‘Africa Rising’ – Good Governance is the Key to Sustained Growth and Optimism

‘Africa Rising’ has become one of the catch phrases in global economic governance discourse. It refers to a new chapter for the African continent characterized by healthy economic growth and improved governance. Africa is now seen as a source of hope, and sustained one at that since the continent’s GDP growth looks set to continue. In recent decades, the African continent is experiencing unparalleled economic growth. This growth, captured by the concept of ‘Africa Rising’, has attracted billions of dollars in foreign investment. Of the world’s ten fastest growing economies, seven are from Africa with sub-Saharan Africa overtaking many other parts of the world in terms of its impressive economic growth. Some have even referred to this inundation of foreign interest in Africa as the 21st century ‘scramble for Africa’ only this time Africa is in control of the planning, managing and financing of its own destiny.
However, this robust economic growth is not without its own set of challenges especially because such growth remains unequal with poverty and unemployment still prevalent in many African countries. As the president of the African Development Bank put it: “you can’t eat GDP”. Many see good governance as the only sustainable solution to these challenges. The concept of good governance became noticeable in international circles around 1989/1990 and for over a decade since it has been a guiding principle in global economic governance to refer to certain ‘proper’ administrative processes believed to enhance the value of development. Broadly speaking, the definition of good governance is aligned with principles of democracy, which in turn are believed to secure the terrain for trade liberalization. Traditionally, good governance was defined in universal terms and did not necessarily take into account the wide variety of socio-cultural and political contexts. An example of this notion is the use of good governance as a condition for the granting of aid by ‘traditional’, western donors between the late 1980s and early 2000s.
Today it is widely argued that no single approach can be applied to a continent as diverse as Africa, although there are certain facets of good governance that have been agreed upon as imperative for peace, stability and sustainable growth. Some of the most important principles of good governance include multi-party democratization, the establishment of strong institutions, and the decentralization of power. There has been an increase in studies on the relationship between democracy and development; some have argued that democracy is not a necessary precondition for economic growth while others insist that democratic regimes appear to be more conducive to development because they are associated with stability. However, the democracies that are considered to be stable appear to be those that have been maintained over a long period of time and therefore have a strong, institutionally entrenched processes and decision-making procedures. One can suggest that an established democracy lays the foundation for long-term developmental affects, made possible by the features such as accountability and an active civil society. With regards to accountability, it is argued that democratic governments are accountable to their electorate and are therefore more likely to make concerted efforts to meet the needs of the majority. Another important feature of democracy as a feature of good governance, is the importance it places on civil society. Civil society plays a vital role in advocating notions such as equality and improved standards of living. When combined, these factors paint a picture of constant dialogue between the state, civil society and the electorate, which would mean that social problems such as poverty and inequality could be tabled and addressed.
According to Mo Ibrahim, “As Africa rises, our ability to face our greatest challenges will be determined by how strong, inclusive, and equitable are our institutions”. According to one of the arguments presented above, if good governance is the only solution to Africa’s challenges, it is necessary that the fundamental principles of good governance be well enough established across Africa as stability and development thrive in long-term, institutionally strong democratic systems. This however takes time and, as already mentioned, each sovereign state needs to implement good governance within the framework of its individual social, cultural, political and economic contexts.
As applied to the concept of ‘Africa Rising’, globalization has presented itself as a double-edged sword. It has created a wealth of opportunities for Africa to integrate itself into the global economy and channel the proceeds into development but it has also highlighted the need for Africa to play ‘catch up’ with its more developed counterparts in terms of the political and institutional capacities needed to manage its space on the international stage. As we embark on a new path of global economic governance, the phrase ‘trade not aid’ comes to mind as encapsulating the break away from downward moving transactions between the global north and south and the move towards a more horizontal model of development amongst ‘equal’ partners. However, in order for African countries to engage in this new realm of trade amongst ‘equal’ partners towards the goal of sustained economic growth, there development too needs to be sustainable and this can only be achieved by remedying the social ills (poverty, inequality, unemployment) that constitute the continent’s major obstacles.
“Africa Rising” delineates the African continent as being a source of positivity and promise based on recent levels of impressive growth. This notion is well founded as African countries continue to emerge as formidable forces in the international economic arena but it is evident that reforms in the institutionalization of African development need to be made in order to secure a future of sustained growth and prosperity for this vibrant continent. Africa should not stand in the way of its own bright future.

Written by: Emma George

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Africa Shines: Leading the way in UN Climate Change Summit negotiations

Climate change is not tomorrow’s problem, but is very much todays’ predicament. The United Nations Climate Change Summit took place this past September in New York. While pessimists did not believable in the possibility of any concrete measures be taken, the outcomes were very much so the contrary. At the forefront, taking the lead of negotiations were leaders of various African nations. Leaders showed a united front and made use of the channels available to them to do so. Indeed, organisations such as the United Nations, despite debates on their efficiency, do provide the platform and much-needed visibility for developing nations to shape agendas. The systematic use of institutions and international processes creates incentive for countries to partake in global governance and consequently influence global policy. The UN Climate Change Summit has shown Africa’s potential to shine and claim its rightful seat in global governance discussions.

Encouraging measures to confront climate change were announced by government, business, finance and civil society leaders present at the United Nations Climate Summit in New York. “Never before have so many leaders gathered to commit to action on climate change,” UN Secretary General Ban Ki-moon said.

The most significant event at the Summit was the leadership role demonstrated by African nations, very much behind these bold measures for change. As such, 19 ministers from Africa endorsed the Africa Clean Energy Corridor (ACEC). The initiative seeks the development of renewable energy projects used by the Eastern Africa Power Pool and Southern African Power Pool from its current 12% to at least 40% by 2030. 80% of all electricity in eastern and southern Africa is generated from gas, oil or coal. The transition away from carbon fossil fuels would save 2,500 tonnes of cumulative carbon dioxide emissions. The mutual effort led by African nations will also diversify resource availability, improve energy security and improve investment opportunities and job growth. In effect, cooperation on renewable energy implementation in the region would reduce generation costs by 4% and nearly triple electricity supply on the African continent.

Furthermore, the restoration of over 30 million hectares of degraded forest lands was a main focus on the Summit with nations such as Ethiopia, DRC and Uganda committing to the course in order to achieve a global Bonn challenge to restore 150 million hectares of deforested and degraded lands by 2020.

“The courageous leadership demonstrated by these countries and by the wide range of global leaders in support of the New York Declaration on Forests, underlines that nature-based solutions can play a vital role in our fight against climate change and addressing the fundamental need to reduce emissions,” said Julia Marton-Lefèvre, Director General of International Union for Conservation of Nature (IUCN). IUCN estimates that meeting the 150 million hectare challenge target alone could add approximately US$ 85 billion to national and local economies and remove an additional 1 billion tons of carbon from the atmosphere each year.

Pledges by African countries to combat deforestation and more than double restoration targets will bring significant climate benefits as it inspires initiatives that will contribute significantly to poverty reduction, economic development and food security across countries and regions. It is clear through this past UN Summit that African nations are more than ever determined to take the lead on global issues. The time of Afro-pessissism is over as leaders of the continent are showing great commitment to not only fighting climate change but changing opinions on the role played and to come for African nations.

Not only has this rhetoric been framed, but practice is matched to the latter. In effect, the continent has pledged to add climate change bonds to global warming resources. In 2016, the first climate change bonds will be issued from Africa. These bonds will allow Africa to make use of both capital markets and donor funds to reinforce its defences against extreme weather patterns such as prolonged drought or extreme heat. The plan was revealed as a consequence of the New York Summit and will see a first issue of around $200 million for up to five years. If successful, the bonds will be reintroduced every five years over a period of at least thirty years. African Risk Capacity (ARC), an African Union agency, will be developing and issuing the bonds. ARC was founded early 2014 to improve the continent’s ability to plan, prepare and respond to natural disasters and climate change. One can expect in the future continued bold measures and positions from the continent on other global issues justifying their growing leading influence in international affairs.

Written by Emma Bonvalot-Noirot (@Em_BN)

Are we seeing the emergence of a new G7 that could challenge the current economic world order?

On Tuesday the International Monetary Fund released its latest World Economic Outlook, which revealed that a group of emerging markets’ GDPs have increased to a degree that they are now bigger then the original G7.
Gavin Jackson and Keith Fray of “The Financial Times” explore the notion of a hypothetical new G7, below is a link to their article.
http://m.ft.com/ftdata/2014/10/08/datawatch-a-new-g7/

The IMF is resisting calls to offer Zimbabwe new loans

The International Monetary Fund has said it will not lend more money to Zimbabwe, because the country is in arrears on repaying previous loans.

The IMF’s specialist Africa team is in Harare finalising a programme to help the government revive its stricken economy, with full details to be released next week.

IMF Assistant Director for Africa, Domenico Fanizza, told the BBC new loans were out of the question.

http://www.bbc.com/news/business-29387821

Superpowers have failed us, so small nations must unite for climate revolution

People gather near Columbus Circle before the People's Climate March in New York on Sunday, September 21. People from around the world are participating in what's billed as the largest march ever calling for action on global warming. CNN
People gather near Columbus Circle before the People’s Climate March in New York on Sunday, September 21. People from around the world are participating in what’s billed as the largest march ever calling for action on global warming. CNN

“No nation is immune to the impact of climate change but it is the world’s poorest that will be hit the hardest. A fair and inclusive global agreement to combat climate change is a moral imperative. Time is of the essence for Africa.”

Executive secretary of the United Nations Economic Commission for Africa, Carlos Lopes writes on the importance for African states and developing nations as a whole to take on the lead on climate change. This week’s UN Climate Change meeting has already started causing a few waves.

Read about Lopes’ contribution here.

Zim: Now the Russians are coming too

With Zimbabwe’s largest single foreign investment deal in the bag, President Robert Mugabe on Tuesday stood outside his rural home and thumbed his nose at the Western world that has isolated him for years.

He was about to sign a $3-billion platinum mine deal with the Russians, the biggest ever single investment by a foreign investor since independence, just weeks after he secured billions of dollars’ worth of infrastructure deals with China.

http://mg.co.za/article/2014-09-18-zim-now-the-russians-are-coming-too%20%E2%80%A6

IMF to give Ebola-hit west Africa US$127 million http://www.enca.com/imf-give-ebola-hit-west-africa-us127mln#

WASHINGTON – Guinea, Liberia and Sierra Leone could receive an additional $127-million from the International Monetary Fund to help them deal with the worst-ever outbreak of the Ebola virus, the IMF said on Wednesday.

The funds, which must still be approved by the IMF’s executive board, could help cover financing gaps in the West African countries over the next six to nine months, which the IMF estimates at $300-million in total.

“The Ebola outbreak is a severe human, social and economic crisis that requires a resolute response from the international community,” IMF Managing Director Christine Lagarde said in a statement. “The governments of the three countries have requested additional IMF support to help

cover the acute financing needs they are facing as a result of the outbreak.”

“Additional and prompt balance of payments and budget support from the countries’ bilateral and multilateral development partners will be important to support macroeconomic stability through this challenging period,” the IMF said.

Guinea, Liberia and Sierra Leone are among the poorest countries in the region and the hardest-hit by the worst Ebola epidemic since 1976, which has killed nearly 2,500 people.

The proposed funds would represent an expansion of the three countries’ current IMF programs. Guinea already has a $200 million program from the IMF while Liberia is getting about US$80 million from the fund and Sierra Leone has an IMF program of about $96 million.