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Monthly Archives: September 2014

South-South Co-operation especially for African states still to be harnessed, by Chofor Che


The twelve United Nations (UN) Day for South-South Co-operation was celebrated on the 12 of September 2014. The UN created a unit for South-South Cooperation to promote collaboration within its agencies as well as to promote South-South trade and investment. All the same, the idea of South–South cooperation only began to influence the field of development only in the late 1990s.This cooperation is now well known as South America-Africa (ASA) cooperation, mainly because of the geographical spectrum.

South America and Africa posses over one quarter of the world’s energy resources, which include the oil and natural gas reserves in Equatorial Guinea Nigeria, Bolivia, Brazil, Ecuador, Venezuela, Algeria, Angola, Libya, Chad and Gabon. This is a major reason why South-South cooperation needs to be harnessed between the two continents as well as between states in the two continents.
Two summits have been organized by the ASA cooperation. In 2006 the first summit took place in Abuja, Nigeria with 12 delegates from South America and 53 delegates from Africa in attendance. In September 2009, the most recent and second summit took place on the Margarita Island in Venezuela, where 12 heads of states from South America and 49 heads of states from Africa attended.

There is no gainsaying that South–South cooperation has to some extent been successful in decreasing dependence on financial aid from developed countries and in creating a shift in the international balance of power. Despite this allusion there is still need to harness South-South cooperation especially in Africa. A good way of harnessing South-South cooperation would therefore be to capitalize on success stories and see how this can be transposed to other developing countries and countries in transition.

One of the major goals of the cooperation is to improve economic ties and foster development. Among several regional trade agreements which were reached during the 2009 summit was South Africa signing an oil agreement with Venezuela. According to Wikipedia, Venezuela equally signed a memorandum of understanding with Sierra Leone to form a joint mining company. Another country in the South which has been very instrumental in South-South cooperation is Brazil. Brazil has been able to develop an increasingly successful model of assistance of over $1 billion annually, way ahead of many traditional donors, which capitalizes on the transfer of knowledge and expertise, rather than solely relying on financial aid. Brazil’s form of South–South development aid has been referred to as a ‘global model in waiting’.

Most recently, the South–South cooperation has acknowledged the importance of a successful and holistic financial policy as a way to better tackle poverty. Because of this holistic approach, financial policy makers from over 100 countries in transition and developing states now form a global knowledge-sharing network known as the Alliance for Financial Inclusion (AFI).

In an op-ed by Business in Cameroon, dated the 12 of September 2014, the Indian High Commissioner, A R Ghanashyam purports that, trade between India and Cameroon is currently estimated at 250 billion FCFA per annum. He revealed this in an interview in the Cameroon government’s daily publication, Cameroon Tribune. He added that although Cameroon is “the country with which trade with India has grown the most in the Central African region over the last few years, this trade relationship’s potential is immense” and still hardly harnessed.

To reverse this trend, the Indian diplomat wishes to bring the Small and Medium Size enterprises (SME) development model implemented in India to Cameroon, which made these structures the backbone of the Indian economy and created a bridge between Indian and Cameroonian SMEs.

Regardless of the continuing interest of many states in Africa and South America, cooperation is still faced with major challenges. Stringent taxation systems still exist in African states which pose as a serious impediment to South-South cooperation.

The Doing Business Reports of 2013 and 2014 expose African states as the worst states to do business in. This indeed is an impediment to South-South cooperation. In addition to this melee remains bad governance and corruption in both African states and South American states. Added to these ills is the precarious conflict situation in states like the Democratic Republic of Congo and the Central African Republic.

Areas that some of the leaders intend to see major developments are in the security and political arena. This is to say that cooperation will give the continents more political and financial power when it comes to the global arena. Some leaders hope that the cooperation will offer greater freedom in choosing a political system. The international community and the UN especially should thus continue to support the efforts of the developing countries to expand South-South cooperation. Developing countries and countries in transition need to thus copy success stories from Brazil, Venezuela and South Africa. Issues that need to be addressed for a fluid South-South cooperation are bad governance, corruption, over taxation, peace and security. Only such measures may truly harness South-South cooperation especially amongst African states.

This article is originally written in French and published at LibreAfrique.org as ‘Retard de la coopération sud-sud en Afrique’ http://libreafrique.org/ChoforChe-cooperation-sud-sud-170914 on the 17 of September 2014.

 
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Posted by on September 23, 2014 in Africa Development

 

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Aid remains a major problem to the growth and development of the Central African region, By Chofor Che


The Sub Saharan African region (the region) is the largest recipient of aid. Most of this aid goes to states in the Central African region (the sub region) such as Cameroon, Chad, the Democratic Republic of Congo, Congo Brazzaville, Gabon and Equatorial Guinea. Despite its position as the greatest recipient of aid, states in the Central African region especially, remain the poorest in the world. The vast resources embedded in the region and in the sub region specifically renders this fact paradoxical. What is really the cause of this very disturbing melee?

The African Economic Outlook opines that the average economic growth rate in the region, rather than picking up, has in fact decelerated from 6.1 percent in 2005 to a projected average of 4.8 percent in 2014. These figures are indeed disturbing as they remain far off the 7 percent growth rate target deemed important for the region and the sub region in particular to meet the targets set by the Millennium Development Goals (MDGs) in 2015.

In an attempt to redress the quagmire of underdevelopment, the region has been the centre of attention for large scale initiatives to redress its economic stagnation via aid increases. The sub region most especially has been part of this drive. Past international endeavors dedicated to poverty alleviation in the region such as the United Nations (UN) $25 billion Special initiative for Africa have not delivered to poverty alleviation in the region. Franklin Cudjoe of IMANI Ghana, Maud Martei and Pilar Rukavina in the 2014 second edition of a publication by Africanliberty.org, sponsored by the US based Atlas Economic Foundation opine that, rather than stimulating development , increased aid has gone hand in hand with increased dependency. According to these authors and other authors like Ayodele T, Noluyshungu T.A and Sunwabe C.K, more than $500 billion in foreign aid was pumped into Africa, with little to show for it. Indeed adversarial trends have been noticed as renewed aid influxes did not correlate with an improvement of economic performance as Gross Domestic Capital (GDP) actually fell. According to 2014 poverty data furnished by the World Bank Group in 1975 there were 140 million Africans living in poverty compared to 204.9 million in 1981, 360 million in 2000 and 413.7 million in 2010.

The evidence furnished in the above paragraphs show that rather than enhancing the region’s position, aid is serving to maintain the status quo by supporting corruption and policy mismanagement. As propounded by Boone P in a 1995 article entitled ‘Politics and the Effectiveness of Foreign Aid’, “aid does not significantly increase investment and growth, nor benefit the poor as measured by improvements in human development indicators, but it does increase the size of government.” This is observable amongst some of the poorest states in the region especially in the Central African sub region. States in the Central African region are all characterized by centralized regimes upheld by corruption and humongous influxes of aid.

The Global Financial Integrity, a Washington D.C. based non-profit organization that traces illicit money estimates that $1 trillion gets stolen from developing states especially in Africa in a typical year. Contrasted against the approximate $134 million that developing states receive, it suggests that foreign aid may simply be a drop in the ocean of a well-oiled corruption industry. In a study conducted in Chad in 2004, it was discovered that of a total sum of money released by the Ministry of Finance destined for rural health clinics, less than $1 of it actually reached the clinics. This is evidence that aid is not reaching its intended benefactors.

Blame for the continued embezzlement of aid money cannot be attributed to African leaders alone. There is clear awareness on the part of donors that such practices are occurring, signaling a disturbing tolerance for their continuation. Patricia Adams of Probe International has asserted that the World Bank was privy to the knowledge that, up to 30 percent of their loans was embezzled by corrupt officials. Despite the World Bank’s firm adoption of a zero –tolerance, good governance stance, corruption remains chronic throughout its projects due to inadequate supervisory procedures.

It is thus time to resist calls for pouring even larger sums of aid into countries in the region and in the Central African Sub region. Foreign aid has not proved to be the solution so far and will continue to elude Africans in particular as the solution to eradicating poverty. What is really needed in Africa is an enabling environment for free market institutions. A good starting point may be to inject the ideas of free markets in African Constitutions which so far have remained devoid of promoting free markets. Such a move must be thus followed by a reform of institutions like the judiciaries and taxation systems which would allow ordinary Africans especially those in the Central African region to take ownership over their own developmental process, thereby reducing the need for foreign financial assistance.

This article is originally written in French and published at LibreAfrique.org. as ‘L’aide : obstacle à la croissance et au développement de l’Afrique centrale’ http://libreafrique.org/ChoforChe-aide-100914 on the 10 September 2014.

 
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Posted by on September 23, 2014 in Africa Development

 

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A need for a rapid upgrade of African ports, by Chofor Che


The issue of over congestion at African ports is a serious concern. The World Bank concurs that Sub-Saharan Africa has a serious infrastructure deficit estimated at about $48 billion a year which is hindering the continent’s competitiveness and hence its economic growth. With the exception of Durban, the cargo dwell time (the amount of time cargo spends at ports) averages about 20 days in African ports, compared with 3 to 4 days in most other international ports. None of the past attempts to solve this problem have worked.

In 2013 I was invited by the Cameroon Chamber of Commerce to participate in a special edition of ‘La Chambre’, a journal published by this institution. Amongst the salient issues addressed in this 15th edition of January, February and March 2013, was the dilemma of congestion at the port of Douala. I argued in my piece that a major reason for such delays is that certain public and private actors in the system benefit from such delays. Importers use the ports to store their goods. Customs brokers have little incentive to move the goods because they can pass on the costs of delay to the importers. And when the domestic market is a monopoly, the downstream producer has an incentive to keep the cargo dwell times long as a way of deterring entry of other producers. Another hurdle I identified was that at the Douala port for instance, fiscal pressure seems to play a role in cargo dwell time. The correlation tends to be positive: higher fiscal pressure leads to higher dwell time, with a noticeable exception of duty free items that have a relatively long average dwell time despite the absence of duties. This could be linked to bargaining time between the customs broker and customs agent, a misclassification, a duty free line, or simply the time to furnish additional documents. The net result is inordinately long dwell times, ineffective interventions, and globally uncompetitive industries in African countries. It seems the arguments I advanced in my article fell on deaf ears because as I write this piece, the problem of congestion at the port of Douala as well as several other ports on the continent has become chronic.

In an op-ed by a Kenyan link, Daily Nation, dated the 26 August 2014, Mr. Danson Mungatana, Kenya Ports Authority chairman calls on African countries to expand their ports. In this op-ed according to Mr. Mungatana, it is important for African countries to expand their ports so that they can benefit from the global maritime trade, which is increasingly turning to larger ships. He added that bigger berths are needed to handle the bigger ships being built. He equally calls for the utilization of up to date technology and equipment to benefit from the increased maritime trade. According to Mr. Mungatana “The steady increase in ship sizes, coupled with growing cargo volumes, has put pressure on cargo infrastructure and terminal capacities the world over, in particular for African ports, which have capacity constraints and poor transport infrastructure.”

Indeed the issue of congestion at ports in Africa stifles economic development. African states need to rethink their strategy on managing ports on the continent. The solution to decrease dwell time in these ports relies mainly on the challenging task of breaking the monopoly by state actors as well as some private actors. There is need for collaboration and understanding between public authorities, logistics operators, and some shippers rather than just investing massively in infrastructure which of course is important. Addressing the challenge will also necessitate that there be support from the general public for reforms that will promote their interests. Before they offer their support, the public needs to be informed of the stakes and challenges especially as they are the most affected by this congestion. If such measures are taken into consideration by African states, then we may find a solution to the alarming scenario of congestion at our ports.

This article is originally written in French and published at LibreAfrique.org. as ‘Urgente nécessité de mise à niveau des ports africains’http://libreafrique.org/ChoforChe-port-010914 on the 1 September 2014.

 
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Posted by on September 23, 2014 in Africa Development

 

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ADB’s Africa Information Highway Initiative And The Data Centre Market In The Central African Region – Chofor Che, Published by Africanliberty.org on the 25 August 2014


In February 2014, the Africa Information Highway (AIH) was launched by the African Development Bank (ADB). According to a top executive at the ADB, Ivo Njosa, in an op-ed by SciDev.Net, published in early August 2014, a major reason for such an initiative is that development data from the African continent and the Central African region most especially remains porous. Policymakers, governments, international organizations, private-sector organizations, research institutions, and even ordinary African citizens find it difficult to get viable data on development issues on the continent and especially on the Central African region.

The AIH initiative is composed of two types of portals for each participating state, namely an open data portal and a statistical data portal. According to SciDev.Net, open data and new statistical initiatives are being created to correct long overdue barriers to viable development data access across the African continent. These initiatives promise to improve services and increase transparency and furnish better services.

SciDev.Netopines that since the AIH initiative was launched, it has seen an increase in its users, both from the Diaspora and within the African continent. SciDev.Net adds that the most current published report exemplifies Mozambique’s statistical data portal as the most visited.

Amparo Ballivian, a lead economist at the World Bank purports that open data on states in the developing world can be utilized “to improve the efficiency and coverage of public services in a variety of development sectors such as education, health, transport, energy”. According to Ballivian, such initiatives can assist in the creation of job opportunities, improve transparency and generate new businesses both in the public and the private sector. Ballivian informed SciDev.Net that the purpose of the Partnership for Open Data idea is to put in place an extensive partnership of institutions so that they can work together to have better data and not discredit data provided by these institutions.

Lead consultant at the ADB, Ivo Njosa concurs that the AIH will thus furnish a more fluid medium whereby data can easily be shared. According to this ADB top executive, “Open data portals contain data from national and other sources [such as the WHO, the World Bank, or the UN] and allow users to create and share content directly on the open data [portal] or through social networks.”

This is indeed a laudable initiative by the ADB and there is thus need for collaboration with other existing initiatives on the continent. Franklin N. Nnebe, Managing Director of Nnebe Business Services Ltdattests that data centers in Africa are becoming very important for development. South Africa is host of the most sophisticated data center market in Africa. North Africa comes second to South Africa in the Data center market. Kenya comes first in the data center market in the East African region which ranks third on the continent. West Africa comes fourth with Nigeria being the guru in this sub region with respect to data centers. The Central African region tails the list.

Some of the reasons why the central African region comes last in data center creation are partly because of poor institutional and instrumental measures in place. According to the Mo Ibrahim Foundation Report of 2013 this region is ranked the last with respect to infrastructural development and good governance. It is thus vital for the Central African region to embrace free market ideologies that would enable the growth of more viable data collection centers for better development and peace in the region. There is thus need for a revisit of internal factors like governance and infrastructural development in the region. There is equally a need for a vibrant private sector which can take up the challenge in setting up viable data collection centers in the sub region. Such measures may make the Central African region a top hub for data collection centers in the future.

– See more at: http://africanliberty.org/content/adb%E2%80%99s-africa-information-highway-initiative-and-data-centre-market-central-african-region-ch#sthash.kX8ryGek.dpuf

 
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Posted by on September 8, 2014 in Africa Development

 

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