Position Papers

Analysis in brief: The amount of remittances sent by Africans working abroad to their home countries is so great that they are a factor in nations’ economic growth. But high transaction costs and customer accessibility are troubling these financial lifelines. While remittances to Africa were up in 2022, the rate of growth for these transactions is being hindered.

The importance of remittances will only grow

Remittances are defined as financial transfers made by migrants to their friends or family members back in the places from which they originated. Usually, remittances are country-to-country transfers. However, in-country remittances are also important, as workers in one part of the country, often under contract or perhaps employed by the UN or an NGO, send home portions of their earnings. Remittances are an important and, in some cases, essential source of household income for citizens of Low- and Middle-Income Countries (LMIC) – a definition that incorporates all African nations except for Mauritius. Remittances are lifesavers when it comes to mitigating the impact of disasters faced by the sender’s relatives, who have little or no income, and act as a social safety net for family members living in underdeveloped areas.

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Analysis in brief: With half of agricultural production wasted due to rotting and essential drugs spoiled from a lack of refrigeration, the need for a sustainable cold chain from field to market is now recognised by the private and public sectors. Action is being taken by innovative pilot projects for small farmers, and there is massive investment in shipping preservation.

Investment in preservation devices is no trivial matter

Cameroonian entrepreneur Anastasie Obama was recognised by the UN in 2021 as a “Food Hero” for adding revenue to prawn exports by using a family recipe of smoking the seafood to make a value-added product. Her business has grown since that recognition, thanks to improvements in a system that allows her company to mass-produce their tasty product. That system is a better cold chain infrastructure. A cold chain is a temperature-controlled supply chain that preserves agricultural products – fruits and vegetables, fish and meat, dairy and cut flowers – from the moment of harvest to the items’ arrival at stores and markets. Some of these markets are overseas. However, by the time a perishable product has reached a port or airport, the cold chain infrastructure available there is usually well-developed. It is on the farm itself and transportation links from farm to shipper where problems arise.

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Analysis in brief: Africans’ desire for democracy continues to be challenged by autocrats, and much of the struggle centres on how to secure the legitimacy of the essential element that makes democracy work, and that necessity is a free election.

An election offering no choices is a danger to national security

Democracy is being undermined globally – and not just in Africa. Corrupt elections are one major encumbrance to democratisation, but illegitimate elections mounted by autocratic governments create a vicious circle. These choiceless elections are held in the name of ‘democracy’, and when they fail to deliver change, they are then used by autocrats as reasons why democracy is not an ideal mode of government. Elections, according to non-democratic forces, cannot express the will of the people, which is only truly known, they claim, by the benevolent autocrat himself. This is paradoxical because there is only one system that empowers a nation’s people with self-governance, and that is democracy (from the Greek word “demo,” meaning “the many”). Oligarchies are government of the few, and monarchies and dictatorships are government of the one (“mono”). It is not democracy that fails the people, it is people who fail democracy by not recognising and overcoming political power usurpers who rob them of self-governance. All governance is aimed at fulfilling self-interests. In democracies, the interests of the entire population are met through the collective use of state financial, security, judicial, administrative and legislative bodies. For non-democratic systems, these institutions serve to fulfil the self-interest of the ruling elite.

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Analysis in brief: Compared to media coverage given to piracy in West Africa’s Gulf of Guinea at its height two years ago, relatively little attention has been given to this year’s decrease in the area’s piracy. Piracy is one of several economic and security threats to the region that originates in its coastal waters.

Still a grave threat, West Africa’s pirates no longer pillage without impunity

For centuries, the Gulf of Guinea has been the transportation and trade lifeline between 20 Central and West African coastal and five landlocked nations. The waters of the coastline that measures 6,000 km is also vital to the economies of landlocked Central African nations whose imports and exports travel by road, rail and river barge to and from Atlantic Ocean ports. The gulf is defined by Senegal in the north and Angola to the south – a maritime area encompassing 11,000 square km (4,247 square miles). Because of oil shipped through the gulf from Nigeria and Central, Southern and West African sources, the Gulf of Guinea remains one of the world’s most important shipping routes. One out of four ships sailing to and from Africa passes through this gulf, which is 25% of African maritime traffic.

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Analysis in brief: Water insecurity is a continent-wide crisis throughout Africa. The Nile River exemplifies what happens when climate change and population growth stress even a massive body of water on which millions of people depend.

Africa’s insufficient water resources

All of Africa’s most notable water crises, including the shrinkage of Lake Victoria and the disappearance of Lake Chad, are part of a larger scenario involving African nations’ water security. It may come as a surprise that Africa’s most water-secure country is Egypt, which is 90% desert and where 90% of the people are forced by their country’s environment to live within 50 km of the great Nile River – the historic source of the people’s lives and livelihoods. This is due to water-use planning that has been practiced for millennia to ensure the survival of the population.

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Analysis in brief: Africa will be the world’s last continent to embrace electric vehicle technology, largely because of the world’s use of Africa as a marketplace for its used petrol-powered cars. However, the next 15 years, which will see Africa’s transition to the inevitability of electric vehicles, will be time used by African countries to prepare the infrastructure and policy needed for the transportation revolution.

Cost hinders electric vehicle roll-out

Africa contributes 10% of the world’s carbon emissions – the cause of global warming that is disproportionately and negatively impacting Africa. However, that percentage is certain to rise because Africans will still be driving polluting petrol-powered vehicles long after these have been phased out of the developed world. The reason: 85% of vehicles purchased in Sub-Saharan Africa are used cars imported from the rest of the world. While electric vehicles (EVs) are less costly to use over the vehicle’s lifetime – electricity is cheaper than petrol – their upfront purchase price is prohibitively high for most Africans. A used petrol car imported from abroad costs a fraction of the US$ 55,000 price tag of an average EV. Of course, if the developed world were serious about cutting carbon emissions, it would ban the export of used petrol cars. Instead, the developed world seeks one last profit from Africa for its discarded petrol cars. A UN Environmental Programme (UNEP) study found that 40 of 49 Sub-Saharan African countries have poor-to-weak used-car market regulations, allowing cars with low emission standards to contribute to a growing crisis of urban air pollution, which is all the more reason to switch to EVs.

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Analysis in brief: A highway system across Northern Africa’s Sahel region is being completed much more rapidly than the proposed continent-spanning Trans-African Highway. A major transportation advancement, the link’s potential to spark investment opportunities recalls the days when Africa’s first railroads opened new lands for commerce.

Like the Trans-African Highway that has been decades in the making, the Northern African Trans-Sahelian Highway is not just one route but consists of several interlinking highways. This is because neither the Trans-African Highway nor the regional highway for the Sahel can hope to reach the many places required for connectivity – without a map of such a road resembling a spider web. While the trans-African ‘Cape to Cairo’ highway will require decades more work to be realised, the Trans-Sahelian Highway is 90% completed.

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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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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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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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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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