IOA Position Papers

Unique attractions lift Africa’s hospitality industry

Analysis in brief: As Africa’s hospitality industry welcomes foreign visitors in record numbers, contemporary trends are directing future tourism growth. Egypt and South Africa remain top tourist destinations, staying at the forefront of holiday innovations.

Most major African economies host annual tourism conventions. These can be government sponsored like Africa’s Travel Indaba held each May in ocean-side holiday-destination Durban, South Africa, or they are presented by the private hospitality industry itself, such as the African Hospitality Investment Forum that concluded in Windhoek, Namibia, on 27 June 2024. The common factor that has threaded through all the tourism conventions in 2024 has been optimism from rising tourism numbers, including overseas visitors, attendance of attractions and overall tourism revenue. At these conferences, trends are noted, and the means to exploit these trends are presented. With few exceptions, the dark days of the Covid-19 pandemic are history, and companies that did not survive the tourism industry’s long closure are reportedly regrouping to form new enterprises.

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Conflict continues to produce food security crises

Analysis in brief: Insurgencies are the primary cause of food shortages throughout Africa in 2024, with the Sahel region particularly affected. Harsh weather wrought by climate change worsen the food production outlook. Sustainable solutions are available, but all rely on the establishment of peace and security.

Identifying the challenges

Conflict has negatively affected food production throughout Africa’s history. In 2024, the perpetual plague of conflict in various African locations has put millions of people in danger of starvation, outstripping available international aid. The 21st century has brought a new perennial plague: global warming, causing severe weather like flooding and drought that disrupts food production. Both conflict and climate change are human-caused maladies that can be ended through human actions. For the foreseeable future, however, humanitarian groups can only track areas of the highest danger and prepare mitigation measures.

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Resource management: An African perspective

Analysis in brief: The discussion about the exploitation of Africa’s mineral resources, particularly rare earth minerals, is being conducted from a Western point of view. In this context, African countries have legitimate reasons for seeking the best deal for themselves for commodities whose deposits are vast but, nonetheless, finite.

The term ‘resource management’ carries the benign suggestion of simply managing natural resources for maximum benefit for the country on whose lands they originate. However, the term is often used interchangeably with the more sinister ‘resource nationalism’, with its implications of nationalising foreign investments and thus making investment riskier. To African nations, resource management is the preventative function against what was robbed of their immense but finite mineral wealth during the colonial era. To foreign investors, the term is synonymous with stifling state protectionism. Two often-competing factors are essential to the economic prosperity of African nations. The first is the need to keep African nations as senior partners in the exploitation of their minerals. The second is need to maintain foreign investment. The optimal way to achieve both goals is through negotiations with multinational firms who have business sense to honour national sovereignties.

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Failure to stop terrorism financing is largely a failure of political will

Analysis in brief: African countries are consistently targeted by terrorist organisations, but nearly two-dozen governments are failing to follow international guidelines to stop the financing of these groups. Harm to national economies results, while an unintended failing of governments, is a beneficial outcome for terrorists seeking to destabilise Africa.

The Financial Action Task Force (FATF) is the international community’s answer to terrorist financing. FATF sets guidelines for governments to stem the flow of money to terror groups and steers countries towards meeting those goals. However, achieving regulatory reform can be one cost too many for poor African countries. Consequently, half (12 of 21) of the countries ‘greylisted’ by FATF are African. Blacklisted countries like Iran and North Korea are actual sponsors of terrorism: These are sovereign states where funding originates, which is then distributed across Africa through a system of corrupt politicians, crooked accountants, underhanded lawyers and lackadaisical banks with money transfer oversight. Countries that allow this to happen become facilitators of terrorism and are greylisted for this authorisation. To return to legitimacy, they need to clean up their acts by enacting financial reform measures. In addition, to demonstrate their serious intentions, governments need to prosecute money launderers.

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Sub-Saharan Africa’s national economies improve when new thinking is applied

Analysis in brief: The varying degrees of economic growth between Africa’s five regions illustrates how fundamentals like electricity supply determine economic performance. Continentally, Africa is achieving good – if delayed – post-Covid epidemic growth.

Overall, Sub-Saharan Africa will record positive economic growth in 2024, according to the African Development Bank and the World Bank, although the forecast degrees vary. However, for some countries, even positive growth is insufficient if it falls below population growth, leading to new jobs being created for an unmatched number of job seekers. True economic growth must raise the standard of living for all the citizens of a country. This cannot be achieved when economic inequity results from a country’s elite controlling a large percentage of a country’s wealth, leaving the large majority of the population mired in poverty. While economic inequity must be addressed as an ongoing concern, this paper’s focus is on the rising countries’ economic performances.

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Africa’s legitimate elections offer the change African people desire

Analysis in brief: 2024 sees an unusually substantial number of elections throughout Africa. Whenever African people may vote in free and fair elections, they choose their own interests. However, depending on the African country’s leadership, many Africans are not given a genuine opportunity to achieve change.

Determining real from stage-managed elections

National elections have the potential to change governments and usher in new policies that allow national, economic and social growth. The significant elections of 2024 are all national in scope:

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Harnessing solar energy bridges energy access gaps for Africa’s future

By Chipo Maziva

Analysis in brief: Africa holds the greatest potential for solar energy, yet this enormous potential remains largely untapped. Solar energy represents a unique transformational opportunity that can provide reliable, affordable and sustainable electricity supply and improve economic prospects and the quality of life for all Africans. To this end, Africa needs to reconsider its approach through credible action and accountability in the use of its abundant indigenous energy resources.

Africa’s crippling electricity problem

As Africa’s economy continues to expand, access to sustainable and affordable energy is becoming increasingly essential for supporting robust economic growth and improving the livelihoods of all Africans. In 2021, an estimated 600 million Africans did not have access to electricity. Compared to the rest of the world, Africa generates only 4% of the global energy. Despite the tremendous potential that Africa’s energy sector holds, private sector investment in energy infrastructure and service delivery remains minimal.

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Africa’s maritime industry is improving by embracing digitalisation

Analysis in brief: The realities of rapidly evolving ship technology and competition from other means of transportation have compelled Africa’s maritime industry to become more efficient, faster and environmentally friendly. This is largely achieved by the industry adopting digital solutions.

Online and computerised solutions to tasks associated with the maritime industry have made for more efficient movement of goods by sea, and much more is in store. In many ways, shipping remains as it has always been. Cargos are loaded and unloaded onto ships for voyages from Africa’s great Atlantic and Indian Oceans and Mediterranean Sea ports or from freshwater ports on Africa’s mighty rivers or great lakes. These trips are significantly enhanced by modern technologies like GPS, which make it impossible for any vessel to be ‘lost at sea.’ Cargo still goes through customs, but this process is also expedited by digital technologies. In shipping, speed and efficiency are the goals that need to be met to drive down costs. Lower shipping costs mean more profit for businesses and reduced prices paid by consumers.

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New Red Sea Pirates required a unified international response

Analysis in brief: Ships at sea are as vulnerable to pirate attacks today as they ever were in history. In the Red Sea, the pirates are anti-West militants whose attacks on ships have caused global economic havoc and worrisome environmental harm. Only an international coalition will end the danger.

The cause of the crisis

Never has a small country been able to hold hostage so much of the world and cause such damage to global wealth and the environment as the Houthi militant group that controls much of Yemen, located on the Red Sea, only 762 km from mainland Africa. Because of its dominant control of the country, thus becoming the principal governing force, the country name Yemen is often used in the media to describe the perpetrators of the Red Sea attacks, so that Yemen and Houthi become synonyms. In fact, the Houthi are sponsored by Iran, which seeks to control Yemen, while the runt government of Yemen is supported by Saudi Arabia, which also wishes to rule the country. Thus, the civil war can be seen as a proxy war between Iran and Saudi Arabia. Like Iran and Saudi Arabia, the Houthi militant group has seen the Israel-Palestine conflict as its excuse to raise its profile in the world. Yemen originally claimed it was only seeking to impede Israeli shipping in an effort to harm that country’s economy when its militants attacked Israeli’s first ship in October 2023. The ruse was quickly exposed when indiscriminate attacks on all vessels using the Red Sea shipping lanes became so virulent that world shippers abandoned the route. This has resulted in global economic harm and environmental damage.

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New age for Africa’s mineral wealth

Analysis in brief: New discoveries of valuable minerals remain regular occurrences throughout Africa. Getting these natural resources to market requires adaptations to new environmental, labour and social realities to ensure economic benefits are truly equitable.

While the trend in Africa’s minerals is shifting toward a demand for rare earth metals, there remains strong interest in and perennial customers for Africa’s traditional mineral extracts, from precious metals (like gemstones and gold) and industrial inputs (like copper) to energy extracts (like natural gas and oil). To meet the demand from all sources, exploration is an ongoing activity continentally. Scores of mineral deposits are located annually. A look at mineral discoveries from 1990 to 2020 shows all regions of Africa are bursting with new exploitable mineral wealth.

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Climate financing in Africa

Analysis in brief: The cost of financing projects to mitigate the harmful effects of climate change are beyond the means of African countries, and the private sector is not doing enough. Creative financial tools may be the answer.

The irony that the continent that contributes the lowest amount to global-warming carbon emissions but suffers the worst initial effects of climate change is not lost to Africa’s governments. They face a massive financial challenge of mounting mitigation efforts to save their environments and populations. Droughts have become disasters occurring with predictable regularity in East Africa, with the Horn of Africa particularly hard hit, while arid conditions in North Africa and the Sahel region have worsened. Storms are intensifying in Southern Africa, and the intensity of tropical cyclones striking Madagascar has grown.

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