IOA Position Papers

Africa’s energy crossroads: The market forces, coal and oil, are making way to renewable energies.

The following article is based on information obtained by the author while undertaking a comparative study on African nations’ competitive statuses for a client of IOA. Other IOA research is also referenced.

Africa’s energy landscape is changing, driven by new market imperatives and technological innovations. Vested interests seeking to preserve the dominance of old forms of energy may be resisting, but cannot hold back the tidal force of an evolving energy market place. Coal and oil are becoming dinosaurs, not just because they are literally composed of the remnants of prehistoric plants and animals, but because money is gradually moving toward renewable energies: geothermal, hydropower, solar and wind.
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GBR World Congress Report 2018

Global Business Roundtable

World Congress Report 2018

Stimulating intra-African trade has been a top discussion point over the last decade. The recently signed Continental Free Trade Area agreement between all 54 states will look to address key concerns in terms of trading within Africa. This agreement will also need to be taken into account within the context of evolving industries across the continent, but also specifically in countries such as Angola, Kenya, Nigeria, Rwanda, Tanzania and Zambia.

IOA’s latest report, in partnership with the Global Business Roundtable, provides key insights on the shifting nature of trade agreements in Africa, the evolution and decentralisation within top sectors such as energy, mining, ICT and agriculture, and the relevant opportunities for small business growth in these focal areas.

Africa’s slow but sure movement toward value added economies

The following article is based on information obtained by the author while undertaking a comparative study on African nations’ competitive statuses for a client of IOA. Other IOA research is also referenced.

Is there an African economist who hasn’t advised against making an economy predominantly dependent on raw material exports? The governments of Africa mostly lack the political will to venture into value added manufacturing rather than shipping out natural resources in their unprocessed state. With investment in the value added chain, raw agricultural products and minerals have their profitability enhanced. Oil that can be refined for domestic consumption in oil-rich African countries is instead refined on other continents and shipped back at higher cost to African countries of origin. Instead, Nigeria, Africa’s largest oil producer, recently invited tenders for the importation of petroleum products.
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Africa’s Top 5 most politically-stable countries

President Ian Khama is proving to be a successful leader for Botswana. [1]
Political stability is a quality hard to acquire in African governments, and often fleeting once obtained. Politicians once taking office can hijack a democratic system to remain in power indefinitely, turning the country into a ‘paper democracy’ that has democratic institutions like a constitution, courts and legislature but in fact is an autocracy whose governance institutions serve the head of state. Political stability is also a relatively new factor in the governance of Africa. The longest continuously stable democracy is Botswana. The vast arid country has faced its own governance issues but remained committed to its constitutional roots that ensure a government that benefits the Botswana people rather than any one leader.

Is there a formula that allows an African country to sidestep the pitfalls of military coups d’état and ambitious tyrants that in an instant can upend years of progressive democratic governance? The answer lies within the collective will of the governed, the people of any country.  The pro-democracy movement that in 2011 rid North Africa of its despots during the Arab Spring and the subsequent removal of long-seated autocrats in Angola, Burkina-Faso, The Gambia and Zimbabwe, suggests that populations are willing to be denied their political rights only for a finite period of time. In Togo, President Faure Gnassingbé whose family has ruled since 1967 is subject to massive weekly street demonstrations seeking an end to his dynasty. In the Democratic Republic of Congo, another family dynasty continues as Joseph Kabila remains in office more than a year after his last presidential term expired. However, he must rely on security forces to suppress unprecedented resistance from political opposition groups. Though in office less than two years, Tanzania’s President John Magufuli and Zambia’s President Edgar Lungu are showing alarming autocratic tendencies that will subsume their countries’ political freedoms if the Tanzanian and Zambian people allow.
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Africa’s Top 10 most food-secure countries

Finding enough to eat has been an ages-old challenge for Africans. Against a physical environment often hostile to agricultural and pastoral activity – deserts, mountains and dense forests – the population explosion of the past century has made the goal of food security an ever more difficult accomplishment. More and more people compete for a finite amount of agricultural production. However, political will by governments to prioritise food security, combined with use of new crop and food production technologies, has allowed some countries to break the chains of food insecurity.

Olive tree plantation in Tunisia. Olive oil is Tunisia’s largest agricultural export. Image courtesy: Getty Images. Available at http://www.gettyimages.com/detail/news-photo/olive-tree-plantation-olive-growing-in-tunisia-olive-trees-news-photo/167065803?esource=SEO_GIS_CDN_Redirect#olive-tree-plantation-olive-growing-in-tunisia-olive-trees-olea-picture-id167065803

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Djibouti welcomes India: the strategic motivations for India’s visit

By Mandira Bagwandeen, Independent Analyst[1]

Analysis in brief | The newly elected Indian president’s visit to Djibouti and Ethiopia is indicative of India’s readiness to develop closer economic and strategic ties with the Horn of Africa, especially against the backdrop of China’s growing presence in the Indian Ocean region.

Indian president, Ram Nath Kovind signs agreement on bilateral consultations with Djiboutian president, Ismaïl Omar Guelleh in October 2017. Photo courtesy: Press Trust of India. Available at: http://www.newindianexpress.com/world/2017/oct/04/india-djibouti-sign-agreement-on-bilateral-consultations-during-president-kovinds-visit-1666773.html

Key Points:

  • India recognises that the Horn of Africa, especially Djibouti, will be instrumental in realising the actualisation of the Asia-Africa Growth Corridor
  • With China’s growing presence in the Indian Ocean region, India is aware of the need to also expand their presence in key maritime trade and connectivity regions to keep China in check
  • Unable to compete with China’s massive infrastructural investments in the Horn of Africa, India will have to draw on their strengths and present themselves as another investment partner

In early October, India’s newly elected president, Ram Nath Kovind, visited Djibouti and Ethiopia in his first foreign trip since taking office in July 2017. His choice of destinations suggests that India is finally taking the geopolitical and geostrategic significance of the Horn of Africa seriously, and Djibouti in particular. The visit occurred against the backdrop of the recently established Asia-Africa Growth Corridor (AAGC), an economic co-operation agreement between India and Japan that aims to connect African and Asian economies through new and ancient maritime networks.

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Why the ‘third-term debate’ matters and the difficulties in finding resolution

By Terence Corrigan[1]

Analysis in Brief | Constitutional amendments to prolong the tenure in office of incumbent presidents pose challenges to democracy and constitutionalism in Africa. This phenomenon is poorly understood, and options for dealing with this occurrence are limited.

Key Points:

  • Prolonging presidential terms is a growing phenomenon in Africa, at odds with efforts on the continent to forge a governance culture rooted in democracy and constitutionalism
  • Term extensions do not threaten the existence of democracy and constitutionalism but are profoundly debasing them, undermining their ability to demand accountability and allowing personalised politics to develop
  • Attempts at countering this practice have met with mixed success and, ultimately, concerns about long-term incumbency is an expression of concerns for a broader environment of weak institutions and problematic political culture

Profound uncertainty surrounds Zimbabwe, as President Robert Mugabe refuses to leave office despite vocal demands to do so by civil society and political parties (including his own), and the intervention of the military. Having held power for 37 years, Mugabe has been the central figure in his country’s political life. His interests and outlook have shaped the contours of politics in Zimbabwe, with some deeply damaging consequences for governance: corruption, the personalisation of power, the atrophy of institutions and political processes, and the growth of insidious patronage networks. A post-Mugabe Zimbabwe will have to reckon with the impact of these pathologies for years to come. This is a stark warning about the dangers of extended incumbency – something that is challenging democracy and constitutionalism throughout the continent.

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Top 10 technologically advanced countries in Africa

African countries have a long road to travel to advance to the level of technological capacity common in the developed world. However, some African countries are making strides to boost their communications infrastructure, establish ‘technology parks’ and increase spending on research and development. Most of this government-sponsored activity is done in conjunction with efforts to diversify economies away from dependency on commodities and towards more industrialisation. Once the groundwork has been established and the private sector accepts that a country is serious about becoming more technologically savvy, then private investment can enter to further boosts technology advancement.

The Ebene Cyber Tower located in Ebene Cybercity in Port Louis, Mauritius. Construction began in 2001, with the suburb being promoted as a new information technology hub for Mauritius and as a link between African and Asian markets.
Image courtesy Jean François Koenig, Wikimedia Commons

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The Africa Country Benchmark Report (ACBR)

The Africa Country Benchmark Report (ACBR) is the definitive resource for understanding Africa, providing comprehensive assessments of all 54 African countries. The report scores, ranks and insightfully assesses each country holistically, as well as across business, economic, political and social factors, all presented in an 750-page infographic-driven publication.

View the ACBR intro video below or click here for more information on the ACBR.

Looking at the data: Lessons on best African economic policy

ACBR analysis in brief | More than the private sector, governments determine the success or failure of African economies. Government policies that propel economies toward prosperity should be shaped on best practices discernible in an analysis of Africa’s 54 countries’ economies in IOA’s 2017 Africa Country Benchmark Report.

The economies of Africa’s many and diverse countries prosper or fail on the basis of their government’s political performance, which invariably shapes their response to economic issues. Examples range from South Africa, where the national currency is the world’s most volatile because investors tie the rand to governmental conflicts, to Africa’s well-performing small island economies that prosper because of governmental foresight, with progressive economic policies. An examination of the lead economic indexes on Africa has drawn these insights as part of IOA’s 2017 Africa Country Benchmark Report (ACBR) assessments of overall national performances. Other factors determine the success or failure of economies, and from these lessons can be drawn on the best and worst practices.

The 2017 ACBR analyses 34 international indexes and 30 key indicators, and from this data specific to the economic field, the top five economic ‘takeaways’ emerge. The data points to commonalities found in African counties’ economic successes and failures, and offer insight into countries’ overall economic performances, from trade and investment to equality and stability.

Here are five important lessons that should be learned from, demonstrated by countries that perform well in the ACBR’s economics section:
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Looking at the data: Lessons on best African social policy

ACBR analysis in brief | Poverty and a lack of individual rights has hindered social progress in Africa. However, some of the continent’s 54 countries have shown how to establish winning policies and succeed with national development by uplifting living standards and ensuring democratic rights.

Africa’s countries are as varied as their cultural and historic circumstances, as well as their environments and natural resources. All emerged from the colonial era encumbered by poverty, and all went in several directions to achieve social development. IOA’s 2017 Africa Country Benchmark Report (ACBR) assesses which African countries have succeeded in developing effective social welfares and can offer lessons to other developing African countries. The conflict between honouring traditional practices and achieving human rights requires compromise, with traditional authorities honoured with customary respect but citizens allowed to pursue their aspirations in business and politics unfettered by state constraints. Progressive social welfare policies result in improved conditions for all people in a country. Governments can pay for these programmes from revenues earned by well-performing economies, made possible by open, equitable societies where individuals are allowed to think, imagine and ultimately prosper.

The top five social welfare ‘takeaways’ from the 2017 ACBR were discerned by analysing data from the 34 international indexes and 30 key indicators that were incorporated into the survey. A holistic view of a country’s performance results clearly shows how economic and political factors work to the success or detriment of social progress. Out of this evaluation emerges some commonalities found in African counties that score highest in their people’s education, freedoms, health and safety.

Here are five important lessons learned from countries that perform well in the ACBR’s society section:

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