouvelles sources d’énergie propres.
• L’Afrique compte près d’un milliard de personnes - le plus vaste marché de consommateurs hormis la Chine et l’Inde.
• La croissance économique est aujourd’hui plus forte en Afrique que dans n’importe quelle autre région du monde.
• L’Afrique disposera bientôt de sa propre force militaire de réserve qui pourrait contribuer de manière significative à la lutte contre le terrorisme.

Énergie et ressources

L’Afrique recèle d’immenses ressources : plus de la moitié des réserves mondiales de cobalt, de manganèse, de café, de cacao, d’huile de palme et d’or. Elle a du platine et de l’uranium en abondance, et possède près de 20 % du pétrole vendu sur le marché mondial. Chaque mois, n découvre de nouveaux gisements de pétrole et de gaz sur le continent. D’ici deux ans, l’Ouganda à l’Est et le Ghana à l’Ouest rejoindront le club des plus gros producteurs de pétrole. Dans le domaine des énergies propres, l’Afrique possède un atout : de nombreuses régions du continent sont propices au développement de projets d’énergie solaire. Le jour où les centrales solaires d’Afrique du Nord seront reliées à l’Europe et alimenteront des usines à Barcelone, à Bari et à Bruxelles, est peut-être tout proche. D’autre part, le continent détient 40 % du potentiel d’énergie hydroélectrique mondial, en tenant compte du barrage Grand Inga qui, une fois achevé, produira quelque 39 000 MW, ce qui en fait le plus important projet hydroélectrique dans le monde. L’Afrique est également bien lotie en énergie géothermique. À eux seuls, les pays de la vallée du Rift pourraient générer environ 7 000 MW, selon les estimations du Programme des Nations unies pour l’environnement. Le Kenya prévoit de produire 1 000 MW d’énergie géothermique d’ici à 2018.

Stabilité et croissance

Au cours de ces dix dernières années, l’Afrique a enregistré en moyenne un taux de croissance supérieur à 5 %. Parallèlement, elle a connu une période de stabilité politique sans précédent. Il y a bien eu

des heurts, notamment au Kenya, à Madagascar, en Mauritanie, au Soudan, en Guinée et au Zimbabwe, mais l’Union africaine est parvenue à résorber la plupart de ces crises, et la stabilité est revenue ou en voie de l’être. Comme l’explique Vijay Mahajan, spécialiste du marketing et consultant pour des multinationales, la classe moyenne africaine représente à peu près 300 millions de personnes qui sont aussi des consommateurs. On peut établir un parallèle avec ce qui s’est produit en Inde il y a quinze ans, quand l’urbanisation rapide et les investissements massifs dans les services et les infrastructures ont transformé le pays. Bientôt, plus de 70 villes africaines compteront une population de plus d’un million d’habitants. Aujourd’hui, le PNB par habitant est déjà plus élevé en Afrique qu’en Inde, et un quart des nations africaines a un PNB par habitant supérieur à celui de la Chine. Alors que les économies européenne et américaine stagnent, l’introduction de nouvelles technologies en Afrique, en particulier les TIC, permettra au continent de progresser à pas de géant. Aucun doute qu’il se développera davantage dans les dix ans à venir qu’au cours des 50 dernières années.

Superpuissance : les clés d’un statut

Devenir une superpuissance demande beaucoup d’efforts. Mais surtout, pour accéder à ce statut, un pays doit se convaincre qu’il est une superpuissance. Il doit adopter une attitude radicalement différente. Moins de dépendance, davantage de vision. Ces dix dernières années, à part quelques exceptions notables (Obasanjo, Bouteflika, Wade, Mogae et Mbeki peut-être, ainsi que quelques membres de la commission de l’Union africaine), l’Afrique a cruellement souffert de l’absence de dirigeants charismatiques et d’un manque de vision parmi les élites politiques. Un système d’éducation de qualité et le retour de milliers d’Africains dans leur pays devraient tout changer. Lagos, Luanda et d’autres centres d’activité du continent accueillent déjà les Africains de la diaspora qui reviennent en masse. Ceux-ci ont été formés dans les meilleures universités du monde. À présent, ils rentrent chez eux pour exercer leur métier. Ils emportent avec eux des capitaux, du savoir-faire et de nouvelles technologies. On assiste à ce que j’ai appelé la « Raspora ». La vente de Celtel qui a rapporté des millions il y a cinq ans à Mo Ibrahim, le chef d’entreprise soudanais vivant au Royaume-Uni, a attisé leur appétit. Depuis, « l’effondrement » des États-Unis et de l’Europe a rendu le retour au pays encore plus tentant.

L’Afrique a besoin aujourd’hui de bons dirigeants. Une génération animée de convictions profondes, comme le nouveau président du Gabon, permettra à l’Afrique d’accéder au statut de superpuissance. Pour cela, ces nouveaux dirigeants doivent mettre fin au clientélisme et se tourner résolument vers leur nation, leur région et vers le monde.

A common agenda for an uncommon people

I attended the East African Community’s rail conference in Dar es Salaam last week. As EAC integration makes its slow steady progress (much like the railways) there is increasing talk of the significance of this regional merger. A single market! A larger customer base! Greater movement of people and goods! A stronger political force in international fora! A single currency! (The Greeks may cringe at the last one)…

As I milled about with representatives from the five nations (Kenya, Uganda, Tanzania, Burundi and Rwanda) as well as co-sponsor delegates from the World Bank, it occurred to me that whilst it’s wonderful to see African neighbours attempt to collaborate for mutual benefits - I am of Eritrean origin so a particularly poignant sight for me- there is a risk that this political and economic marriage may exaggerate similarities between these very distinct parties in the minds of others. For ‘others’, read ‘The West’ and, as no serious conversation regarding Africa can now take place without reference to China, also ‘The East’.

Too often in the past and in the present, Africa has been presented as a homogenous place plagued by famine, corruption, war but blessed with exotic people and wildlife. Once a rather handsome West Indian asked me if I spoke ‘African’… I was far too enamoured to be rude but let him know that there were nine languages (NB not dialects) spoken in my tiny country of four million people and I only spoke one of them – and not as well as I’d like either.

Now – for those investors whose interests are piqued (as they should be) by the potential of the EAC and the promising GDP growth rates that have remained largely resistant to the credit crunch, please note: diversity is the one consistent feature in Africa.

This has been firmly brought to light in my time here in Dar es Salaam following my time working in Kenya and a very brief jaunt in Uganda. The people, the politics, the language, the attitudes are as far apart as the breath taking wide landscape allows. Call a Canadian an American, and I guarantee they won’t jump on you half as fast as a Tanzanian would if you had the audacity to bracket them with Kenyans. Tanzanians are not only a different kettle of fish, the distinctions within the nation are also significant. In fact, these virtual and cultural intra-national boundaries are as strong if not stronger than those between North and South Londoners (South rules!) or Brooklyn and Manhattan or ‘insert example of your own’.

So what to do?

Don’t assume: respect these important, ingrained distinctions; use on the ground intelligence; leverage local relationships and speak to those in the know – preferably face to face. An improved physical infrastructure will facilitate greater mixing but East Africa will never be a uniform mass despite its uniformly poor rail service.

What do you want to be famous for?

What do you want to be famous for?

And we’re not talking just 15 minutes. India has become the destination for software development, as well as a number of major outsourced processes from accounting to call centres. As new markets emerge to offer services at cut prices, whole new industries spring up around the world, boosting economies and cutting costs, and corners, for big industry. Markets like Costa Rica, the Philippines and Ireland compete in the call centre industry as well, for example, but Africa has now started to look at what it can sell on the global BPO marketplace.

As The East African writes this week: For many developing countries, outsourcing is the ultimate get-rich-quick scheme. The author writes about “the lure of the half-trillion-dollar market”, which has seen 65% growth from 2005 to 2009, 85 per cent of which is unaddressed, being irresistible.

But none of this is inevitable. It takes strategic investment from public and private sector to build the infrastructure, the talent, the demand for a particular service. While Kenya wants to become the top BPO destination in Africa as part of its Vision 2030, there’s a lot of ground work to be done – locally and internationally.

Could African countries succeed in positioning themselves as an outsourcing destinations, as a way to boost the economy, create jobs, to develop new industries? Some of the raw ingredients are there: a young labour force that can be trained in new skills, for example. More importantly, labour is cheap while the cost of property and development and source materials is lower than in much of the world.

Take the film industry. We’ve already seen Mexico, Canada and Eastern Europe become choice destinations for films ‘located’ in the United States, as they offer cheaper locations. Already numerous advertisements that seem to take place in Rome or Paris are shot in Cape Town.

But it’s not as simple as a price tag. Whether it’s a call centre or a cinema lot, to build an entire industry involves infrastructure, technology, people, training, facilities, tax breaks and an economic landscape that encourages start-ups and new entrants, rather than kills any competition.

The GIBS’ review this week touched upon it, with a review of an article from Knowledge@Wharton about Chinese development, and a comparison with India.

“A crucial aspect of the Chinese version of the developmental state has been the creation of physical infrastructure like roads, airports, electricity, internet, etc., writes WMG Media. India, in contrast, has neglected the state provision of physical infrastructure in favour of ‘soft infrastructure’ – building human capital, especially the use of the English language, to make the country a resource of service professionals for businesses all around the world.”

So there are different routes to be taken to establish a centre of excellence and a capacity to solve and service a global need, but it definitely doesn’t come to those who wait. It takes private and public collaboration and conscious planning. As countries like Rwanda and Kenya invest in ICT and skills they may not immediately compete with the likes of India and China, but they’ll sure compete favourably with the rest of the continent.

Private Sector Development in Africa – Perceptions and Realities

Can the private sector really be a driver creating opportunities for people to escape poverty and improve their lives? In theory, private sector development should be the ultimate driver of socio-economic development through job creation and its contribution to economic growth. In practice, several factors such as perceptions of Africa, insufficient policy frameworks and dependence on international aid have resulted in limited private sector impact to date.

After working in Africa for a while, one easily forgets that many outsiders still have a very “Live Aid” image of Africa. They do not know it as a region with one of the highest growth rates and a rising, well-educated middle class, but rather think of it as a place of war, famine and corruption. This persistent perception, despite recent progress and achievement, also disempowers Africans, engendering a sense of ‘passive victim’ rather than ‘accomplished entrepreneur’.

Investors who take the time to understand the continent and its opportunities tend to be well rewarded. The British firm Tullow is probably one of the most striking examples. Not too long ago, it was still a smallish outlet but its investment and belief in the African continent has already triggered the fundamental transformation of two economies and thereby the success of its own operations. The investment Tullow made in oil exploration in Ghana and Uganda has led to significant discoveries that have spelt a new and lucrative future for both countries.

Apart from the abundant natural resources found in most of her countries, Africa is also touted as the potential food basket of the world. Agriculture accounts for more than 50% of GDP and up to 90% of employment across much of the continent, but productivity remains low. And while there has been much talk about transforming the sector, the reliance on subsistence and small-holder farming has proven more than a stumbling block to developing diversified economies with higher levels of income, than an opportunity in itself.

For private sector development to work, African countries and its development partners need to create policies for commercially viable markets while promoting their country’s image and competitive advantage. An example of this is Kenya; after the arrival of a new high-speed internet cable, recognized the opportunity for Business Process Outsourcing (BPO) through the pairing of enhanced connectivity and its relatively large base of well-educated workers.

Ultimately, the promotion of value-add industries and the development of the required policy frameworks and infrastructure will allow the private sector in Africa to make significant progress in its development and contribution to job creation and poverty alleviation. The classic example of trying to sell chocolate as a finished product instead of selling cocoa as a raw material has lost none of its appeal.

Zuma in the UK

By Hamish Stewart and Marco Picardi, africapractice London

The arrival last week of Buckingham Palace’s first candidly polygamist guest under Queen Elizabeth II’s reign has been uncharacteristically subdued. But, whilst the South African premier, Jacob Zuma, will be crossing his fingers for as mellifluous a sojourn as possible, his visit should be seen as an opportunity for Britain to reassert itself as a protagonist in Africa in the face of rapidly growing competition from the BRIC countries.

Britain has much work to do on the continent if it hopes to retain its historical importance in the region and to match the surging investment and growing influence of the BRIC nations. Amongst this grouping, it is China that has made the most waves in its permeation of the continent. Although China is certainly not a new arrival in Africa, trading sums of up to $100 million per annum with some states during the height of the Cold War, recent rapid growth in the volume of economic transactions with Africa has been striking; within ten years of establishing economic and diplomatic ties with South Africa, it is now the rainbow nation’s largest trading partner. In fact, Chinese engagement in continent has seen it claim the title of Africa’s biggest trade partner, a relationship currently worth around $100 billion and growing.

Not to be left out, Russia, India and Brazil have also joined in the post-colonial struggle for new business opportunities on the continent. By mid 2008, Russia had become the second largest foreign investor in Africa. While this situation has changed following the financial crisis, it is a strong indication of what lies ahead. Large, formerly state-owned firms such as Rosneft, Lukoil and Gazprom continue to pursue new opportunities in the oil and gas sectors in diverse countries from Nigeria to Angola.

Along with other emerging economies Russian, and more significantly, Chinese private sector and government investment in the continent is changing the politics of aid and trade in Africa. The British are limited in their capacity to match the munificent repayment terms and low interest rates often afforded in Chinese financing of infrastructure development. Innovative schemes adopted to bolster Sino-African business, such as the creation of special cooperative economic zones, first seen in Zambia in 2007, where Chinese enterprises get tax breaks in exchange for attracting investment into the local economy, present a challenge to Britain’s traditional relationship with the continent. The most recent of these projects, a proposed Suez Economic Zone agreement between the Egyptian government and a Chinese firm from Tianjin, highlights the increasing reach of emerging economies in strategic economic sectors.

Britain must no longer rely so heavily upon historical political ties in seeking to influence the path to development of key countries, but rather must be prepared to engage in constructive long-term investment that will demonstrate commitment to a prosperous future for Africa. In light of Chinese, Russian and more recent Indian trade overtures to African leaders, Britain must be more aware that what she offers is a choice among a growing list of developmental partners in Africa. As domestic economic tides ebb and flow it will be increasingly important for Britain to build constructive economic and political relations with Africa. Here’s hoping Zuma and the Queen will get things started…

Is REDD the new green?

Deforestation contributes an estimated 17% to global greenhouse gas emissions and reduced emissions from deforestation and degradation (REDD) is one of the most effective ways of addressing climate change. Further, avoiding dangerous climate change would be very hard to achieve without addressing deforestation.

Despite its cost-effectiveness, significant funding will be required to address deforestation due to the scale and complexity of the problem. The Union of Concerned Scientist estimates that “for $5 billion a year, REDD can protect nearly 20% of the tropical forests in danger of deforestation, and $20 billion a year can protect about half. With funding approaching $50 billion a year, tropical deforestation could be reduced by two-thirds.” In comparison, the UK’s Eliasch Review estimates between $17-33 billion would be required annually in order to halve emissions from deforestation by 2030.

The outcomes of the climate summit in Copenhagen included a Green Climate Fund over $10 billion annually between 2010-12, only a portion of which will be allocated to REDD activities. While the current funds available are certainly not sufficient or adequate, the promise of increased funding in the future can be used to further evaluate the existing carbon stock in tropical forests, develop demonstration projects and establish the necessary institutional structures.

For Africa, there are immense opportunities to attract climate finance to the Congo Basin Forest which is the world’s second biggest tropical forest after the Amazon. It contains about one quarter of the world’s tropical forest, a wealth of biodiversity with about 10,000 plant species and 70% of Africa’s plant cover. Its vegetation alone contains about 25-30 billion tonnes of carbon – the equivalent of about four years of current global anthropogenic CO2 emissions.

However, the region and its six countries (Cameroon, the Central African Republic, Congo-Brazzaville, DR Congo, Equatorial Guinea and Gabon) face significant challenges in establishing the mechanism to effectively manage any funds based on relatively weak institutions in most countries. While several efforts such as the Congo Forest Basin Partnership and the World Bank’s Forest Carbon Partnership Facility are only two of numerous activities, it will be crucial for the countries in the Basin to develop their own demonstration projects and fund structures that will show effective implementation, adequate monitoring of carbon stocks and flawless financial administration.

In order to increase credibility and African ownership of current and future forest funding, such pilot programs should be a mix of government and market-based approaches for both the funding and the administration of the funds and projects. The Copenhagen Accord already called for a mix public and private sources of funding but it will be important to also develop the right mix of institutions to allow innovative and effective mechanism to address the great challenges and opportunities REDD provides for Africa.

Climate finance after Copenhagen

Calculating the real cost of climate is a highly complex and contentious affair. It is undeniable that we need to fundamentally transform our economies to get on the path of low-carbon growth, especially by reducing energy consumption and reliance on fossil fuel and halt deforestation as one of the biggest single contributors to climate change. We also need to adapt our way of life to the unavoidable effects of climate change such as changing rainfall patterns, extreme weather events and rising sea levels. While it remains difficult to calculate the costs of the required action on such a massive scale, there is a clear urgency to make substantial funds available as soon as possible.

A variety of climate funds have already been established, most of which have a very specific purpose and relatively limited funding from donor countries. A proposal for a new approach in raising up to $100 billion a year for “Green Fund” for the transition to a low-carbon economy by the World Future Council has been taken up by the IMF. The principal idea is to raise finance through the issuance of additional Special Drawing Rights (SDRs), a reserve asset created by the IMF. The creation of “new money” by issuing new SDRs should not cause inflation if the funds are productively invested into renewable energy.

Africa has long been demanding significantly increased climate funding as the continent most affected by and least responsible for climate change. The official Proposal by the African Group in Copenhagen demanded the establishment of a new adaptation fund to finance the full costs of adaptation activities and the related transfer of technology sharing and capacity building in developing countries, with sources of funding be new, substantial and sustained public funding from developed countries, with an annual scale not less than 2.5 % of the GNP of developed countries. The hopes for such significant funding were shattered together with many other aspirations for the Copenhagen conference but at least some commitment was made in the Copenhagen Accord with regard to climate finance:

“Scaled up, new and additional, predictable and adequate funding as well as improved access shall be provided to developing countries, in accordance with the relevant provisions of the Convention, to enable and support enhanced action on mitigation, including substantial finance to reduce emissions from deforestation and forest degradation (REDD-plus), adaptation, technology development and transfer and capacity-building, for enhanced implementation of the Convention. The collective commitment by developed countries is to provide new and additional resources, including forestry and investments through international institutions, approaching USD 30 billion for the period 2010-2012 with balanced allocation between adaptation and mitigation. Funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa. In the context of meaningful mitigation actions and transparency on implementation, developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance. New multilateral funding for adaptation will be delivered through effective and efficient fund arrangements, with a governance structure providing for equal representation of developed and developing countries. A significant portion of such funding should flow through the Copenhagen Green Climate Fund.

To this end, a High Level Panel will be established under the guidance of and accountable to the Conference of the Parties to study the contribution of the potential sources of revenue, including alternative sources of finance, towards meeting this goal.”

While the Ethiopian Prime Minister Meles Zenawi was criticised by many for his willingness to compromise and settle for less adaptation funding than requested, the fact that there now is such as fund can partly be attributed the to Joint appeal of France and Ethiopia from 15 December. Meles is now a member of the high-level panel for the Green Climate Fund which has a formidable task ahead in addressing the following key issues:

1. Out of the USD 10 billion committed, how much is new and additional money, i.e., not a diversion of Official Development Assistance (ODA) or previously committed funding to deforestation by countries such as Norway or low-carbon growth by countries such as the UK? And if it is not “new money”, how should additional commitments be measure without penalising countries for their commitments earlier on?

2. What will be the mix of public and private, bilateral and multilateral, including alternative sources of finance for the fund and will the funds be dispersed as grants or loans?

3. Which financial institution will allow fulfilling the long-standing demand by developing countries to have balanced representation in the administration of the fund in addition to figures such as Meles already taking prominent positions?

4. What will the money be spent on? Just deforestation and forest degradation, adaptation, technology development and transfer and capacity-building as outlined in the accord or other measures such as finalizing national low-carbon growth and adaptation plans, improving in-country capacity to design and implementing national climate change actions as proposed by the UK, Mexico, Norway and Australia?

5. And last but not least, how will Africa build its capacity to be able to absorb and us additional climate funding after 2012, especially if it comes anywhere near the USD 67 billion for adaptation and USD 200 billion for mitigation as requested in the run-up to Copenhagen?

Despite all the shortcomings of Copenhagen, the rather timid initial financial commitments together with the prospect of something more substantial might provide a good opportunity to address these questions and make climate finance work for Africa