Saturday, January 07, 2017

POLITICAL TITBITS OF SIERRA LEONE: FEATURING-CONSTANCE CUMMINGS-JOHN & NANCY STEEL!



  1. {Courtesy :
    Vitabu Books.blogspot.co.uk}




    Five days a week, Nancy Dolly Grant would walk past the Princess Christian Mission Hospital on the eastern side of Freetown to an old produce port at Susan's Bay, Big Wharf.  

    The Princess Christian Mission hospital that lies back from the old Fourah Bay road, along which ran railway track, was established in 1892 as a teaching hospital for "training African ladies in nursing and in ministering to the spiritual and bodily needs of the sick and poor." 

    The premises had a large free ward for women and children, a small ward for paying patients, a ward for European missionaries, consulting room, operating room and a residence for the European matron and sisters. 

    Two miles away, on the west side of town, near the waterside market at King Jimmy, was the much larger government-run hospital, Connaught Hospital, that was opened in 1910 by the English duke of Connaught, Arthur.

    Young Nancy’s “greatest ambition” was to be a nurse.

    Between the two hospitals ran narrow, congested streets, overcrowded with trading stalls and little houses packed with families. 

    One of those families was Nancy’s.  

    This is how Nancy recalled her 1920s childhood in a private communication with Filomina C. Steady. Dr. Steady has written seminal books on African women’s movement and the impact of collective action on economic growth, education, democratizations, family formation, and women's rights.
    “We only had two easy chairs for grownups; children did not dare sit on them. We sat on kerosene boxes instead. We had to scrub the chairs and boxes every Saturday and we covered the boxes with antimacassars to make them more decent and comfortable. Our floor was not made of wood or concrete but of plain earth. We never ate our main meal before 7 or 8 p.m. because every day after school we, the girls, had to help my mother to trade at Big Wharf before she could get enough money to buy food for the main meal. We used to go home at about 6 or 7 p. m to cook. We went hungry for a long time and had to do the cooking on empty stomachs.”  -- Nancy Steele



    Reporting from Freetown for the Chicago Tribune Foreign News Service in October of 1923, Floyd Gibbons found people who had taxation without representation. 
    “Among them are educated Negroes, college graduates, both men and women, who are lawyers, doctors, judges, engineers, preachers, and editors of five weekly newspapers. …Some of the women wear evening gowns and sit on the right of the governor at dinner and fill their programs with the names of young Englishmen. Others use sackcloth for adornment and wear string above the waist but a pickanny strapped to the back. …These black British subjects in Sierra Leone are not in sympathy with the political independence program of Marcus Garvey and American promotion of the Universal Negro Improvement Association.”  



    By 1924, Sierra Leone was divided into a Colony and a Protectorate, with separate and different systems constitutionally defined for each.

    Joining the dots was Isaac Theophlilus Akuna Wallace-Johnson. 

    Born into a poor Krio family in Wilberforce Village, he attended mission schools in the colony. At the age of eighteen, he entered government service as a customs clerk, but was dismissed for helping to organize the first trade union in Sierra Leone. After serving as a clerk in the Carrier Corps, he joined the merchant marine as a sailor, later editing a newspaper in London dedicated to promoting the welfare of seamen.

    In 1931, Wallace-Johnson founded the first labor union in Nigeria, and in 1936 he was jailed in the Gold Coast (Ghana) for publishing a scathing attack on colonialism. He returned to Sierra Leone in 1938 and, within a year, had organized eight labor unions, a newspaper, and a political movement that swept aside all opposition in the city council elections.

    His West African Youth League was dedicated to greater popular representation, an expanded civic role for women, improved salaries and conditions for workers, and national unity among all Sierra Leoneans.

    Wallace-Johnson taunted the colonial authorities by making public certain secret documents showing the governor's agreement to painfully lower salaries for working people. British officials tried to prosecute Wallace-Johnson, but no local jury would convict him, and at one point, eighteen of Freetown's twenty-one lawyers were members of his Youth League. Moreover, Wallace-Johnson was personally popular—a likeable man with an excellent sense of humor, who once told a group of workers, "I am not anything above you; I am at par with you."

    Antagonism between the Colony and Protectorate escalated in 1947, when proposals were introduced to provide for a single political system for both the colony and the protectorate. 

    Most of the proposals came from the Protectorate. 

    The Krios, led by Wallace-Johnson, opposed the proposals, the main effect of which would have been to diminish their political power.  

    Milton Margai, a medical doctor turned politician, joined forces with the paramount chiefs in the face of Krio intransigence. In November 1951, Margai oversaw the drafting of a new constitution, which united the separate colonial and protectorate legislatures and provided a framework for decolonization. 

    The decolonization of Africa followed World War II as colonized peoples agitated for independence and colonial powers withdrew administrators from Africa. 

    Decolonization began in earnest in Sierra Leone in 1951.  

    Sierra Leone’s 1951 constitution gave power to the majority while minority Krio politicians founded their own party. But younger Krios like Constance had joined the protectorate politicians' Sierra Leone Peoples Party (SLPP). 

    Her fellow Krios, the Negro leaders of Sierra Leone who wanted no Marcus Garvey, nor changes in rule, condemned her as a traitor.  

    In 1952, Nancy left Freetown to study abroad at the Edgware General Hospital in England, sponsored by Britain's newly established National Health Service.

    Prior, she had attended the African Methodist Episcopal  (A.M.E.) Girls Industrial School in Freetown, some years after Constance Cummings-John served as principal. 

    A.M.E. schools were divided into four departments: primary, grammar, normal and industrial. The industrial department was reportedly one of the best AME schools. Shoe repair, agriculture, and carpentry were taught to male students, while the girls were instructed in domestic science, laundering, sewing and home sanitation. 

    Vocational Education
    As the system of Western education in colonial Sierra Leone evolved it came to be patterned increasingly after the British Grammar School model, with strong emphasis on academic subjects, primarily for male students. The development of vocational and technical education was largely ignored. One of the earliest attempts at reforming this model was provided by the first vocational school, the African Methodist Episcopal Girls Industrial School. The African Methodist Episcopalian (AME), an African-American church, headed in Freetown, by the Reverend Henry Metcalfe Steady, founded it in 1924. Mrs. Constance Cummings-John became its principal, shortly after her return to Freetown from England in 1937. In her autobiography, she remarks on the financial and other difficulties experienced by the school, such as the use of outdated equipment, lack of proper instructional material, and the paucity of teachers with the proper teaching credentials. Helped by local businessman, Babington Johnson, who provided the premises at minimal rent, the school improved significantly. It expanded its curriculum from home economics and literacy to industrial courses. Students were taught how to make cooking stoves and furniture, and they also learnt weaving. The emphasis was on self-reliance and students participated in fund-raising activities. In the 1950s and 1960s, the Eleanor Roosevelt Memorial School, expanded on this pattern by combining academic subjects with vocational education course. Once again, Mrs. Cummings-John’s role was significant, since she was the founder of the Roosevelt Memorial School. [Filomena C. Steady, New Perspectives on the Sierra Leone Krio, pp. 274, 275, By Mac Dixon-Fyle, Gibril Raschid Cole]


    By 1954, two years into Nancy’s nursing degree, the old Edgware hospital had 651 beds.  A year later, Nancy qualified as a nurse and began a course in midwifery but gave it up because she didn’t like it. Instead she took a diploma in social work, while she earned a living as a nurse in London. 

    In 1956, Nancy met her future husband at a student dance and the couple married four years later. Mr. Steele was an engineer from the Caribbean. The couple had a son who died in his infancy. Sierra Leone held its first parliamentary election in May 1957. 

    The Sierra Leone People’s Party (SLPP), which was then the most popular political party, won the most seats in Parliament and Milton Margai was also re-elected as chief minister. Margai was first elected chief minister of Sierra Leone in 1953, when Sierra Leone was granted local ministerial powers. In 1959, Milton Margai was awarded a knighthood. 

    1960 Independence Conference 

    The Sierra Leone constitutional conference was held in Lancaster House, London.


    On April 20,1960, Sir Milton Margai led the twenty-four members of the Sierra Leonean delegation at the constitutional conferences that were held with Queen Elizabeth II and British Colonial Secretary Iain Macleod in the negotiations for independence held at the Lancaster House in London. All of the twenty four members of the Sierra Leonean delegation were prominent politicians, including Sir Milton himself, his younger brother lawyer Albert Margai, the outspoken trade unionist Siaka Stevens, SLPP strongman Lamina Sankoh, outspoken Creole activist Isaac T.A. Wallace-Johnson, medical doctor Dr. John Karefa-Smart, paramount chief and first female member of parliament Ella Koblo Gulama, educationist Mohamed Sanusi Mustapha, Creole dominated UPP party leader Cyril Rogers-Wright, professor Kande Bureh, Creole diplomat Edward Wilmot Blyden III, lawyer Sir Banja Tejan-Sie, educationist Amadu Wurie, former Freetown mayor Eustace Henry Taylor Cummings, Paramount Chief Tamba Songu M’briwa, second female member of parliament Constance Cummings-John, and Creole diplomat Hector Reginald Sylvanus Boltman.

    Absent from the Lancaster House table in London were student activist voices like Nancy Steele’s. 


    Out of view, she co-founded the National Congress of Sierra Leone Women in 1960 with Wallace-Johnson, one of the delegates at the independence talks, and Princess Gibson-Bucknor, who later edited We Yone, the official organ and newspaper of the All People’s Congress, founded in 1960 by Siaka Stevens in a merger with Wallace-Johnson.

    Nancy was one of the devoted disciples in the formation of the All People’s Congress (APC).

    Described as a dynamic force in the women’s congress, Nancy was probably the most militant figure to have made an impact, Steady wrote.

    The political women’s association founded by Steele, Gibson-Bucknor, and Wallace-Johnson later became the women’s wing of the All People’s Congress.


    “My national consciousness developed on account of the bad circumstances of black people in England. They had to do the dirtiest jobs,” Nancy recalled.  


    On the conclusion of talks in London on May 4, 1960, Britain agreed to grant Sierra Leone Independence on April 27, 1961. 

    However, the outspoken trade unionist Siaka Stevens refused to sign Sierra Leone’s declaration of Independence on the grounds that there had been a secret defense pact between Sierra Leone and Britain.

    According to Steady, Stevens’ refusal was based on his opposition to continued maintenance of military bases in Sierra Leone after independence, which he felt would submit Sierra Leone to continued British domination. 

    Another point of contention by Stevens was the government’s position that there would be no elections held before independence, which would effectively shut him out of Sierra Leone’s political process. 

    Stevens’ proposals were not accepted, but these moves attracted those who wanted independence without continued British economic, military, and cultural influences. 

    The delegates received a hero’s welcome on their return to Freetown. 

    Stevens, who was a member of the People’s National Party (PNP) delegation to the London constitutional talks for Sierra Leone's independence, launched his “elections before independence” movement” as a protest against the United Front Coalition. The movement eventually crystallized into a formidable political party, the All People’s Congress (APC), with Stevens as the leader.


    The ruling Sierra Leone People’s Party (SLPP) accused the APC leadership of attempting to sabotage the independence celebrations of 1961. Consequently 43 APC leaders, including Stevens, were arrested and detained under a state of emergency act. 

    Young people and women in particular were attracted to APC’s mass appeal. It had twenty-seven branches throughout the country, but its early success was more apparent in Freetown.

    The APC campaigned for nonalignment and socialism, and advocated equal opportunity for all Sierra Leoneans irrespective of ethnicity, class, color, or creed. They galvanized mass support by using the bottom-up approach. 

    The 1962 general election returned Stevens as a parliamentary member for the Freetown West II constituency, and the APC won the municipal election. 


    Nancy was elected councilor.

    In 1961, with the independence of Sierra Leone, Constance’s husband became the new country's ambassador to Liberia. She was rewarded in 1966 with Freetown's mayoralty— the first woman to serve as mayor of Freetown. Prime minister Albert Margai, who succeeded his late brother Milton, had, appointed Constance as mayor of Freetown, in succession of Stevens but she held the position for only a few months. Her party lost the general election of 1967. 

    The 1967 election gave the APC 32 seats out of 66 in the parliament. Nancy became an Alderman of the Freetown City Council.

    Although the APC and Stevens won the election and the governor general appointed Stevens prime minister, the military commander Brigadier David Lansana disputed the results. There was then a successful military coup against the new government. 

    On March 23 the same year, Lansana and Albert Margai the outgoing prime minister, were arrested. The constitution was suspended, Freetown’s city council was dissolved, and a National Reformation Council  (NRC) was formed with Colonel Andrew T. Juxon-Smith as chairman. 

    The NRC was in turn overthrown in April 1968 by army officers who formed the Anti Corruption Revolutionary Movement.  Stevens was reinstated as prime minister in 1968 after the National Interim Council headed by Brigadier Bangura restored the constitution. 

    Attending a conference out of the country at the time, Constance was accused of financial corruption and was advised not to return. She settled in Tooting, south London, where she became active in politics and the disarmament movement.  

    Undated photo of Nancy Steele a few years before her death in 2001
    In Sierra Leone, Nancy worked hard for the APC and was responsible for much of the mobilization of women to the party.  

    According to Steady, Congress provided Nancy with a means of mobilizing women, but in addition it also provided her with a platform to assert her political stature. Nancy made speeches at rallies, conventions and inauguration of branches throughout the country.
    “There were all indications that Nancy would gain a parliamentary seat and a ministry after the elections scheduled for May 1973. Her experience of political organization dates back to her student days in England. Her role in building up the APC and in inaugurating and sustaining Congress is widely known and credited. She has held political office in the City Council as councilor and as alderman; She had the support of Congress, which at this stage was a springboard for her attainment of political office.  The elections were held in a climate of political tension and in all but five seats the APC was unopposed. Mrs. Steele, once regarded as a dead certainty on the ticket, was not given a party symbol. She stood as an independent candidate and lost.” 
    (PS: Added note:)
    [Mrs Nancy Dolly Victoria Steel died on Boxing Day,26 December 2001in London UK. A funeral service was held at Walworth Methodist Church Camberwell South East London. She was buried in Freetown Sierra Leone after being given a Civic Funeral having acted as Mayor while she was an Alderman of the Freetown City Council.]
    [Constance Agatha Cummings-John died in London on 21 February 2000. A funeral service was held at St. Augustine's Church, Broadwater Road Tooting South West London.






    Sources for Fantasy History

    T. J. Alldridge, I.S.O., F.R.G.S., A Transformed Colony: Sierra Leone, as it was, and as it is. Its progress, peoples, native customs and undeveloped wealth 
    (Westport, Connecticut: Negro Universities Press, 1970; originally published in London: Seeley & Co., Ltd., 1910), 368pp & map.  Notes © 2002 by Jim Jones, Ph.D.


    Birmingham, David (1995). The Decolonization of Africa. Routledge. ISBN 1857285409.

    “Negro Leaders of Sierra Leone Scorn Freedom, Want No Marcus Garvey Nor Change in Rule” By Floyd Gibbons, Chicago Tribune Foreign News Service, Chicago Tribune Oct. 29 1923 
    http://archives.chicagotribune.com/1923/10/29/page/19/article/display-ad-17-no-title


    Other Readings:

    The Educational Work of the African Methodist Episcopal Zion Church, 1820-1920
    By Rufus Early Clement

    New Perspectives on the Sierra Leone Krio
    By Mac Dixon-Fyle, Gibril Raschid Cole

    LOST HOSPITALS OF LONDON
    http://ezitis.myzen.co.uk/edgware.html


    Sierra Leone
    http://panafricapress.com/597?lang=en

    Sierra Leone was ripe for Independence: Exclusive interview with Reginald Boltman
    By Murtala Mohammed Kamara, Africa News reporter in Freetown, Sierra Leone.
    Feb 28, 2011, 12:45
    http://news.sl/drwebsite/exec/view.cgi?archive=7&num=17413&printer=1

    Encyclopedia of African History 3-Volume Set

    Edited by Kevin Shillington

    Female Power in African Politics: The National Congress of Sierra Leone, Filomina Chioma Steady, Munger African Library Notes, Issue #31 August 1975  
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Saturday, December 24, 2016

Africa: Low Commodity Prices Continue to Impede Growth


THE EFFECTS OF FALLING COMMODITY PRICES ON AFRICAN COUNTRIES!! Analysis & Explations!





WASHINGTON, April 11, 2016— Economic activity in Sub-Saharan Africa slowed in 2015, with GDP growth averaging 3.0 percent, down from 4.5 percent in 2014. This means that the pace of expansion decelerated to the lows last seen in 2009.

These figures are outlined in Africa’s Pulse, the World Bank’s twice-yearly analysis of economic trends and latest data for the region. The 2016 growth forecast remains subdued at 3.3 percent, way below the robust 6.8 percent growth in GDP that the region sustained in the 2003-2008 period. Overall, growth is projected to pick up in 2017-2018 to 4.5 percent.

The plunge in commodity prices – particularly oil, which fell 67 percent from June 2014 to December 2015 – and weak global growth, especially in emerging market economies, are behind the region’s lackluster performance. In several instances, the adverse impact of lower commodity prices was compounded by domestic conditions such as electricity shortages, policy uncertainty, drought, and security threats, which stymied growth. There were some bright spots where growth continued to be robust such as in Côte d’Ivoire, which saw a favorable policy environment and rising investment, as well as oil importers such as Kenya, Rwanda, and Tanzania.

The external environment confronting the region is expected to remain difficult. In a number of countries, policy buffers are weaker, constraining these countries’ policy response. Delays in implementing adjustments to the drop in revenues from commodity exports and worsening drought conditions present risks to Africa’s growth prospects.

”As countries adjust to a more challenging global environment, stronger efforts to increase domestic resource mobilization will be needed. With the trend of falling commodity prices, particularly oil and gas, it is time to accelerate all reforms that will unleash the growth potential of Africa and provide affordable electricity for the African people,” says Makhtar Diop, World Bank Vice President for Africa.

Several countries are expected to see moderate growth. Among frontier markets, growth is expected to edge up in Ghana, driven by improving investor sentiment, the launch of new oilfields, and the easing of the electricity crisis. In Kenya, growth is expected to remain robust, supported by private consumption and public infrastructure investment.

The projected pickup in activity in 2017-2018 reflects a gradual improvement in the region’s largest economies – Angola, Nigeria, and South Africa – as commodity prices stabilize and growth-enhancing reforms are implemented.

African Cities as Engines of Growth

As Africa undergoes rapid urban growth, there is a window of opportunity to harness the potential of cities as engines of economic growth. The rapid decline in oil and commodity prices has adversely affected resource-rich countries and signaled an urgent need for economic diversification in Africa. Urbanization and well managed cities provide a major opportunity to offer a springboard for diversification.

The growth of cities, when well managed, can spur economic growth and productivity. But African cities are currently not delivering agglomeration economies or reaping urban productivity benefits. Instead they suffer from high housing and transport costs, in addition to the high cost of food that takes up a large share of urban household budgets.

Housing and transport are particularly costly in urban Africa. Housing prices are about 55 percent higher in urban areas of African countries relative to their income levels. Urban transport, which includes prices of vehicles and transport services, is about 42 percent more expensive in African cities than cities in other countries. Like households and workers, firms also face high urban costs. Cross-country analysis confirms that manufacturing firms in African cities pay higher wages in nominal terms than urban firms in other countries at comparable development levels.

To build cities that work—cities that are livable, connected, and affordable, and therefore economically dense—policy makers will need to direct attention toward the deeper structural problems that misallocate land, fragment development, and limit productivity.

“To ensure growth and social development, cities need to become less costly for firms and more appealing to investors,” says Punam Chuhan-Pole, Acting Chief Economist, World Bank Africa and the report’s author. “They must also become kinder to residents, offering services, amenities. All of this will require reforming urban land markets and urban regulations and coordinating early infrastructure investment.”

Terms of trade

Commodity price drops have lowered Africa’s terms of trade in 2016 by an estimated 16 percent, with commodity exporters seeing large terms-of-trade losses. Across the region in 2016, the impact of this shock is expected to lower economic activity by 0.5 percent from the baseline, and to weaken the current account and fiscal balance by about 4 and 2 percentage points below the baseline, respectively.

Moving Forward

Sub-Saharan Africa countries will continue to face low and volatile prices in global commodity markets. Governments must take steps to adjust to a new, lower level of commodity prices, address economic vulnerabilities, and develop new sources of sustainable, inclusive growth. Africa’s growing urban centers offer a springboard for diversification. But they need better institutions for effective planning and coordination that can raise urban economic density and productivity, and spur the region’s transformation.

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http://www.speed-program.com/blogs/by-author/otis-holloway/the-impact-of-the-fall-in-commodity-prices-on-african-economic-growth


https://www.imf.org/external/pubs/ft/reo/2016/afr/eng/pdf/chapter2.pdf

https://www.weforum.org/agenda/2016/03/why-the-fall-in-oil-prices-is-a-problem-for-everyone

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Editor’s note: On April 14, 2016, the Brookings Africa Growth Initiative hosted its first in a regular series of private, high-level roundtables identifying, managing, and mitigating the major risks to Africa’s development. This session examined current external risks, namely falling commodity prices, China’s economic slowdown, and rising external debt. Below is a summary of their discussion. For more on the roundtable series, see here.

As Africa continues to face a number of challenges due the “triple threat” of falling commodity prices, China’s economic slowdown, and the rising cost of external debt, these external shocks also provide opportunities in 2016 for implementing innovative, robust policies to accelerate and sustain future growth. In the inaugural Doing Business in Africa: A Risks, Trends, and Opportunities Roundtable, participants from government, civil society, academia, and the private sector explored what these external shocks mean for doing business on the continent and how related policy measures can support new and existing economic opportunities. Since external factors—including GDP growth in G-7 countries and China, oil and non-oil commodity prices, and borrowing costs in international capital markets—account for nearly half of GDP growth fluctuations in sub-Saharan Africa, understanding exactly how these factors influence the economic activities in African countries and what can be done to weather and emerge stronger from these shocks is important to fostering successful businesses and investments in the region. During the roundtable, participants engaged one another on solutions for these challenges, sharing their unique perspectives and opening the discussion to related, medium-terms risks as well.

On the effects and future prospects of low oil and other commodity prices:

Oil price shocks to the global economy in 2015 and through 2016 are indicative of an end to the commodity super cycle and the beginning of the “low for long” scenario, one discussant noted. The decline in commodity prices severely affected some African countries that, like many low-income countries, are highly dependent on fiscal revenues from exporting commodities. In light of the price slump, currencies in these countries are weakening, inflation is rising, equity markets have dropped, and bond spreads have increased. Moreover, as another participant mentioned, if not swiftly addressed these short-term shocks could have far-reaching effects on longer-term growth outcomes.

To reduce their vulnerabilities in this new low-price environment, many commodity-exporting countries are attempting to diversify their economies and move up value chains, but, as one participant affirmed, these policies take time to implement, and concurrent shocks can further complicate efforts—even lead to economic crisis. Experiences in Latin America reveal that low commodity prices can lead to an increase in fiscal deficits, which means that countries require additional financing to fill their budget gaps. One important lesson learned from this scenario is that eventually financing can dry up, stranding countries if they are not prepared for this possibility.

On the risks and likelihood of a protracted economic downturn in China:

China’s recent, ongoing transition—a rebalancing from an investment-led growth model to a more innovation-based, consumption-oriented one—has resulted in excess capacity in construction and heavy industry in China, according to one discussant. With excess capacity, investment has slowed, pulling down the country’s growth rate. In turn, African countries have been affected by China’s weakening demand for primary goods through the channels of falling prices and declining export volumes.  At the same time, China is beginning to turn its capital outward, and is expected to become the biggest creditor in the world as well as a sizable source of foreign direct investment (FDI) for developing countries (in natural resources and other sectors). African countries must be poised to attract Chinese investments by improving their investment climates as well as their human capital.

Although China is certainly a major trade and investment partner for the region, as remarked by participants, some questioned whether China should really be considered a defining influence on Africa’s future growth path. For example, one participant suggested that mobile financing will open up the continent in ways that exporting commodities and Chinese FDI cannot. 

On the rising cost of external debt:

In line with the drop in commodity and oil prices—as well as growing risk aversion from investors—borrowing costs have increased substantially for the continent since 2014. With restrictive global financial conditions projected to remain constant in the near term, the cost of external debt is equally expected to stay high, potentially reducing some countries’ access to the sovereign bond market.

A point that one participant emphasized—as has been witnessed in several Latin American countries—is that what matters most to African countries is in which foreign currency the debt is denominated, even more so than the amount issued. The currency matters because when national currencies depreciate or are devalued, their countries’ external liabilities increase based on the foreign currency in which the debt is denominated. This possibility is a likely reality for several African countries that are facing currency declines. Another participant also noted that debt relief for African countries has contributed massively to where the continent is today, yet, going forward, more accountability on countries’ reasons for borrowing, who is providing the assistance, and more transparency regarding the terms of the borrowing is needed.

On short-term shocks v. longer-term business climate reform and development strategies:

Because, as one participant offered, the long-term picture is often spoiled by short-term shocks, a number of equally pressing, medium- to long-term shocks were stressed throughout the discussion. In this regard, finance matters. One participant highlighted the longer-term micro-risk of banks de-risking—ending or limiting business relationships with clients to avoid risk—and Africans possibly losing access to the global financial system. It was agreed that monitoring these trends and preventing widespread de-risking to ensure that Africans are not excluded is vital for maintaining growth. Similarly, promoting financial inclusion among women, the youth, and those in poverty should be a priority.

Poverty trends in the region also concerned some participants, who concurred that although relative poverty levels are decreasing, rising absolute numbers of people living in poverty present a significant challenge to many African economies and societies. Job creation and raising labor productivity by investing in human capital, education, and health, will help fight poverty sustainably and should be a core pillar of African policymakers’ agendas. Furthermore, the alternative could be extremely costly as increasingly marginalized, vulnerable groups may turn to more desperate means of acquiring income through crime, violence, or a pivot to extremism, for instance.

More broadly on the topic of doing business in Africa, one participant noted that international and multilateral financial institutions are aggressively targeting investments in Africa and in many cases are already seeing massive returns on their portfolios. This is partially due to recent improvements in the business climate (although, as many noted, there is still more to do), and in particular the World Bank’s Doing Business report, which is a huge driver of competitiveness in Africa and globally. However, having the technical expertise on the recipient side to meet investors halfway is definitely still needed in numerous countries. Moreover, as significant international trade and investment regimes such as the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) are being formalized, it is incredibly important not to leave African countries out of these agreements, one participant emphasized. In order to build an inclusive global system that is sensitive to African needs, African voices must be included within these discussions, participants agreed.

On infrastructure and technology:

On another note, throughout the discussion, infrastructure was mentioned as necessary to improving the business environment in Africa. It was proposed that in order to finance Africa’s vast infrastructure needs, countries should assess the benefits of issuing bonds against the potential downside risks. Other options for financing infrastructure projects include FDI, private equity investment, and public-private partnerships (PPPs) at the national, bilateral, and regional level. Regional integration and, more specifically, finding ways to finance regional infrastructure projects are receiving growing attention from African countries and international/multilateral donors, and may require new and innovative financing mechanisms. A pointed question participants raised was: How do you incentivize countries and other partners to invest in regional projects?

Technology is also changing how Africans do business, and possibilities exist for African countries to leapfrog in extraordinary ways—in telephony and other industries. Mobile banking is a powerful example, of which participants discussed at length. Lessons from Kenya’s mobile banking system, M-Pesa, show the transformative power of mobile systems, as M-Pesa began in 2007 as a money transfer platform in 2007 and is today a technological platform that provides a wide array of digital and financial services to a vast majority of Kenyans. Compared with traditional banking systems, mobile banking is inclusive to women and the poor, and also reduces leakages and fraud. While there is some concern about cybercrime and potential attacks on mobile banking systems, mobile banking deals mostly with micropayments so the extent of damage would be limited. Leapfrogging in the renewable energy sphere (micro- and mini-grid systems) is also already occurring and could be scaled up, provided that technology costs decline over time. 

Key takeaways:

  • The Africa rising narrative is not uniform: It is important to look at what parts of the continent and what sectors are not “rising” in order to develop targeted policy measures to address them. In developing national growth strategies, it is equally important to consider locational advantages within the surrounding region and how regional integration could play into domestic growth. For example, Kenya is surrounded by five landlocked, resource-rich countries. Therefore investing in and establishing efficient ports, railway and road networks, transit airports, ICT capacity and fiber optics will enable Kenya to become a prominent trade and transit hub for the region.
  • In response to the short-term external shocks facing Africa, encouraging diversification (especially when commodity prices are low) is key, as is recognizing that China is a strong trade and investment partner to the continent, but at the same time it is not a panacea, especially if a major global slowdown occurs. By reducing vulnerability to external shocks (diversifying economies, exports, and trade partners) and building resilience (foreign reserve buffers), African policymakers and businesses will weather external shocks and have greater protection against them in the future.

  • If Chinese financing in Africa continues to blossom and is applied within good institutional environments, it could have widespread, positive benefits for African countries. Working on domestic capacity to absorb investment from China and remaining a competitive in the investment landscape is crucial for African countries.

  • There are still a number of longer-term, binding constraints to economic development and growth in African countries: corruption, lack of human capital, power outages, financing physical infrastructure, and low labor productivity to name a few. Multilateral and bilateral partnerships, namely with China and the U.S., could help on several of these fronts. The U.S. is already trying to boost labor productivity and human capital through Power Africa, Feed the Future, and various health and educational initiatives.

  • Development banks are already doing an effective job of expanding economic opportunities across the continent and should continue to build infrastructure that that is not purely export-oriented in order to create jobs locally and serve local populations. Understanding the risks of certain types of debt is important for African policymakers. Commodity-backed debt is not sustainable, for example, and foreign-currency-denominated bonds could be subject to risks in the case of national currency depreciation or devaluation.

  • African policymakers should focus on building regulatory frameworks, engaging in institutional development, and prioritizing human capital. Of particular concern is that absolute poverty levels are rising, and marginalized groups may turn to violent extremist groups rather than productive jobs for steady incomes.

  • Services and industry are complementary sectors, although structural transformation in Africa has tended see a shift from agriculture to employment and growth in services rather than industry. Some experts are worried about the rise of the services sector’s contribution to GDP in many countries, compared to the relative rise of agriculture or industry because they think there is less value addition in the services sector and hence a lower likelihood that the sector will become an engine of growth. But services can be labor intensive—making good use of the continent’s dynamic labor force—and service sector jobs are adopting technology rapidly, giving workers new skills and improving their productivity. So the shift to services is beneficial to the continent in a number of ways.

https://www.google.co.uk/amp/s/www.brookings.edu/blog/africa-in-focus/2016/05/27/external-risks-to-africas-growth-falling-commodity-prices-chinas-economic-slowdown-and-rising-external-debt/amp/?client=safari

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World Commodity Prices and their Impact on Developing Countries

https://www.odi.org/projects/1481-world-commodity-prices-their-impact-developing-countries





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