Africa Archive

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Cash Transfer Programs Succeed for Zambia’s Poor, Offer Lessons for Battling African Poverty, AIR Finds

African nations increasingly embrace cash transfers to combat the continent’s cycle of poverty WASHINGTON D.C., United States of America, June 8, 2016/ — Programs designed to alleviate hunger and increase food supply through cash transfers to some of Zambia’s poorest families achieved those goals and more, final evaluations conducted by the American Institutes for Research (AIR) (http://www.AIR.org) revealed. Overall, researchers found that a cash-transfer program geared toward families with at least one young child had effects that amounted to a net benefit of 1.5 kwacha—Zambia’s currency— for each kwacha transferred. A second program for households with fewer able-bodied people to farm had effects that amounted to a net benefit of 1.68 kwacha for each kwacha transferred. Besides eating more meals and building more reliable food reserves, families used the money to improve their housing, buy additional necessities for their children, acquire more livestock and reduce debt. The studies, commissioned by […]
African nations increasingly embrace cash transfers to combat the continent’s cycle of poverty
WASHINGTON D.C., United States of America, June 8, 2016/ — Programs designed to alleviate hunger and increase food supply through cash transfers to some of Zambia’s poorest families achieved those goals and more, final evaluations conducted by the American Institutes for Research (AIR) (http://www.AIR.org) revealed.

Overall, researchers found that a cash-transfer program geared toward families with at least one young child had effects that amounted to a net benefit of 1.5 kwacha—Zambia’s currency— for each kwacha transferred. A second program for households with fewer able-bodied people to farm had effects that amounted to a net benefit of 1.68 kwacha for each kwacha transferred.

Besides eating more meals and building more reliable food reserves, families used the money to improve their housing, buy additional necessities for their children, acquire more livestock and reduce debt.

The studies, commissioned by UNICEF, are likely to be closely watched as African nations increasingly embrace cash transfers to combat the continent’s cycle of poverty. South Africa’s program is the largest, with roughly 16.1 million people—about a third of its population—receiving some kind of social grant.

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Notably, the two Zambian programs were unconditional—providing small, consistent sums of money with no strings attached on how they were spent. The programs bucked general criticisms that cash transfers spark dependency. Rather, the discretionary approach empowered families, who used the grants to improve their living standards in ways that made sense given their individual circumstances. At no point during the multiyear grants did alcohol consumption increase. Nor was there any impact on fertility, according to the evaluations.

“The unconditional approach worked,” said Stanfield Michelo, director of social welfare at Zambia’s Ministry of Community Development and Social Welfare. “And because it did, the region is making positive strides. Without a doubt, the changes would not have been possible without AIR’s rigorous evaluations.”

The evaluation of the Child Grant cash-transfer program (CGP) lasted four years, and the evaluation of the Multiple Category Targeting Grant (MCTG) lasted three years. Begun in 2010 in three of Zambia’s poorest districts, the CGP was open to all households with at least one child under age 4. Half were randomly assigned to receive cash transfers of 60 kwacha ($12) a month, and half to a control group that did not receive funds. The MCTG was aimed at poor households with fewer able-bodied people to farm, due largely to a “missing generation” of parents in their 30s and 40s and disproportionally high numbers of adolescents and orphans cared for by widows and grandparents. As with the CGP, half the MCTG participants received the equivalent of $12 a month and half were in a control group that didn’t.

The studies were notable not only for their duration, but also for their use of randomization and control groups to tease out the program’s true effects.

“Few evaluations of cash transfer programs can make such strong causal claims with as much certainty as these two evaluations,” said David Seidenfeld (http://www.air.org/person/david-seidenfeld), AIR’s senior director of international research and evaluation and lead study author. “The design of the study, which extended over several years, allowed us to see that the beneficiaries do not grow complacent over time, but instead find ways to grow the value of the transfer beyond benefits related to food security and consumption.”

Although the studies revealed persistent successes, they also offered future researchers and policymakers an idea of cash transfers’ limitations. The studies did not show consistent successes in education or child nutrition, possibly due to large-scale infrastructure issues—namely, the supply of social services, access to clean water, and a lack of health care and education facilities.

Among the studies’ principal lessons, researchers found that the degree of positive impact depended largely on the participants’ characteristics. For example, the multiple-category grants had large impacts on schooling because participating households had more school-age children. Overall, school enrollment jumps of 8 percent for children ages 11–14 and 11 percent for children 15–17 were attributed to the program, and these age groups are at the greatest risk of dropping out in Zambia, according to the report. By contrast, four years into the program, the child grants had no enrollment or attendance impacts for children in three groups: ages 4–7, 8–10 and 15–17.

“Another lesson is that the unconditional nature of the grants gave participants the flexibility to use the money to combat principal life challenges,” said UNICEF Zambia Representative Hamid El-Bashir Ibrahim. “For example, the CGP significantly affected many indicators commonly associated with resiliency—the ability to manage and withstand shocks. Households with transfers significantly improved housing quality and tools, livestock procurement, and opportunities to diversify income-generating activities so they could better withstand emergencies.”

“The overall results demonstrate unequivocally that common perceptions about cash transfers—that they are handouts and cause dependency, or lead to alcohol and tobacco consumption, or increases in pregnancy—are not true in Zambia,” Seidenfeld said. “Quite the contrary. Due to the unconditional nature of the grants, households had the flexibility needed to meet their most pressing challenges head on.”

The final reports on the Child Grant cash transfer program (http://bit.ly/25KDdJk) and the Multiple Category Transfer Grant program (http://bit.ly/1Udb21M) can be found on AIR’s website. The site also features a video (http://bit.ly/1TXR5Oe) of David Seidenfeld discussing lessons learned from the multiyear studies.

Source: APO (African Press Organization) on behalf of American Institutes for Research (AIR).

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What would Magufuli do? … to cut costs

Users tweeting #WhatWouldMagufuliDo are offering wry ways to emulate Tanzania’s John Magufuli’s clampdown on wasteful spending.


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Corruption on the rise in Africa poll as governments seen failing to stop it

Transparency International estimates 75 million Africans paid a bribe in the past year BERLIN, Germany, December 1, 2015 ()TI/APO) – A majority of Africans say corruption has risen in the past 12 months and most governments are seen as failing in their duty to stop the abuse of power, bribery and secret deals, according to a new opinion poll from Transparency International (http://www.Transparency.org). In the report People and Corruption: Africa Survey 2015, part of the Global Corruption Barometer, Transparency International partnered with Afrobarometer, which spoke to 43,143 respondents across 28 countries in Sub-Saharan Africa between March 2014 and September 2015 to ask them about their experiences and perceptions of corruption in their country. The majority (58 per cent) of Africans in the surveyed countries, say corruption has increased over the past 12 months. In 18 out of 28 countries surveyed a large majority of people said their government is doing […]
Transparency International estimates 75 million Africans paid a bribe in the past year
BERLIN, Germany, December 1, 2015 ()TI/APO) – A majority of Africans say corruption has risen in the past 12 months and most governments are seen as failing in their duty to stop the abuse of power, bribery and secret deals, according to a new opinion poll from Transparency International (http://www.Transparency.org).

In the report People and Corruption: Africa Survey 2015, part of the Global Corruption Barometer, Transparency International partnered with Afrobarometer, which spoke to 43,143 respondents across 28 countries in Sub-Saharan Africa between March 2014 and September 2015 to ask them about their experiences and perceptions of corruption in their country.

The majority (58 per cent) of Africans in the surveyed countries, say corruption has increased over the past 12 months. In 18 out of 28 countries surveyed a large majority of people said their government is doing badly at fighting corruption.

Despite these disappointing findings, the bright spots across the continent were in Botswana, Burkina Faso, Lesotho and Senegal. Citizens in these countries were some of the most positive in the region when discussing corruption.

For the first time, people reported business executives as highly corrupt. Business ranked as having the second highest levels of corruption in the region, just below the police. The police regularly rate as highly corrupt, but the strongly negative assessment of business executives is new compared to previous surveys.

Many Africans, particularly the poor, are burdened by corruption when trying to get access to key basic services in their country. 22 per cent of people that have come into contact with a public service in the past 12 months paid a bribe.

Of the six key public services that we asked about, people who come into contact with the courts and police are the most likely to have paid a bribe. 28 per cent and 27 per cent respectively of people who had contact with these services paid a bribe. Across the continent, poor people who use public services are twice as likely as rich people to have paid a bribe, and in urban areas they are even more likely to pay bribes.

“Corruption creates and increases poverty and exclusion. While corrupt individuals with political power enjoy a lavish life, millions of Africans are deprived of their basic needs like food, health, education, housing, access to clean water and sanitation. We call on governments and judges to stop corruption, eradicate impunity and implement Goal 16 of the Sustainable Development Goals to curb corruption. We also call on the people to demand honesty and transparency, and mobilize against corruption. It is time to say enough and unmask the corrupt,” said Transparency International Chair José Ugaz.

It is increasingly clear that citizens are a key part of any anti-corruption initiative. However, the survey finds that corruption reporting mechanisms are often seen as too dangerous, ineffective or unclear. More than 1 out of 3 Africans thinks that a whistleblower faces negative consequences for reporting corruption, which is why most people don’t report.

“Our work as civil society is clear: we have to spread a message of hope across the continent. Corruption can be tackled. People need to be given the space to stand up against it without fear of retaliation and governments need to get serious about ending the widespread impunity.”

Transparency International recommends:

– Governments strengthen and enforce legislation on corrupt business people and anti-money laundering to curb the high volume of illicit flows from the continent. This could address the negative perception of business if those profiting are held to account.
– Governments establish right to information and whistle-blower protection legislation to facilitate the role of civil society in making public institutions more transparent, accountable and corruption-free.
– Governments show a sustained and deep commitment to acting on police corruption at all levels by promoting reforms that combine punitive measures with structural changes over the short- and medium-term. Cracking down on petty bribery has direct impact on the most vulnerable in society.
– The African Union and its members provide the political will and financing needed to implement the review mechanism established for its anti-corruption convention.

Unless it’s stopped, corruption slows development and economic growth while weakening people’s trust in government and the accountability of public institutions.

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More pressure on African governments to have stronger enforcement of anti-bribery and corruption regulation 

“The way that things have always been done” is changing in many African countries   LAGOS, Nigeria, March 13, 2015/ — 57.6% of companies see the development of policies and procedures that can be practically applied in all countries as the most challenging internal anti-corruption and compliance issue. This is one of the topics discussed today at a webcast with Uche Orji, CEO and Managing Director, Nigerian Sovereign Investment Authority (NSIA), hosted by Control Risks’ CEO Richard Fenning (https://www.controlrisks.com).   • While FCPA and UKBA still lead anti-bribery and corruption regulation, in a number of African countries the governments feel increasing pressure to join the current trend of stronger enforcement of anti-bribery and corruption regulation in developing countries   • An integrated, global approach to mitigate corruption risk is important, but local adjustment is key   •  “The way that things have always been done” is changing in many African countries and often […]

“The way that things have always been done” is changing in many African countries
 
LAGOS, Nigeria, March 13, 2015/ — 57.6% of companies see the development of policies and procedures that can be practically applied in all countries as the most challenging internal anti-corruption and compliance issue. This is one of the topics discussed today at a webcast with Uche Orji, CEO and Managing Director, Nigerian Sovereign Investment Authority (NSIA), hosted by Control Risks’ CEO Richard Fenning (https://www.controlrisks.com).
 
• While FCPA and UKBA still lead anti-bribery and corruption regulation, in a number of African countries the governments feel increasing pressure to join the current trend of stronger enforcement of anti-bribery and corruption regulation in developing countries
 
• An integrated, global approach to mitigate corruption risk is important, but local adjustment is key
 
•  “The way that things have always been done” is changing in many African countries and often management determination and the acceptance of “wasted” time and higher costs can avoid the need for bribes to secure business.
 
•  Only 66% of internationally operating companies have policies in place that forbid facilitation payments
 
Tom Griffin, Managing Director West Africa, Control Risks, comments on the discussion:
 

“Often companies try to roll-out a global anti-bribery and corruption programme from Western headquarters and are then surprised that it is not effectively implemented in other markets – this is not unique to African countries. Companies need to adapt the policies and initiatives to the local culture, for example the type of training for employees. Some of our clients with their headquarters in Africa are more effective in their fight against bribery and corruption than those headquartered elsewhere, as they have an anti-bribery and corruption programme very focussed on the specific issues of their market.”
 
“Knowing the local market and the country you are operating in is key to implementing a successful anti-bribery and corruption programme.”
 
“Control Risks sees a change in ‘how things have always been done’ in many African countries. The fight against corruption is higher on the political agenda than ever before and when we discuss the corruption problems in operating in these countries, we need to acknowledge this.
 

* Source: International business attitude to corruption, Control Risks, 2015. Distributed by APO (African Press Organization) on behalf of Control Risks.

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International community must learn from the failure of most of the poorest countries, says UNCTAD report

Unctad’s Least Developed Countries Report 2014 Growth with structural transformation: A post-2015 development agenda ​The Least Developed Countries Report 2014 says that the international community must learn from the failure of most of the poorest countries to meet the Millennium Development Goals (MDGs) despite registering strong economic growth – a phenomenon the Report dubs the “LDC paradox“. The Report – subtitled Growth with Structural Transformation: A Post-2015 Development Agenda – says the LDCs are the battleground on which the post-2015 development agenda will be won or lost. Its success will depend on action by the international community and the LDCs to structurally transform their economies and break the vicious circle of human and economic development that has trapped these countries in poverty. The LDC paradox arises from the failure of LDC economies to achieve structural changes despite having grown vigorously as a result of strong export prices and rising aid […]

Unctad’s Least Developed Countries Report 2014

Growth with structural transformation: A post-2015 development agenda

​The Least Developed Countries Report 2014 says that the international community must learn from the failure of most of the poorest countries to meet the Millennium Development Goals (MDGs) despite registering strong economic growth – a phenomenon the Report dubs the “LDC paradox“.

The Report – subtitled Growth with Structural Transformation: A Post-2015 Development Agenda – says the LDCs are the battleground on which the post-2015 development agenda will be won or lost. Its success will depend on action by the international community and the LDCs to structurally transform their economies and break the vicious circle of human and economic development that has trapped these countries in poverty.

The LDC paradox arises from the failure of LDC economies to achieve structural changes despite having grown vigorously as a result of strong export prices and rising aid flows. Some other developing countries – not categorized as “least developed” – especially those that mostly depend on commodities for production, employment and exports, have also faced a similar paradox.

Yet from 2002 to 2008, LDC growth exceeded the 7 per cent target agreed by the international community, and even after the 2008 financial crisis they grew faster than other developing countries, at an average of 5.7 per cent per year.

Only one LDC – the Lao People’s Democratic Republic – is on track to achieve all seven of the MDG targets analysed in the Report, and only four of the 39 LDCs outside South and South-East Asia (Ethiopia, Malawi, Rwanda and Uganda) are on track to meet even a majority of these targets.

Under the MDGs, global poverty was halved by rapid progress in the more advanced developing countries, the Report says. But a central goal of the post-2015 development agenda is expected to be the eradication of poverty by 2030. This means reducing it to zero everywhere – and it is in the LDCs that this will be most challenging. Their performance will largely determine the success or failure of the whole post-2015 development agenda.

Eradicating poverty in 15 years is a much more ambitious goal than the MDG target of halving it in 25 years, the Report says. Even China has not achieved this, despite extraordinary economic growth and development for twice as long. Moreover, prospects for export prices are now much more uncertain following the financial crisis, while aid to LDCs has stopped increasing as donor countries implement austerity policies.

Can LDCs meet the Sustainable Development Goals?

With the 2015 target date for the achievement of the Millennium Development Goals (MDGs) fast approaching, the international community is taking stock of countries’ performances, and discussing a Post-2015 Development Agenda, along with a much more ambitious new set of Sustainable Development Goals (SDGs) to succeed them.

Global goals such as poverty eradication can only be realized if they are achieved everywhere, and it is in the LDCs that they are the most challenging. Therefore, the performance of the LDCs will be critical to achieving the SDGs.

LDCs have enjoyed unprecedented economic growth since 2000, helped by increasing commodity prices and aid flows. But despite economic growth and substantial progress in human development, most LDCs will not meet the majority of the MDGs. Understanding this “LDC paradox” is crucial to the development of a coherent post-2015 agenda. This report contributes towards that objective.

Key messages

  • LDCs are trapped in a vicious circle of economic and human underdevelopment. Real economic progress and achieving the planned SDGs depend on reversing this process in order to unleash an upward spiral of economic and human development by harnessing the synergies between the two.
  • Economic growth is not enough: it must be accompanied by structural transformation and the creation of decent jobs in higher-productivity activities.
  • The “LDC paradox” is rooted in the failure of the MDGs to recognize the need for a policy framework that generates transformative growth, and in the inability of the LDCs to achieve structural transformation.
  • If the LDCs are to meet the more ambitious SDGs in a more challenging external environment, this shortcoming must be rectified in the post-2015 agenda. That agenda will need to focus much more on ensuring a structural transformation of LDCs towards a modern and diversified economy, which shifts labour towards higher value-added sectors and more knowledge-intensive activities, thereby reversing their chronic decline in labour productivity relative to other developing countries while increasing quality employment.
  • Policy lessons can be gleaned from non-LDC developing countries that have successfully combined economic and human development through economic transformation. While they have used a wide range of policies and regulatory measures to promote structural transformation, this report focuses on three critical policy areas:
    1. Resource mobilization, to generate financing for public and private investment.
    2. Industrial policy, to direct those resources into sectors and activities that promote structural transformation.
    3. Macroeconomic policies that support structural transformation rather than impeding it.

It also highlights the importance of rural development as well as industrialization in LDCs, and the need to foster synergies between agricultural upgrading and the development of non-farm rural production.

In addition to appropriate domestic policies, achieving the SDGs in LDCs will require concerted efforts by the international community commensurate with the ambition of the new goals themselves.
This includes creating more development-friendly international financial and trading systems, and agreeing on an effective and equitable global response to climate change. Donors will also need to fulfil their long-standing commitments on the quantity and quality of official development assistance.

Since women constitute a large proportion of the population in LDCs and are important contributors to both social and economic development, especially in rural areas, this Report also proposes a new international support measure, Female Rural Entrepreneurship for Economic Diversification (FREED), to bolster the development and consolidation of women’s enterprises in non-farm activities in rural areas in LDCs.

Downlad the full report or sctions from http://unctad.org

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African Economic Outlook 2014: Empowering people through investments in skills and technology needed to boost development

Empowering people through investments in skills and technology needed to boost development

By participating more effectively in the global production of goods and services, Africa can transform its economy and achieve a development breakthrough, according to the latest African Economic Outlook, released at the African Development Bank Group’s Annual Meetings.

Produced annually by the African Development Bank (AfDB), the OECD Development Centre and the United Nations Development Programme (UNDP), this year’s report shows that Africa has weathered internal and external shocks and is poised to achieve healthy economic growth rates.

The continent’s growth is projected to accelerate to 4.8 percent in 2014 and 5 to 6 percent in 2015, levels which have not been seen since the global economic crisis of 2009. Africa’s economic growth is more broad-based, argues the report, driven by domestic demand, infrastructure and increased continental trade in manufactured goods.

“In order to sustain the economic growth and ensure that it creates opportunities for all, African countries should continue to rebuild shock absorbers and exercise prudent macro management. Any slackening on macro management will undermine future economic growth,” said Mthuli Ncube, Chief Economist and Vice-President of the African Development Bank.

“In the medium- to long-term, the opportunity for participating in global value chains, should be viewed as part of the strategy for achieving strong, sustained and inclusive growth,” he added.

The report argues that more effective participation in regional and global value chains – the range of activities in different countries that bring a product from conception to delivery to the consumer – could serve as a springboard for Africa in economic diversification, domestic resource mobilisation and investments in critical infrastructure. In order to do so, however, the continent needs to avoid getting stuck in low value-added activities.

For instance, Africa’s exports to the rest of the world grew faster than those of any other region in 2012, but they remain dominated by primary commodities and accounted for only 3.5 percent of world merchandise exports in 2012.

Avoiding that trap involves investing in new and more productive sectors, building skills, creating jobs and acquiring new technology, knowledge and market information. These interventions require sound public policies, as well as entrepreneurs that are willing and capable of helping achieve these gains.

The report uses the example of South Africa, which achieved a remarkable turnaround in its automotive industry by removing obstacles and providing incentives for component producers and assembly lines. It also shows that the development of agribusiness value chains in countries such as Ghana, Kenya and Ethiopia has contributed to economic growth and job
creation.

“African economies have a great potential to build on their demographic dynamism, rapid urbanisation and natural-resources assets. The challenge now for many of them is to ensure that greater insertion into global value chains is achieved and has a positive impact on people’s lives,” said Mario Pezzini, Director of the OECD Development Centre.
“Public policies need to be articulated in a targeted strategy.

Get more from http://www.africaneconomicoutlook.org/en/

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European Development Days close showing the way forward to a new development agenda

The European Development Days 2013 had a focus on building the new partnership for development.
Here is a live stream of the closing session

Speakers

  • Jan Eliasson, Deputy Secretary General, United Nations
  • Ellen Johnson Sirleaf, President of Liberia –
  • Andris Piebalgs, EU Commissioner for Development
  • Paul Collier, Co-Director, Centre for the Study of African Economies, University of Oxford, UK
  • Dr Debapriya Bhattacharya Chair, Southern Voices on Post-MDGs, Centre for Policy Dialogue
  • Winnie Byanyima, Executive Director, Oxfam International
  • Simon Maxwell, Senior Research Associate, Overseas Development Institute – Moderator
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Development as a collective action problem: Addressing the real challenges of African governance

Is the current model of African democracy bad for growth/good public services?

Conclusion from 5yr African governance study

The Africa Power and Politics Programme (APPP) set out to tackle one of the most important and challenging development questions of the early 21st century – what sort of governance does Africa really need and how is it going to get it? It aimed to do so by generating a new body of comparative research findings and empirically-grounded theory.

Governance for development in Africa: building on what works

The starting point was the realization that the concept of good governance is insufficient and questionable in the face of African realities and the continent´s challenges for economic transformation. Solutions need to be realistic about material and social constraints and build on local arrangements that are known to work.

The currently emerging “good fit” approach is seen as a useful step forward, but much of the new context-sensitive governance programming continues to look much like the old kind. Confined by principal-agent thinking, governance reforms continue to be perceived in terms of an unhelpful demand and supply metaphor.

The real challenges for governance in Africa lie, according to the APPP, in overcoming institutional blockages underpinned by collective action problems. Against the background of the identified shortcomings, what would an alternative reform agenda look like and what does that mean for African reformers and the global agenda?

The report is available online: http://www.institutions-africa.org/page/appp+synthesis

Synthesis

This report disagrees with this framing of the choices facing governance reformers. It argues that governance challenges in Africa are not fundamentally about one set of people getting another set of people to behave better. They are fundamentally about both sets of people finding ways to act collectively in their own best interests.

The report appeals for more recognition of the coordination challenges and collective action problems that prevent both governments and groups of citizens from acting consistently as ‘principals’ in dynamic development processes. Domestic reformers and external actors alike have something useful to contribute to improving governance in Africa, but only if they appreciate better the nature of the challenge.

The main elements of this argument are strongly supported by a significant body of existing research evidence and practical learning, including the experience of many practitioners who consciously or otherwise remain within the principal-agent straitjacket. The APPP research assembled here organises, complements and elaborates this evidence. The argument is developed over seven chapters that show its relevance to each of the particular topics in the bullet list above.

Ministers, parliaments and voting publics at both ends of the development assistance relationship need to be convinced that development progress is about overcoming institutional blockages, usually underpinned by collective action problems. It is not, for the most part, about resource shortages or funding gaps. Indeed, under certain quite common conditions, direct funding of development initiatives is harmful. On the other hand, institutional blockages can be overcome, and external actors may be able to make a positive contribution. But this is difficult work, especially for staff of official agencies with diplomatic or quasi-diplomatic responsibilities. It requires the intensive use of skilled labour and calls for exceptional local knowledge and learning capabilities. It may well call for greater use of ‘arm’s length’ forms of development cooperation, delivered by organisations that can work in ways that are more embedded and adaptive.

Ministers, parliaments and voting publics … need to be convinced that development progress is about overcoming institutional blockages, usually underpinned by collective action problems.

Questions and discussion: Report launch at ODI

Presentation of the APPP Synthesis Report in Berlin

Expert Discussion with Dr. David Booth (former Director of the Africa Power and Politics Programme 2007-2012)
The main findings of the APPP research programme will be presented and discussed, including the question of necessary new modalities for aid in African governance reforms and respective implications for the aid industry.
Discussant: Dr. Julia Leininger (German Development Institute, DIE)
Chair: René Gradwohl (INISA e.V.)
Tuesday, September 10, 2013, 14.30-17.00
at the Friedrich-Ebert-Stiftung (Hiroshimastr. 17, 10785 Berlin)

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African Economic Outlook 2013: Natural resources can fuel Africa’s economic transformation

Sustainable development rests on diversification and investments in human capital

Africa’s agricultural, mining and energy resources could boost the continent’s economic growth and pave the way for a breakthrough in human development, according to the African Economic Outlook 2013 (http://www.africaneconomicoutlook.org), released in Marrakesh.

The report is produced annually by the African Development Bank (AfDB) (http://www.afdb.org), the OECD Development Centre, the Economic Commission for Africa (ECA) and the UN Development Programme (UNDP). For the whole report, including statistics and specific country performance, please visit www.africaneconomicoutlook.org

The continent’s economic outlook for 2013 and 2014 is promising, confirming its healthy resilience to internal and external shocks and its role as a growth pole in an ailing global economy. Africa’s economy is projected to grow by 4.8% in 2013 and accelerate further to 5.3% in 2014.

The report shows this growth has been accompanied by insufficient poverty reduction, persisting unemployment, increased income inequalities and in some countries, deteriorating levels of health and education.

“Now is the time to step up the tempo of economic transformation, so that African economies become more competitive and create more gainful jobs”, say the authors of the report, adding that “widening the sources of economic activity is fundamental to meeting this challenge.”

The report argues that African countries must tap into their natural resource wealth to accelerate the pace of growth and ensure the process can benefit ordinary Africans.
“Growth is not enough”, said Mario Pezzini, Director at the OECD Development Centre. “African countries must provide the right conditions for turning natural resources into jobs, optimise their resource revenues through smart taxation and help investors and locals to make the most of linkages.”

According to the report, four key elements are needed to achieve that objective. Firstly, African countries should create the right conditions for such a transformation to take place, including infrastructure, education and the creation of larger and more competitive markets.

“Access to markets is fundamental to structural transformation based on natural resources: regional integration and better access to the markets of large partners could open new opportunities for all”, said Emmanuel Nnadozie, Director, Macroeconomic Policy Division at ECA. In the second instance, the primary sectors require sound land management, balanced and effective tax systems and the right mechanisms and incentives to cause an acceleration and diversification of the sources of growth. In the agricultural sector for instance, transport, fertilizers and more resistant seeds are required for an increase in productivity. Africa has 24 per cent of the world’s agricultural land, but accounts for only 9 per cent of its production. Thirdly, governments and investors must ensure that a fair share of the proceeds from natural resources and extractive industries accrue to society: for example, they should be invested in people’s capacities to take up new jobs in promising sectors. Finally, the report suggests that African countries can foster change and economic diversification actively, for example through corridors of development around power, transport and communication lines. Stable and transparent use of budgets is key to achieving that goal.

“Now is the time”, said Mthuli Ncube, Chief Economist and Vice-President of the African Development Bank (AfDB), “After ten years of improved stability, sound macroeconomic policies and blossoming trade links, growth has made African nations freer than ever to choose their own development paths and implement active policies for economic transformation.”
Ultimately, transformation means opening opportunities so people can find jobs, create businesses, as well as invest in health, education and food security. In turn, higher levels of human development for all, including the most vulnerable, can accelerate the pace of economic transformation, leading to a virtuous cycle of growth and development.

“Among many other benefits, human development can help drive Africa’s structural transformation by speeding both the rate of innovation and uptake of new technologies,” said Pedro Conceição, Chief Economist at UNDP’s Regional Bureau for Africa. “But for this to happen, more attention should be paid to improving access to and quality of education and healthcare systems, transforming agriculture and fostering job creation in order to narrow income inequalities.” Source: African Press Organization.

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European Report on Development (ERD) 2013 seeks to contribute to the global reflection on the post-2015 development agenda

ERDBRUSSELS, Belgium, April 9, 2013/ — Based on an assessment of the Millennium Development Goals experience and on an analysis of the changing international context, and likely trends for the next 20-30 years, the ERD 2013 (http://www.erd-report.eu) looks at key potential drivers of a post- 2015 global partnership, to tackle poverty in the poorest countries and promote structural transformation in an inclusive and sustainable manner. The Report highlights three such drivers: flows of money (development finance), flows of goods (trade) and flows of people (migration).

The ERD 2013, entitled ‘Post 2015: Global Action for an Inclusive and Sustainable Future’, comes just over a month after the publication of EU’s proposal for the development framework once the Millennium Development Goals (MDGs) come to an end in 2015 (explained in the policy document ‘A Decent Life for All: Ending Poverty and Giving the World a Sustainable Future’ http://europa.eu/rapid/press-release_MEMO-13-143_en.htm).
This independent report argues that, while impetus for development lies primarily at the domestic level, an enabling international environment in which to pursue their development agenda is also essential for developing countries. The report also advocates that strong international collective action is therefore fundamental, and identifies potential key drivers of a global partnership.
Speaking at the launch event, Commissioner Piebalgs said:”I am pleased to see that the new ERD, which is particularly timely and relevant, in many ways complements and supports the work of the Commission. This year’s report, with its in – depth analysis and ambitious messages, will help stimulate the debate on the post – 2015 development agenda, both at the EU and global levels.
“The report argues that the post-2015 agenda should build on the MDGs, but strive to deliver on the wider vision of the Millennium Declaration and promote inclusive and sustainable development. In this vision, poverty eradication remains a central objective, but its achievement and protection requires strategies that tackle the roots of it in an inclusive and sustainable manner. The achievement of this vision will require going both “Beyond MDGs” and “Beyond Aid”.

The analysis reaches four key conclusions for a post 2015 agenda:

  • A transformative agenda – Emphasising structural economic and social transformations, creating employment, addressing inequality and finding sustainable solutions – is vital.
  • National ownership is key: the new framework should pay more attention to how global goals relate to national needs and targets.
  • Scale up global collective action. Greater international collective action through global public policies is urgently needed. Richer countries should strengthen their support in areas important to development; enhance Policy Coherence for Development; and increase both the level and effectiveness of aid.
  • A new framework should be about instruments as much as about goals: instruments to be used and their targets should be clearly highlighted.

The Report presents a series of policy recommendations for the international community and global action, in view of supporting the achievement of an ambitious post-2015 agenda. It also presents more specific recommendations for the European Union. The ERD is an independent report, prepared by a team of researchers from three research institutes: ODI, DIE and ECDPM. The initiative is supported by the European Commission and seven EU Member States, namely Finland, France, Germany, Luxembourg, Spain, Sweden and the United Kingdom. To enrich its analysis, the ERD 2013 draws on case studies carried out by local research institutes in four countries (Côte d’Ivoire, Nepal, Rwanda and Peru).

Report Downloads: http://www.erd-report.eu/erd/report_2012/media.html
YouTube channel: http://www.youtube.com/user/TheERD2013?feature=mhee