East Africa – Pest Outbreak Threatens Crops

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There are serious concerns over the new armyworm outbreak, which has already ruined large areas of cultivation.

On February 14th international leaders held talks in Harare, Zimbabwe, to tackle the armyworm outbreak, which has spread across several African countries, including Zambia, Zimbabwe, South Africa and Ghana.

There have been more recent reports suggesting that Malawi, Mozambique and Namibia may also be seeing outbreaks. The species of ‘fall armyworm’ originates from the Americas and United Nations (UN) FAO coordinator for South Africa, David Phiri, said, “farmers do not know really how to treat it.”

The caterpillars eat maize, wheat, millet and rice, key food sources in southern and eastern Africa. The Centre for Agriculture and Bioscience International (CABI) recently said that it is spreading rapidly and needs an urgent response.

The armyworm name is misleading as the pest is actually a caterpillar, and should not be confused with the African armyworm, which is known in the region. This species originates from the Americas, although no-one is sure how it made it to Africa. It is thought that it could have arrived on a commercial flight or in imported food.

According to the United Nations (UN) Food and Agriculture Organisation (FAO), it has taken only eight weeks for the pest to spread to six southern African countries. The caterpillar stage does the damage but “it’s the adult moth that migrates long distances and that’s how it’s managed to get round Africa,” said Professor Ken Wilson, an armyworm expert.

“These army worms attack the maize leaves, the flower and even bore into the stalk. And because they dig into the stem of the plant, it is difficult to notice them. It is only on close inspection that you realise almost the entire plant has been destroyed” said Chimenya Phiri, Malawian farmer, reported BBC News on February 14th.


Armyworm – www.phys.org

South Africa’s agriculture ministry said little was known about how the armyworms arrived or what their long-term effects would be; “It may become a migratory pest similarly to the African armyworm and may migrate in large numbers from one area to another, causing great damage,” reported UK-based the Guardian.

“If it is a small level of the worms, it’s easy to control, using pesticides. Otherwise, it’s very difficult to control it, so they will have to use different methods – including sometimes burning the crops,” said Phiri.

Zimbabwe’s Deputy Agriculture Minister Davis Marapira said that the pest had been detected in all of the country’s 10 provinces.

The FAO, which is hosting the Harare meeting, said armyworm outbreaks combined with current locust problems “could be catastrophic” as southern Africa has yet to recover from droughts caused by the El Nino climate phenomenon.

Zambia reported that almost 90,000 hectares of maize have been affected. In Malawi, some 17,000 hectares have so far been affected. In Namibia approximately 50,000 hectares of maize and millet has been damaged, and in Zimbabwe up to 130,000 hectares could be affected.

The FAO said it had initiated the process of procuring pheromone insect lure traps, which are used for capturing armyworm and monitoring their spread.

(© AFP 14/2 2017; PANA, Lusaka 16/2)

Find out more in the Africa Research Bulletin:

RWANDA: Food Security Fears
Economic, Financial & Technical Series
Vol. 54, Issue. 1, Pp. 21568A–21568C

Drought and Hunger
Economic, Financial & Technical Series
Vol. 54, Issue. 1, Pp. 21563A–21563C

Africa’s Pulse – Agriculture Could Be The Key
Economic, Financial & Technical Series
Vol. 53, Issue. 9, Pp. 21424A–21424B.

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Africa – ‘Panama Papers’

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As global reverberations are felt following unprecedented leaks, some of the most pressing concerns are in Africa.

A number of high profile African leaders and businessmen have been named in the recent ‘Panama Papers‘ leak involving the Panama-based firm Mossack Fonseca, detailing the global scale of tax avoidance and evasion; top officials from at least 15 African countries have been named.

The leaks have added to the calls, made in an African Union (AU) and UN Economic Commission for Africa report in 2015 that African money kept in foreign banks should be repatriated to the continent. At a conference in 2015, former South African President Thabo Mbeki said that Africa was loosing US$50 billion through illicit cash flows, more than double the Official Development Assistance (ODA) the continent receives, although a report by the Organisation for Economic Cooperation and Development (OECD) put the amount higher at $150bn, reported Deutschewelle.

The information released in the leaks strongly correlates with findings of the report and confirms the existence of a network of offshore accounts and investment vehicles, driving tax avoidance and evasion. According to a report by the UN Economic Commission for Africa, it is an undeniable fact that these illicit financial flows deserve our full attention continentally and globally.

“There are illicit funds from Africa in European banks. We started discussions with the European Union (EU) some years ago to bring back these funds. We find it morally and economically good for the banks to send the funds back,” said the African Union Commission (AUC) chairperson, Nkosazana Dlamini Zuma.

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BBC

In July 2015, at the UN Financing for Development conference in Addis Ababa, Ethiopia, African nations led the G77 bloc of developing countries who offered to forego international aid if western countries closed tax loopholes and shut down tax havens, reported the Daily Maverick.

The leaks are not entirely new revelations as many in Africa have been pushing for the global tax system to be overhauled, pointing to the billions that is lost from the continent each year. However it is the scale of the networks of financial secrecy, essentially set up to be unaccountable, that is becoming clear, and the intricate and murky connections between world leaders and businessmen.

Journalists have yet to make their way through but a tiny fraction of the 11-million documents and the high profile and politically connected nature of the African individuals implicated, seems to indicate that more are yet to come.

The leak was obtained from Mossack Fonesca by German newspaper Süddeutsche Zeitung who worked in collaboration with the International Consortium of Investigative Journalists (ICIJ) and around 106 worldwide news organisations. Mossack Fonseca is a leading creator of shell companies, corporate entities that are used to hide asset ownership. The leaked internal files contain information on 214,488 offshore entities connected to people in more than 200 countries and territories.

A full breakdown of findings from the ICIJ are available here.

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African Public Officials Implicated – ICIJ

Country Level Findings

Botswana

The President of the Court of Appeals, Justice Ian Kirby, has been named in the leaked files, being said to hold shares in up to five offshore companies mainly in the UK, although he has insisted that all of these are legal. Much of Botswana’s wealth comes from diamond mining, and has been noted to have checks and balances in place to avoid illicit flows of wealth. However, commentators said that it was a worrying sign that many wealthy people in Botswana were considering to invest offshore, reported Deutschewelle.

DR Congo

A leading financial institution with close connections to the gold mining industry, Rawbank, has been implicated in the leaks, which show that the Rawji family, the shareholders of the bank, make extensive use of tax havens and shell companies, maintaining a web of offshore structures such as Khazana Holdings and Hurricane Investments in the British Virgin Islands, Pix Business and Trading Mamu Investments in Panama, and many more. Each of the entities are connected to many other shell companies, which lead to a complex and illusory network of financial connections. There have been concerns that with Dubai’s rise as a gold buyer, a destination for around 70% of DR Congo’s gold, coupled with its financial secrecy, illicit financial flows are growing, reported the Daily Vox.

Jaynet Desiree Kabila Kyungu – twin sister of President Joseph Kabila – considered one of the most influential people in the country, owns a media company together with a Congolese businessman, who were both co-heads of an offshore company in the South Pacific, said to have shares in mobile telecoms operators in DR Congo, reported Deutschewelle.

Egypt

The son of the overthrown President of Egypt Hosni Mubarak was named; Pan World Investments INC, owned by his son Alaa Mubarak, was managed by Credit Suisse in the British Virgin Islands. After the toppling of Mubarak authorities asked Mossack Fonseca to freeze Pan World’s assets, although it is claimed that this was never fully implemented, reported Aswat Masriya.

Ghana

Ghana’s former President John Agyekum Kufour ‘s eldest son, John Addo Kufour, allegedly controlled a bank account in Panama worth US$75,000. They appointed Mossack Fonseca, to manage the fund, reported Deutschewelle.

Guinea

Mamadie Toure, widow of Guinea’s late president, Lansana Conte, was allegedly granted the power of attorney to Matinda Partners and Co Ltd, a British Virgin Islands company, in November 2006. Authorities in the US claimed that Toure received $5.3 million to help a mining company win a mining concession from President Conte just before he died in 2008, reported Deutschewelle.

Kenya

The company which recently bought a controlling stake in the Raila Odinga’s molasses plant in Kisumu – Energem Resources Inc – has been linked to many dubious diamond mining companies in West and Southern Africa and tax havens in the British Virgin Islands.

Kalpana Rawal, Kenya’s Deputy Chief Justice was implicated in several business deals linked to two companies based in British Virgin Islands. The documents revealed Rawal’s involvement in real estate in the UK through offshore companies. Kenya’s constitution bars public servants from owning a bank account outside the country, reported Deutschewelle.

Separately, a Danish national, who has previously been accused of land grabbing in Kajiado Country, has been accused of running Avon Developments Limited, registered in the British Virgin Islands, reported the Daily Nation.

Namibia

The leaks have revealed details about the Sicilian Mafia’s business network between Italians and Namibian businessman Zacky Nujoma, the youngest son of founding President Sam Nujoma. According to reports even though much of the criminal syndicate is imprisoned, the empire – with connections to Namibia, Italy and South Africa – has used financial secrecy companies in the British Virgin Islands, reported the Namibian.

Nigeria

Former Delta State governor, James Ibori, who has already been implicated for embezzling up to $75m in London property, has been named in the leak, leading to concerns that the true amount involved could be much higher.

Senate Bukola Saraki, said to be the third most powerful person in the country, has been named as failing to declare offshore assets in his wife’s name.

Africa’s richest man, Aliko Dangote and his half-brother Sayyu Dantata, have also been linked to Mossack Fonseca’s shell companies. The two are said to have repeatedly bought and sold shares in 13 companies, mainly in the Seychelles, reported Deutschewelle.

Theophilus Danjuma, a retired army general and former defence minister, is one of Nigeria’s richest people, due to ownership of one of Nigeria’s most lucrative oil blocs. The leaks exposed another of his companies – Eastcoast Investments Inc – which he incorporated in Nassau, in the Bahamas, reported the Premium Times.

South Africa

President Jacob Zuma’s nephew Clive Khulubuse has been mentioned in the leaks, as being authorised to represent the offshore company Caprikat Limited, which purchased oil blocks in the DR Congo. According to reports the leak showed that he did not directly benefit from the deal which “deepens the mystery as to what he was doing there. The question arises why would they use him and what benefits would he have gained from that?” Sam Sole, from the investigative team at South African newspaper the Mail & Guardian said.

Zimbabwe

The opposition People’s Democratic Party (PDP) has called for an investigation after the Panama Papers brought to light links between two wealthy Zimbabwean business men, and the Zimbabwean regime. Billy Rautenbach and John Bredenkamp were named as engaging in widespread tax avoidance and externalising huge sums of money outside the country. PDP spokesman Jacob Mafume said “Bredenkamp is an arms dealer and mining tycoon while Rautenbach is the owner of GreenFuels and is involved in diamond mining”, both well known funders of the ZANU-PF ruling regime.

“As a result of the controversial links between Rautenbach and Zanu PF, major shareholders in fuel retail companies such as Sakunda and Redan have been elbowed out of business as the Zanu PF cartel has moved in to create a total monopoly in the fuel sector and thus keep consumers hostage to high fuel prices…What concerns us at the PDP is that the Panama Papers are being released when Mugabe in February said over $15 billion of proceeds from diamond mining remained unaccounted for,” Mafume added, reported New Zimbabwe.

Find out more in the Africa Research Bulletin

KENYA: Graft-Tainted Ministers Sacked (Free to Access)
Economic, Financial & Technical Series
Vol.52, Issue.11, Pp.21059B–21060B

Transparency International: “Endemic Corruption” Plagues Most of Africa
Economic, Financial & Technical Series
Vol.51, Issue.11, Pp.20627B–20627C

TANZANIA: Illicit Outflows Report
Economic, Financial & Technical Series
Vol.51, Issue.5, Pp.20413C–20414B

NIGERIA: Illicit Oil Proceeds Laundered
Economic, Financial & Technical Series
Vol.50, Issue.9, Pp.20119A–20120C

AFRICA: Illicit Financial Flows
Economic, Financial & Technical Series
Vol.49, Issue.2, Pp.19449C–19450C

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Africa – UN Economic Development Report

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Report highlights the potential for the service sector to catalyse growth but the Greek crisis harks back to African IMF-imposed structural reforms and the continents’ continued indebtedness. 

The United Nations (UN) Conference on Trade and Development (UNCTAD) report, ‘The Economic Development in Africa Report 2015: Unlocking the Potential of Africa´s Services Trade for Growth and Development’ (available here), launched on July 8th,  provides extensive analysis of different policy issues facing Africa’s service sector and recommendations to enhance regional integration and inclusive development on the continent.

Starting with the basis that the services sector is a “critical source of income and employment…and the most dominant sector” in 30 out of 53 African countries, contributing almost half of the country’s economic output and around a third of formal employment between 2009-2012.  The reports, however, also comments that such “dynamism…has failed to translate into structural transformation” necessary for developmental needs and is delivered at a high cost.

The report claims that the services sector has the “potential to become a significant driver of sustained economic growth and structural transformation” but that this would require policies to build bridges between the “services sector and other sectors of the economy, especially manufacturing”.

The report highlights some examples where African economies are tapping into opportunities in the services sector; examples of “emerging regional services” are financial and banking services industries in Mauritius and Nigeria, the commercial and cargo air transport industries in Ethiopia and South Africa, educational services industries in Uganda and Ghana, telecommunications services in Egypt and port service industries in Djibouti and Kenya.

However opportunities aside, many African countries are feeling serious economic and social strain; the Ebola-affected countries of West Africa, tourism-reliant countries such as Egypt and Tunisia suffering from recent terrorist attacks and mineral heavy economies affected by global price drops, alongside the many regional conflicts that are hampering economic and social development.

In Ghana, the Premium Times on July 3rd reported that sources were suggesting that public debt in the country could reach 70% of GDP by the end of this year, with the Ghana Cedi loosing 99% of its value against the US dollar and increasingly high inflation. Ghana has borrowed from the International Monetary Fund (IMF) 26 times since 1966, leading to the imposition of more and more conditions for the repayment of loans. The article concludes that the IMF and World Bank with extensive privatisation, foreign direct investments (FDI) and deregulations, have led to debt traps that have further encumbered and disregarded the poorest. Recently on July 7th, Ghana gave signs that it may  consider renegotiating its bailout terms with the IMF, viewed by some economists as unrealistic.

A recent commentary by Radio France Internationale draws parallels between the recent Greek economic crisis in Europe and similar actions by the IMF during the 1980-1990s in Africa. Greece, defaulting on its 1.5bn loan repayment, has felt the imposition of strict capital controls and the country is heading towards an exit from the Eurozone.

François Ndengwe from the African Advisory Board explained that “what is happening to Greece, happened to Africa for over three decades”. Dr Samuel Nyambi, Executive director of CAPDEV, a development company commented that “for myself and many other Africans, we feel a lot of sympathy with the Greeks and the reforms they’re having to swallow, because we went through the same thing with the IMF’s structural adjustment programs.”

During the 1980s-90s the IMF and the World Bank imposed a stringent set of structural reforms to repay debts owed; these reforms have been critiqued by many economists as seriously hindering economic and social development on the continent. According to GlobalInsolvency, reforms centred on the repayment of loans led to lay-offs, privatisation, salary cuts and reduced spending, that made the pursuit of long-term development agendas impossible, resulting in further indebtedness and increased poverty in almost every African country where the IMF structural reforms were implemented.

Find out more in the Africa Research Bulletin

Africa-IMF: Mission Visits and New Funding
Economic, Financial & Technical Series
Vol.52, Issue.5, Pp.20852B-20855A

Africa: Competitiveness Report
Economic, Financial & Technical Series
Vol.52, Issue.5, Pp.20841A-20842B

Africa -IMF/World Bank: Growth Remains Solid, but Slows
Economic, Financial & Technical Series
Vol.52, Issue.4, Pp.20815C-20818A

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Africa: The Future Looks Bright for African Solar Power

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Surge in investment and implementation of solar power projects is hoped to address developmental needs.

On January 25th the World Bank introduced ‘Scaling Solar’, an initiative aimed at creating favourable market conditions for private solar projects across Africa, increasing the energy supply to both residential and commercial customers. This is one of a number of projects that have become operationalised in recent months.

Africa provides huge scope for solar projects, with abundant sunlight and open-space, solar power could provide novel solutions to development needs.

Scaling Solar is combining resources from the World Bank, the Multilateral Investment Guarantee Agency (MIGA) and finance from the International Financing Corporation (IFC). The IFC website quotes Vice President for Global Client Services, Jean Philippe Prosper, explaining that “by quickly delivering affordable electricity to previously un-reached populations, significant progress can be made on other development goals”.

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According to the IFC a number of obstacles have constrained the development of solar energy in Africa including:

  • A lack of utility-scale projects due to unique structures and features of African markets
  • A lack of competition and inexperienced investors
  • High transaction costs that constrain smaller projects
  • Perceived risks and costs of capital
  • The limited institutional capacity of African governments

The Scaling Solar initiative seeks to overcome these hurdles by providing access to solar technology, increased participation and risk management and credit enhancement products.  The World Bank hopes to build upon its experience of large and small scale solar power, particularly the Renewable Energy Independent Power Producer Program (REIPPP) in South Africa.

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Under the REIPPP in South Africa a number of successes have been highlighted; on March 6th 2015 Abengoa and the Industrial Development Corporation (IDC) announced the operationalisation of Africa’s first concentrated solar power project (CSP), the 100 Megawatt (MW) KaXu Solar One Project. Abengoa and IDC are also implementing the 100 MW CSP Xina Solar Project expected to be commissioned in 2017 and the Khi Solar One Project, a 50 MW CSP project.

In Rwanda, Gigawatt Global Ltd have implemented East Africa’s first utility-scale energy project, a 8.5 MW solar field at Rwamagana, 60km from Kigali. The solar field consists of 28,360 PV panels across a 20 hectare plot of land and is expected to provide 6 % of Rwanda’s energy needs.  Chaim Motzen, Managing Director and Co-founder of Gigawatt Global Ltd, told Ventures Africa that the project was testament to the viability of financing and building large utility-scale solar in Africa.

In Ghana, plans are under-way for the Sankana project; Home Energy Africa Ltd are hoping to construct a 100 MW project in the Nadowli-Kaleo district by 2016. Ghana has already seen huge investments in utility-scale solar projects including the Nzema Solar Power Plant expected to be one of the largest in the world, report Ventures Africa.

The increased positivity around African solar power is due largely to rapidly improving technology and cost efficiency. The International Energy Agency predict a huge increase in African solar projects, for both residential and commercial uses, and the World Energy Outlook 2014 states that by 2040 renewable energy is expected to account for 45% of power generation capacity across the continent.

Find out more in the Africa Research Bulletin

Power: Cameroon
Economic, Financial & Technical Series
Vol. 52, Issue 1, Pp.20722-20725

Power: Egypt
Economic, Financial & Technical Series
Vol.51, Issue 12, Pp.20686A- 20689C

World Energy Outlook 2014 – Energy in Sub-Saharan Africa Today
Economic, Financial & Technical Series
Vol.51, Issue 10, Pp.20615A-20615B

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Piracy in the Gulf of Guinea

Piracy off the coast of Somalia has been much in the news.

The kidnappings of Westerners by Al Shabaab militia and Kenya’s invasion of Somalia has added a new dimension.  Less reported is the rise of the practice off the west coast of Africa in the oil-rich Gulf of Guinea.  

So why is the issue of piracy in the Gulf of Guinea particularly troubling?

1. The problem is growing

The coast of Nigeria, Africa’s largest oil producer, has long been a dangerous place to sail but now the risk has spread. Benin’s coast has seen at least 20 incidents in 2011 compared to none in 2010, raising alarm in the shipping industry.

2. This is where the oil comes from

The Gulf of Guinea produces more than three million barrels of oil per day  (bpd) equivalent to 4% of the global total, ultimately destined for Europe and the US.  Some estimates says that by 2015 America will be getting up to 25% of its oil supplies from here. The area also includes some of the newest players in the oil scene. Ghana, for example, which has huge reserves and only began production in December 2010, is already producing 77,000 bpd.

3. These pirates mean business

The pirates are targeting diesel and oil tankers. They don’t want hostages. They want the fuel or whatever else they can take. The pirates in the Gulf of Guinea are more violent than their counterparts off the coast of Somalia. Hostages are generally released within 72 hours, but are often maltreated and physically abused.

4. The problem’s even worse than it seems

Inadequate information-gathering from the region means that it’s almost impossible to assess the frequency of the attacks and they are seriously under-reported. One security analyst told Reuters that “in Nigeria it is estimated that approximately 60% of pirate attacks go unreported.”

5. Regional Countries Lack Resources

Affected countries are joining forces. The Togolese navy – which managed to foil an attempted hijacking of a Maltese tanker 15km off the Togolese coast in late September – is pooling monitoring resources with Benin and Nigeria.  The regional group, Economic Community of West African States (ECOWAS) decided to expand its maritime security committee from five to 10 members. Benin, Cote d’Ivoire, Senegal, Sierra Leone and Togo will now join Cape Verde, The Gambia, Ghana, Guinea-Bissau and Nigeria according to a press release issued by Defence Ministers. These initiatives don’t alter the fact that local coastal defences are weak and the coastline is craggy, offering hiding places for potential attackers.

6. International Efforts

Not much is being done yet on the international stage. The United Nations is worried and is sending an assessment team. A Security Council statement “expressed concern over the increase in piracy, maritime armed robbery and reports of hostage-taking … and its damaging impact on security, trade and economic activities in the sub-region.” Both France and the United States have sent warships to assist navies in Benin, Ghana, Nigeria and Togo to track down the pirates.

Find out more with the following back issues of the Africa Research Bulletin

Gulf of Guinea, Rise of Piracy (Economic, Financial and Technical Series, Volume 48, Issue 9)

ECOWAS Defence Chiefs Meet on Piracy (Political, Social and Cultural Series, Volume  48, Issue 10)

Islamic banking continues rapid growth

Already a rapidly expanding sector in Kenya, Tanzania, South Africa, Egypt, Sudan and Nigeria, Islamic banking now looks set to develop elsewhere, too, as the governments of Ghana, Uganda, Ivory Coast, and Somalia begin making strident efforts to introduce the system.

The practice has been identified as having huge growth potential in Africa, where Muslims constitute 51 percent of the population.  More than 250 Islamic financial institutions, including Islamic banks, Takaful companies, Islamic Funds, Modarabas, and Islamic Microfinance, are already operating in Africa, according to research by MicroFinance Africa.

A recent article by the Nigerian Daily Trust newspaper suggests that the growth of Islamic banking may owe partly to the failure of the Western banking system that precipitated a worldwide financial crisis that is yet to end.

“Non-Interest (Islamic) banking may be seen as a recent financial system improvised as alternative to tackle the turmoil inherent in conventional banking system. However, there were earliest references which suggest that Islamic banking came into the picture first in Egypt in 1963. This pioneering effort was achieved by Ahmad El Najjar who brought the idea into existence, whose key principle was profit sharing (non-interest based philosophy of Shariah). By the end of 1976 there were 9 such banks in Egypt alone. These banks neither charged nor paid interest but their activities were mostly limited to trade and industries where these banks invested directly or as partners of depositors.”

Indeed, the reasons appear both numerous and complex, but the rise of Islamic banking is a trend to keep an eye on.