REFORMS ARE CENTRAL TO AFRICA’s pre-eminence in global trade. These reforms, though recognised as important requirements, are yet to be seen as widespread realities as Africa’s slowly reforming countries have slim chances of competing on the global trade turfs. “A slowly reforming society stagnates,” wrote Gordon G. Chang, a US global analyst. To paraphrase Chang further, it is important to aver that “the sometimes glacial approach to reform” is not suited to the severe problems that are plaguing Africa in a world where the pace of change is accelerating. The post-COVID-19 era will prove particularly more challenging than ever before and would require quick and flexible adaptation measures as well as resilience to cope with unrehearsed, but high impact, events that would unfold.
At the core of all reforms in Africa is the need for robust reforms in the energy sector. This will have many implications, for business, economy, security, industrial development and communication revolution, all of which are useful for the success of Africa-wide global commerce. Progress in energy transition globally has shown that energy to power the world is not in short supply. In Africa, in particular, energy for powering the continent in ways that are environmentally sustainable is in abundance. What is yet to be done is the harnessing of such energy for the benefit of all within the continent. The International Energy Agency (IEA) only recently held a virtual ministerial conference where representatives from Austria, Brazil, China, Denmark, India Indonesia, Ireland, Italy, Japan, Senegal, South Africa, United Kingdom (UK), World Economic Forum, Asian Development Bank (ADB) and United Nations Climate Change Conference (COP) spoke at the official opening. Specifically, the president of the 2021 COP26, Alok Sharma from the UK, spoke on behalf of COP26.
Africa’s future development and global competitiveness will be inextricably tied to energy security. The form of energy, its affordability, availability and quality will determine, in no small measure, the speed, scope and structural aspects of Africa’s development. Investment opportunities in infrastructure that would drive the future development have caught the attention of policy makers, development finance institutions, business community and the civil society for a wide range of reasons. How these disparate issues are interlinked can be explained in some basic ways. The transport infrastructure of the future will require features that are a complete departure from the old, archaic models. Although previous efforts towards integration through infrastructural development during the colonial era failed to materialise, prospects for integration now seem ever more promising than before.
The 759 km Addis Ababa–Djibouti City Railway, a new standard gauge international railway that officially commenced commercial operations on January 1, 2018, and now provides landlocked Ethiopia with better access to the sea than the over a century-old earlier international metre gauge railway, is an example. This ambitious project, which gulped an estimated $3.4 billion and funded through external loans, combines many attributes. Unlike the road transport, the shorter criss-cross transit time, freight cost reduction, greater volume of freight, transit safety and security all make import and export businesses much easier and cheaper. In what is considered as one of the biggest of Ethiopia’s mega-projects – expected to transform its largely agrarian economy into East Africa’s industrial hub – the railway project is expected to cut the transit time of roughly two days by over 1,500 trucks daily to between 10 and 12 hours for the faster passenger trains and freight trains respectively.
Perhaps the first trans-boundary and longest electrified railway on the African continent, the Ethiopian infrastructure and transport project combines the use of environmentally friendly energy – electricity – to power its fleet of coaches. This provides a leading example for all other African countries in their infrastructural development programmes as well as regional integration agenda. Many countries and national economies in Africa are fragile because they are landlocked. Ethiopia, through its trans-boundary rail system with Djibouti, has inched further forward in its efforts to break the jinx of being a landlocked country. This is also an example for other landlocked countries to follow.
In On Africa (IOA), a think tank, in its third edition of the Africa Country Benchmark Report (ACBR), an intellectual resource for understanding Africa, recently pointed out some stark and disturbing observations about landlocked countries in Africa. It is more difficult for landlocked countries to participate in the global economy. According to IOA, Africa’s landlocked countries “have built-in geographic disadvantages that contribute to poor performances in economic, social and even political growth. Some landlocked nations have overcome these disadvantages, providing templates for others to follow.” Ethiopia, through its trans-border rail project, is a shining example. It is expected to facilitate international trade as more than 95 per cent of Ethiopia’s trade passes through Djibouti. Others are Botswana and Rwanda, two countries that have shown good examples of sound business growth policies. One of the grim observations by IOA was that “transhipment of goods through neighbouring countries with sea access has inhibited landlocked countries’ export growth” whereas “African integration that opens borders and allows free-flowing goods and people will assist landlocked countries’ development.”
The overall poor development of Africa can be attributed in part to the predicaments of the 16 landlocked countries, constituting a third of Africa’s 54 countries, with 14 of them ranked “low” on the Human Development Index (HDI), a measurement that tracks some development indices like education, income per capita and life expectancy. Botswana, Burkina Faso, Burundi, Central African Republic, Chad, Ethiopia, Lesotho, Malawi, Mali, Niger, Rwanda, South Sudan, Swaziland, Uganda, Zambia, and Zimbabwe, all landlocked, are essentially countries in the Sub-Saharan Africa. Their economies are largely hamstrung by artificially high cost of freight and logistics, often caused by cartel control. They are heavily dependent on neighbouring countries for shipping or port access. The process is often complicated by underdeveloped infrastructure and corruption, which lead to added costs, customs regulations hitches, tariffs and unnecessary delays in shipping goods. Any effort or strategy towards improving the economy of Africa through trade devoid of considerations for the predicaments of landlocked countries is inadequate at the best and mediocre at the very worst. While these have hindered Africa from taking full advantages of the provisions of the ACP-EU and World Trade Organisation’s trade relations, it is bound to slow down the pace of implementation of the African Continental Free Trade Agreement (AfCFTA).
Another major area urgently in need of reforms in Africa is on environmental stewardship as an integral component of economic development. Globally, there is a growing emphasis on this, with ramifications and relevance, covering production, processing, consumption and trade as environmental footprints have become yardsticks for assessing commerce. Compliance will significantly affect the acceptability of export products of African origin. In agriculture, this will need to be in tune with the Sustainable Development Goal 12, which recognises consumption and production as a way of reducing the destructive impacts on natural environment and resources. The South American Amazon forests – considered an enormous carbon sink – have attracted global attention on the grounds of what has been adjudged as reckless destruction to pave way for commercial agriculture. Africa’s agriculture must therefore undergo transformation from the emphasis on expansion of farm sizes for yield increases to emphasis on yields per hectare of lands. Nations, governments and businesses must therefore urgently embrace and apply the new aphorism of “people, planet and profit” to their policies and actions.
Activists, politicians, corporate entities and opinion leaders have to be on the same page on green or circular economy, based on an economic system targeted at reducing waste and the incessant use of resources. To be well positioned to tap into the future benefits of technological development, energy must have pre-eminence in Africa’s development strategy.
The relevance of the IEA’s recent virtual conference comes to the fore here as one of the key issues canvassed or reported by some countries’ ministers during their presentations, including the South Africa’s, was the prospect of abolition of coal-fired electricity supply in the foreseeable future. It seemed like there was a tacit consensus on the issue of renewable energy. Although Africa’s contribution to the global greenhouse-gas emissions remains minimal to at just 7.1 per cent, chances of rapid and significant increase are high as Africa speedily urbanises. This calls for energy transformation and mainstreaming of the green economy in particular as many African countries are signatories to the Paris Accord (or COP21) of 2015, a treaty that was aimed at limiting the global temperature rise to 1.5 degrees Celsius.
China, as polluter-in-chief, has become the world’s largest emitter of carbon dioxide by far, followed by the United States (US), with both countries responsible for 40 per cent of the global greenhouse gas emission. Africa has to innovate and adapt as the continent is not insulated from the transmission of the global warming effects of pollution produced from the US, Europe, China, or elsewhere in far-away Asia. Africa also must endeavour not to join in adding to the misfortune of raising the global carbon emission in the course of pursuing economic development. For Africa of the future, no meaningful economic or industrial development is to be expected without reliable, affordable, stable, and cost-beneficial energy supply. Africa cannot therefore hope to grow its economy except it puts the energy issue at the forefront.
Technologies that reduce greenhouse gas emission, contribute to a reduction in global warming, keep the environment from pollution and promote good health of the generality of the people on the African continent must therefore be promoted as priorities.
Frontpage November 3, 2017