Africa-Continent
2016 – A Bad Year For Africa

2016 looks set to be a bad year for Sub-Saharan Africa. The periodic global climate change brought on by El Nino has brought floods to Europe, but serious drought to Africa. In some countries, like Malawi, the water shortages are not just effecting crops and animals, but also the big hydro-electric plants that produce much of their electricity.

Misery is therefore shared by both the rural and urban population. Factories are being forced to cut back radically on their output, the service industries are reduced to a few hours per day when electricity is available, or must rely on individual generators, with the obvious extra costs that those create. Food costs for staples, like maize flour, have increased substantially this year throughout much of Africa.

____________________________________________________________________________________________________________

 

Driving through the North West Province of South Africa recently, we were struck by the number of fields left fallow this year due to lack of water. Maize corn production in SA has held up remarkably well, all things considered, but economists still predict that this country, once a bread basket of Africa, may have to depend on imported maize for the first time in living memory. Certainly, South Africa’s traditional role as the exporter of both maize and also, to a lesser degree, electrical power for its drier neighbours to the north (Angola, Namibia, Botswana, Zimbabwe, Zambia, Malawi, Tanzania) is being sorely tested. Maize is the vital foodstuff for non-tropical Africa. It is the daily porridge (“Pap” in South Africa), nourishing and filling, of the poorest. Those who are a bit richer will add rice, bread, meat and gravy once or twice a week. Many farmers pay their labourers with maize flour. The stems and rusks of maize are cattle fodder. A poor maize harvest, therefore, can have a devastating effect on those elements of society who are already the most vulnerable to rising costs.

Lower global oil prices have been a blessing for the non-oil producing Africa countries as they struggle with power outages, but for the new oil producing countries of Africa, the fall in oil prices has caused financial challenges. Countries such as Nigeria & Angola which were budgeting on high oil prices are now struggling to provide for the expectations of their populations. Nigeria has imposed import restrictions in order to prevent the outflow of its petro-dollars. This, in turn, has adversely effected those African economies and businesses, such as South Africa’s, which had invested in Nigerian ventures. The latest victim, a South African furniture retailer which has closed down its Nigerian subsidiary because it could import the furniture into Nigeria.

Armed struggles in some countries continue to destabilize some parts of the Continent – Nigeria, Mali, Niger, and neighbours continue to battle it out against Boko Haram and its derivatives, with the war ebbing and flowing over the borders. The war lords of northern and eastern DRC also continue to challenge the central state of Joseph Kabila, who is supposed to be stepping down from the presidency after 15 years but seems disinclined to do so. Those small wars drag in the neighbours, particularly Uganda, and Rwanda. Rwanda’s Paul Kagame was reelected recently despite increasing opposition. Uganda continues to battle with Islamists on its northern borders, while Kenya is threatened by Somalian Islamic along its northern coast which has prevented the development of tourism. Recently, the old opponents to the Mozambique government have started to ferment trouble, going as far south as Biera, which has a large safari park nearby. Then there is the continuing strife in Africa’s newest country, Southern Sudan. While none of these events are linked to the drought of 2016, any hopes that things would get better seem to be impossibly optimistic this year.

Finally, there are those who feel that Brexit will create a long term downturn for Africa.

Brexit of course has lead to a very rapid devaluation of the UK pound compared to the main African currencies, for example, the pound has fallen 15% against the SA rand since mid-June. The UK imports heavily from its ex-colonies – mainly minerals, metals, and farm produce (tea, coffee, wool, wine, fruits, sugar, flowers). The weaker pound may help the UK’s own economy, but it reduces the attractiveness of imported African produce, exactly at the time the drought increases costs.

Then there is development aid. As far as I know, no one has looked at this potential victim of Brexit, they should do so! Over time, since the UK joined the European Union funding for development aid has been centralized in Brussels. Member States continue to contribute some of their aid directly, but everyone agreed that pooling major aid budgets allowed much greater resources to be deployed. A percentage, therefore, of the UK’s contribution to the EU went into the common development aid fund and is dispersed to the aid-receiving projects. As the French ensure its ex-colonies receive a fair share of the total resources, so too the UK looks after its ex-colonies and encourages funding for them. Not only will Brexit remove the British presence in the discussions on which projects in future will benefit, but the UK contribution (which is considerable) will no longer be paid into the EU Development Aid budget. Instead it is very likely that these funds will disappear into national projects that the Leave party promised to its supporters – such as greater support for the NHS. The developing world, and particularly the British ex-colonies, will therefore suffer long term the effects of Brexit.

A major turn around in Africa’s economies could be achieved by moving from fossil fuels and hydro-electric plants to renewable energy strategies focused on wind and solar power sources. Africa has plenty of sun, a steady supply of wind in many areas, and the costs of wind turbines and solar panels are dropping rapidly. South Africa, for example, has just opened a vast solar farm in the Karoo, and is developing large wind turbine farms in the Western Cape which will contribute significantly to its electricity grid, replacing the present polluting coal and oil-fired generators. Development aid via the EU into the poorest countries of Africa might be best aimed at providing such renewable energy solutions, and therefore help the peoples of Malawi, Zambia or post-Mugabe Zimbabwe to move away from their reliance on hydro power. Brexit has, sadly, made that dream very unlikely to happen for many years.

_____________________________________________________________________________

Alastair Tempest 2Alastair Tempest
Regional Director
IORMA Africa 

 

 

 

____________________________________________________________________________________________________________