IOA Position Papers

Tipping point: Finding long term solutions to Africa’s latest debt crisis

By Jacques du Preez

Analysis in brief: Africa has a long standing history of debt, the causes of which can be traced back to its pre-independence years. Although the onset of the global covid-19 pandemic has sent many African governments’ debt situations into a state of freefall, this crisis has been long in the making. The run-up to what is to become Africa’s present day debt plight began not long after the general African debt forgiveness of 2001 and is now recognised as a global economic issue. It has become clear that African economies need more than simply having their debts written off. The paper analyses how this unsustainable debt laid came to be and how the continent can navigate its own way out of the quagmire whilst still meeting its developmental objectives.

The Covid-19 pandemic is one of the largest crises to grip Africa in recent history, not merely in terms of mortality but in long lasting economic terms. Restrictions imposed by many African governments to contain the pandemic have hurt the continent’s already fragile economies more than the pandemic itself. Slumps in demand for vital commodities like oil have particularly left a sharp pinch in revenues, as the strain of government debts, which already stood at an unsustainable US$500 billion at the start of this year, threaten to plunge many African nations into bankruptcy. Unlike the last crisis of the late 1990’s which saw many African countries have all or most of their debts forgiven by their debtors, Africa cannot rely on the hope that its broad array of current creditors may collectively decide to grant blanket debt forgiveness. The continent therefore needs more than simply having its debt written off; African nations need to enhance their ability to foster local credit markets and improve the local legislative environment, in addition to changing their spending culture. Understanding the main drivers of economic indebtedness is also key to promoting the necessary political and fiscal reforms required to achieve sustainable growth. The run-up to what is to become Africa’s present day debt crisis began not long after the general African debt forgiveness of 2001 and was marked by three key events: 1) the uptake of a Eurobond debt market, 2) the influx of cheap and opaque Chinese credit, and 3) the commodity demand shocks in 2015 and currently in 2020.

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‘Big Data’ and Africa’s political campaigns: The growth (pains) of Africa’s Technological Democracy

By Marthinus Swart

Analysis in brief: As ‘Big Data’ mining becomes more prevalent across the African continent, especially with regards to how political campaigns are run, there is hope that a more transparent use of political and voter data can be used to strengthen Africa’s democratic efficiency.

In the fast-paced, digitally driven world we currently inhabit, everything we do leaves a digital trail that can be used by a multitude of actors to gain a picture of who we are as human beings. We generate this digital trail when we browse the internet, move around with our smartphones, and when we talk to our friends and family on social media. Today’s reality is one of widespread information availability which has, in turn, given rise to the era of ‘Big Data’ – referring to society’s ability to harness information in novel ways and create new forms of value.1

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Africa looks to past and future to meet the challenge of housing for all

By James Hall

Analysis in brief: A new generation of African builders is coming up with local and African-oriented solutions to housing shortages and the expense of building. Some of their inventions are inspiring.

“African solutions to African problems” is a phrase heard in all matters, from humanitarian and political crises that affect the region to infrastructure and economic challenges. Housing for all is a need that is becoming more urgent as urbanisation accelerates throughout the continent. Old ways of building are being reconsidered by young construction engineers who apply new technologies, and in some cases, revisit the value of traditional materials. The goal is affordable, decent housing that appeals to the African lifestyle. Working against the affordability of housing are outdated building regulations, inefficient supply chains, and a lack of construction personnel with advanced training. A holistic approach to meeting Africans’ housing requirements is being undertaken, from shaking up local bureacracies to skills training, because it is now understood that good housing is not just an individual desire but a social and national economic necessity. Decent housing improves its occupants’ health and education, providing water, hygienic facilities and a place for students to do homework.

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Africa’s population boom offers two outcomes: economic opportunity or humanitarian crisis

By James Hall

Analysis in brief: No continent will see population growth like Africa in the 21st century. Whether this growth brings economic progress, or the reverse, betterment of social services or their collapse and a strengthening of democracy or political chaos depends on planning and visionary leadership.

Even with deadly pandemics occuring like the COVID-19 outbreak of 2020, the remaining 80 years of the 21st century will see huge rises in Africa’s population numbers. Within the next 30 years, as the world’s population is expected by the UN to increase by 2 billion persons, from 7.7 billion today to 9.7 billion in 2050, five of the nine countries that will constitute more than half of that growth will be located in Africa. They are in order of their growth: Nigeria, the Democratic Republic of Congo, Ethiopia, Tanzania and Egypt. The aforementioned countries have one thing in common. In 2020, each country is experiencing some degree of political disruption, from a terrorist insurgency in Nigeria, rebel warfare in DRC, and degrees of encroaching authoritarianism in Egypt, Ethiopia and Tanzania. One fear of political observers is that as populations grow and strain available resources and degrade the environment, political instability will increase.

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As Morocco captures mountain fog, Africa’s water needs find one technological solution

By James Hall

Analysis in brief: Africa’s water needs are accelerating. Populations are growing just as traditional water sources are endangered by climate change. Technological innovations are showing promising ways to tap into water sources that always existed but, before now, could not be accessed.

Africa’s quest for water sources to sustain life pre-dates modernity. However, with every economic activity tied to availability of water, from agriculture to mining, tourism to manufacturing, demands on water supply are ever-growing. The continent’s ability to increase equitable prosperity and sustain population growth requires new thinking at a time when climate change is diminishing water security. Meanwhile, pockets of rural Africa continue the same struggle as their ancestors: accessing a bare minimum of water to sustain human life, some crops and animals. Morocco, a largely desert and mountainous country, experiences uneven water distribution, and its water policies must target usage by urban areas and industry without neglecting rural community needs. Various technologies are being explored or utilised by Morocco to harvest water, sometimes from unusual sources, and to store, mitigate wastage and facilitate distribution. Other African nations both north and south are looking at Morocco’s innovations to gauge their effectivness. One exciting method of finding a new source of water is the harvesting of mountain clouds and fog. While this method cannot meet the water needs of large populations, the requirements of small mountain communities that have been perpetually in want of water can be met.

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Mozambique’s energy sector caught in Southern Africa’s first terrorist insurgency

By James Hall

Analysis in brief: Southern Africa’s first terrorist insurgency is casting doubt on progress to commercially exploit Mozambique’s promising natural gas deposits. Mozambique’s government has been unable to thwart the terror attacks, offering little hope for relief to multinational energy giants at work in the country.

The reaction of two of the largest oil companies at work in Mozambique, Total and ExxonMobil, to the insurgency of Islamist militants in the country’s northern Cabo Delgado province has signalled their perception of where the conflict is headed. Meeting with government authorities, the company officials did not press for a cessastion of violence that was threatening their investments, but merely for the deployment of more troops to guard their operations. Some oil installations have already been attacked. By their request for security, the oil majors were admitting there was no immediate solution to the terror operations now five years old, or their faith that government has a plan or ability to suppress the insurrection. Rather, the oil firms want protection beyond what their private security companies can provide. Clearly, they believe Mozambique is being challenged by a long-term problem; one that the Southern African Development Community has finally admitted has regional repercussions. Ironically, through their unkept promises to the people of Cabo Delgado, the energy companies are also responsible for their unsettled security situation.

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Coronavirus reshaping the way African societies are looking at alcohol consumption

By James Hall

Analysis in brief: South Africa’s ban on the sale and transportation of alcoholic beverages came as a response to the Covid-19 outbreak. However, the immediate success the ban has produced in lowering deaths, injuries and domestic violence raises the obvious question of how to retain these benefits when the ban is lifted at the end of the crisis. Alcohol abuse in South Africa is just one social malady that may get the attention and remedial action it deserves as society re-examines itself in the wake of the historic pandemic.

South Africa is the bellwether of Sub-Saharan Africa. From providing a new model for African democracy in the post-Cold War era to showing how a diversified economy buttressed by cutting-edge technology and good transportation infrastructure produces the most vibrant economy, Africa’s southern-most nation has been the paradigm to be emulated. With the outbreak of Covid-19, South Africa’s mitigation strategy, most notably its nationwide lockdown, has been duplicated by neighbouring countries. One mitigation that seemed radical for Africa’s largest wine producer and exporter was a ban on the sale and transportation of alcoholic beverages. Yet, no public objection arose because the need was explained, and the benefits were soon apparent. Three weeks after South Africa imposed the ban, the World Health Organisation on 14 April 2020 recommended that alcohol consumption should be restricted to reduce the spread of Covid-19.

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Is Africa possibly more prepared to handle the COVID-19 outbreak than initially thought?

By Judith Mondo

Analysis in brief: Despite Africa’s well-known vulnerability to infectious outbreaks, the continent has shown great resilience in handling the COVID-19 outbreak so far. Many African countries have responded relatively quickly to testing and containment measures, which have significantly slowed the spread of contagion and saved the continent some precious time to ramp up healthcare resources. A number of factors have contributed to the continent’s preparedness, including the experiences learnt in dealing with previous epidemics such as Cholera and Ebola.

The new coronavirus, which originated in China almost four months ago, currently constitutes one of the biggest threats to humanity, claiming thousands of lives and sickening over a million others worldwide. The virus has extended to more than 200 countries and territories around the globe, has infected over 2 million people and killed more than 140,000 others as of the April 17th, 2020. In Africa, the spread of the virus has been slow relative to the rest of the world. Compared to the United States (US) for example, where the number of COVID-19 cases has risen exponentially from around 35,000 in the second week of March to over 670,000 presently (Johns Hopkins University, 2020), Africa has reported over 16,200 positive cases during the same period (Africanews, 2020).

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The Coronavirus will accelerate growth in Africa’s online economy, ultimately helping to close the digital divide

By James Hall

Analysis in brief: The global pandemic COVID-19 has already hit Africa’s economies hard. Mobile money and other on-line financial solutions that have taken root in recent years are providing valuable financial services and are keeping economies functioning. Having proved their essentialness during this crisis, e-commerce and digital networks can expect investment from governments and the international private sector, as well as further consumer growth in the coming years.

The medical crisis presented by the Coronavirus pandemic is unprecedented for Africa. The recurring Ebola outbreaks were restricted to particular countries and at worse were sub-regional in scope. But COVID-19 is continental, indeed global in its reach. The crisis has struck the economies of every African nation hard, as well as Africa’s trading partners abroad. The closest comparison to social and economic disruption from a medical crisis would be HIV/AIDS, which has also impacted all African economies. However, the sexually-transmitted disease is far harder to transmit than COVID-19, and its spread was measured in years, not in days.

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The Trade Fair Fad – seeking alliances in the guise of making money

By James Hall

Analysis in brief: African nations are being wooed by the world’s major powers as alliance partners. Trade is the calling card, but make no mistake, the mission of Britain, China, the EU, Russia and the US is to line up allies to their own advantage.

Africa continues to be touted for its economic promise for tomorrow and yet has commodities, products and markets that foreign powers desire today. Indeed, due to Africa’s population growth, by 2050 a quarter of the world’s consumers will be African. However, much as with the case of commodities, investors want profits today. The combined economic output of all African countries is less than Italy’s, however, Africa has more than fifty times the diplomatic clout than Italy: 54 United Nations votes against Italy’s one. In the guise of increasing trade, foreign powers are seeking alliances for diplomatic advantage, or in the case of the US, to get African cooperation on security issues.

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African nations lay the groundwork for sustainable social services – ACBR 2019

By James Hall

Analysis in brief: The ability of African countries to deliver competent social services to their populations is incrementally improving but has far to go against a background of widespread poverty, poor education and food insecurity.

The measures of Africa’s societal progress are on a gradual upward trend. While this trend is encouraging, much remains to be accomplished to ensure that all of Africa’s people acquire optimal education, food security, healthcare and other necessities of life. The Society quadrant is one of the four quadrants in which African data is divided in the 2019 edition of the Africa Country Benchmark Report (ACBR). The other three quadrants – Business, Economics and Politics – are all components used to make societies better; influencing standards of living, personal health, education and overall social welfare. How business communities, domestic economies and national governments are performing in their roles are ultimately assessed in how well citizens live.

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