Environmental Justice and Water Conflicts in Africa

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Environmental Justice

In 1964, construction of the Kainji dam, 800 km (497 miles) north of Lagos, was undertaken by a consortium of three Italian companies, Impresit Spa, Girola and Lodigiani, who then merged into Impregilo, together with the Netherlands Engineering Company (NEDCO) and the English firm Balfour Beatty Ltd.

The dam, which takes its name from an island on the river, altered the river’s course, creating an artificial lake also named Kainji and causing the forced displacement of local residents. The dam project cost an estimated US$ 209 million, a fourth of which was supposed to cover compensation to local citizens being forcibly displaced. The project was entirely financed by the Nigerian Government together with the Dutch Government, the World Bank and the US Agency for International Development (USAID).Around 40,000 farmers were displaced due to The Kainji dam project, leading to protests, bloackades and public campaigns. The farmers, joined by communities around the project, the local government and some social movements, requested that the government did what was best for the environment and the people. The project stopped, albeit not in response to the protests, but due to a flood that crumbled the dam and damaged the area, doing more damage to the environment and claiming lives.

The restoration of the area and a compensation for the affected population is paramount.

When projects like this would be embarked on, it is only just that people whose livelihoods will be affected by it be carried along. Had there been consultations with the communities involved before the commencement of the project, the concerns they raised during their interactions would have informed ideas on how best to manage the project to ensure its success without too much impact on the communities. Environmental justice is key to the success of major projects like this.


In 2004 and 2005, then dictator Hosni Mubarak issued decrees which essentially privatised the supply of water. This was in line with a World Bank approach that saw privatisation as a means to efficiency and access to loans. Under the decree, authorities in 14 of Egypts 28 governorates were transformed into holding companies and the focus shifted to profit and cost recovery. The price of water increased and citizen protests took place in subsequent years.

From the second half of 2007 till January 2008, Egypt witnessed about 40 protests about the absence of basic rights connected to drinking water, according to one estimate.

The situation led to people accessing water from polluted sources, with obvious health consequences. Protests have continued in subsequent years, linked to declining annual water resources. Egypts water is anticipated to decline by 15.2 billion cubic metres by 2017 from a required 86.2 billion cubic metres to a projected 71.4 billion cubic metres.

While the privatisation seemed to be in the best interest of the Egyptian economy, civil society organisations wanted a people-led process of development that would see water access as a basic right and encourage community ownership.

For what its worth, environmental justice will continue to be a knotty subject. The Egyptian case again brings to fore the politics of justice. What is just and who determines justice will always be up for debate, especially with increasing social inequality in African economies. Usually, what is just differs from one social class to the other. For example, to a poor man, privatisation of water is purely an injustice but to a rich man, if privatisation would ensure availability of water, it is just to privatise. We will continue to have different frames of meanings for decisions taken as it affects the environment.

There is the need to always try to strike a balance after considering all parties that will be affected by decisions about the environment.

Often times, we end up having groups whose interests are satisfied and who think justice has been done, and other stakeholder groups (often local people) who see things very differently. Such differing perceptions of environmental justice are usually at the heart of environmental conflicts.

The above is written as part of my course work on ENVIRONMENTAL JUSTICE (UNIVERSITY OF EAST ANGLIA)

Information about the conflicts was courtesy of EJ Atlas

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Opportunities present themselves during recessions

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Nigeria is in a recession. The National Bureau of Statistics (NBS) is expected to confirm this in less than two weeks when it releases the country’s second quarter (Q2) GDP results. The economy had contracted by 0.36 in the first quarter and it could not have done better in the second quarter.

“Recession is like a fish out of water and the best way to manage it is to take the fish to the water/pond or create a new pond,” says Kamran Azim Head of Operational Risk at Wema Bank Plc. “Locally, the economists and policy makers are on the mode “wait and watch or sitting ducks” which will not help the situation. Any wrong decision today can have a negative outcome for decades to come,” he adds.

Tension is high in the country as inflation continues to rise to record levels. Businesses are shutting down and unemployment soars as organisations reduce staff strength as part of cost-cutting measures. As gloomy as the situation seems, not all businesses will die as a result of recession, some will come out stronger. The difference between the ones that die (or go comatose) and the ones that come out stronger is, knowing what to do during a recession.

Many businesses are in a high state of confusion at the moment. Average running cost keeps rising but revenues continue to drop. Many workers bear the brunt of the situation and are being owed salaries for months. The brave business owners sack some of their workers to keep costs low. For entrepreneurs, the current situation is even worse. While they struggle to move through the arduous stages of setting up a business, recession makes growth almost impossible. During times like this, many startups die before they get any investment. In fact, investors are more careful about where they put their money during recession; only few are willing to take big risks.

Times are hard for businesses: big companies, growth companies and also startups. But there are important messages from Wema Bank that should help everyone through this time of recession.

Opportunities present themselves during recessions

Don’t look too far. Don’t chase too many big deals. What you are looking for may be right at your doorstep. If look well enough, you would see that there are opportunities you can exploit. If you did not know, some small businesses are recession-proof and they survive recession after recession. For example, bakery operators will always enjoy demand for their products, even when prices rise. The Lagos State Association of Master Bakers and Caterers of Nigeria has increased the price of bread by 20 percent, but many families in Lagos, Nigeria’s commercial capital will still eat bread as breakfast tomorrow. However, you should think beyond bread; there are several opportunities outside the bakery.

 Cash is king

Are you a new entrepreneur or a seasoned business owner, please remember that you need cash more than ever before. There is no doubt that uncertainty of the economy is high; it is therefore, wise to keep enough cash on hand to cover at least 30 days of monthly expenses. Of course, you know that cash on hand means funds that are immediately available to a business, as opposed to assets that must be sold to generate cash. Usually such funds are kept in Wema Bank where you can access them any time from the various available channels.

The amount of cash on hand determines what financial hardships can be absorbed without going into debt or arranging other financing. You sure do not want to accumulate debt during this period.

Rejoice! Your competitors will fail

That seemed rather harsh, but it is the truth; a lot of your competitors will close shop one after the other over the coming months. Pity them and move on; grab the opportunity to attract new customers. This is an excellent time for you to expand and take advantage of a larger market share. Don’t sleep on it. Do it now!

However, be careful not to be caught up in the euphoria of your new-found status as a ‘market leader’. Every business owner (especially small businesses) should continue to run his or her business with caution and absolute prudence. There will be more tough times ahead.

Don’t stop shouting

The good news is that recessions do not last forever. Once the current recession ends (some analysts predict December 2016), every survivor has a good chance of emerging stronger. Usually, survivors of recession become the market leaders during the recovery, but these are the ones who never stopped shouting. Whatever you do, don’t cut advertising. Studies by McGraw-Hill Research show that, companies that continue to advertise come out ahead after a recession. Keep telling people what you do and how well you are managing your business to remain profitable despite recession.

For startups, this is the time to be strong. Negative data keep flying around in droves but you cannot be discouraged now. What you need to do is to act! Ask for advice from people who have led businesses through a recession. You will find their experiences very valuable.

 

 

 

Africa’s entertainment and media industry have since moved on from tradition

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“The line between traditional media and digital media is blurred – consumers want more flexibility and freedom in how they consume content.” – PwC

Albums in physical forms don’t really sell anymore. Digital disruption in the music industry over the last decade has changed things.

According to a new report by professional services firm, PwC, African entertainment and media industry has entered a new landscape – one where the media is no longer divided into distinct traditional and digital spheres.

The report titled Entertainment and media outlook: 2015 – 2019 (South Africa – Nigeria-Kenya) presents the Outlook forecasts that South Africa’s entertainment and media industry is expected to grow from R112.7 billion in 2014 to R176.3 billion in 2019, at a compound annual growth rate (CAGR) of 9.4%. Digital spend is expected to fuel the overall growth.

“Consumers are choosing offerings that combine an outstanding and personalised user experience with an intuitive interface and easy access. This includes shared physical experiences like cinema and live concerts, which appear re-energised by digital and social media,” says Vicki Myburgh, entertainment and media leader for PwC Southern Africa.

One of South Africa’s most popular music groups Mi Casa is on a tour and will release a new album on iTunes this month. The group is contributing to the growth of the South African entertainment industry as content providers and making more money as the industry grows. My interview with the group will be published soon on thenerveafrica.com.

From Somaliland to Eritrea, Flydubai has a thing for uncharted routes

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When Emirati budget airline Flydubai began operating flights to Somaliland recently, many wondered why the company chose to add the unknown country to its growing African routes. But barely two months after the four times a week flight to Somaliland started, has it proven to be a good business decision.

“Flights to Somaliland which we operate four times a week have been well received and we are seeing demand for these flights,” said Kareem Mahjoub, a company spokesperson.

Somaliland has been an autonomous region of Somalia for more than 20 years, but its self-proclaimed independence is yet to be recognized by any country or international organisation. It is internationally recognised as part of greater Somalia where terrorist group Al Shabaab is based, the last place on the mind of most businesses. Regardless of this, Flydubai became the first carrier to ply the Dubai-Hargeisa route.

With the success in Somaliland, a route widely believed to be less travelled, Flydubai is set to launch direct flights between Dubai and Eritrea’s capital Asmara starting from October 25. The flights to also be operated four times a week will mark the start of the first direct link between Eritrea and the UAE in line with the Government of Dubai’s vision, by creating trade and tourism flows in previously underserved markets.

Eritrea is not like Somaliland, it is an internationally recognized autonomous country but according to the World Bank, it is the worst place to do business in the world. The country located in the Horn of Africa ranks 189th out of the 189 countries on the World Bank Ease of Doing Business list. But it isn’t just business that is hard to do in Eritrea, the country has a grueling record of human rights violation. Widely criticized over alleged arbitrary arrest and detentions, freedom of speech, press, assembly, and association are limited in Eritrea. Those who practice “unregistered” religions, try to flee the nation, or escape the mandatory military duty are reportedly arrested and put into prison. The Eritrean government had often denied the claims.

Although tension between Eritrea and its neighbours have left the country isolated and UN sanctions have had a negative impact on the overall investment and business environment, the economy of Eritrea has experienced considerable growth in recent years. African Development Bank (AfDB) in a recent report projects Eritrea’s real GDP growth to continue increasing from 2.0 percent in 2014 to 2.1 percent in 2015. This is mainly due to increasing investments in the mining sector.

While Eritrea’s human rights record, as alleged, is condemnable, state-owned flydubai never stops seeing business opportunity in any situation. Eritrea is rich in human and mineral resources such as copper, gold, iron ore, nickel, silica, sulphur, marble, granite and potash. Development of these resources plus the right policies will significantly increase the need for travel between Dubai, the business hub of Middle East and Eritrea, a potential business hub in the Horn of Africa.

Flydubai CEO, Ghaith Al Ghaith said of the launch: “Adding to our recent operations to Burundi, Tanzania, Uganda, Rwanda and Somaliland, we are delighted to add a direct link between the UAE and another emerging market with great potential for more growth”.

Al Ghaith said that the airline was keen to reflect the UAE’s efforts to support emerging markets, particularly in East Africa.

Sudhir Sreedharan, Flydubai’s Senior Vice President Commercial (GCC, Subcontinent, Africa) also noted that “flydubai will be the first UAE carrier to connect Dubai with Asmara as trade and tourism continue to rise between the UAE, Africa and the rest of the world.”

Many international companies have their MEA office in Dubai. With China, South Korea, Italy and Germany believed to be aggressively pursuing market opportunity in Eritrea, more travel is expected in the coming years.

There are also thousands of Eritreans living in the UAE. Sreedharan said “Additionally flights to Asmara will provide the Eritrean diaspora with greater opportunity to visit their families and friends in their home country.”

Buhari’s people-centric policies may be his greatest undoing

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“We will stop corruption and make the ordinary people, the weak and the vulnerable our top priority,” said Muhammadu Buhari while delivering one of the speeches in which he reeled out promises to Nigerians ahead of the 2015 Presidential election. Now president, Buhari is trying his best to stay true to his words but the very promises that made the ‘ordinary Nigerian’ vote for him may be his downfall.

One of the promises of Buhari’s campaign was to create a Social Welfare Program of at least N5000 that will cater for the 25 million poorest and most vulnerable citizens. This will be given once it can be the poor can demonstrate children’s enrolment in school and present evidence of immunisation.

While the social safety net has been lauded as a growing number of developing countries are investing in social safety nets to improve the lives and livelihoods of billions of poor and vulnerable people, according to the World Bank.

In Africa alone, the number of countries setting up social safety net programs has doubled over the past three years. World Bank Group’s Senior Director for Social Protection and Labour notes that “More countries at all income levels are investing in social safety net programs because they are transformational”. Truly, there are evidences to show that these programs provide poor families with funds for the education and health of their children. However, only one out of 10 people on the continent is covered by such programs. The numbers could be worse in Nigeria where data gathering has been a big issue. President Buhari is proposing a conditional cash transfer model, which the World Bank recommends as the best targeted safety net program. This is because it devotes as much as 50 percent of benefits to the poorest 20 percent of the population. The international lender also notes that nearly half of every cash transfer money spills over into the local economy because beneficiaries invest in livelihoods. The prospects look good but several questions have emanated from the proposed social safey program that President Buhari needs to answer truthfully (to himself) before embarking on. More so, no one will hold him for not delivering on one of his promises as he told Nigerians soon after he won the presidential election that his manifesto was ‘subject to modification’.

The first question President Buhari must ask himself is whether the number of Nigeria’s poorest does not exceed 25 million and whether the poorer ones would do just fine without a similar program. According to World Bank’s 2014 figures, there are 178.5 million people in Nigeria, 33.1 percent of which are poor. These numbers show that there are about 59 million poor people in Nigeria. While several Nigerians often argue that World Bank’s data may be flawed as there are several poor people in the country that are not considered in data gathering due to reasons we can only blame the Nigerian government for. A friend once visited Adikpo-Ichol in Benue State and from his description of life in the remote town where there is no power, pipe borne water or health centre, it is unlikely such places get covered in any development indexes. As far as their State government is concerned, the town only exist on paper as they are also said not to be included in the country’s electoral process. However, if Buhari insists there are 25 million ‘poorest Nigerians’ who need the safety net, he should ask himself another question.

Can Nigeria afford the social safety net program at its current state? The president might have answered this to himself already, and that may explain why the program is yet to start. Besides, Buhari’s All Progressives Congress (APC) had announced prior to the elections that he would plug all loopholes through which public funds are being lost. When this happens, the party said the government would “have reasonable quantum of funds for social investments programmes in education, health, and safety nets such as free school meals for children, emergency public works for unemployed youth and pensions for the elderly”. Seeing that the president is still trying to block the leakages, it may be unfair to ask why the program has not started but considering how much the government will be spending on the social safety net program, even when he succeeds in plugging leakages, President Buhari may need to consider other pressing needs that could easily translate to better lives for the country’s poorest. If the government pays N5, 000 to each of the 25 million poorest people every month, the government will be expending N125 billion monthly and N1.5 trillion every year on ‘handouts’ – about 34 percent of Nigeria’s 2015 budget. While safety nets have the potential of reducing poverty, for Nigeria, there is hardly any economic sense in spending as much. Remember there are still no good roads nor good schools or health facilities. We have to fix them first.

Maintaining his people-focus stance, President Buhari also recently decided against removing fuel subsidy despite the proven strain it puts on the nation’s finances. Although the transition committee he set up to design a blueprint for his administration’s activities had advised him to end the subsidy regime which currently costs the country N1.69 billion daily, what President Buhari cares about is how a removal could affect transportation, food, rents, etc. The state of Nigeria’s finances calls for some difficult decisions to be made by the president, but he seems too scared to offend the common man whom he promised ‘Change’ when begging for his vote. With Nigeria still deriving 75 percent of its revenue from oil and oil prices keep crashing, it is only a matter of time before the decisions Mr Buhari is leaving unmade haunt him.

East Africa’s Fate As Oil Crisis Worsens

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Recent oil and gas finds across the East Africa region has positioned it as a lucrative investment destination in Africa. Research has shown that discoveries in the last few years are more than that of any other region in the world, and the boom is expected to continue for the next five years. This impressive position is however becoming less significant as global oil prices continue to fall. A continued decline threatens the region’s economic prospects.

 

Multiple Oil and gas discoveries, better economic prospects

The ongoing market integration by the East African Community (EAC), which comprises Burundi, Kenya, Rwanda, Tanzania and Uganda, has contributed to the region becoming an attractive investment destination. But the recent oil and gas finds in Kenya and Tanzania have also made its prospects even better.

 

East Africa Oil map source: paixetdeveloppement.net

British exploration firm, Tullow Oil and its partner, Africa Oil have found more than 600 million barrels of oil in Kenya, and has discovered over 8 commercially viable oil wells since the first oil find in 2012. Uganda also has 6.5 billion barrels of oil deposits discovered over the last eight years. Tanzania’s natural gas discovery has topped 50.5 trillion cubic feet. Albeit not a member of the EAC, Mozambique is another country in the East African region that has found gas. It has a reserve of about 200 billion cubic feet. The natural gas finds in Tanzania and Mozambique are among the largest in the world.

Uganda and Kenya are expected to commence commercial oil production by 2017, while Mozambique and Tanzania’s natural gas projects are expected to come online in 2019. The discoveries are very important to the region, as they have the potential of hastening economic growth via investments in road, rail and other infrastructure. Whatever bright hopes the region may have before as regards economic growth from oil revenue, has now been lulled by the falling oil prices. Production has not even begun.

Recouping its massive investments in infrastructure just got harder for East Africa

Kenya, Uganda and Tanzania are particularly hopeful to lure investors to key infrastructure to further exploit their oil and natural gas. The region is already investing in infrastructure. Several projects have commenced, one of them is the LAPSETT project valued at $23 billion. It includes the construction of a network of roads, railways and pipelines linking Kenya, Ethiopia and South Sudan.

 

source: vision2030.co.ke

Kenya is expected to increase its spending on infrastructure by 15 percent by 2015. The government also plans to fast-track the construction of a pipeline to export crude.

Uganda has signed an agreement with France’s Total, Britain’s Tullow Oil and China National Offshore Oil Corporation (CNOOC) to develop oil fields and a pipeline linking them to the coastal port of Lamu in Kenya for export. The country is also considering bids from companies including Japan’s Marubeni Corp. and a group of investors led by China Petroleum Pipeline Bureau to build a 60,000-barrel-per-day refinery.

With a loan from the Export-Import Bank of China, Tanzania hopes to complete construction in 2014 of the $1.2-billion Mtwara gas-pipeline project stretching to Dar es Salaam on the coast. Norway-based Statoil and London-based BG Group are also considering a liquefied natural gas (LNG) export plant on the Tanzanian coast.

However, the free fall of global oil prices is beginning to raise fears on whether the region will be able to recoup its massive investments on infrastructure, as investors have become less optimistic. Toronto-listed explorer Africa Oil, whose interests span across several African states such as Kenya and Ethiopia, said this month that its plans in Kenya might be brought into question if the long-term outlook saw prices dropping below $70 a barrel. The company has already put up part of its stake in Kenya for sale.

 

Oil legislation

The region’s future economic growth seem to have been tied to its oil boom, as legislations aimed at milking the new found cash cow is being effected across East Africa.Even Rwanda whose hope of striking oil is just being kept alive by the success of its neighbours, have put an exploration policy in place ahead of its anticipated discovery. The upstream petroleum law is also currently being drafted.

Kenya has raised the capital gains tax for oil and gas related transactions to 37.5 percent. Analysts have however said it will have a negative impact on the development of the exploration industry still in its early stage. This will include potential barriers to entry for new investors and erosion of present investor confidence. When Kenya announced its capital gains tax plans in September, the shares of Canadian firm Africa Oil, one of the major exploration companies working in the country, dropped. This shows how far-reaching the effect of the new tax regime can be.

Kenya has licensed 41 out of its 46 oil and gas blocks to 21 companies, showing the country’s eagerness to start making money from oil. Its Petroleum Bill is also expected to be passed by Parliament this month. The bill proposes, among other things that petroleum production be managed under the Energy Regulatory Authority; it stipulates how the revenues from future oil and gas extraction should be shared.

There also contains in the bill, a proposal to establish the Kenya National Sovereign Wealth Fund. The fund would build a portfolio of investment in Kenya and abroad, and it will consist of a stabilization fund, a future generation fund and an infrastructure and development fund. However, with the continued decline in oil prices, Kenya may have to wait close to a decade to actualize these plans.

East Africa gets a wake-up call

The multiple oil finds in the region may be good news for East Africa, but it is coming at a bad time. The present oil glut which is making prices fall seem set to continue, as the much awaited meeting of OPEC ended with the cartel maintaining its output at 30 million barrels per day. Some analysts have said that oil prices could fall to as low as $60 per barrel if OPEC does not agree to a significant output cut.

 

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With oil-based economies struggling under the impact of the price fall, it is unlikely that prospective oil producers will get any new investments in the mean time, as investors hold back to see where the oil market heads in the coming months.

Although the current trend in the oil market is not expected to play on for too long, East Africa might have just gotten a wake-up call. It has to ensure it does not get carried away by the natural resources boom and fall into the Dutch disease risk. The region should continue its market integration and focus on strengthening its manufacturing and agricultural sectors.

 

How Africa Is Losing Billions To Conflicts

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When American author and poet, Maya Angelou said “I thought if war did not include killing, I’d like to see one every year,” she apparently wasn’t thinking of the economics of war. Conflicts in Africa have led to the squandering of rich mineral, agricultural and human resources that should have benefited the masses, while robbing African communities of their developmental potentials.

Although, international media seem to blow armed conflicts in Africa out of proportion as many would argue, it is however true that the continent has had its hands full in recent times, with armed conflicts deteriorating into terrorism as well as political uprising impeding economic growth in the north. On average, violent conflicts shrink a country’s economy by 15 percent, a percentage international organisation, Oxfam says is a conservative one, as the real cost could be much higher. Military expenditure, medical costs, destroyed infrastructure and care for displaced persons are some of the obvious ways countries lose money to conflicts.

 

A Growing Occurrence in Africa

Wonder why conflicts are becoming synonymous to African communities? Many are quick to attribute this to the continent’s ethnic and religious diversity. But a research titled “Why are there so many civil wars in Africa? Understanding and preventing violent conflict”, by scholars, E. Elbadawi and N. Sambanis showed that “the relatively higher incidence of war in Africa is not due to the ethno-linguistic fragmentation of its countries, but rather to high levels of poverty, failed political institutions and economic dependence on natural resources.”

Conflicts have therefore continued in Africa as bad leadership, dictatorship and lack of political will to face socio-economic challenges head-on continue to extend the reign of violence in most African nations.

The Ibrahim Prize for Achievement in African Leadership has been acclaimed as the world’s biggest individual prize, but it has not been awarded since 2009. In a statement by Mo Ibrahim Foundation, organiser of the award, said they decided not to give the 2013 laureate to any African leader “after careful consideration”. Apparently, no African leader was deem fit for the award. Whether any African leader will make the cut and win the $5 million prize (plus $200,000 annually for life) set up by Sudan-born billionaire Mo Ibrahim remains to be seen.

Poverty level has also remained high on the continent, with 75 percent of the world’s poorest countries located on the continent; for years now, the Democratic Republic of Congo (DRC) has been ranked the poorest in the world, says The Borgen Project, a non-profit organisation. The World Bank also affirms that 218 million people in Sub-Saharan Africa live in extreme poverty.

Despite efforts to end crises on the continent, violence keeps rearing its ugly head in many parts of Africa. This, according to a report by Jeffrey Gettleman, East African Bureau Chief for New York Times, is because some of Africa’s bloodiest, most brutal wars are not really wars. “Not in the traditional sense, at least,” he wrote. “The combatants don’t have much of an ideology; they don’t have clear goals. They couldn’t care less about taking over capitals or major cities — in fact, they prefer the deep bush, where it is far easier to commit crimes. Today’s rebels seem especially uninterested in winning converts, content instead to steal other people’s children, stick Kalashnikovs or axes in their hands, and make them do the killing. Look closely at some of the continent’s most intractable conflicts, from the rebel-laden creeks of the Niger Delta to the inferno in the Democratic Republic of the Congo, and this is what you will find,” Gettleman explained. “Terror has become an end, not just a means,” he added.

Economic Consequences In their 2003 publication titled; Breaking the Conflict Trap: Civil War and Development Policy, Collier, Paul, V. L. Elliott, Håvard Hegre, Anke Hoeffler, Marta Reynal-Querol, and Nicholas Sambanis noted that capital may take flight from a country plagued by a civil war. Enders, Walter and Todd Sandler’s 1996 article on “Terrorism and Foreign Direct Investment in Spain”, added that, a sufficiently intense terrorist campaign may greatly reduce capital inflows. Conflicts in Africa, since the end of the cold war till 2007, has cost the continent $241 billion, an Oxfam report at the time said. Since that report, many more conflicts have ravaged the continent and several more billions of dollars lost in the process; The Oxfam report estimated that $18 billion is lost to war annually in Africa. Conflicts have both long and short-term impacts on African economies, with developmental, environmental and human well-being all affected – reducing quality of life, capabilities of people to live the kinds of lives they value. Despite all these challenges, Africa’s economy has risen to be one of the fastest growing in the world, with countries like Nigeria and Ethiopia getting a projected GDP growth of more than 7 percent in 2014.

The West African country recently became the largest economy in Africa after a recalculation of its GDP, but it still contends with insurgency in its north east. The Islamist sect, Boko Haram is responsible for thousands of deaths and destruction of property worth millions over the years in its quest for a state ruled under Islamic law, Sharia. Other African countries have had their share of civil war, terrorism and violence which has grounded economic activities of several cities, halting growth and development. But come to think of it, with the current economic growth in Africa, how much more would Africa’s economy grow if there were no crises claiming billions of dollars annually?

 

Arab Spring

The tragic suicide of a young vegetable seller in Tunisia on December 17, 2010 signalled the beginning of what the world came to know as the Arab spring. Mohamed Bouaziz could not find a job and was selling fruit at a roadside in Sidi Bouzid, but a municipal inspector confiscated his wares. Frustrated with the situation, he set himself on fire an hour later in protest of police corruption and ill treatment. He died on January 4, 2011. Various groups pained by his death and the situation of the country which they blamed for Bouaziz’s death came together to begin the Tunisian revolution.

The protest in Tunisia was successful and President Zine Al Abidine fled to Saudi Arabia. This sparked a wave of unrest in Algeria, Egypt, Libya and Morocco. President Hosni Mubarak resigned in Egypt on February 11, 2011 after 18 days of massive protests, signalling an end to his 30-year presidency. Muammar Gaddafi of Libya was overthrown on August 23, 2011. Most of these protests deteriorated into civil war. Gaddafi was killed after a civil war with foreign military intervention led to the overthrow of his government.

According to HSBC, the Arab spring not only led to loss of lives, billions of dollars were also lost. In a 2013 report by the bank, apart from the economic and human cost of lives during uprising in these countries, the impact even in post-revolution states is obvious.

“We estimate the value of lost output will top $800 billion by the end of next year (2014),” the HSBC report said. The bank considered seven states most affected, which include African countries: Egypt, Libya and Tunisia. It said GDP for those countries would be 35 percent lower at the end of 2014 than if there had been no Arab Spring. The Financial Times however notes that the damage to the Arab Spring countries hasn’t been to GDP alone as unemployment remains high – among the highest in the world. “The rates are really depressingly high if you look at the region as a whole,” said Sudeep Reddy, a reporter on economics for The Wall Street Journal on TV in September, 2013.

“About 25 percent of youth, 1 in 4 people are unemployed between the ages of 15 and 24 – and that is actually, probably undercounting the severity of the problem,” Reddy said at the time. According to Africa Development Bank (AfDB), many Egyptians living below the poverty line are “still waiting to reap the full benefits of lasting social, political and economic change,” even years after the Arab Spring. The Arab Spring has also made Africa less attractive to certain investors. Although Africa as a whole is enjoying improved Foreign Direct Investment (FDI) driven by improved environment for doing business in West and East Africa, same cannot be said about North Africa. The International Institute of Finance (IIF) estimated private capital inflows into emerging markets at around $1.181 trillion in 2012, with a modest $73 billion going to the Middle East and Africa. It was however forecast to rise to $82 billion by 2013 and $84 billion in 2014. “Domestic political developments and geopolitical uncertainties have more of an impact on flows to non-oil exporting countries in the MENA region (Egypt, Lebanon and Morocco), the IIF said.

 

East Africa

Just two years after the world’s newest state was formed, the East African State, South Sudan has suffered from one crisis or the other. A new wave began in December 2013 after fighting escalated between army factions allied with President Salva Kiir and those of his former vice president Riek Machar. South Sudan’s economy is the world’s most oil-dependent, with oil exports accounting for 98 percent of the country’s revenue (as of January 2012) and approximately 80 percent of its gross domestic product. Nearly 10,000 people have been killed in the South Sudan conflict, according to the International Crisis Group.

The UN Office for the Coordination of Humanitarian Affairs (OCHA) also estimated that 413,000 people have been internally displaced, while 74,300 refugees have fled to neighbouring countries. Kenya’s foreign affairs secretary, Amina Mohammed said the violence in South Sudan spells economic trouble for Kenyan investors who had big businesses in Juba, a January report by Sabahionline, an online news platform in East Africa said. Kenyan business people and companies, especially in the banking and construction sectors, had made great strides in South Sudan, she said, but lamented that businesses belonging to Kenyans have been looted in the violence. According to Mohammed, if the conflict does not end soon, the economic implications will be felt in Kenya, as thousands of citizens who have lost job opportunities in South Sudan return home to compete for the few opportunities available in Kenya.

Apart from the economic effect the violence in Sudan is sure to have on Kenya if it continues, the Inspector General of Police, David Kimaiyo highlighted security as another concern. “Essentially, lack of law and order with our close neighbours will lead to the infiltration of illegal firearms into Kenya. This may lead to an upsurge of crime like cattle raids and formation of dangerous criminal groups,” he said. This might have started already, as the level of violence in Kenya has increased in recent times. Although none has been directly traced to refugees, returnees or fighters from South Sudan, violence in East Africa’s largest economy is said to have already started threatening foreign investments.

 

Aids and Gains

The West have been playing big brother for African countries by providing aids to combat HIV/AIDS, polio, develop infrastructure amongst others. However, their contribution to armed conflict in Africa does not say much about their philanthropic roles. Although they may be contributing a lot to financing these operations, none of the top donors to Africa are among the top 5 countries contributing security personnel to the United Nations peacekeeping operations.

The world’s most powerful countries are also the world’s biggest arms suppliers. France, Russia, China, Britain and the US, together account for over 80 percent of the world’s conventional arms exports. Between 2000 and 2004, the US, Britain and France earned more income from arms exports to Africa, Asia, the Middle East and Latin America than they provided in aid, according to controlarms.org.

The world is awed by Africa’s economic resurgence. Despite the growth-hampering conditions prevalent on the continent, several foreign companies invest billions of dollars on Africa’s potential – growth statistics, return on investment, hugely untapped market to name a few.

 

A Conflict-Free Continent

Imagine a Nigeria without Boko Haram bombings in the North, imagine an Egypt without the political crises, imagine a Libya without civil war, imagine a Mali without conflict, imagine a Democratic Republic of Congo (DRC) without the Kivu conflict, and imagine a Somalia without the civil war; that’s Africa with additional $18 billion saved. This can be expended on further developing the continent’s much needed infrastructure deficit.

For what it is worth, Africa is seeing marginal but commendable strides in terms of leadership, with the continent now able to boast of leaders and individuals that are championing a new era of growth, despite all odds. Democracy is gradually taking root in Africa and leaders are becoming more accountable.

Thus, if high levels of poverty, failed political institutions and economic dependence on natural resources were the major causes of conflicts, Africa is managing to steer itself through the midst of challenges, as countries on the continent are embracing political stability, birthed exponential economic growth. Also a new crop of young African leaders, refined with global standards, are demanding and implementing strategies to ensure the African renaissance continues.

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