The Threat of a Water War Egypt and Sudan to Stand Together

Egypt and Sudan draw battle lines with upstream nations over access to the Nile

NATIONS FIGHT over water, especially when access is curtailed or threatened, and there are the ingredients for a battle over the 4,100-mile long Nile River. Egypt and Sudan have counted on the abundance of the Nile’s life-giving flow. Now upstream nations want to keep more of the abundance for themselves. Ethiopia, Uganda, Kenya, Tanzania, Congo, Burundi, and Rwanda are asserting their rights to more of the river’s relentless flow. Washington needs to intervene to forestall hostilities between the countries.

Britain conquered Uganda and Kenya in the 19th century in part to protect the precious Nile waters from being diverted away from their critical possession of Egypt, the Suez Canal, and the Red Sea route to India. Without the yearly sustaining floods of the Nile, agriculture and settlement in the valley of the river from Luxor to Cairo and Alexandria would have been impossible.

When Britain in the 1920s controlled all of the waters of the Nile, bar those sluicing down the Blue Nile from Ethiopia, it signed a pact that gave Egypt and Sudan rights to nearly 75 percent of its annual flow. This 1929 agreement was confirmed in 1959, after Egypt and the Sudan had broken from Britain but while the East African countries were still colonies.

A new 2010 Cooperative Framework Agreement, now signed by most of the key upstream abutters, would give all riparian states (including the Congo, where a stream that flows into Lake Tanganyika is the acknowledged Nile source) equal access to the resources of the river. That would give preference to large scale upstream energy and industrial, as well as long-time agricultural and irrigation uses.

Egypt and Sudan have refused to sign the new agreement, despite years of discussions and many heated meetings. Given climate change, the drying up of water sources everywhere in Africa and the world, Egypt, which is guaranteed 56 billion of the annual flow of 84 billion cubic meters of Nile water each year, hardly wants to lose even a drop of its allocation. Nor does Sudan, guaranteed 15 billion cubic meters.

About 300 million people depend on the waters of the Nile. The upstream countries, with still growing populations, believe that their socio-economic development has long been unfairly constrained by Egypt’s colonial-era lock on the river. Ethiopia and Uganda have not been able to support agricultural schemes. Nor have they been able fully to harness the river or its tributaries for industry and power. Both have suffered from major hydroelectric shortages in recent years.

Egypt has declared the continued surge of the Nile waters a “red line’’ that affects its “national security.’’ There is discussion in Egypt about the use of air power to threaten upstream offenders, especially if Ethiopia becomes too demanding. In theory, Ethiopia could divert much of the Blue Nile to its own uses. Or Ethiopia and others could charge Egypt for water that has largely escaped modern pricing.

Egypt is sufficiently disturbed by Ethiopia’s potentially aggressive water designs that it has recently made friends with Eritrea, Ethiopia’s arch enemy. In 1998, Ethiopia and Eritrea went to war over slices of insignificant mountainous territory. Although the shooting ended in 2000, a peace settlement handed down by the World Court in 2006 has still not been observed by both sides. If Egypt attacks Ethiopia, Eritrea might join in. Egyptian generals claim that Israel is on the other side, helping the upstream nations by encouraging their thirst for water and by financing the construction of four hydroelectric projects in Ethiopia.

All these issues provide conditions for a war over water. Washington, Egypt’s largest donor, has significant leverage to de-escalate tensions and mediate between the haves and have-nots. After all, Washington supports both Egypt and Ethiopia lavishly and militarily. It needs to demand that all sides stand down.

A Brief History of “State Capitalism”

Something old, something new

A brief history of “state capitalism”

IN SEPTEMBER 1789 George Washington appointed Alexander Hamilton as America’s first ever treasury secretary. Two years later Hamilton presented Congress with a “Report on Manufactures”, his plan to get the young country’s economy going and provide the underpinnings for its hard-fought independence. Hamilton had no time for Adam Smith’s ideas about the hidden hand. America needed to protect its infant industries with tariffs if it wanted to see them grow up.

State capitalism has been around for almost as long as capitalism itself. Anglo-Saxons like to think of themselves as the perennial defenders of free-market orthodoxy against continental European and Asian heresy. In reality every rising power has relied on the state to kickstart growth or at least to protect fragile industries. Even Britain, the crucible of free-trade thinking, created a giant national champion in the form of the East India Company.

The appetite for industrial policy grew with the eating, and after the second world war intervention became a mark of civilization as well as common sense. The Europeans created industrial powerhouses and welfare states. The Asians poured resources into national champions.

This long era of state activism has left a surprisingly powerful legacy, despite the more recent fashion for privatisation and deregulation. The rich world still has a large number of state-owned or state-dominated companies. For example, France owns 85% of EDF, an energy company; Japan 50% of Japan Tobacco; and Germany 32% of Deutsche Telekom. These numbers add up: across the OECD state-owned enterprises have a combined value of almost $2 trillion and employ 6m people.

The new kind of state capitalism started in Singapore. Lee Kuan Yew, its founding father, was prime minister for more than 30 years and a tireless advocate of “Asian values”, by which he meant a mixture of family values and authoritarianism. He rivalled Beatrice Webb in his faith in the wisdom of the state. But he also grasped that Singapore’s best chance lay in attracting the world’s most powerful corporations, though he rejected the laissez-faire ideas that flourished in Asia’s other great port city, Hong Kong.

Singapore could easily have remained a tiny oddity but for a succession of earth-shaking events. The first was the oil embargo imposed by the Arab petrostates in the wake of the 1973 Yom Kippur war, quadrupling the price of oil and shifting the balance of power in the world economy. Arab governments tightened their control over the newly valuable oil companies and amassed growing financial surpluses. For them the economic shock was proof of the power of their oil weapon. For the Chinese it demonstrated the importance of securing a safe supply of oil and other raw materials.

The second event was Deng Xiaoping’s transformation of China. Deng borrowed heavily from the Singaporean model. He embraced globalisation by creating special economic zones and inviting foreign companies in. He espoused corporatism by forcing state enterprises to model themselves on Western companies. And he concentrated resources on national champions and investment in research and development. By doing all this, he plugged 1.3 billion people into the world economy.

The final event was the collapse of Soviet communism. This was initially seen as one of the great triumphs of liberalism, but it soon unleashed dark forces. Communist apparatchiks-turned-oligarchs grabbed chunks of the economy. Between 1990 and 1995 the country’s GDP dropped by a third. Male life expectancy shrank from 64 to 58. Once-captive nations broke away. In 1998 the country defaulted on its debts.

The post-Soviet disaster created a craving for order. Vladimir Putin, then Russia’s president, reasserted direct state control over “strategic” industries and brought the remaining private-sector oligarchs to heel. But just as important as the backlash in Russia was the one in China. The collapse of the Soviet Union confirmed the Chinese Communist Party’s deepest fear: that the end of party rule would mean the breakdown of order. The only safe way forward was a judicious mixture of private enterprise and state capitalism

As Romney so eloquently has stated  that there has been a frontal assault on Capitalism, we should begin this debate on how Capitalism has been  for centuries and later to discuss how it has evolved.  I do not think there is ANY candidate that does not believe we need to have capitalism at the core of our  society. It is how it has become perverted and has gone against the other cores of our society  those being humanity, equality and the protection of the health well-being and rights of all citizens of the United States is above all  … even CAPITALISM. We now must seek a balance  for all these values to peacefully coexist again.

It is my intention to bring this  need to the forefront of the rest of this presidential election cycle

Bad Day of Rain Fitting ending to a BAD week for Romney

The scene at Harmon Tree Farm didn’t feel like the usual Mitt Romney rally. Situated next to an old barn dressed up with a large American flag, there was a live band performing old AC/DC classics, including “You Shook Me All Night Long,” prompting supporters to hoot and dance.

“Shake it girl!” the band’s frontwoman called out to a wildly dancing lady in the audience at one point.

Just before Romney’s campaign bus pulled up, the torrential rain began. Some people ran for cover, to their cars and to a nearby building, while others simply stood in the rain shielding themselves with blue and white Romney for President signs.

As Romney disembarked from his bus to his now familiar entrance song—”Born Free” by Kid Rock—an aide tried to shield the candidate from the pouring rain, but he pushed forward, shaking hands and waving at supporters as he took the stage in the pouring rain.

After an introduction by Nikki Haley, the South Carolina governor whose dark hair was soon sopping wet, Romney took the microphone, his face glistening with moisture but his slick hair unmussed.

“Wow! Pull out the umbrellas,” Romney declared, eying the dark skies.

Motioning to folks who were waving his campaign signs, he said, “Use those signs for what they were made for: To keep your head dry!”

“My oh my,” he bellowed, as the rain poured.

On any other day, Romney’s campaign might have tried to move his rally elsewhere. But the image of the candidate stumping in the rain for every last vote wasn’t so bad for a campaign now worried that Saturday’s pivotal primary here won’t go their way.

Romney stood on stage for nearly 15 minutes and shook hands along the soaked rope line for another 20 minutes more. His aides and closest supporters looked on, at least one admitting some anxiety about Romney’s standing among voters here on primary eve.

“I feel good,” Nathan Ballentine, a Republican state representative and one of Romney’s early supporters in the state, told Yahoo News. “But it’s going to be close… It was always going to be close.”

There has been a change in the air around the Romney campaign in recent days. When Romney arrived in the state 10 days ago, he was coming off his victory in New Hampshire and what was then a win in Iowa. On the stump today, he acknowledged for the first time that he had suffered a “slim defeat” in the Hawkeye State—a notable admission given his campaign refused to describe his phone call to Rick Santorum on Thursday about Iowa’s election results as a “concession.”

Stuart Stevens, a Romney adviser, told reporters Thursday that the campaign had always viewed South Carolina as a tough race—noting that Romney had placed fourth here four years ago. He said he expected the primary go well beyond Florida, where he added that Newt Gingrich and Rick Santorum were also waging “tough” campaigns.

In Gilbert, Romney also seemed to join in setting expectations for Saturday’s election, emphasizing to reporters that he came to the state with the odds stacked against him.

“I had a lot of ground to make up …  Speaker Gingrich is from a neighboring state, well-known, popular in the state, so I knew we’d have a long road ahead of us, and frankly to be in a neck-and-neck race at this last moment is kind of exciting,” Romney said. “I think I said from the very beginning South Carolina is an uphill battle for us.”

The candidate added that even if he doesn’t finish first in Saturday’s primary, he expects to walk away with “a lot of delegates.”

“We have a long process ahead of us,” he said.

More Options in Alternative Renewable Energy

This one is not as far fetched as it may seem…. and opens even more possibilities… I would rather money be spent on this type of energy  development rather than an oil pipeline … 

http://humanbatteries.com/

Yes HUMANS are in some ways  batteries or potential chargers of batteries in just doing what they already do  except with specially fitted  items .. no change you human behavior at all…. sounds good to me. 

The Real Romney: Questions of Character and Truthfulness

COLUMBIA, S.C.–With the Republican nomination shimmering just over the horizon, Mitt Romney dominated the news at noon Tuesday on WIS, the NBC affiliate here. A flashback to Monday night’s Republican debate described it as “Mitt Romney against the rest.” A new South Carolina poll, sponsored by Monmouth University, showed Romney leading the GOP five-pack, even among evangelical voters. Sid Bedingfield, a journalism professor at the University of South Carolina, cautioned, “It’s no secret that conservatives are not in love with Mitt Romney.” And there was no break from the midday Mittathon when the newscast paused for commercials: A 30-second spot sponsored by a shadowy independent group called Citizens for a Working America PAC heralded Romney as the only Republican who could beat Barack Obama.

Barring a dramatic upset in next Saturday’s South Carolina primary or a political upheaval soon thereafter, voters will have more than nine months until the November election to contemplate Romney as the nation’s 45^th president. No White House candidate can stand public scrutiny for that long without new revelations or, at least, new theories about what makes him tick. But the contours of the Romney story are unlikely to change–a devoted son of a failed presidential candidate; devout Mormon and dedicated family man; data-driven (and maybe cold-hearted) business consultant and leveraged buyout executive; non-ideological one-term governor of Massachusetts; and disciplined right-wing presidential candidate who has been running virtually nonstop since 2007.

Assuming Romney is indeed the Republican Party’s presidential nominee, the jumping off point for all future explorations into his political and business record will be The Real Romney by Michael Kranish and Scott Helman, which was published Tuesday. The authors, Boston Globe reporters assisted by the rest of the newspaper’s staff, have written a shrewd and fair-minded biography of the cautious and unruffled front-runner, a candidate who appears to be basing every public comment and gesture on research from a PowerPoint presentation (his favorite form of briefing).

The Real Romney contains little that is likely to dominate the headlines this week or influence Saturday’s voting in South Carolina. But make no mistake, this book is important. It offers intriguing insights about Romney, who would be the first president to see the world through the prism of quantitative business analysis rather than backslapping politics. (George W. Bush, who was a year behind Romney at Harvard Business School, also had an M.B.A., but as a presidential candidate in 2000 and 2004 he campaigned as a decisive C.E.O. rather than a dedicated quant who believes that cosmic truth can be found in numbers.)

Here are some thoughts about how man in The Real Romney might govern from the Oval Office:

“It was good training for how life works. I mean, rejection of one kind of another is going to be an important part of everyone’s life.”

That was the mature Romney, running for governor in 2002, looking back on his two and a half years as a Mormon missionary in France during the late 1960s. What comes through in the Globe’s telling was the austere isolation of the missionary experience: no television, no telephone, and minimal contact with home. Just a regimented life of prayer, French studies and knocking on doors in quest of converts.

Most presidents (think Lyndon Johnson, Bill Clinton or both Bushes) have never spent more than a stray afternoon living the contemplative life. But looking ahead to the November election, it is fascinating that Romney’s missionary years have an eerie similarity to Barack Obama’s stint as a community organizer in Chicago. (Yes, their motivations were starkly different). Like Romney, who found between 10 and 20 French converts, Obama had minimal success in creating anything lasting amid the abandoned steel mills of 1980s Chicago. Although, Obama was not under religious discipline, his life in those days was monkish. As Obama wrote in Dreams from My Father, “When I wasn’t working, the weekends would usually find me alone in an empty apartment, making do with the company of books.”

Holding oneself aloof may be a Romney tradition. In a 1967 magazine profile, Life described presidential candidate George Romney as “a loner who is really close to one person, Lenore,” his wife.

“A wall. A shell. A mask. There are many names for it, but many who have known or worked with Romney say the same thing: he carries himself as a man apart, a man who sometimes seems to be looking not into your eyes, but past them.”

In this passage, Kranish and Helman are summarizing dozens of interviews depicting Romney as driven and task-oriented, congenitally impatient with the small social niceties that leaven day-to-day life. Outside his family and a small group of longtime, mostly Mormon friends, Romney tends to regard other people as data points rather than as objects of curiosity. At Bain Capital, where he made his fortune, Romney encouraged debate and disagreement within the formal structure of company decision-making. As Romney explained his management style at a 2007 conference, “Get people of different background and experience who disagree with each other and are willing to debate and argue.” This adversarial method combined Romney’s law-school training and the case-study method central to the Harvard Business School.

There is no single personality type that automatically produces successful presidents. But, as we have glimpsed with Obama, there is a downside to a leader who is swaddled in bubble wrap of his own making. Anyone elected without close political intimates (truth-tellers like Senator Richard Russell for L.B.J. or Jim Baker for George H.W. Bush) can be victimized by the sycophancy that naturally surrounds a president. Even if a President Romney were to demand candor, aides would be apt to bow to his whims and tell him what he wanted to hear. That is how it is in all White Houses, as bad news has a way of being diverted and distracted before it gets to the Oval Office.

Driving around New Hampshire in the months before the 2008 primary, Romney insisted on traveling in a personal Fortress of Solitude, accompanied only by his longtime press secretary, Eric Fehrnstrom. In contrast, most presidential candidates use drive time as a way of cementing the loyalties of party activists and picking local political intelligence. Romney did not “apply the old adage about management by walking around,” Brian Keough, who headed Romney’s 2008 New Hampshire primary campaign, complained to the Globe reporters. “If you want to know how things are going on the factory floor, go talk to the factory workers.” Unless the cameras are on, such unstructured banter is the antithesis of the Romney style.

“This start was nothing like the typical small business. It was a nearly risk-free opportunity with substantial financial backing — and a lucrative fallback plan in case of failure.”

The candidate’s more than two decades at Bain, as The Real Romney summarizes them, did not fit into either the create-jobs mythology that he pushes in campaign debates or his critics’ portrait of a gimlet-eyed cost-cutter distributing pink slips like confetti. Romney, who the biography describes as “deeply risk averse,” was hesitant to leave the structured environment of business consulting to head the company’s new private-equity arm. Ultimately, Romney the Reluctant Capitalist negotiated a sweetheart deal under which the partners at Bain Consulting would provide the seed funding to launch Bain Capital. And, if the new venture somehow went south, Romney would get his old consulting job back complete with retroactive raises. Romney, in fact, was so cautious that he concocted in advance with the firm’s founder, Bill Bain, a cover story to explain away any future failure.

What should not be lost in the campaign debates over Romney’s activities at Bain is how adroit an investor he was. According to a private analysis of Romney’s record conducted by Deutsche Bank, Bain Capital made money on roughly half of its investments. “Overall, though, the numbers were stunning,” Kranish and Holman write. “Bain was nearly doubling its investors’ money annually, achieving one of the best track records in the business.” Bain Capital tended to concentrate on the industries that 1950s auto executive George Romney might understand: makers of wheel rims and photo albums. For all of Romney’s political boasting about helping launch Staples, Bain invested only a paltry $2.5 million in the company before selling its interest after three years for $13 million.

Romney’s greatest business triumph had nothing to do with creating new companies, and everything to do with saving the Bain brand. In the early 1990s, the eight original partners, who pre-dated Romney at Bain Consulting, wanted to cash out. The company foolishly borrowed $200 million to buy back their holdings just as the 1991 recession hit. With Bain Consulting on the cusp of bankruptcy, Romney was brought in from the sister firm down to the hall to devise a rescue plan. The Romney solution inflicted a heavy dose of pain on all concerned: the original partners had to give up $100 million in equity; nearly 20 percent of Bain’s worldwide work force were laid off; the compensation for the remaining business consultants was cut; and creditors were forced to take 80 percent on the dollar. But Bain survived and eventually prospered. It was, in the words of Kranish and Helman, “the very definition of the kind of ‘turnaround’ for which Romney would claim expertise.”

“My usual approach has been to set the strategic vision for the enterprise and then work with the executive vice presidents to implement that strategy.”

Those were Romney’s words to a group of state legislators in 2003, a few weeks after he was sworn in as Massachusetts governor. In the annals of governing, it is hard to imagine a more maladroit way of courting independent legislators than likening them to executive vice presidents in a Romney-run enterprise. This disdain for politics had its virtues. Romney as governor ran a virtually scandal-free administration in which patronage took a back seat to merit. And although it would be a tad embarrassing to stress this point on a debate stage while other Republicans are threatening activist judges, Romney’s judicial picks as governor were shaped far more by merit than ideology.

The unanswered question in The Real Romney is how much has this relentless businessman learned about how politics really works in his decade as governor and presidential candidate. As Kranish and Helman tell it, after his failed 2008 presidential bid, “Romney closely analyzed the campaign … he wallowed in the data, crunched the numbers and evaluated the results thoroughly.”

It is hard to imagine another politician analyzing defeat in such a systematic manner. It is also hard to capture the essence of politics through such a bloodless exercise. Romney, in fact, brings to mind Louis Armstrong’s immortal response to the question of what is jazz: “If you don’t know, don’t mess with it.” Maybe these days, Romney knows. Or maybe the Republican Party is embarking on a grand experiment to test whether business methods can really succeed in the political arena–and, ultimately, if Romney is lucky, in the White House.

Southern Baptist Evangelicals Declare “Mormonism is heretical to Christianity”

Mormonism is heretical to Christianity??  Well that is the Claim of a Southern Baptist Evangelical Leader… read below for more:

The Theological Differences Behind Evangelical Unease With Romney

By LAURIE GOODSTEIN

The Rev. R. Philip Roberts, the president of a Southern Baptist seminary in Kansas City, Mo., is an evangelist with a particular goal: countering Mormon beliefs.

Mr. Roberts has traveled throughout the United States, and to some countries abroad, preaching that Mormonism is heretical to Christianity. His message is a theological one, but theology is about to land squarely in the middle of the Republican presidential primary campaign.

As the Republican voting moves South, with primaries in South Carolina on Saturday and in Florida on Jan. 31, the religion of Mitt Romney, the front-runner, may be an inescapable issue in many voters’ minds. In South Carolina, where about 60 percent of Republican voters are evangelical Christians, Mr. Romney, a devout Mormon and a former bishop in the church, faces an electorate that has been exposed over the years to preachers like Mr. Roberts who teach that the Mormon faith is apostasy.

Many evangelicals have numerous reasons, other than religion, for objecting to Mr. Romney. But to understand just how hard it is for some to coalesce around his candidacy, it is important to understand the gravity of their theological qualms.

“I don’t have any concerns about Mitt Romney using his position as either a candidate or as president of the United States to push Mormonism,” said Mr. Roberts, an author of “Mormonism Unmasked” and president of the Midwestern Baptist Theological Seminary, who said he had no plans to travel to South Carolina before the voting. “The concern among evangelicals is that the Mormon Church will use his position around the world as a calling card for legitimizing their church and proselytizing people.”

Mormons consider themselves Christians — as denoted in the church’s name, the Church of Jesus Christ of Latter-day Saints. Yet the theological differences between Mormonism and traditional Christianity are so fundamental, experts in both say, that they encompass the very understanding of God and Jesus, what counts as Scripture and what happens when people die.

“Mormonism is a distinctive religion,” David Campbell, a Mormon and an associate professor of political science at the University of Notre Dame who specializes in religion and politics. “It’s not the same as Presbyterianism or Methodism. But at the same time, there have been efforts on the part of the church to emphasize the commonality with other Christian faiths, and that’s a tricky balance to strike for the church.”

On the most fundamental issue, traditional Christians believe in the Trinity: that God is the Father, the Son and the Holy Spirit all rolled into one.

Mormons reject this as a non-biblical creed that emerged in the fourth and fifth centuries. They believe that God the Father and Jesus are separate physical beings, and that God has a wife whom they call Heavenly Mother.

It is not only evangelical Christians who object to these ideas.

“That’s just not Christian,” said the Rev. Serene Jones, president of Union Theological Seminary, a liberal Protestant seminary in New York City. “God and Jesus are not separate physical beings. That would be anathema. At the end of the day, all the other stuff doesn’t matter except the divinity of Jesus.”

The Mormon Church says that in the early 1800s, its first prophet, Joseph Smith, had revelations that restored Christianity to its true path, a course correction necessary because previous Christian churches had corrupted the faith. Smith bequeathed to his church volumes of revelations contained in scripture used only by Mormons: “The Book of Mormon: Another Testament of Jesus Christ,” “The Doctrine and Covenants” and “Pearl of Great Price.”

Traditional Christians do not recognize any of those as Scripture.

Another big sticking point concerns the afterlife. Early Mormon apostles gave talks asserting that human beings would become like gods and inherit their own planets — language now regularly held up to ridicule by critics of Mormonism.

But Kathleen Flake, a Mormon who is a professor of American religious history at Vanderbilt Divinity School, explained that the planets notion had been de-emphasized in modern times in favor of a less concrete explanation: people who die embark on an “eternal progression” that allows them “to partake in God’s glory.”

“Mormons think of God as a parent,” she said. “God makes the world in order to give that world to his children. It’s like sending your child to Harvard — God gives his children every possible opportunity to progress towards this higher life that God possesses. When Mormons say ‘Heavenly Father,’ they mean it. It’s not a metaphor.”

It is the blurring of the lines between God, Jesus and human beings that is hard for evangelicals to swallow, said Richard J. Mouw, president of Fuller Theological Seminary, an evangelical school in Pasadena, Calif., who has been involved in a dialogue group between evangelicals and Mormons for 12 years and has a deep understanding of theology as Mormons see it.

“Both Christians and Jews, on the basis of our common Scriptures, we’d all agree that God is God and we are not,” Mr. Mouw said. “There’s a huge ontological gap between the Creator and the creature. So any religious perspective that reduces that gap, you think, oh, wow, that could never be called Christian.”

Mormons tend to explain the doctrinal differences more gently. Lane Williams, a Mormon and a professor of communications at Brigham Young University-Idaho, a Mormon institution, said the way he understands it, “it’s not a ‘we’re right and they’re wrong’ kind of approach. But it’s as though we feel we have a broader circle of truth.

“My daily life tries to be about Jesus Christ,” he said. “And in that way, I don’t think I’m much different from my Protestant friends.”

In a Pew poll released in late November, about two-thirds of mainline Protestants and Catholics said Mormonism is Christian, compared with only about a third of white evangelicals. By contrast, 97 percent of Mormons said their religion is Christian in a different Pew poll released this month.

Mr. Mouw said that only a month ago he was called to Salt Lake City to mediate a theological discussion about Mormonism among four evangelical leaders who had collaborated with Mormon leaders to pass the Proposition 8 ban on same-sex marriage in California. After two and a half days of discussions, the group was divided on Mormon theology, Mr. Mouw said.

“Two concluded that while Mormons are good people, they don’t worship the same God,” Mr. Mouw said. “Two concluded that Mormons love Jesus just as the evangelicals do, and they accepted the Mormons as brothers and sisters in Christ.

“That’s the split,” Mr. Mouw said, “and it’s very basic.”

THE GREAT AMERICAN RIFT

THE GREAT AMERICAN RIFT

3 years ago I said that as far as our economy was concerned it did not matter who won the presidential race because we were in for very difficult times… I just never realized myself HOW difficult those times would become.

Across the country Americans are still in shock that they are so much worse off than they were in 2006… and most do not see it getting better although the all hope it will… but in reality I see nothing to indicate it will get better… OHH yes I see SOME economic reports that show this thing or that thing  is getting better…  only to find out  later that  it as not as great as reported originally… This makes most of us think that we cannot trust the economic data being provided anymore.

Let’s take the rate of inflation… for most of us that means the CPI or the Consumer Price index… most of us see greater inflation in our household budgets than what the government reports… this is not new… in fact the government over the past 30 years or so has CHANGED how this inflation figure is calculated 19 times.. . Yes, you read that correctly, that is not a typo…..  NINETEEN times, each and every time decreasing the actual inflation that a normal household really experiences. Don’t believe me… look at your utility bills that last few years… or see how much your food Costs are… and the size of the package your food is in… it may not appear smaller… but if you look at the actual weight on the package it is… you are paying the same or MORE for less.

Gasoline, food, utilities insurances (Health and auto and homeowners) and much more that are most of the actual budget of a home are sky high and wages are not up… and taxes have risen in some areas like the so called penny tax School taxes in many places are HIGHER than property taxes… and we are not getting the bag for our buck there… but I will save education issues for a later post. Even my cable bill with Comcast or the new name X-finity is outrageously high… and like most Americans I am fed up, frustrated and feel helpless when my elected officials are getting good paychecks and NOT helping the people who they were elected to serve… Politics which was always a dirty word has become so bad that I fear some people will cause physical harm to me if I bring it up in a conversation….

OK so I hope most of us can agree with the into here… now for what I see as the GREAT AMERIAN RIFT.

No surprise that Politics is to blame for where we are… the only difference we may have is WHO or Which Party you feel is responsible… and to tell you the truth I don’t care which side you’re on… it is bad. Politics used to be negotiating from an ideological viewpoint the ways in which to make this country great and keep it great… NOW however I see it as just an argument on Ideology… and the polarization of this country has never been so great since the Civil War that tore this country apart and took decades to recover economically and more than a entry to mostly heal the social divide (which unfortunately still exists in areas of racism, homophobia, religion, women’s rights,  and the Right to Life movement, etc) we are a nation divided to the point that if we could  see one state on one side of the issue I would not be surprised if a succession movement evolved again. But geographical divides will never be tolerated… and so, because of politicians, we find ourselves involved and on the brink of another civil war in this country… the GREAT RIFT will cause a great divide that may never heal under our current form of government.

The squeaky wheel gets the grease… or so they say… but Politics has become a situation of such Ultra extremists in both parties controlling the entire party and hence setting an agenda that is not in keeping with the actual real beliefs of those in that party…. And WORSE… not being honest loyal Americans FIRST.  IF they were good Americans I believe they would want and FIGHT for is best for the PEOPLE of America….  It is PEOPLE who make America great… and sadly we are losing that greatness because of cowardly politicians. They bow to those motivated to vote… so I say with a loud voice the GREATEST THREAT TO THE AMERICAN WAY IS VOTER APPATHY

Children of parents who constantly fight and call each other names and LIE never fare well in life Citizens of a country whose politicians are so intransient in their positions suffer from that as well…  Unless your party gets 80% of a vote where at least 80 percent of the registered voters voted… THEN YOU DO NOT HAVE A MANDATE FROM THE AMERICAN PUBLIC…you simply won an election… so get over your self-grandioseing and get on with helping America… you incessant BS is aggravating to most Americans to say the least.

Someone needs to come out and speak for the SILENT MAJORITY and the loud mouths and liars are in control lately… I believe 80 percent of Americans are not happy with either party the way they are behaving… and this polarization of America MUST STOP. Am I angry?? DAMN right I am.

I am a lifelong Republican… and quite frankly I am pissed off at my party… and the Tea Party in particular … for what they are doing to America today. BACHMAN… oh for crying out loud… Spineless politicians who will not say the truth about her obvious ignorance in the things she says… WHY… “OH well… She is a Republican and we can’t call her out on false statements!”… Most of America knows what you our LEADERS are afraid to say and would welcome honesty and straight talk for a change… at least I know I would… you lose my respect every day when you allow this type of behavior in OUR party…

I voted for Obama… why?? Because I tough he was better then what you put up for President… I like John McCain… but Sarah Palin… come on guys did you intentionally want to lose??

Taxes.. Can any republican say with all honesty that it is right for a Hedge Fund manager to make millions… sometimes hundreds of millions and only pay 15% taxes when his staff pays 30-40 percent in taxes.  And don’t give me the BS that he creates jobs with lower taxes… he creates NOTHING but profits a leach on society…. Shaving pennies from hundreds of trades a day in rapid computer generated trades… the Stock market is no longer a free and fair market with these types of shenanigans going on.

I would LOVE less regulation from Government… but greed and corruption exists and Corporations cannot be trusted to do what is right… they incentivized by one thing and one thing only profits… and who can blame them when you have corrupted the system so much as to let them fail the people of this country and demonize anyone who dares speaks up for the human condition in this country… instead encourage them to do what is right with financial incentives if need be… and then and only then will I support a reduction on regulations.. I said it above and I will repeat it again now: PEOPLE make America Great.. NOT businesses or corporations… we have the most creative and innovative collection of minds in this world… yet it appears they get sucked into how to maximize profit and to disregard the human condition.  I cannot begin to say how ashamed I am sometimes for being Republican… but yet I will not become a Democrat… for they are besieged with equally distasteful ideas… and will drive their party into the ground unless they learn to compromise and negotiate for the benefit of the American public … even if it is at the expense of some of their pet projects.  Simply put.. BOTH of your parties are more damaging to AMERICA then IRAN… because you have lost your souls for your ideology to the detriment of this country

China: China is NOT our friend,, and dependence on them for the benefit of business has NOT helped America.. Ohh yes it may have reduced some costs to the American Public… but in reality we lost more in jobs and wages and disposable income and reduced our GDP by doing so. And WHAT DID WE GAIN.. Corporate profits at the expense of our country… the same for NAFTA and other free trade agreements.. And now in our current situation we have no ability to create jobs for our unemployed as there are fewer factories to employ the people we need to give jobs to. WTO is basically a fare to the Hourly wage earner in the industrialized world.

Government is NOT the same as Households or business… and it not the same at FEDERAL level as it is on the state level… IN Economic down times like these GOVERNMENT NEEDS TO SPEND MORE TO HELP CREAT JOBS AND BRING BACK A TAX BASE OF EMPLOYED PEOPLE (Do I have to remind you of Roosevelt’s initiatives that helped bring us out of the Great depression) … Cutting Corporate taxes does NOT create jobs as you have told people or by extending the tax cuts last time around you have not seen a real increase in hiring… and why is that.. Well Mr. Politician… our economy is more than 70% consumer driven: no jobs, no spending… no spending then no company wants to invest in plant, equipment or hiring… so where do the jobs come from…ONE word… INFRASTRUCTURE  as these projects are critical in America today when our infrastructure is crumbling and jobs are just not available anywhere else… and they have to be paid for by our government through HIGHER taxes on those that can afford and on corporations…

Why is it so hard for you to understand BASIC economics and tell the truth instead of pandering to a minority base of zealots who will destroy this country?

SO… what is the RIFT we are facing in America today? It is Class Warfare… based in steep and entrenched Ideology that is not often based in reality or honesty. It is the division in America not just between political parties but in the haves and have-nots… It is politically driven and fueled by greed and fear and is clouded by lies and distortions of truths… it is the worst of all types of warfare.. it is the kind that fuels revolutions in other countries… and destroys nations… it is  the warning bell to the fall of America as   great nation and we will not even know until we have fallen so low as  to not be able to pull ourselves up.  And it seems to be savored not only by our enemies and countries jealous of our success…. But also by the Media who likes conflict and sound bites and lacks the same courage to set things straight and to further polarize this country based on ideology.

So as this election season now seems to be starting and we have 15more months of this slander and false statement season and cowardly politicians on both side.. Remember this… WE are ultimately responsible for what is about to happen.. WE the SILENT MAJORITY… who has failed to speak up… who accepts  the media on face value… who blindly believes their parties rhetoric… and then the PEOPLE who FAIL to VOTE… as I said above the GREATEST threat to America today is Apathy.. a failure to vote and to make your voice head at the voting booths.. WE are responsible for the future of this Country….

Who among you will raise to the occasion and do the simplest thing to help it by voting… and who among you will just lay down and accept whatever happens… From the Primaries where you will select your candidate (*where I fear the most for my party in getting a BAD candidate again because the radicals get their supports to the polls and the majority of republicans just sit back and watch and then find out they have a  fool for a candidate)… to the General election where you should vote for the BEST person for President as opposed to your Party’s CANDIDATE FOR PRESIDENT…. WILL YOU STAND UP FOR AMERICA??

A final note to my Republican Party.. If you give me someone like Bachman as  our candidate I will NOT vote for her… but I will vote. Republican or not I am an American first… and that woman has no business even being in Congress let alone holding the office of President of the United States. Until you  my fellow republicans find your backbone and speak truth and care for the AMERICAN people I will not be able to vote Republican .

Greetings Ms Shelly, Whoever and wherever you are.

Craig’s Diatribe on the USA and Global Economy (# 2)

June 6, 2008

This blog entry (number 2 in a series) is to try and express my viewpoints on the current state of the USA Economy, my predictions for the future and how we are no longer a localized economy but now are part of a GLOBAL economy.

Where are we NOW? Commodity Prices:

Before I go into the Global Economy for Commodities and Fuel/power Prices I need to say that a LOT (maybe as much as one third in some cases) of the increase of Costs is from the weak dollar … as such, most of this post is dedicated to the supply and demand issues of the global econony.

The has been great interest in Oil prices… as well as there should be… I talked about Oil being in our everyday life before… as a commodity…. But I need to address some misconceptions about what the general public believes about the Price of Oil today.

First: OIL IS A COMMODITY… that means the prices are subject to supply and demand…. There is NO QUESTION that China and India play a significant role in the new use of oil… as a fuel and as a commodity for other applications…. This is a result of the rest of the world using those countries for lower prices thus bring in more Currency (Money) into those countries and lifting them out of the poverty (and to satisfy our own greed for more at lower prices and greater profits) that we saw them suffering from… now that we have awoken the sleeping giant, so to speak, there is no putting them back to sleep. They will continue to demand oil and other commodities at an ever increasing rate of consumption.

We have been duped into believing that “Speculators” are to blame for higher prices… if South West Airlines is a speculator then you are right… but the reality is that it is GLOBAL DEMAND that pays these exorbitant prices we are seeing… and as I said before… there is NO GOING BACK.

IF we produce more oil it will only keep up with the demand worldwide. While it may make us less dependent on oil for our own needs the prices we will pay in the USA will be based upon WORLD PRICES… not our domestic (USA) production. To believe otherwise is just foolish. Additionally, currently we are importing only about 30 percent of our domestic needs.

We are not entitled to lower fuel prices… it is what it is and we will not sell for less than the world price unless we become a socialist society and subsidize our oil… and that will never happen… or at least I hope we will never become a socialist country. Our sense of entitlement is what is causing a great many problems for us in this country today… and it needs to be put into proper perspective.

Many Americans want to know why China or India Consumption of oil is hurting us here… it is simply business…. I business you do not want to hear about but at least need to understand….The companies that drill for oil are not federal Government Oil Companies… they are in the business to make money… the basic model of Business is that thing called supply and demand… Because I drill and pump crude oil in the USA does not mean that I am obligated by any law to sell it in the USA… as a businessman when I get something out of the ground I can sell it to the highest bidder…. If the USA does not want my product but someone in another country wants it… then I am entitles to sell it to any country (with few exception) I want to … THAT IS BUSINESS. To expect that I should sell it to you at any cheaper price is unreasonable… and bad business… and since these companies that do pump crude oil have other people who own stock (real ownership) of their companies… then they have a legal (fiduciary) obligation to maximize profits for their owners… remember again… we are NOT a socialist Country. Additionally to punish me for selling at the market price with a windfall profits tax is unreasonable… you may not like my profits… but they are legitimate and are mine… additionally I will increase prices to compensate for the “surcharge” tax on my profits.

If we really want Oil Companies to become energy companies then we need to develop incentives to foster the Oil Companies to become “Energy Companies” release in the Fall of 2008….

As I said you did not want to hear that… but those are the basic facts of life today, as we know them! Painful is it not?? Yet this has been the standard model of capitalism for hundreds of years and is not going to change anytime soon.

The same is true of cheap food and household energy use and even in other commodities like gold and Steel and copper (used in your wiring I might add) (I will address health care in another post… and you will NOT like what I have to tell you there either).

The ONLY way of getting a better price is to strengthen the dollar… but our past practices in our country have caught up with us and now we have financial troubles with Credit availability (after years of easy credit) and even with interest rates low we are not able to get the benefits of those cheap rates. Yet is we raise interest rates to fight the higher costs (also known as inflation) we will cause greater harm to the overall economy… the government and the Federal Reserve are in quite a conundrum and there is no quick fix to this problem of a stringer dollar… so do NOT anticipate things getting better quickly.

As bad as things are now they will get better based upon what has already happened… and I fear for many Americans with the Winter Heating Season just ahead (yes we are actually almost there and it is only the beginning of summer) as any American who drives to work and makes less than 40,000 per year per household will find themselves financially in the red (to me this is the new Poverty level in the USA). Elderly Americans on fixed incomes will suffer the most and the Cost of Living adjustments are not accurately reflection the actual increase of cost on the average family… and how can they when the supposed US Index for the Average hourly wage is over 17 dollars an hour…. That shows how skewed the Inflation indexes are by the number of “high wage” earners there are in this country… it is, simply, out of control.

In a future post I will give the bad news … I NOW expect oil to reach 250 dollars a barrel by sometime in 2010… unless the dollar gets better fast…. However with the choices for president and the policies I see coming down the road… that may not be able to be done (remember the discussion on Fiscal and Monetary policy and the effects). Hence 5 dollar a gallon gas will be cheap by comparison…

Corn Prices :

When we find other uses for Commodities outside the normal and regular use we create a demand for additional supply of that commodity. Corn, however, has had a double whammy effect. Yes I am talking first about Global Demand… Most of us think of corn as a food product for our table in many different forms…. Many of us forget that beef and chicken and even pork is raised for slaughter through the use of “feed corn” for them to consume to get these products…. Now also remember that farmers have limited amount of land to use… they also want to get the most out of every acre of land they farm… and currently feed corn is a great provider of revenue.

AS we increased the standard of living for impoverished countries like India and China… they consumption patters changed…. Meaning they now eat more of the Meats I described above…. Those meats also require the feed corn to produce. …Hence demand for feed corn went up and farmers produced more feed corn as a result.

The second whammy was the production (and subsidy by our government) of Ethanol. This non-food use for Corn drove the demand beyond the normal supply and demand curve and as we have seen dramatically increased prices… while the effectiveness of using Ethanol is being debated and alternatives are being developed this demand will not come down and prices will remain high.

What has surprised me about this is, that it was not expected by so many people…. Using a food in a way that is not a food product would naturally increase the demand for that product. As a note…. using Sugar Cane for ethanol will also raise food prices… yet the government may be more willing to do this because of the health consequences of sugar (yes gaining weight).

Corn prices are a direct result of GLOBAL DEMAND and the traditional supply and demand pricing but in a global context.

Energy Costs:

Generally we think of energy as the gasoline we put into our cars. This is true but we consume electricity in ever greater quantities then ever before. Heating, Air-conditioning, lighting TV’s Computers… ALL requiring Energy…. Energy is derived from many sources… Nuclear is being touted as a future provider of energy to wean us off of fossil fuels… but the COST to produce which is said to be low… will NOT reflect in lower prices to the Consumer…. The pricing index will show that they will sell this energy at lose to the same price as Coal or Diesel or natural gas plants… this seems to be the case with Hydro electric now. OLD power plants, are increasing prices, because of consumption, they are not lowering them. Yes the prices of oil and Coal have a lot to do with the international (Global) demand… and the prices have been going up dramatically…. So while we like to think we are better off with “alternative Fuels” and Alternative generation facilities” we are kidding ourselves if we think that will reduce our costs by very much at all… Making electricity… the production of power is a business and as such they obligation is to get the highest price for the product as possible. WE are not entitled to lower power costs!

Electricity is a produced commodity from a natural resource commodity…. At least for now.

Post #3 will be about credit, housing prices and maybe the stock market and Global Currencies

If you have been reading these posts… I will eventually get to the part where I make recommendations for the future… but I still need to explain more about where are are and how we got here.

Craig Eisele

US Losing out in Africa Projects at Critial Economic Times.

France and South Africa signed three economic accords Friday. French leader Nicolas Sarkozy was near the end of a two-day state visit to South Africa at the end of February. While the President of France has talks with Britain and the US, this was his first to an English-speaking country since he took office in France.

The energy accords were signed during a business conference in Cape Town between France and South Africa.

In a major part of the France-South Africa energy deal, French energy giant Alstom will build a 1.36 billion coal-fueled power plant in South Africa, where energy is in desperately short supply. South Africa’s electricity crisis has been called a national emergency by the government. South Africa is one of the few African nations with a booming economy, and it needs power for its many activities such as mining and manufacturing.

Bravo, the name of the planned French-constructed power station, will be erected in the northeastern Mpumalanga province and will have a capacity of 4,740 megawatts. Alstom of France signed the deal with Eskom, South Africa’s state power utility, with the President of France and South African chief Thabo Mbeki looking on.

The second contract between the French Development Agency and Eskom was worth 100 million euros and will fund new power-generating wind turbines. A third deal, between the South African government and French nuclear giant Areva, will provide professional training. The apartheid regime that ended in 1994 kept the country black majority uneducated and most lack the skills training necessary to work in nuclear energy.

The French company Areva is bidding against the U.S.’s Westinghouse to construct up to 12 nuclear reactors between now and 2025 in South Africa, whose government has not awarded the contract to either yet. South Africa sees nuclear power as its best chance to solve its energy crisis in the future. Sarkozy voiced his strong ambitions for France to win all the coal and nuclear power plant contracts up for grabs in South Africa.

The energy accords were only the latest in a sweeping list of relationship-changing initiatives put forth by the President of France during his South African visit. Many other agreements covering energy, transport, science and tourism were also signed by France and South Africa. French leader Sarkozy further discussed overhauling France’s participation with South Africa in the areas of defense, democracy and human rights.

The President of France stressed that France’s relationship with South Africa, never a colony of France, should serve as a model for the West’s new relationships Africa countries. Carla Bruni, Sarkozy’s new bride, visited an employment project for women in the poor township of Khayelitsha, and joined him at a visit to an AIDS clinic. Bruni also met Wednesday with wives of disappeared Chad opposition leaders.
France’s President arrived in South Africa after a brief stop in Chad, a former French colony that has seen almost ten years of turmoil and never yet enjoyed true democracy.

A Good Source for Mining Information in Africa

The post below is a News Letter I subscribe to for Mining News in Africa. At the end of the News Letter you will find their Web Site and you can subscribe there. By the way…. it is FREE!!!

How Eskom plunged South Africa in darkness Quiz Humour Give us your Feedback (Click any of the links above to go directly to that section of the newsletter)

There is a dirge being sung all over the world. Its sombre tones sound ominous. It is sung so often that at the mention of the title listeners want to switch off but they don’t. It is as if they are waiting for a more cheerful variation to be introduced, but so far each variation has been more disturbing than the foregoing variations. The theme of the song is Energy.

How Eskom plunged South Africa in darkness

In a previous newsletter I referred to the increase in the number of emails received from investors abroad who are anxious to know what impact the Eskom fiasco is making on the economy.

The questions are pertinent:

What has gone wrong over the past eight weeks?
How soon will full energy supply be restored?
What is the likelihood of another massive collapse in the future?
What are the direct implications for the mining and minerals sector?
What type of capex is required to meet short term demand?
How much will have to be spent to meet energy demand in the long term?
What action is being taken right now to cope with the crisis?

Most people in South Africa know the answers to these questions – or they think they do. For the benefit of persons who may have a skewed picture of the energy crisis in South Africa and also for the benefit of investors and other interested parties abroad who would like to know more about the latest developments, I will I will try to sum up the situation.

What has gone wrong over the past eight weeks?

Ask a Black South African man whether he is looking forward to his wedding day and he will say: “Too much!” That is his way of saying that he is really looking forward to the occasion. Ask him whether his job is being affected by power failures, he will say: “Too much!”

So, what has gone wrong over the past eight weeks? Too much!

The sudden collapse of Eskom, a government utility, was the culmination of a series of errors over a period of several years.

• The South African government had been warned of an impending ‘meltdown’ four years ago and on numerous occasions since. The warnings have been ignored. The result: no expansion took place over the past four years.

• Bad planning.

• Incompetent, bungling and greedy managers who were more interested in lining their pockets than in performing their duties. It was recently revealed that Eskom will pay its under-performing top management R7,2-million in performance bonuses.

• Inadequate procurement policies. SA’s power crisis follows years of under spending by Eskom on generators.

• Electricity exported at lower prices than that paid by the South African public while two major gold, two platinum and two manganese mines were compelled to close down on Black Friday, 25 January and during the following week.

• An acute skills shortage.

• Poor maintenance.

• Eskom has blamed wet coal for dismal power station performance. It is true that the country experienced extremely wet weather for weeks since January but depleted coal stockpiles also played a part.

How soon will energy supply be restored?

• First priority is to replenish depleted stockpiles. Eskom is aiming to secure 45 million tons of coal over a 2-year period. So far Eskom has contracted 37m tons to augment its stock pile. Stockpile stood at 3.3 days in January. Now at 5 days. Eskom is looking at 5.4m tons before winter.

• The next step would be to modify coal handling facilities to prevent coal from getting wet.

• Procurement policies would have to be reviewed.

• Scheduled load shedding is seen as an immediate way of reducing the shocks experienced by industry and commerce as well as households.
  

About a week ago, in a reply to an enquirer I naively stated that with cooperation from all sectors – reducing power consumption by 10% – Eskom can just about cope. The very next day the country’s vulnerability was exposed when it was hit by untimely cold weather. Immediately everything went wrong for Eskom.

Wet and cold weather during February and March resulted in a huge surge in the demand for electricity. Eskom was unable to cope. On 18 March, nine overworked generators tripped. A further nine were down due to planned maintenance. Many Johannesburg suburbs were without power causing heavy traffic congestion and delays.

What is the likelihood of another massive collapse in the future?

The situation is now totally unpredictable. Reuters UK reported that South Africa’s power system is stable but vulnerable. Just how vulnerable is demonstrated by what has happened in just the past few days.

When Eskom said power to the country’s vital gold and platinum mines may have to be cut if more generators failed, local mining shares tumbled immediately.

“Is Eskom insolvent”?

This question was asked on a radio programme. It is not unlikely that the question will echo in parliament. There is a lack of transparency on the part of Eskom especially as far as its finances are concerned. Just when it seems that Eskom is playing open cards, new revelations about irregularities are reported.

Raymond Parsons, the business convenor at Nedlac, the government, labour and business negotiating chamber said on 19 March 2008 that Eskom’s credibility could be restored only if it’s costing and finances were independently audited. So what does that tell you?

What are the direct implications for the mining and minerals sector?

Needless to say coal miners and coal transport contractors will benefit greatly.
Mines, all operating mines, new mines and mines poised to start producing are apprehensive. The Chamber of Mines of South Africa and member mines have undertaken to cooperate with Eskom by reducing power consumption, but confidence in the government’s ability to deal with the situation is flagging.

What type of capex is required to meet short term demand?

Eskom is opening up three power stations that were mothballed in the 1980’s when Eskom had excess capacity. Capital expenditure needed to refurbish and open up Camden (in ?), Grootvlei (2009) and Komati (2010) power stations will cost R16 billion (US$2bn)

How much must be spent to meet energy demand in the long term?
A new coal-fired power station called the Medupi Plant which is to be built in Limpopo, the northern province, will cost R78 billiion ($10bn). I’m prepared to stick my neck out and say that expenditure will be considerably higher and that Eskom will not be able to meet the deadline of 2015.

Why the negative remark?

Eskom is asking for a 60% price increase. A private-sector generating company, who wished not to be named, reportedly said: “That 60 percent average price increase implies that Eskom’s marginal cost of bringing on its mega coal projects is way, way higher than we, as a private sector company, are building capacity for.”

Brian Dames, head of Eskom’s generating division, is speaking about a R300 billion ($48bn) investment drive. With so many factors, including load shedding, that could have a negative effect on economic growth, will Eskom succeed in attracting investors?

How can investors be confident when Xstrata/Merafe Resources JV, for example, are deferring plans to double the capacity of its Project Lion ferrochrome smelter because Eskom told users they could not guarantee supply.

How realistic are Eskom’s plans? Must we believe that all factors had been taken into consideration? Eskom must supply 150Mt coal to power stations in the provinces of Mpumalanga and Kwa-Zulu where most of the power stations are situated. Road and rail networks are inadequate. Tutuka power station near Standerton needs 10.6 Mt but New Denmark colliery can only supply 5.1Mt. The rest will have to be trucked and that at a delivery capacity of one truck every 6 minutes. Roads are already crumbling.

Like a scalded cat Eskom is running around to find quick solutions to its problems. Its first move was to resort to unscheduled power shedding. Following outcries from various sectors a system of scheduled power shedding was introduced. Realising that its appeal to its users to reduce electricity consumption by 10% fell on deaf ears Eskom resorted to a plan to raise its tariffs by 14,2 percent this year.

On past occasions when I drove through Johannesburg’s affluent suburbs at night I often wondered how much electricity was being consumed by owners of well-lit properties. Rows of lights mounted on exterior walls, houses illuminated like movie sets and illuminated swimming pools conjured up a magical picture. Some lights were burning throughout the day.

Eskom, realising that customers in the higher income bracket people were not going to switching off security lighting or underfloor and pool heating, air conditioners and other electrical gadgets, then planned to introduce a new “time-of-use” tariff structure aimed at getting affluent domestic users to slash consumption by 10 percent.

Unable to deal with the power crisis Eskom called for power hikes that would hit consumers hard in the pocket. So the latest move is the power utility’s call for an increase of 60% in tariffs.

The South African Chamber of Commerce and Industry described Eskom’s proposal as “very radical”. The Chamber said the move would hamper business competition and growth.

Trade unions, the ruling political party, the ANC, as well as the opposition parties came out strongly against the proposed price hike of 60% and said that the increases would lead to a higher cost of living, making electricity inaccessible to poorer customers and threaten thousands of jobs.

Along came a columnist who argued that when the price of electricity is increased it is unlikely that consumers will reduce intake. More electricity will be used than can be supplied. A 100 percent increase might make a difference but South Africans, used to low energy prices, will not be moved to cut down on energy usage. “Fuel prices have risen 500% over a relatively short period, but that has not stopped people from driving”, he said.

Eskom is in a terrible predicament:

• Increase tariffs, and the economy will suffer.

• Use the money generated by increased tariffs to fund its multi-billion-rand build programme, and be left without sufficient funds to cover the costs of primary energy inputs such as coal and diesel. Eskom is now paying 25%-30% more than budgeted.

• Avoid dealing with really competent and reliable overseas suppliers of capital equipment because of not being BEE compliant, and prepare from some high-voltage shocks.

• Fail to restore credibility or to be more transparent, and destroy investor confidence.

• Raise all the funds needed for implementing plans to build another 10 or 15 or 20 power supply facilities, and see whether this will reduce the time needed to construct such facilities.

• Try to transport of coal by road from new and existing coal mines to new and existing power stations on deteriorating roads, and see how long it will take the government to upgrade such roads. Already all South African roads are in a bad state. Some 50-billion rands will be needed over the next five years to bring roads up to international standards.

• Build more coal-fired power stations, and get walloped by clean air legislation,

• Pump more foul fossil fuel emissions into the air, and make a handsome contribution to earth warming.

• Get approval form the National Energy Regulator of SA (Nersa) for the increase of 60% on top of R60-billion provided by the treasury, and see how crippling inflation is going to affect the economy.
  

QUIZ

1. What is a market for shares called?

2. What is a block of cast metal called?

3. Many mining companies are concentrated in this city on the Canadian west coast

4. Platinum-bearing pyroxenite layer originally termed the Lombaard Reef was later changed to the name of a well-known geologist. Who was he?

5.The thickness of the lithosphere, the solid portion of the earth.
50 km
!00 km
200 km

6. A woman who marries a man for his money is called;
a. A gold-digger
b. A gold coiner
c. A gold prospector

7. Where was the world’s richest concentration of gold discovered?
a. Klondike
b. The Witwatersrand
c. Barberton

8. Besides Johannesburg, there is another city in Africa that is also called the city of gold. Is it:
a. Accra in Ghana
b. Addis Ababa inEthiopia
c. Timbuktu in Mali

9. Co is the symbol of a hard, brittle, metallic element. Is it:
a. Cobalt
b. Corundum
c. Copper

10. When a letter or document is to be read by a person other than the addressee, we c.c. it. What does c.c. stand for?

Click here for the answers

Humour

A man in a hot air balloon realized he was lost. He reduced altitude and spotted a man below. He descended a bit more and shouted, “Excuse me, can you help me? I promised a friend I would meet him half an hour ago, but I don’t know where I am.”
The man below replied, “You are in a hot air balloon hovering approximately 30 feet above the ground. You are between 40 and 42 degrees north latitude and between 58 and 60 degrees west longitude.”
“You must be an engineer,” said the balloonist.
“I am,” replied the man, “but how did you know?”
“Well,” answered the balloonist, “everything you told me is technically correct, but I have no idea what to make of your information, and the fact is I am still lost.”
The man below responded, “You must be a manager.”
“I am,” replied the balloonist, “how did you know?”
“Well,” said the man, “you don’t know where you are or where you are going. You made a promise which you have no idea how to keep, and you expect me to solve your problem. The fact is you are exactly in the same position you were in before we met, but now, somehow, it’s my fault.”

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Regards

The Infomine-Africa Team

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Infrastructure Development Tops AfDB Projects in Africa

I have read the article below and am in awe of the lack of strategic planning and the failure of appropriate methodology to bring to Africa this much needed Infrastructure. This lack of this basic “backbone” infrastructure is what hold Africa back more than any other issue that faces Africa today. Trying to develop Africa in the same way as North America or Europe is NOT feasible. There has to be a unique and special plan such as the one developed by Trans-African Development  Strategies and the sister Company Trans African Development Company to bring this “backbone” Infrastructure to fruition. The current approach will hold Africa back for at least 50 years. When I read articles like this I can honestly say I am furious at the lack of true understanding… but then I remember that organizations like AfDB are NOT inclined to think “outside the box” …. As those who know me will tell you I subscribe to the basic philosophy “If you cannot solve the problem you are facing…. then you are facing the wrong problem” If AfDB and others would redefine the problem as I have then the realistic and implementable solutions would be obvious!!! But I have tried to discuss this with AfDB and others… and to my dismay they are not interested in even considering anything but the “Status Quo” thus dooming Africa and it’s people to decades of unnecessary poverty and suffering. My offer to AfDB and others interested in truly and honestly solving these and other issues that face Africa remains open but I am NOT optimistic that closed minded individuals will ever consider other pragmatic approaches.

Infrastructure development tops AfDB projects in Africa

 

 

The announcement was made during a recent conference on African infrastructure held in Senegal, which brought together donors, government ministers, and representatives of regional bodies such as the African Union and its intergovernmental development initiative, NEPAD.
An AfDB press release notes that the promised funds will come from the bank’s low-interest lending window, the African Development Fund (ADF). In December, the Bank secured commitments from donors to contribute a record $8.9 billion to replenish the ADF for the next three years.
It has earlier been reported that the loans will finance regional infrastructure projects, including the construction of “a number of major road and rail projects aimed at crisscrossing the continent with transport corridors.”
Proposed projects would include transcontinental transportation corridors that would require a huge outpouring of money. They would serve to benefit exporters and, by extension, transnational companies that profit the most from Africa’s commodities.Some of the more ambitious proposed projects include the construction of “Trans-African highway projects to connect Beira in Mozambique to Lobito in Angola, Dakar in Senegal to Lagos in Nigeria, and Lagos to Mombassa in Kenya.”
While Africa suffers from an acute lack of infrastructure, it is important to consider what type of infrastructure is most needed to help alleviate poverty on the continent. By and large, transcontinental highways and railroads will require a huge outpouring of money and serve to benefit exporters and, by extension, transnational companies that profit the most from Africa’s commodities. Roads and high-quality railroads are indeed necessary to move goods to and from land-locked countries such as Uganda.
The sheer scale of transcontinental projects, however, could distract effort and funds from these more manageable projects, and in the end the more grandiose projects have a higher likelihood of being abandoned because of unmet expectations.
At the same time, Africa’s poor will likely remain cut off by the lack of basic local road networks and adversely affected by the intense footprint that such large-scale physical infrastructure projects often entail.
A recent study by International Rivers and Environmental Defense also shows that large, capital-intensive infrastructure projects such as these tend to be the most prone to corruption. Questions also remain as to whether the AfDB has the requisite experience to identify and mitigate the serious potential impacts of these projects, and whether it wields sufficient leverage to ensure that its social and environmental safeguards, which are strong on paper, are enforced.
Since it resumed regular operations after facing a financial crisis in the early 1990′s, the AfDB has sought to define itself as a lender with special expertise on infrastructure in Africa. It has consistently allocated a significant portion of its lending to the sector, and was chosen to coordinate regional infrastructure initiatives, such as NEPAD’s Infrastructure Action Plan and the Infrastructure Consortium for Africa (ICA). However, the AfDB has made limited progress in its convening role, and few of its ambitious plans to create regional energy, transportation, and water initiatives under NEPAD have come to fruition.
While African governments appear keen to benefit from this and other regional infrastructure schemes, it remains unclear the extent to which this latest initiative is demand-driven or being pursued at the behest of donors. The lion’s share of new donor commitments at the AfDB have been earmarked for infrastructure, while a new high-level panel (see “High-level panel issues report on prospects for African Development Bank”) on the Bank recognizes that the board of the ADF is disproportionately influenced by its donors. A recent Financial Times article suggests that AfDB President Donald Kaberuka “is facing dissent from some African staff concerned that efforts to carve out an independent role for the AfDB are being undermined by some western donors.”

AFRICA’s Power Crisis demands action NOW!!

Power Crunch – Southern Africa Must ‘Run While Others Walk’

The Herald (Harare)
NEWS
28 January 2008
Posted to the web 28 January 2008

By Munetsi Madakufamba
Harare
AS southern Africa enters its second year of crippling energy shortages as accurately predicted by the Southern African Power Pool about four years ago, massive short-term projects of close to US$8 billion will need to be fast tracked over the next couple of years to get the region out of the present situation.

Electricity shortages have in recent weeks severely affected some Southern African Development Community member states leading to scheduled and, in some cases, unscheduled power cuts. From last year, load shedding has been introduced in countries such as Namibia, South Africa, Zambia and Zimbabwe.

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Faced by mounting pressure from industry and domestic consumers, South Africa’s power utility Eskom announced mid-January that it will discontinue electricity exports to neighbouring countries to meet local demand.

The Sunday Independent quoted Andrew Etzinger, Eskom’s chief of demand side management as saying South Africa’s electricity reserves had dropped during the past year from seven percent to minus 17 percent due to a decline in generation performance.

Etzinger said it would take at least another seven years before the situation could get back to normal. “The fact is in this country, for a long time we have had a surplus of electricity at a cheap price — far cheaper than in other industrial nations. “So it has made sense for the giant investors, whose plant needs massive amounts of electricity, to invest here,” Etzinger said.

“All that’s happened now is that we have to manage the resource differently. “It is simply going to cost investors more — this does not mean that they have to halt their future projects,” he added. South African industrialists say the power shortages are costing them billions of Rand, especially the mines and smelters, which consume most of the country’s electricity.

Southern African countries, which relied on South Africa for their energy sources have had to turn to other sources in the region.

For example, Swaziland which imports 80 percent of its electricity from South Africa is currently in talks with Mozambique.

In a major development for the southern African region, Mozambique recently took over ownership of the giant Cahora Bassa Dam and the hydroelectric power company from former colonial power, Portugal.

Sadc member states agreed last year to fast track short-term generation projects, which will add 6 700 megawatts by 2010 to the regional power grid at a cost of US$7,88 billion.

SAPP, which administers the regional power network, predicted that beginning 2007, the combined power generation reserve capacity in the region would be lower than the peak demand.

In response, Sadc member states have initiated a number of short, medium to long term generation projects as well as some rehabilitation projects that will guarantee the region the much-needed energy security.

Current installed capacity in the region is 53 000 MW of which dependable capacity is only about 41 000 MW against demand of 42 000 MW.

The region requires a reserve margin of 10 percent if its economies are to operate smoothly.

With some of Africa’s fasted growing economies, Sadc’s electricity generation capacity has not increased in tandem with the growth in demand.

Available statistics show that power growth demand in the region has averaged three percent a year over the past decade on the back of economic expansion of around five percent.

With the region having already run out of surplus capacity, SAPP says the problem would likely be overcome by 2010 if planned projects are implemented and commissioned on schedule.

Energy security becomes more pertinent given that the Sadc Free Trade Area, which takes effect this year, is set to spur even more growth in the region. Sadc would also be seeking to enhance its preparedness ahead of the 2010 Soccer World Cup.

If the current situation is to be brought under control, southern African countries may need to take heed of a famous statement by the visionary Mwalimu Julius Nyerere.

Mwalimu once said of the continent’s development, “Africa needs to run while others walk”.

That is perhaps what southern Africa needs to avoid dampening investor confidence generated by the Free Trade Area and the 2010 World Cup. Power pooling is at the core of regional socio-economic development.

SAPP, which manages the Southern African Energy Grid connecting most of the landlocked Sadc member states, has developed a roadmap which seeks to address current challenges.

The SAPP roadmap seeks to boost southern Africa’s electricity generation capacity, with almost 50 short- and long-term projects underway or planned for future development.

The long-term generation projects alone are expected to add 32 000 MW to the regional grid at a cost of US$32 billion.

The plan is to double the region’s generation capacity over the next 20 years through new plants and transmission inter-connectors.

Since 2004, SAPP member utilities have also commissioned rehabilitation projects that have contributed 1140 MW to the regional grid.

Once implemented, the current short-term projects are expected to clear the current 1 000 MW shortfall while creating a regional generation surplus of 5 000 MW or 10 percent by 2013.

The major proposed power plants include the Inga III in the Democratic Republic of Congo with a capacity of 3600 MW, the Kudu Gas Plant in Namibia with a capacity of 800 MW and the Kafue Lower with a capacity of 600 MW.

Notable inter-connectors include the Westcor inter-connector extending from the Inga III in DRC to Angola, Namibia, Botswana and onward to South Africa.

Regional energy cooperation also seeks to facilitate the development of other energy resources such as biomass and biofuels, to augment the power sector capacity.

There is also potential for the region to strengthen self-sufficiency in petroleum and gas resources by undertaking joint regional exploration and development.

African Continent in the Dark

Continent in the Dark

The Monitor (Kampala)
NEWS
29 January 2008
Posted to the web 28 January 2008
Kampala
THE signing of a 92 million euro ($136 million) loan from the European Investment Bank (EIB), last week, to finance the construction of the 250 megawatt Bujagali hydro-electric power project is a shot in the arm for Uganda’s efforts to attract increased direct foreign investments.

This project, slated for completion in 2011, gives Uganda an edge over Africa’s economic powerhouse, South Africa, which is reeling from continued daily power cuts following generation and other operational problems at Eskom, the country’s power company. Eskom generates 95 per cent of the electricity used in South Africa.

(shortage of) power to neighbouring countries because of acute domestic shortages. Zimbabwe, which imports about 40 per cent of its electricity from South Africa, and Mozambique are the worst affected.

Eskom Enterprises has operations on the African continent with its head office being located in Johannesburg, South Africa, and other offices in Uganda, Nigeria and Mali.

Although the power cuts have affected the whole country, the commercial capital, Johannesburg, has been worst hit and Eskom says it would be foolhardy to attract major industrial projects until the situation has been resolved by the middle of next decade.

Eskom’s finance director, Bongani Nqwababa, was quoted by Business Day last week as saying “it is a question of supply and demand. It would be irresponsible now to aggressively pursue energy-intensive businesses.”

Investments

Though these may not be the kind of businesses that the Ugandan Investment Authority (UIA) is gunning for at the present stage of the country’s industrial development, there can be little doubt that there are plenty of other related investments that UIA can pick up as a result of the crisis in South Africa.

Small and Medium sized businesses (SMEs) have been hit hardest by the power cuts with dozens forced to shut and more closures expected if the crisis continues, says South Africa’s black business umbrella body, the National African Federated Chamber of Commerce and Industry (NAFCOC).

Nafcoc President Buhie Mthethwa says the body, which has 300000 members, will approach the government soon with requests for compensation for small enterprises which had lost perishable goods during the blackouts and cannot afford to buy generators to protect their remaining stocks.

Dozens of Nafcoc members, who represent black, coloured and Indian enterprises, are forced out of business by the chronic power outages which add to problems they already face from rising interest rates and restricted access to credit.

Growth in the economy has steadily accelerated since democracy was introduced in 1994 and the government wants to boost the pace to a sustainable rate of 6 per cent from 5.4 per cent in 2006 -a 25-year peak. It also aims to halve unemployment and poverty by 2014.

But now, there is mounting concern that power shortages will put more constraints on a growth rate hampered by a global slow-down as well as higher interest rates.

Credit Guarantee economist Luke Doig says the impact of the power cuts will lead to an escalation in liquidations and debt insolvencies. It will hit Small and Medium-scale Enterprises (SMEs) hard as they didn’t have many resources.

Jeff Osborne, the chief executive officer of Retail Motor Industry Organisation, says power shortages were hitting used car dealers, petrol stations, motor mechanics and panel beaters, which were mainly SME).

These are the same mid-term, long-term knock-on problems Uganda is attempting to avoid or mitigate with the construction of the Bujagali power project; problems that its detractors seem oblivious to.

According to an economic and financial evaluation study carried out three years ago by an independent consulting firm Power Planning Associates Limited (UK), Uganda’s electricity demand is expected to grow by 7.6 per cent per year on average between 2005 and 2020.

To help meet this demand, between 2006 and 2010, Uganda is expected to lease and commission 150 MW of oil fueled power generation as well as some generation from bagasse, a sugar-cane derivative used for renewable power generation, and from small hydro-power plants.

Private generation

Last week’s announcement that Electro- Maxx, an indigenous private power company, will start producing 10 megawatts (MW) of thermal power by June this year is part of the planned exercise to add capacity to Uganda’s power sector.

Electro-Maxx was granted a power generating licence from the Uganda Electricity Authority (ERA). ERA’s decision was communicated in a letter to the company dated January 21 following public hearings last December in Tororo where local leaders and the community gave the project the go ahead.

The $32 million project to be erected at the Tororo power substation will use Heavy Fuel Oil (HFO). And is expected to feed into the national grid.

A power purchase agreement has been executed between Electro-Maxx and the Uganda Electricity Transmission Company to supply power for 18 hours daily.

According to ERA, heavy-fuel oil is much cheaper than light diesel oil and Electro-Maxx will not require additional subsidies.

The government currently pays out billions of shillings in subsidizing expensive power to consumers.

Uganda’s current power demand is estimated at 380 MW while the maximum supply capacity stands at 251MW leaving a gap of about 129 MW.

“The 10 MW heavy-fuel project by Electro-Maxx is therefore highly needed to contribute towards reduction of the current deficit,” ERA said.

Currently, Uganda has a thermal installed capacity of 100 MW but it’s all generated through burning of diesel whose price has continued to rise.

Electro-Maxx chairman Patrick Bitature said the company would later apply to double or triple its capacity.

The plant was originally planned to be built in Mbarara but was shifted to Tororo to lower the cost of fuel transportation through Kenya.

Bujagali

The power supply generated from Bujagali would also enable 50-100 MW of expensive oil fueled thermal generation capacity to be retired. It is also expected that the commissioning of Bujagali in 2011 would help reduce the average cost of supply to end-users by up to 10 per cent compared to prevailing prices in constant terms.

The study found that the commissioning of Bujagali will have a small but positive impact on economic growth, balance of payments and the fiscal balance.

Uganda’s workforce is expected to double over the next 15 years, making the creation of jobs through expanded industry, tourism, and commercial services critical.

Economic Progress in Africa was Focus of Secretary Paulson’s Trip

Economic Progress in Africa Focus of Secretary Paulson’s Trip

United States Department of State (Washington, DC)
NEWS
13 November 2007
Posted to the web 14 November 2007

By Charles W. Corey
Washington, DC
Economic progress in Tanzania, South Africa and Ghana — including infrastructure development and job creation — will be the focus of U.S. Treasury Secretary Henry M. Paulson Jr.’s trip to the emerging market countries November 13-19.

While in Africa, the Treasury secretary also will deliver a major address to the Corporate Council on Africa’s U.S.-Africa Business Summit in Cape Town, South Africa, and attend a G20 meeting of finance ministers and central bank governors, according to Ahmed Saeed, deputy assistant secretary of the treasury for Africa and the Middle East.

Briefing reporters on Paulson’s trip November 9 at the U.S. Foreign Press Center in Washington, Saeed identified Tanzania, South Africa and Ghana as places where “sound governance and good economic polices have, over the last half decade and longer, had profound positive economic consequences.”

All three countries are enjoying “robust track records” of economic growth dating back at least five years, he explained. After implementing positive economic reforms, they exemplify the “good financial and economic news stories that are now emerging from Africa,” he said.

There are parts of Africa, Saeed said, “where there has been real poverty alleviation — particularly in those countries [Tanzania, South Africa and Ghana] that have done the right thing when it comes to economic policy.”

Along with the good news on Tanzania, South Africa and Ghana, he cautioned that there are still “numerous challenges” in today’s Africa that “we all know” and of which we must remain aware.

Saeed said the continent is seeing its “highest growth rates and the lowest inflation levels in 30 years.” The growth in economic policy management “seems to be quite widespread,” he said, with 23 of 48 countries seeing record high growth levels that seem to be trickling down.

“The last four years we have seen average per capita income growth of 3.8 percent, and … the [International Monetary Fund] is projecting 4 percent per capita income growth for this year,” he added.

While in Africa, Paulson is expected to talk about issues that are directly related to economic and financial performance. “He is going to talk about the critical role played by infrastructure … the importance of having a sound and robust financial structure” and of spreading the benefits of growth and sustainable development, Saeed said.

While in Tanzania, Saeed said, Paulson is expected to travel to a U.S. Agency for International Development (USAID) farm outside Arusha that is a sustainable community focused on land conservation. He also will hold talks with the Tanzanian finance minister that will include discussion of a $698 million Millennium Challenge Corporation Compact that Tanzania is expected to sign with the United States early next year, Saeed said.

Before leaving Tanzania, Paulson also is expected to meet with East African Community (EAC) finance ministers from Uganda, Rwanda, Burundi, Tanzania and Kenya to talk about regional capital market integration and how that could foster further economic development across the region. Paulson also will visit the A to Z Textiles mosquito net factory, which is generating jobs and participating in President Bush’s anti-malaria initiative for Africa.

In South Africa, Paulson will be the keynote speaker at the Corporate Council on Africa’s U.S.-Africa Business Summit in Cape Town. While in that country, he also will meet with local bankers, participate in a G20 meeting and visit the Khayelitsha Cookie Company, which is creating important job opportunities, especially for women.

In Ghana, Paulson will visit the Ghana Stock Exchange and participate in a round table discussion with bankers from Ghana and elsewhere in the region. He also will meet with President John Kufuor to review Ghana’s economic progress and then travel to Akosombo Dam, where he will talk about the critical role infrastructure plays in the African development process. “Akosombo Dam is the source of more than 50 percent of Ghana’s energy,” Saeed reminded the reporters, and, as such, is an important source of economic development.

The overarching theme of Paulson’s trip, Saeed concluded, is to “shine a light on those changes that are taking place in Africa, have been taking place for some time in terms of implementing fundamentally sound economic policies, and those changes which are now bearing fruit … and talking about how we can partner with those who have a real commitment to reform.”

(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

Making Sense of the DRC (Democratic Republic of Congo)

Making Sense of the DRC

New Era (Windhoek)
NEWS
2 November 2007
Posted to the web 2 November 2007

By Daniel Ngeno
Windhoek
The difficult road to democratize the DRC, General Nkunda’s rebellion, the democratic process, war of aggression, transition period, democratic elections, president Joseph Kabila’s reconstruction programmes and General Nkunda’s myopic goals

The resumption of armed rebellion in the DRC Easter North Kivu province by a renegade general(General Laurent Nkunda) from the minority Tutsi ethnic group of the DR Congo, poses another huge challenge for a young yet an intelligent president, President Joseph Kabila, and his fragile government.

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This rebellion is also a big challenge for SADC, AU, and UN leaders who have been working hard for the sustainability of peace in the Great Lakes Region in general and in DRC in particular.

General Nkunda’s reason of waging the rebellious war of protecting his Tutsi ethnic group in DRC does not hold water at all. His Excellency President Joseph Kabila during the interview with the BBC in October 2007 posed this question – If Mr Nkunda is fighting to protect the Tutsi ethnic group in the Kivu province, who is protecting the Tutsi in Kinshasa, Goma and in other provinces of DRC where Mr Nkunda does not have soldiers? This is indeed a legitimate question.

Historical Perspectives

But why there has there been absence of peace and stability in the DRC since independence in 1960? To be able to answer this question and to understand the political conflict that has engulfed the DRC, there is a need to look into the historical background of this huge and resource endowed SADC country.

The Democratic Republic of Congo is situated in the heart of Africa, has an area of 2, 345, 409 square kilometres and a population estimated at 60 million people. DRC boasts having one of the largest deposits of mineral resources in the world and has equally rich forest resources and a fertile soil and lots of rain.

The country shares its borders with 9 countries from the four largest political and linguistic groupings of the African continent which are: Francophone, Anglophone, Lusophone and Arabophone. Islamic and Christianity are the main religions in the country. DRC belongs to various economic communities such as SADC, COMESA and CEAC (Communaute Economique de l’Afrique Centrale). DRC’s strategic position is crucial for peace and sustainable development of the African continent.

On the 30th June 2007, the DRC celebrated its 47th year of independence. It is indeed on 30th June 1960 that DRC became a free nation, liberated from the oppressive yolk of colonial dependence and humiliation, but this political freedom has not been easy to maintain in the Congo.

In July 1960, less than a month after gaining political freedom, a tentative partition of the Congo was recorded with the secession of Katanga and South Kasai provinces. It should be noted that this partition was orchestrated by the economic lobby groups of the Western imperialists.

The history has it that in September of the same year (1960), the same western imperialists backed Mobutu Sese Seko in his senseless and brutal actions to destabilize the fragile democratic institutions that were put in place soon after independence.

It was in November 1965 when Mobutu staged a coup and overthrew His Excellency Joseph Kasavubu, the first president of the Congo. We all know what prevailed in Zaire as DRC was known during Mobutu’s regime of 32 years with his one party dictatorship.

Democratic Process in DRC

It all started with the end of the cold war and the wind of change that rocked the world in general and the African continent in particular. The wind which brought the system of multiparty democracy. Mobutu tried by all means to block the wind of change but failed. Nobody can stop or control the wind apart from Jesus as recorded in the Bible.

So, at the beginning of 1990, Mobutu bowed down to the wind of change but wouldn’t totally give up as he came up with a system of mult-partyism limited to three political parties only.

During that period Mobutu conducted a massive campaign throughout the country hoping to legitimise his system with only three political parties recognized, but the Congolese people rejected his myopic political ambition.

On 24th April 1990, Mobutu had to totally bow down to the multiparty democracy system by allowing any political party formed in the country under specific conditions with the view to hold democratic elections after three years. In a short period of time the country has registered over 400 new political parties, but that was not Mobutu’s original plan because he wanted to cling on power forever.

Mobutu’s love of power and plundering the Congolese wealth, motivated him to stay in power for another period of seven years and I believe that if the Alliance of the Democratic Forces for the Liberation of the Congo (AFDL) led by the late Laurent Desire Kabila did not come on the scene in 1996, Mobutu would have died in power as he was officially suffering from prostate cancer since the early 1980′s.

Mobutu’s wish was actually to be mourned as a State President and not as a former Head of State. It is known thereafter that Mobutu died while in exile in Morocco in September 1997, exactly four months after he fled the country on 16th May 1997.

The repressive and divisive politics of 32 years of Mobutu’s regime plunged the country into a dramatic economic and social situation and has caused untold suffering to the Congolese people.

Barely three months after the arrival of the Alliance Forces for the Liberation of the Congo under the leadership of Mr Laurent Desire Kabila had the country started its economic recovery without any external assistance.

As Desire Kabila refused to bow down to the western imperialists, his vision was contrary to the interests of the western imperialists and could not please them, hence they planned to eliminate him at all costs.

War of Aggression

It is worthwhile to point out that the liberation movement under the leadership of Laurent Desire Kabila consisted of Congolese and Rwandan soldiers who were assisting to overthrow the Mobutu regime.

On 28 July 1998, His Excellency Laurent Kabila’ decision to send back home some Rwanda soldiers who participated in the liberation movement was not welcomed by the Rwanda government which had plans not only to partition the eastern part of Congo and annex it to Rwanda but also to control the country’s economy and continue the looting which they started while they were in Kinshasa.

Even the Rwanda soldiers who were in Congo were not happy with the decision to return back to Rwanda. They vowed to return after two weeks in order to come and establish a Rwandan government in Kinshasa and rule the DRC. They had western supportive troops based in Congo-Brazzaville ready to intervene in Kinshasa and help the Rwandan soldiers when they returned back to Kinshasa.

On 2nd August 1998, foreign troops from Rwanda, Uganda and Burundi invaded the eastern part of the DRC, in Kivu provinces. Provinces bordering Rwanda, Uganda and Burundi were attacked by these foreign troops. That was the beginning of the war of aggression from DR Congo’s own African neighbours.

The war of aggression continued until on the 15th August 1998 Rwandan soldiers tried to enter the capital city Kinshasa but faced a strong resistance from the Congolese population from the suburbs areas near the International Airport. No one could stop instant mob justice, unarmed, and they managed to kill a good number of armed Rwandan soldiers, prevented foreign troops from entering Kinshasa and also captured some of the Rwandan soldiers as prisoners of war (PoW).

It was during this time when the foreign enemy troops invaded the DRC that the Angolan soldiers came in to rescue Kinshasa from falling into the enemy’s hands, immediately followed by the Zimbabweans and later by our patriotic Namibian defense Force soldiers from the land of the brave.

After the protracted negotiations, the Rwandan prisoners were released and sent back home. But as soon as they returned to their country they formed a movement called Congolese Rally for Democracy (RCD) which was formed in Kigali the capital city of Rwanda.

The RCD was formed by the frustrated Rwandan soldiers together with some Rwandan officials who had worked in DRC before. Later on some Congolese citizens joint the RCD which painted a picture of legitimacy that it is indeed a Congolese rebel movement.

The RCD then started the war of atrocity against innocent Congolese people in the eastern part of the country and advanced towards some major towns of the DRC forcing the government to enter into political dialogue with the RCD and other smaller rebel movements. Due to power hungry elements within RCD, the rebel movement split into four different rebel movements such as:

RCD-Goma led by Mr Azaria Ruberwa, RCD-ML (Liberation Movement) led by Mr Mbusa Nyamwisi, RCD-National led by Mr Roger Lumbala and RCD-K (Kisangani) led by Professor Wamba-dia- Wamba.

It is during this war of aggression that H.E. President Laurent Desire Kabila was assassinated on 16th January 2001. Despite the assassination of their president, the Congolese people did not bow down to the outside pressure but continued with the assistance of peace-loving countries such as Angola, Zimbabwe and Namibia, to forge ahead with the agenda of protecting the country and working towards sustainable peace and security in the Congo.

For five consecutive years, i.e. 1998 to 2002, there was constant aggression from outside with the sole aim to plunder the wealth of the Democratic Republic of Congo through anarchy and brutal and senseless war. This war has plunged the entire Great Lakes Region into a state of destabilization during the five-year period and continues to have negative effects on the current relations between countries in that region.

The Transition Period

The death of President Laurent Desire Kabila on 16th January 2001 marks the beginning of the new political dispensation for the Congo. Major- General Joseph Kabila, the son of the late Laurent Desire Kabila, was appointed during the extraordinary meeting of the Assembly, as president of the country.

The coming to power of the incumbent president, i.e. President Joseph Kabila, brought hope for peace and stability to the Congolese people. President Joseph Kabila soon after he took over power as State President pledged to do the following: to form a genuine Congolese and republican army, to reconcile Congolese people with themselves, to restore the respect of the authority, to bring peace and stability throughout the country, to lead the Congolese people into democratic elections and to reconstruct and develop the country.

These pledges were not only beneficial to the Congolese but to a large extent to the entire African continent and the SADC region in particular.

President Joseph Kabila, like any other peace-loving leader, was totally opposed to the resumption of the war and strongly believed that there would be no sustainable development in the country without peace.

To realize the objectives he pledged to achieve, he realized that there was a need for him to mellow. He decided to resume political dialogue that was initiated by the leadership of late Laurent Desire Kabila. He went to the extent of rehabilitating former President of Botswana H.E. Ketumire Masire who had been sidelined by the previous administration of Mr Desire Kabila, to resume his role as a mediator in the dialogue.

The four rebel movements from RCD took part in the inter-Congolese dialogue together with the government, the Civil Society, the Mayi-Mayi (the resistant group) and the MLC (Movement for the Congo) of Jean-Pierre Bemba.

All the eight political parties participated in successive negotiations held in Gaborone and Addis Ababa without reaching any agreement. The first consensual agreement was later reached and signed on 19th April 2002 in Sun City, South Africa between the government and the MLC of Jean-Pierre Bemba.

According to the first Sun City Agreement, President Joseph Kabila was to remain Head of State during the transitional period, while Mr Jean-Pierre Bemba was to be appointed Prime Minister of the transitional government.

The National Assembly and Senate were to be led by the RCD and Civil Society respectively, but other parties were not happy with these arrangements and rejected the agreement.

Another round of negotiations took almost two months in Sun City, South Africa in 2003 which led to the signing in April 2003 of the final comprehensive peace agreement (CPA) which was implemented and resulted in holding the democratic elections in July 2006.

During the transition period, President Joseph Kabila made several sacrifices to see his dreams for the country come true.

He accepted a humiliating formula of power sharing that was unique only to the DRC in the entire world i.e. 1:4 (one president and four vice-presidents) in order to put an end to the transition period and legitimise his government.

It was while Heads of States of SADC were busy organizing an international conference for peace in the Great Lakes Region in November 2004 in Tanzania and June 2005 in Kenya, that a neighbouring country, namely Rwanda, was busy arming dissident terrorist troops which were involved in killing, plundering and rape atrocities in eastern DRC.

It is worthwhile to point out that up to that juncture, the Rwanda authority in Kigali had always denied the fact that its armed forces were present in the eastern part of the DRC.

The denial at that point was not surprising because even in 1998 Kigali denied their involvement in DRC but three months later admitted that the Rwandan troops were in DRC.

As like many other Congolese provinces, Kivu where the soldiers of a renegade general Laurent Nkunda are currently committing atrocities, is home to communities that straddle international borders. Kivu’s neighbours, however, have all survived from disastrous civil conflicts such as in the cases of Burundi in 1972 and Rwanda in the 1994 genocide.

The year of extermination and the ideology of genocide have gripped the Rwandans and Burundians. People living at the border with DRC have crossed into Kivu province and this gave the potential for extreme violence in the province during August 2002 and fighting broke out between Rwandan and Ugandan troops fighting to control Kisangani.

Imagine two different foreign forces fighting inside another country (DRC) to control one of its major towns just to continue plundering its resources.

Up to May/June 2004, close to 12 000 Rwandan Hutu rebels were still roaming freely on the hills of south Kivu with no significant means or intentional effort to disarm them.

Although these fighters no longer had the strength to represent a genuine security threat for Rwanda, they offered both the incentive and an ideal excuse to remain deeply involved in the political affairs of the two Kivus, i.e. eastern north and south Kivu through the manipulation of frightened Rwandophone communities, commonly known as Banyamulenge, for periodic threats of military intervention.

It was widely acknowledged at that time that the Rwandan governing elite had developed important commercial interests in the Congo and that alone could be sufficient to motivate the Rwandan government to involve itself in the DRC’s internal affairs.

Moreover, it was only in Kivu that national and regional forces opposed to the ongoing peace process had the opportunity to confront one another and the Kinshasa government and ultimately weaken the transition.

Spoilers, Congolese and non-Congolese alike, who had nothing to gain from a successful transition concluded by free and fair elections, regularly manipulated the chronic ethnic political tensions in Kivu to contest some of its key components such as territorial reunification of the country, the transfer of tax revenues from provincial authorities to Kinshasa, the Disarmament Demobilization and Reintegration (DDR) of militias and the creation of a national army under a unified command structure which were basically President Joseph Kabila’s targets.

Dissenting Elements

Since the beginning of the transition, dissenting elements of the Rassemblement Congolais pour la Democratie (RCD) had resisted reunification simply because of the fear that it would be the ultimate loser, despite some gains it had made during the inter-Congolese dialogue. All those facts contributed to loss of momentum in the peace process.

Towards the end of 2003, Rwanda resumed military support to several Kivu militias and generally promoted a rebellious environment in Goma and Bukavu and that gave some of its old allies the understanding that they could maintain the status quo.

Despite some disarmament, demobilization and reintegration progress in the following few months, including the voluntary disarmament of a few key Hutu rebel leaders, Kigali had given the impression that the restoration of effective Congolese sovereignty generally or of Kinshasa’s authority was not in its interests in that particular political context.

The crisis was far from over. The international community and its principal representative, the UN Mission for Congo (MONUC) failed to develop a strategy that could radically change the environment of political competition.

But President Joseph Kabila being young and intelligent, would not give up and the transition government demonstrated that it was capable of finding political solutions by taking the necessary decisions. For example, with the law on nationality and amnesty, the Banyamulenge were granted Congolese citizenship.

The government also called on the international community to put pressure on the Rwanda authority to cease all hostilities and involvement in the internal affairs of the DRC whether through its own armed forces or by supplying arms to rebels.

Of late, a rebel group headed by General Laurent Nkunda is trying to destabilize the Kivu provinces but I believe that General Nkunda’s rebel forces will not succeed in any way.

Politically, General Nkunda is trying to make his own point but militarily he is the big joke of the century driven by political myopism in a jungle of dark dreams.

Democratic, Free and Fair Elections in DRC

The year 2006′s elections were part and parcel of a long process resulting from a series of agreements concluded over the previous seven years, including the Lusaka Cease-fire Agreement of 1999 in which former President Masire played a major role, the Pretoria and Luanda Agreements of 2002 and the Sun City Agreement of April 2003. The DRC Independent Electoral Commission was also established after the signing of the Sun City Agreement of April 2003.

The materialization of this process started with the registration of about 25,6 million voters back in June 2005, followed by a constitutional referendum and the new constitution was adopted by more than 80% of the registered Congolese voters.

The success of these elections in promoting the democratic process lies in the foundation of voter participation, with involvement of women. The run-up to the presidential elections saw five women out of 33 registered presidential candidates vying for the presidency.

As for the parliamentary elections, 9,707 candidates were competing for 500 parliamentary seats. Despite the peace that prevailed at that time, about two weeks before the set date for the elections, 19 presidential candidates were calling for political talks as a prerequisite to hold the elections. These candidates even threatened to boycott the elections if the talks were not held but the election process at that point was irreversible and there was no time left for further talks.

The Congolese people were eager to go to the polls and grab this historical opportunity with both hands to choose their leaders through the ballot boxes. There was a lot of excitement and anticipation among the registered voters 80% of whom had never voted since they were below the age of 50 years at independence and those elections were the first after more than 45 years since independence. The 30th of July 2006 presidential and parliamentary elections were made possible with huge financial support from the international community that invested some U$420 million which was pumped into the election exercise.

With regard to peace, law and order, apart from 17,500 UN peace-keeping forces, there were 1,450 troops from the EU Special Force (EUFOR)and some 50 000 Congolese police officers especially trained to maintain peace during that highly sensitive period.

Another 2,000 European Special Force troops were stationed in Libreville of Gabon with the aim to intervene as a robust force anytime in case of hostility.

Despite the excitement of the population to go for elections, there were fears of escalating violence because of the tense atmosphere that reigned during weeks of campaigning when clashes were monitored between the government armed forces and MLC forces of Mr Jean-Pierre Bemba, especially in the capital city Kinshasa.

Fortunately, the Congolese people surprised everyone by turning out in large numbers on the 30th of July 2006 to cast their vote in a peaceful and dignified manner. This high turnout for elections was praised by the international observation missions in DRC.

The results of the first round caused the Congolese people to return to the polls for the second round on the 29th October 2006 to choose between President Joseph Kabila who got 44,81% in the first round and Vice-President Jean-Pierre Bemba who obtained 20, 03%. The Congolese people showed the same maturity and commitment although the turnout was slightly less compared to the first round.

The Congolese Independent Electoral Commission is also to be commended for a job well done in handling the elections in a vast country the size of Western Europe but with little infrastructure. After the second round of elections only the MLC of Mr Bemba rejected the results because the party believed that Mr Bemba won the first round of the presidential race with more than 70% based on the results of polling stations in Kinshasa alone, and that made them believe that Mr Bemba should be declared the winner.

They believed that nothing else could justify the holding of a second round of presidential elections. But if they had genuine complaints, they had to lodge it with the Supreme Court but that did not happen as there was no legitimate claim to that effect.

In the Sun City Agreement there is a clause under which the integration of all armed forces is dealt with. This means that, during the transitional period, forces from RCD/Goma of Vice-President Ruberwa, from MLC of Mr Jean-Pierre Bemba, from RCD/ML of Mr Mbusa Nyamwisi, from RCD/N of Roger Lumbala and the Mayi-Mayi were to merge with the Congolese armed forces to form one national army.

But when the leaders from the former rebel movement were to relocate to the capital city, they raised fear for their security and it was agreed that some of their respective forces should continue guarding them. It was the reason why Mr Jean-Pierre Bemba had his own forces guarding him 24/7.

Outright Winner

After the second round of elections but before the release of the results the MLC forces of Mr Bemba positioned themselves all around the Independent Electoral Commission offices in a bid to stop the IEC Chairperson from announcing the results.

But the IEC Chairperson found his way to the National TV station late at night with the assistance of MONUC (the UN Mission to DRC) in order to announce the election results where President Joseph Kabila was declared outright winner.

On Monday, 21st August 2006, the same MLC forces abducted, again, two more soldiers from the Presidential Special Guard Unit and started shelling the National Palace (the DRC State House). It is interesting to know that it was at that specific time that diplomats from the International Commission who were interested in the Congolese transition (CIAT) were holding a meeting with Mr Jean-Pierre Bemba at his residence.

President Joseph Kabila, the sole custodian of the territorial integrity and sovereignty of the Democratic Republic of Congo, ordered the Congolese armed forces to put an end to the disorder and anarchy that MLC forces were bringing into the capital city Kinshasa.

The disorder by the MLC forces was fuelled by M. Bemba. Mr Bemba’s campaign was centred on threats, hatred and acts of violence from his forces. For instance, on two occasions in Tshikapa (Kasai Province) and Tshela (Bas-Congo Province), it is recorded that Mr Bemba stated that if he was not elected as president, he would set Kinshasa ablaze.

Thereafter his speech encouraged his supporters to go to the extent of demolishing a church building, and looted the office of the High Authority of Media (HAM) and the headquarters of popular singer Werrason.

In the process it was reported that they raped some women working for HAM and killed four of the policemen who were guarding the premises.

On 27 July 2006 in Kinshasa, not only did Mr Jean Pierre Bemba repeat the same hatred speeches but he also urged people to cheat by voting for him twice or thrice using colour photocopiers to multiply their voter registration cards.

His campaign speeches of hatred were totally the opposite of President Joseph Kabila’s campaign strategy. President Joseph Kabila went around the country talking about unity, peace, stability and reconstruction of the country for the benefit of all the Congolese.

It has been proven that the incumbent president showed his willingness, commitment and determination to see the democratic process successfully completed in the country with the holding of free, fair, democratic and peaceful elections.

The democratic process however was irreversible despite all obstacles in the way and the Congolese people were eager to see a new political dispensation taking place in the country so that they could start the programmes of national reconstruction in all areas of the DRC. They successful achieved their objectives.

Today, the government of national unity, the two chambers of parliament i.e. the National Assembly and the Senate are in place. The Parliament is led by the former Secretary General of the PPRD, President Kabila’s political party, and the Senate by a former Prime Minister of the Mobutu regime.

The governor and provincial ministers have been elected. The Independent Electoral Commission was awaiting a new piece of legislation, i.e. the law on the decentralization of the country that should enable it to organize the final stage of local government and municipal elections sometime next year (2008) to complete the process.

President Joseph Kabila’s Reconstruction Programmes

President Kabila has set five sectors as his priorities to tackle the ambitious programme of reconstruction of the country. These are called five reconstruction sites, which are:

- The rehabilitation and development of infrastructure;

- Employment;

- Education;

- Water and electricity for all; and,

- Health.

To that effect the DRC government under the efficient leadership of President Kabila is determined to:

- Speed up army reforms to consolidate peace, stability and national unity;

- Restore the state authority and good governance;

- Embark on a programme of economic recovery and stability;

- Fight against poverty, social inequalities and HIV/AIDS; and,

- Restore the family and moral values.

For that ambitious programme to succeed, the DRC needs the support of all peace loving countries from the East, West, North and South. There is a good micro- and macro-environment conducive for conducting business.

At the moment there are many investors from South Africa and it seems that the Namibian business community is not well informed about the DRC business potential for a number of business sectors.

General Nkunda’s Myopic Goals

Despite all the efforts by the government of President Joseph Kabila to restore peace and stability this did not satisfy General Laurent Nkunda.

General Nkunda’s actions to take up arms against his own people went too far. He is not only risking his own life but the lives of innocent followers and the lives of ordinary Congolese, especially women and children who are enduring long and dangerous walks in the Congo jungles day and night to flee the fighting.

Protecting the Tutsi ethnic group in DRC, Mr Nkunda has become a pathological bluffer. His real motive for waging the cowardly war is not to protect the DRC Tutsis but rather using Tutsis as a cover to evade arrest by the International Criminal Court (ICC) which intends to arrest him to face trial for the many atrocities he and his followers have committed against the Congolese people during the previous war.

It seems to me that General Nkunda has outside military and political backing. Where does he get weapons and other military hardware? There is no single fabric to manufacture guns and ammunitions in the whole DRC but General Nkunda so far has managed to arm and feed his followers well to a level of a powerful group of thugs strong enough to resist the government forces’ attacks.

When he was asked by the BBC as to how he felt about the government of President Joseph Kabila’s plan to lodge a military offensive against his forces, General Nkunda confidently replied: “We will not surrender but are ready to defend ourselves.”

Interestingly, there is no condemnation from the western powers since General Nkunda resumed the rebellion. Women and children are on a constant run in that part of the country. The strength of MONUC (the UN peacekeeping force) on the ground is weak and ill equipped to deal with Nkunda’s senseless and barbaric atrocities. Do we need to sit down and look at fellow Africans killing each other? Why are we arming Nkunda? What is it that General Nkunda is trying to achieve with his barbaric actions?

Where is the United States of America which had helped Mobutu to loot and plunder the Congolese wealth? The Mobutu reign of 32 years with the assistance from the west, particularly from the US, is to blame for the current conflict in the Congo. In 1989 Mobutu was officially hosted by George Bush at the White House in Washington DC and this is what George Bush, the former US president said:

“Zaire is among America’s oldest friends and its president, President Mobutu, one of our valued friends in the entire continent of Africa. I found President Mobutu’s analysis valuable and we support him as he strives to resolve peacefully its problems. We thank him for his leadership and we are proud and very pleased to have him with us today.”

Oldest friend in what? A good question indeed, but with a sad answer. Oldest friend in looting and plundering the Congolese wealth. General Laurent Nkunda should understand that there is no going back to the days of Mobutu, and neither of his myopic goals will be realized.

The negotiations that he is trying to call is a big joke because nobody sent him into the bush but himself because of his cowardliness in facing the reality of his deeds and to stand trial for the atrocities he has committed.

To President Joseph Kabila and the entire Congolese population: Aluta Continua. Victory is certain!!

A Good .. but Older…. Paper on the State of African Infrastructure

The paper copied below is OLD… but sadly still paints a relatively close and poignant picture of the status of Infrastructure Development. It can be accessed directly in the web at:
http://www.afdb.org/pls/portal/

We at Trans-African Development have a potential Solution to this dilemma that faces Africa… it is to build a BACKBONE of Infrastructure…. From Major Highways to Electrical transmission Facilities and transmission lines to Fiber Optic and Railroads… but we need the Cooperation of African Nations and Organizations to implement this . I will write more on this int he near future… but for now… this “picture” of African Infrastructure is very revealing.

ECONOMIC RESEARCH PAPERS NO. 46
AFRICAN DEVELOPMENT BANK

Infrastructure in Africa: The Record
By: Afeikhena Jerome
University of Ibadan, Nigeria

The views and interpretations in this paper are those of the author and not necessarily those of the African Development Bank.

INFRASTRUCTURE IN AFRICA: THE RECORD

1. Introduction

In recent years, there has been a resurgence of interest in infrastructure development and Policy reform in developing economies, with much of the debate centering on efficiency
of use and an increased role for private sector participation in the provision of Infrastructure (Jimenez, 1995; Mody, 1996; Kerf and Smith, 1996; and World Bank,1994). The apparent interest emanates principally from the growing realization that human and physical infrastructure are critical elements for economic growth and poverty reduction. Infrastructure plays a pointed, often decisive-role in determining the overall
productivity and development of a country’s economy, as well as the quality of life of its citizens.

A broader source of interest, however, derives from the generally poor performance of state-owned monopolies, combined with the rapid globalization of the world economies, which has brought into sharp focus the economic costs of inadequate infrastructure and prompted a growing number of developing countries to seek new initiates in promoting competition, private entry and foreign interest in the provision of  Infrastructure.

The term ‘infrastructure’ was coined during the Second World War by military strategists to indicate wide-ranging elements of war logistics. Thereafter, development Economists began to use the term interchangeably with ‘overhead capital’ considered to include: those services without which primary, secondary and tertiary production activities cannot function. In its widest sense, it includes all public services from law and order through education and public health to transportation, communication, power and water supply as well as such agricultural overhead capital as irrigation and drainage systems (Hirschman, 1958: 83).

There is no consensus in the literature on a common definition of infrastructure. What remains indisputable, however, is that is that they share some common characteristics which have hitherto been used to justify state involvement in their provision and financing. These characteristics include scale economies in production, consumption externalities and non-excludability. They are equally not generally tradeable.

Broadly defined, infrastructure refers to all basic inputs into and requirements for the proper functioning of the economy. They are usually grouped into two. The first category is social infrastructure, such as education and health which facilitate the supply if skilled and healthy personnel to manage and operate other resources. They also enhance the economic, political and social empowerment of the populace, with the
attendant positive effects on poverty alleviation and efficient use of national resources.

The second category is often referred to as economic infrastructure. Mody (1997) defines this category of infrastructure as the facilities that provide society with the services necessary to conduct daily life and to engage in productive activities. These include power, transportation, telecommunications, water, sanitation and safe water disposal, among other things.

This report is devoted to the study of the complementary physical infrastructure, comprising telecommunications, power, transport (roads, railways, ports and airports), water supply, and sewerage.

Infrastructure has a pervasive influence on the whole economy.
Telecommunications, electricity and water are used in the production process of virtually every sector of an economy, while transportation is necessary for the distribution of
commodities. The quantity and quality of these services are therefore an important determinant of private sector productivity and output. In fact, there is a strong association
between the availability of certain infrastructure -telecommunications (in particular), power, surfaced roads and safe water – and per capita GDP2. The relationship involves  both the supply side, in terms of the contribution of infrastructure to the generation of higher GDP, and the demand side, as higher incomes in turn generate higher demands for infrastructure services. Infrastructure thus makes an important contribution to expanding output.

Africa trails the rest of the world, both in the extent and quality of infrastructure. Notwithstanding the large amount of scarce economic resources absorbed in the development of infrastructure in Africa, there is clear evidence that the provision of infrastructure has been much below standard both in terms of quantity and quality in relative and absolute terms. Infrastructure bottlenecks continue to exist, particularly in the management of current stock.

Traditionally, infrastructure services have been viewed as public goods and the primary responsibilities for their provision have been entrusted to the government-owned
`natural monopolies’. Consequently, these sectors have become inextricably entangled with the public sector that dominated it. While the performance of government-owned
providers of infrastructure, vary from one country to another, their overall performance in Africa has been very poor. The sector is characterized by operational inefficiency, lack of technological dynamism and poor service to consumers. In addition to their inadequacy, the provision of infrastructural services in most African countries is characterized by high prices compared with per capita incomes and long waiting time (several years in some countries) between the time of application for services and actual connection.

The cost of waste, in terms of forgone economic growth and lost opportunities for poverty reduction and environmental improvements, are unimaginably high. Poor infrastructure is a major obstacle to the region’s economic growth, and adversely affectsthe living standards of its people. Inadequate infrastructure adversely impacts on health, education and the capacity for effective governance as well as on the ability of industries to compete in international markets. Most evaluations of structural adjustment programmes in Africa point to deficiencies in infrastructure as a major cause of poor
supply response in economies under reform (Ghura and Hadjimichael, 1996).

The provision of efficient infrastructure is important for the development of the continent particularly in view of the fact that many of its countries are landlocked. As shown in recent literature on the economics of geography, nearly all landlocked countries in the world are poor, except a handful in Western Europe that are closely integrated into the EC via an efficient infrastructure which facilitates low-cost trade.

This chapter takes stock of the state of infrastructure in Africa, investigates more deeply the root causes of the present unsatisfactory outcomes and explores the strategies and policies that can be instituted to improve infrastructure delivery in the pursuit of the overarching objectives of private-sector-led growth and poverty reduction. Accordingly, the paper is divided into four sections. The database on infrastructure in Africa is presented in section 2 while the record of infrastructure service is the focus of section 3.
An appraisal of the causal factors in the dismal performance is conducted in section 4.

2. Data on Infrastructure in Africa

Data on the different types of infrastructure in Africa are sketchy and difficult to find in one publication. An extensive database of physical infrastructure stock for a cross-section
of 102 countries have been compiled and presented in the Appendix. The database has been compiled for 53 African countries by region according to ADB classification. To
allow for comparison, similar data is presented for 17 countries in Latin America, 8 countries in South East Asia and 24 OECD countries. The database comprises six measures:

. Population, GNP per capita and percentage of population with access to safe water and sanitation;

. Kilometres of paved roads;

. Kilometres of railway lines;

. Statistics on the power sector;

. Telecommunication statistics; and

. Information technology.

Apart from physical stocks, the database also provides some measures of the quality of infrastructure.

White It is imperative to sound a note of caution on these global statistics given their comparative basis, it should be noted, however, that the data provides a rough, albeit, useful
basis for analyzing the development of infrastructure on a comparative global and regional basis. The data reveals a strong association between infrastructure capacity and level of development. Countries with lower income level are associated with lower levels of infrastructure capacity and service provision. It should be borne in mind that the
performance of most African countries in all the indicators is quite dismal.

3. The Record of Infrastructure in Africa

It is crucial to examine in greater details the situation in the major infrastructure sub-sectors with a view to highlighting the peculiarities of each sub-sector. For each type of infrastructure , the section examines the state of the available networks, tariffs charged, supply and demand patterns, service quality; industry bottlenecks, and environmental
consideration.

3.1 Telecommunications

Telecommunications infrastructure lies at the heart of the information economy. Countries lacking modern telecommunications system cannot compete effectively in the
global economy. The telecommunications industry in Africa has made limited progress despite concerted efforts and programs aimed at modernizing and expanding the sub-sector.

3.1.1 Networks

Despite the giant strides which a number of African countries have taken in reforming the telecommunications sub-sector in recent years, telecommunication coverage in Africa is amongst the lowest in the world. There are more telephones in Brazil than the whole of Africa. While Brazil has 15,105.9 main telephone lines, Africa has only 13, 695.1 main telephone lines. Africa accounts for only two per cent of telephone main telephone lines globally as shown in chart 1. Low network densities, long waiting
Source : International Telecommunication Union.

Chart 1: Main telephone lines

Africa2%
America32%
Asia28%
Europe36%
Oceania2%
times for access to services, and clear willingness of some users to pay for access to the service illustrate the significant shortage of telecommunications services in the region.

The most common measure of telecommunications access is teledensity or the number of main telephone lines per 100 inhabitants. In 1996, teledensity varied from 0.08 in
Democratic Republic of Congo to 34.01 in Reunion. Africa averages 1.85 compared to 30.38 in the Americas, 6.02 in Asia, 30.60 in Europe and 40.39 in Oceania.

There are substantial differences among the African sub-regions, with four countries currently in the forefront; namely, Reunion 34.01, Seychellis 19.51, Mauritius 16.21 and
South Africa 10.2 . The laggards are sub -Saharan African countries with an average teledensity of 0.52. As many as 34 countries in Africa still have a teledensity of less than 1. These differences among countries are associated in part with variations in per capita GDP  In part, GDP per capita may serve as an indicator of the extent of a country’s rural population, which tended to receive fewer infrastructure services than urban areas did. It may also reflect the affordability of services. However, a nation’s teledensity is usually quoted as an average thus masking regional variability. For example, the distribution of telephone networks in South Africa presents striking internal contrasts. The average teledensity in South Africa is 10.05, but on a provisional level, this ranges between 22 in Gauteng (the region around Johannesburg and Pretoria) and 2 in the Northern pronvince.

The distribution of telecommunications services is biased in most African countries in favour of the urban areas, which account for over 80 per cent of the services, while the
rural areas, where over 80 per cent of the population reside, enjoy 20 per cent of the service.
About 72.9 per cent of telecommunications mainlines were in urban areas in 1995 compared to 27.1 per cent in rural areas. Two countries, however, had most of their telephone mainlines located in rural areas. These are Sao-Tome and Principe (87.0 percent) and Central African Rep. (57.0 per cent).

In terms of quality, networks are burdened with a high percentage of outmoded equipment and high fault rates. The information on faults per main lines, a standard measure of service quality, indicates that the average faults per 100 main lines for the region in 1996 was 78.1 compared with an average rate of 8.9 for America, 19.9 for Europe, 43.7 for Asia and 47.8 for Oceania. The recorded fault rates in the region,
however, range widely- from 1.0 (Eritrea) to 937.5(Guinea).

The most effective route to increasing service quality is the installation of digital exchanges. African countries are striving to modernize their systems – albeit at great cost – in order to remain plugged into the global network. Many telecommunications authorities in Africa, especially in those countries undergoing reforms are installing digital technologies and costly equipment in order to become competitive. In the absence of local manufactures, African countries are dependent on industries outside the region for the purchase of telecommunications equipment and spare parts. Such imports are generally made on a non- selective basis of ‘ready-made’ packages with little room for adaptation to local needs through local enterprise and know-how. Consequently, telecommunications services in Africa do not have the usual multiplier effects (via research and development, local manufacturing, services and employment) as they do in other regions of the world.

Table 1:

Comparative Statistics on Telecommunications Indicators in Africa and the Rest of
the World (1996)

SEE THE ORIGINAL REPORT WITH LINK AT TOP TO VIEW CHARTS AND DATA

i HAVE DEBUGGED ONLY UP TO HERE FOR THE READERS CONVENIENCE IN CHANGING FORMATING… PLEASE GO TO THE LINK ABOVE TO READ THIS 57 PAGE PDF FILE WITH GRAPHIC CHARTS.

Source: International Telecommunication Union

3.1.2 Supply and Demand Patterns

Comparative Telecommunications Statistics for
Africa and the rest of the WorldPer 100 inhabitantMain lines per employeeSatisfied demand (%) 1996Fault per 100 machines peryear

Source: International Telecommunication Union.

Large waiting lists are evident in several African countries, but the demand for telephone connections is in all likelihood considerably higher. A sizable latent demand Lies concealed since prospective users do not even register on waiting lists until there is a realistic chance of receiving a telephone connection. The overall average expected waiting time for services in Africa for 1996 was 3.5 years, the highest in the world, compared with 0.3 in America, 0.7 in Asia and 2.4 in Europe as shown in chart 3. Ten countries recorded a waiting time greater than 10 years. These are Algeria, Eritrea,
Ethiopia, Gambia, Malawi, Mozambique, Sao Tome & Principe, Sierra Leone and Tanzania. With such long waiting times in African economies, there may well be a significant number of discouraged potential subscribers who have not yet joined the
queue for services.

Development of cellular networks in African economies provides one example of customers’ willingness to pay for quick access to reliable services. This willingness is particularly true of businesses and high-income households. While the cellular network penetration rates are still comparatively small, (7.9 per cent of total telephone subscribers in 1996 ranging between 1.1 in Kenya and 18.3 in South Africa), the growth rates in the number of subscribers are considerable in some countries. This level of demand has been achieved despite the fact that charges for cellular services are substantially above those for fixed services in the region and those for cellular services in the EU. Surveys of business users in the region confirm this willingness to pay
for quick access to reliable telecommunications services.4

The introduction of competition has been most notable in mobile cellular and other value-added services, with almost half of the Africa countries allowing more than one provider in these areas. In the majority of markets where cellular mobile services are now provided, private capital has been introduced in the form of joint ventures with state-owned enterprises or stand-alone private ventures

3.1.3 TARIFFS

The structure of tariffs falls relatively heavily on businesses and more lightly on households, but the overall level remains low in most countries. In several African countries, there is no clear practice of pricing services, hence rough and ready norms for billing are adopted. Call waiting and forwarding for residential customers remains largely the domain of dominant local providers.

While detailed data on long-distance and international tariffs are not available, average monthly subscription and installation charges for households and businesses
provide some indication of tariff levels and structures. Table 2 presents average monthly subscription charges and connection rates for both household and business consumers by regions in the world. A comparison across these regions reveals that telecommunications tariff in Africa is the lowest in the world relative to both the global average and other
regions in the world. The relatively low levels of tariffs in much of the region limit the extent to which internal cash flows and private finance can be raised for new investments.
Most countries, characterized by underinvestment and low network growth, are unlikely to break out without reform of the tariff structure. As a rule, those countries at more
advanced stages of development have adjusted tariff structures to allow for more balanced charges between households and businesses and have raised the overall level of
tariffs. The need for investment in this sector to expand capacity and improve service quality is substantial. The necessary expansion in networks will not be achieved without
recourse to private finance. However, unlocking this finance will require a commercial approach to telecommunications and credible reform of tariff structures.

Table 2:

Telephone Tariffs in Africa and Other Regions in 1996 (US$)

3.1.4 Reform Activities the Sector

The telecommunications sector in Africa faces a challenging future given the number of internal and international constraints confronting telecommunications administration, and the demand for value-added services by increasingly sophisticated consumers. Many African countries are already committed to reforms in the field of telecommunications,
including promotion of private sector participation. In the past few years, a domino effect has occurred in Africa’s Telecommunications sector resulting in a flurry of reform
activities which put the continent at par with the developments in other regions. Some of the major reforms being carried out include creation of a regulatory environment to accommodate private companies, institution of well-defined tariff regimes, privatization of state-owned telecommunications operations; and licensing independent telephone companies to provide value added services.

Reform efforts across the region focused initially upon the separation of the telecommunications and postal operations and, subsequently, upon the development of separate regulatory agencies. By 1998, 27 countries in Africa had separated their postal and telecommunications operations, and 30 countries had corporatized the primary operator.

In the regulatory sphere, 18 countries across Africa had undertaken the establishment of a separate regulatory agency by 1998. However, most telecommunications regulatory agencies so far created in Africa have limited powers -the
sector ministry retain the authority to issue directives to the regulator, appoint the heads of the agency, and control the agency’s funding. In Uganda, for example, the ministry in
charge of telecommunications is also responsible for tariff approval and the establishment of licence fees, while in Namibia, the operator is responsible for numbering, tariffs and interconnection rates. In many instances, the establishment of the regulatory agency has occurred in tandem with the privatisation process. In other countries, the introduction of
a regulator has occurred prior to the initiation of liberalization and privatisation plans, such as in Botswana, Mauritius, Nigeria, Tanzania and Zambia.

Privatisation of state-owned national carriers in Africa began in 1989 with the sale of the majority of shares in Guinea-Telecom in Guinea-Bissau, and STP/CST of Sao
Tome and Principe in the same year. Between 1989 and 1997, close to 25 per cent partially privatised their state-owned telecommunications operator. In addition, six more countries have initiated, or announced, plan to sell equity stake in their state-owned telecommunication operator to private investors. However, competition in nation-wide basic services is allowed in just two markets, Ghana and Uganda, where second national operator licenses have been issued.

The cumulative effect of these reforms is a substantial increase in telecommunications infrastructure. In 1996, Africa recorded its highest annual growth rate of 10 per cent in telephone main lines. The highest growth rates were recorded by Botswana, the Gambia, Cape Verde and Mauritius. North African countries, however, recorded marginal decline.

3.2 Internet Access
Internet is today one of the most dynamic telecommunication markets in Africa in spite of the fact that the region remains behind the rest of the world in informatics and information
technology, accounting for less than 1 per cent of global spending in the sub-sector.
Over the past five years, the number of African countries with access to the internet has risen dramatically. It was first introduced to Africa through a range of initiatives by national,
international and non-governmental organizations, Internet is now clearly becoming a commercial undertaking with increasing private investment. Most of the countries (47 of the 54 nations) in the region have developed some form of Internet access in capital cities, either through local dialup, store and forward e-mail with a gateway to the internet, or through a full leased-line service. About 44 countries and territories have achieved full Internet public access services at least in capital cities. There are only five countries- Comoros, the Republic of Congo, Eritrea, Libya and Somalia that do not have plans for full internet assess.

3.2.1 Network

The key indicators of internet development are: (1) the number of host computers, (2) the number of internet service providers (ISPs) and (3) the number of users.

a. Internet host computers: In 1997, there were 129,326 internet host computers in Africa, of which 122,025 were in South Africa, 3,310 in North Africa and 3, 991 in Sub-
Saharan Africa. The density of internet hosts was 28.16 hosts per 10,000 people in South Africa, 0.25 in North Africa and 0.07 in Sub-Saharan Africa. The average for Africa was
1.70.

b. Internet Service Providers (ISPs): About half of the countries in Africa allow competition and have more than one ISP. Of the 300 or so ISPs in the region, around 200
offer full internet services. South Africa has the highest concentration of ISPs with nearly 80
service providers.

c. Internet Users: In 1997, there were 896,120 Internet users on the continent of Africa, in addition to 800,000 in South Africa. This is equivalent to approximately six users for each
host computer. The number of users averages about one user per 5,000 people (excluding South Africa with a rate of one to 65 people), compared to a global figure of one internet
user per 45 people; or one per 6 in Europe and North America.

3.2.2 Tariffs

The high price of internet connections and personal computer (PCs) relative to income is a major inhibiting factor to a wider use of internet in Africa.. Estimated PCs per 100 inhabitants in 1996 was just 0.66 compared with 15.87 in America, 9.56 in Europe and 30.31 in Oceania. Considering the lower incomes of most African countries, it is unrealistic to expect widespread Internet usage on the continent. As the internet market in Africa becomes increasingly liberalized, and market forces take firmer root, prices will be driven lower owing to increasing competition among ISPs, the privatisation of state-owned telecommunications corporations, and the liberalization of domestic telephone markets.

3.2.3 Bottlenecks

Internet use in Africa is limited. The basic obstacles in the path of rapid Internet growth are the lack of telecommunication infrastructure, and the relatively high hardware and transmission costs. Although many countries have taken major steps to improve their infrastructure, great variation still remains between regions and countries; rural areas, where 70-80 per cent of the population resides, are largely uncovered by telephone service.
International internet bandwidth is lacking because international leased lines are costly and crowded, and peering between ISPs is limited. Proposals, such as the Africa One and SAFE- undersea fibre-optic cables, or wireless technologies including WLL, VSAT, HF radio and GMPCS systems, or stratospheric Helium supported balloons promise to extend internet services to both urban and rural areas. Hardware is much more expensive in Africa relative to many other parts of the world due to high import tariffs and little price competition.

An increasing number of countries are allowing internet service provider (ISP) competition, even though more than ten countries still hold monopoly control. PTOs have
assumed a monopoly position especially in countries where the Public Telecommunications Operator (PTO) established the international internet backbone with some exceptions, such
as South Africa, Mozambique and Zambia. Foreign internet service providers are increasingly entering into Africa and are expected to gain market share from the local companies. Open entry for ISPs, however, is not enough to ensure rapid Internet growth. An appropriate, “Internet-friendly” regulatory framework is also important to achieve effective
entry, survival and growth of ISPs. High license fees, for example, can limit the entry of ISPs.

3.3 Transport

Transport constitutes an important sector for the enhancement of economic growth and the socio-economic integration of the African region, particularly the promotion of intra- and extra-African trade. However, despite the efforts made in the past five decades to develop the transport sector in Africa, it has remained inadequate and ineffective. The general lack of repairs and maintenance in infrastructure has led to further deterioration in the sector in recent years, and has, as well, increased the magnitude of its operational problems and costs. The environmental implications of transport policies and projects also received low priority.

However, despite the difficult environment of high operating costs and low capacity utilization, the various sub-sectors of transport have shown some remarkable resilience.

3.3.1 Roads

In Africa, road transport is the most widely used means of transportation. The fragmentary
nature of the railway system and the limitations imposed on the scope of inland water
transport by geographical factors are such that the transport of people and goods by rail and
inland waterways has to be supplemented usually by road transport over long distances.

3.3.1.1 Road Network

An accurate assessment of the development of the road networks in African countries is made difficult by the lack of reliable statistical information and the compelling necessity to employ, for analytical purposes, surrogate indicators, such as aggregate lengths, classified according to operating conditions, instead of such standard indices as ton-kilometre or passenger/ kilometre.

Africa had approximately 311,184 kilometers of paved roads in 1991 (see Table A2), with half of them in poor conditions. Chart 4 indicates that only 24.2 percent of total road network in Africa were paved in 1996 albeit with considerable regional diversity. 57.4 percent of the roads in North Africa were paved compared to 25 percent in South Africa and 10.2 percent in Central Africa. Road densities per km2 are generally much lower than those of Asia and Latin America. Road construction and maintenance standards vary greatly in
Africa: few countries are able to construct and maintain trunk-road systems to stipulated requirements and standards according to volume and weight of traffic. Road building has
traditionally been given more priority than road maintenance in most African countries, with scant attention to the imperatives of recurrent costs and road management once a road has been constructed. Besides, as the road networks expands, the institutional and financial burden has tended to increase much more rapidly than the national budget could cater for, especially in times of socio-economic crisis.

Another important dimension to the quality of infrastructure is maintenance and renewal. Lack of maintenance has left over 50 per cent of the paved roads in poor conditions. Over 80 per cent of the unpaved main roads in Africa would be considered just fair. The case of rural feeder roads is even worse; up to 85 per cent are estimated to be currently in poor conditions.

The constructing of international road networks on a sub-regional basis in Africa has received much greater attention. However, a real regional African road system does not as yet exist; what exists, instead, is a large number of separate national road networks that are ineffectively coordinated, and are at best a series of ad hoc inter-country road links and connection.

3.3.1.2 Demand and Supply Pattern

National road networks in Africa have not kept pace with the growing demand: kilometre lengths are limited and their standards of construction often low. The existence of
inadequate and poorly maintained rural and feeder roads connecting villages and farming areas with each other, and to market centres is a major gap in rural transport in most
countries. And few cities have been able to keep pace with road network needs. As agriculture and industry expand, and as national and subregional economies develop, existing road networks will require tremendous extensions and improvements in quality. In particular, road links between nations will have to be strengthened to meet large scale
demand for intra-and inter-subregional goods traffic; all of this require heavy capital investment and expenditure on roads in many African countries.

3.3.2 Rail

Railways in Africa are fragmented, and can hardly be described as a system since the railways run from the interior to sea ports, a reflection of their antecedent as a transport
system designed for external trade purposes.

3.3.2.1 Available Network

The aggregate network of African railways is estimated at 73,000 route kilometres, of which South Africa alone accounts for some 22,500 km. Eleven countries namely; Burundi,
Central Africa Republic, Chad, Cape Verde, Comoros, Djibouti, Mauritius, Seychelles, Somalia, the Gambia, Guinea Bissau and Libya have no railway system. With the exception of North Africa, railways in Africa generally have a low level of traffic. Most of the lines are of light rail, and are unsuited for fast and heavy traffic. Moreover, there is general deterioration due to maintenance problems.

The national railway networks in Africa are mostly independent of each other and, with the exception of Eastern and Southern African railways, unconnected among themselves. All the networks in Africa were built at the end of the nineteenth century or the beginning of the twentieth century, with different technical characters, gauges, couplings, brake systems, buffers, etc. The only exceptions are, Tazara, the Trans-Gabonese, the Trans-Cameroonian and the mining lines. The 1.067 m gauge predominates, especially in sub-
Saharan Africa, whereas the 1.435 m gauge accounts for 76.1 per cent of the total kilometrage in North Africa.. Upgrading existing railway lines would involve major investments in track realignment, resignalling, safety systems and rolling stock..

3.3.2.2 Demand and Supply pattern

Almost all the railways in Africa enjoyed monopoly or near-monopoly status at inception, especially for long- and medium- distance transport of goods and peoples. With the spectacular development of road transport and to a lesser extent, air transport, in the 1970s, railways have, however, faced increased competition in the transport market, to
which they have not always been able to positively respond and adapt.

3.3.2.3 Tariffs

Railway tariff has stagnated or declined in recent years, and measures of operational efficiency have shown little improvement. For example, locomotive availability remained
generally low at around 50 percent, although both Uganda and Zimbabwe have improved performance in response to restructuring plans. Most railway authorities in Africa have not pursued sustainable tariff policies. Being public or semi-public enterprises, they were not always profit-oriented or cost- conscious in their operation, limiting their ability to maintain the existing networks, let alone upgrade or expand them. Whenever they made profits, they were required to pass them to the users in the form of reduced tariff rates. The tariff basis was the same throughout the network, varying only with distance.

Freight rates by rail in Africa are on average about twice as high as those in Asia and one and half times those in Latin America. But, at the same time, rail operations run at a
deficit. A number of reform programs are under way. These include increased managerial autonomy and sub-contracting more services to the private sector. Some have sub-contracted part, or all, track maintenance to the private sector (Cameroon, Gabon, Nigeria and Senegal) and Senegal has also sub-contracted cleaning of rolling stick, maintenance of wagons, catering and parcels traffic. The broadest private sector initiative involves re-unifying the railways of Cote d’ Ivoire and Burkina Faso, with a view to operating them
under a concession agreement with the private sector.

3.3.3 Airports

Air transport network in Africa is still relatively underdeveloped. All countries in the region have at least one international airport as well as several smaller ones. Few of them are capable of handling large amount of traffic. Less than 50 per cent of the 5,304 potential air links among the countries in the region are actually operational or being actively exploited at present. The countries with the highest number of airports are Egypt (17 airports) and Nigeria (15 Airports). Most of the airports lack modern equipment and infrastructure. They are characterized by deteriorating runways, and obsolete traffic control equipment. Much of
the infrastructure required for ancillary activities, such as customs and immigration, air cargo, catering, baggage handing and connecting surface transportation, is lacking compared
with market needs. For example, operational and safety shortcoming that plague Nigeria’s international airports have given them the reputation of being among the worst in the World.

Almost every African country own at least one airline although some of them are being privatized in recent times. However, Air Afrique is a regional airline, jointly owned
by ten countries. The privatized airlines include Kenya Airways incidentally the first airline to be privatized in Africa, Royal Air Maroc and Air Tunisia both of which are
partially privatized. Nigeria, however, adopted the liberalisation of the domestic aviation industry resulting in the licencing of 22 private carriers, of which 14 offer scheduled
passenger service, 7 carry cargo and the balance provide charter fights.

Only Cote d’ Ivoire is currently actively reforming its airports with the ceding of the management of Abidjan’s international airport to a French international consortium, Aeria, which has pledged to spend CFA 14 billion upgrading the airport.

3.3.3.1 Tariffs

The airlines in Africa suffer from high operational costs compared with their counterparts world-wide, including other developing regions; they lack proper maintenance facilities
locally and their tariffs are generally uncompetitive in the absence of subsidies. With the growth of mega-airlines in many regions of the world, the African airlines, being mostly
small and poorly equipped, are unable to compete in the international market. And the only hope for survival for most of them lies in mergers with bigger and more competitive
carriers.

.3.3.3 Demand and Supply Pattern

Air services are restricted by low demand in several countries. Apart from Air Mauritius which accounted for about 50 per cent of total persenger traffic in 1997, the share of African
airlines in international traffic is very low, owing in part to a reputation of poor services and reliability. For example, the share of Air Egypt in international traffic is only 25 per cent at
most, despite fare reductions in recent times.

3.3.4 Sea Ports

Maritime transport is extremely important to African countries due to the nature of its operations, and the high proportion of traded goods transported by sea. However, the poor quality of port services and infrastructure in Africa, and the low level of trade volumes are some of the major limitations on the growth of this sub-sector. Port productivity is, on average, about a third of international norm due to poor management, excessive bureaucracy, and inadequate as well as unreliable of equipment. Delays in clearing goods are frequently a problem. Most ports are in need of modern, better managed facilities to serve traffic for which sea transport has a significant cost advantage over surface transport, such as dry and liquid bulk cargoes or containerized cargo. The port of Mombassa, for instance, has only two cranes one of which is frequently out of order. The main port of Ghana was recently rehabilitated and expanded but suffers from mostly human inefficiencies. Manufacturers habitually post employees in the port for several days on end to make sure that the goods move in and out of the port on time. There is generally a need for upgrading of existing ports in Africa.

Less than two per cent of the African merchant fleet capacity are container ships; the majority being conventional cargo ships. The shipping lines that principally service long-
distance sea routes consider most of Africa’s coastal traffic as mere subsidiary to their traditional overseas activities.

3.3.4.2 Tariff

Ocean freight charges in Africa are competitive. The impression that ocean freight charges from Africa are prohibitively high is not supported by the facts. Empirical evidence provided by Biggs, et al. (1994) and presented in Table 7 on freight and port charges from five African countries to the port of New York/Newark and a comparison with similar charges from Sri Lanka and Bangladesh, two countries in East Asia, indicate that freight charges generally reflect their relative distances to the port of destination and appear to give West African countries a slight competitive advantage. However, port charges in the principal ports in Africa are higher than the comparable charges in the two Asian ports.
Consequently, when freight and port charges are added up, the costs of transportation from some ports in Africa may actually be higher than from those ports in East Asia. Interviews with a number of large shipping agents indicate that the frequency of sailing from the principal African ports to New York/Newark is also not a constraining element.

3.4 Electricity

3.4.1 Available Network

Total electricity generation in 1994 was 350,000 Gigawatt-hours. The generation mix is dominated by fossil fuel generating plants which account for 81 percent of total
electricity generation, with hydro accounting for just 15 per cent. A small fraction of available hydro resources is utilized in Africa, with 64.4 percent of the exploitable hydro capacity located in East and Southern Africa, 34.2 percent in West Africa and 1.2 percent in North Africa. This is mainly due to shortfalls in water-flow associated with climate change in some countries, low demand in countries endowed with immense hydro resources, and potential transmission losses associated with long distance transmission from countries endowed with immense hydro resources to energy deficient
countries and regions. Oil-based generation is more uniformly distributed in Africa while coal-based generation feature prominently in the southern African countries of South

Africa, Zimbabwe, Botswana, and Mozambique; and in Morocco in North Africa and Niger in West Africa. Gas fuelled plants are of increasing importance in Algeria, Nigeria
Tunisia. Nuclear and geothermal plants are relatively unimportant at 2.7 and 0.1 per cent respectively. Kenya remains the only country exploiting its geothermal resources, though progress in this direction remains lack-lustre.

In terms of regional distribution, North Africa accounts for about one third of Africa’s electricity production based largely on burning oil supported by coal and natural gas. West Africa’s share of 9 per cent is based on a mixture of hydro, oil and gas. Central Africa’s share of 4 per cent is dominated by hydro and East Africa’s share of 3 per cent consists of s mixture of oil and hydro. Southern Africa produces the largest share of Africa’s electricity production-about-55 per cent which is dominated by hydro and coal-burning generating plants.

The region’s generation, transmission and distribution systems tend to be old and inefficient, resulting in often substantial losses of generated energy, as much as 40
percent in the case of Uganda. These system losses have further limited the amount of energy available for production and consumption. Furthermore, in many countries consumers have experienced frequent power outages as well as voltage fluctuations, which damage electronic equipment and motors. This unreliability has forced many enterprises in the region to buy and install their own generators, thus raising their
overhead costs.

Self-provision of electricity is common across the region. In Uganda, most large customers maintain stand-by diesel generators.5 In Guinea, between 1983-1992 the private sector installed for its own use some 70 MW of power generation, and in 1993 produced some 109 GWH of electricity, almost as much as the national electric utility6

3.4.2 Demand and Supply Pattern

Africa’s state-owned energy sector in the early 1990s typifies some of the worst failings of the African public monopoly model. While deficiencies in the public enterprises model are
hardly unique to Africa, its weak administrative capacity and legacy of political instability exacerbate the problem.

Countries in the region have one state-owned company performing the four separable activities of generation, transmission, distribution and supply. Only a few countries, such asGhana, have separate companies responsible for generation and transmission, and distribution. Private sector participation in the power sector, although not legally
prohibited, is negligible in most countries in the region. Available data on the structures of power sectors in the region and the policies of different governments suggest that the
pattern of vertically integrated monopoly enterprises with little or no autonomy from government to operate in a commercial manner is typical of Africa. For example, the utility SONEL in Cameroon is approximately 93 percent state-owned, with a board of directors appointed by the government’ UEB in Uganda handles generation, transmission and distribution, and also regulates itself; and NEPA in Nigeria is a state monopoly, and government controls all procurements and foreign exchange transactions. Almost all
countries in the region have opted for an electric utility industry that is an arm of government and generally vertically integrated.

Table 8 presents two performance indicators for selected countries in the region: transmission and distribution losses and rate of return on net fixed asset. Countries perform
differently according to these indicators. Uganda has, for instance, transmission and distribution losses of 38 percent and zero rate of return on net fixed asset, while Ghana has
lower transmission and distribution losses (17.8 percent) and a higher rate of return on net fixed asset (6 per cent) than Uganda. Such differences are also observed when countries in
the region are compared with some countries in other regions of the world (Table 8).
Comparing the performance of the power sectors in most of these SSA countries with that of Chile, a developing country which has reformed its power sector, the latter outperforms
most of the former (at least according to the two indicators that we cite in Table 8). (The only exception is South Africa1).

Most of these countries have rates of return on net fixed asset and debt service coverage that are very low. For instance Nigeria, Sierra Leone and Guinea obtained negative returns in the range of minus 6.2 to 16 percent (Gutierrez 1996). On the issue of reliability, data for power systems in Africa are extremely limited; moreover, supply is widely considered to be low in several African countries. Alternatively, electric utility industry reforms in Chile and Argentina, which led to significant increases in plant availability factors, have reduced the number, length and frequency of outages as compared to their previous experiences (Gutierrez 1996).
3.4.3 Electricity Tariffs

Prices of electricity have typically been between 3 and 4 cents per KWH, compared to 8 and 9 cents or higher in developed economies. Prices have thus been insufficient to generate revenue to cover long run marginal cost, taking into account asset depreciation. These problems are further exacerbated by difficulties in billing and billing decision. Traditionally, state-owned enterprises have played a dual role in electric utility services, acting both as providers of services and regulators. The regulatory structure is not transparent, often characterized by undesired distortive effects. Tariffs, for example, are set by cabinet decision or by the line ministry responsible for the power sector. Most countries have had relatively high inflation (i.e., double-digit) during the past twenty years. As a consequence, there has been a definite tendency to use the cabinet’s or the line ministry’s
ability to manipulate electricity prices as part of broader anti-inflationary programmes. This suggest that real electricity prices have actually fallen drastically n those countries in the region with high inflation.

3.5 Water and Waste Management

Africa made some progress during the International Drinking Water Supply and Sanitation Decade (1980-90). The number of persons served in urban and rural areas rose from 110
million in 1980 to 230 million in 1990 (114 million of the later being in urban areas). But this was overshadowed by rapid population growth, resulting in more urban residents being
without adequate water supplies in 1990 that in 1980. Water supply and treatment are also deficient in the region. In 1995, only 60.1 and 40.24 percent of the region’s urban and rural
population respectively had access to safe water, albeit with substantial variation in different countries the range was 18 and 18 percent in Central African Republic and 95 and
100 percent for urban and rural areas respectively in Mauritius. Chart 5 presents a comparative analysis of the percentage of population with access to safe water for Africa
and other regions. Most of the water pipe networks are old and urgently require repair and replacement.

UrbanRural

Africa’s performance in terms of access to sanitation is equally deplorable. In 1995, only 36.6 per cent of the population had access to sanitation compare to 51 per cent in South East Asia, 64.1 percent in Latin America and 96.7 OECD countries (see Table A1).

However, why Mauritius attained 100 per cent access, the comparative figures for Zambia, Congo Republic and Lesotho are 23, 9 and 6 per cent respectively. A few urban water utilities have been restructured (Conakry, Abidjan, Banjul, for instance). They have moved from being government departments operating with little commercial autonomy and no accountability to commercially run public agencies or to fully or partially privatized firms. Experience has shown that delivery of water to the poorest segments of the population becomes both cheaper and more reliable through such reforms but this transition is still in its early stages.

3.5.2 Tariffs

Except in very few countries, water and waste-water sectors rely on governments for a substantial part of funding requirements, especially for capital investment. Charges are thus kept low to convey benefits to households. Table 9 presents the median price of water for several African countries in 1993. The figures compare favourably with the median price of $0.54 in Asia Pacific but low compared to $2.24 in industralized economies. As with other infrastructure sectors, the balance between household and industrial water tariffs tends to fall more heavily on industry. Currently, the price of water does not reflect its scarcity, resulting in wasteful use of water.

3.6. War Affected Countries

Many devastating conflicts have persisted in several African countries ( Ethiopia, Namibia, Uganda, Angola and Mozambique) while pernicious internal struggle continue to plague others (Liberia, Somalia, Sudan and Sierra Leone). The damage inflicted on the social capital and economic potential of these countries have been horrific. The impact of warfare on physical infrastructure has been enormous, exercebating the already precarious situation. While war ravaged, infrastructure stocks including roads and bridges were often the primary targets. Existing infrastructure stocks were often severely depleted. For example, in Uganda, the transport infrastructure suffered greatly from neglect during the troubled period between 1971 and 1986. The international airport at Entebbe was extensively damaged during the conflict with Tanzania in 1979-80. The railway system was not left out as many sectors of tract, apart from the rolling stock, were in serious need of remedial work by 1986. This has been the trend in many war ravaged economies.

.7. Landlocked Countries and Infrastructure

Africa has a considerable number of landlocked countries, incidentally among the poorest countries in the world. The current state of infrastructure provision in these countries is demonstrably poor relative to other African countries, thus constituting impediments to the growth potentials of these economies. Countries like Malawi, Uganda, Zimbabwe and Zambia rely on neigbouring countries to ensure reliable delivery. Transportation problems are compounded for landlocked countries by problems in intermodal transportation. In many cases, railway system differ among countries, schedules are not coordinated, and even in transport by road, goods tend to be delayed by customs control. It takes a typical Ugandan business man, three and half months from the time of shipment departure from Europe until arrival Kampala, three times what will be needed under comparable conditions elsewhere in the world (Donaldson, et. al. 1997).

3.8 Infrastructure and the Environment

Infrastructure development in Africa has largely proceeded with minimal consideration for environmental standards and quality. This has been a major factor in the severe degradation of the environment in the form of industrial pollution. In any case, environmental issues have not been given serious policy considerations in Africa’s development agenda. Environmental awareness has only become perceptible in recent years since the Earth Summit in Rio de Janeiro in Brazil in June 1992. The concept of sustainable infrastructure development has become relevant in Africa.
Creating a sustainable infrastructure economy based on efficient resource use should be given greater consideration. The environmental problems within urban areas often termed the ‘brown agenda’ is more immediate in Africa. The issues involve include the lack of safe water supply and sanitation, inadequate solid and harzadious waste management, emissions from cars etc. The need arises to introduce environmental sound practices in the management of existing infrastructure in Africa. 

 

Causal Factors in the Inadequate Provision and Delivery of Infrastructure Services in Africa.

A pertinent question is what led to the present unsatisfactory outcomes? In spite of the recognition that each infrastructure sector has its own peculiar problems, there are common weaknesses in most African countries. An extensive inquiry is beyond the scope of this paper, but it suffices to focus on several general reasons affecting infrastructure delivery in Africa.

While political and economic instability, low per capita incomes and often challenging geographic conditions have significantly constrained the development of Africa’s infrastructure, there is abundant evidence that the protracted crisis in the sector is due mainly to past and current policy choices. A major explanatory factor is the prevalence of a regime of price controls that for a long time had little consideration for commercial objectives including cost recovery. Prices amount, on average, to just above a third of supply costs and are half as much as those in industrial countries. The pricing regime is characterized by administered prices that are in many cases appreciably below what is required to operate, maintain and rehabilitate facilities, and consequently entail large efficiency losses and social costs. Too often, controlled prices often imposed on state infrastructure monopolies, prices that are unresponsive to changing market conditions, encourage uneconomic investment of resources targeted at meeting the inefficient and unsustainable growth in the demand for infrastructure services. It is evident that prices that are below economic costs and what is needed to finance infrastructure development and maintenance expenditure in the face of escalating cost conditions in the industry are unlikely to restrain excessive demand and minimize uneconomic investment of resources. With negative or at best low positive financial and social rates of return to infrastructure investment associated with low product prices, it is not surprising that supply shortages persisted in the sector. In response to these shortages, many businesses and households have resorted to self-provision, often at high cost. For example, according to a 1988 study of 179 Nigerian manufacturers, 92 percent of forms surveyed owned electricity generators, and 44 percent had boreholes to assure their own private water supply. In the face of chronically unreliable public services, many also had acquired radio equipment for communications (37 percent of firms) and vehicles to transport personnel (37 percent) and freight (63 percent).
For firms with 50 or more employees that could practice economies of scale, the extra costs of private power generator amounted to some 10 percent of the total machinery and equipment budget; for smaller firms, the burden was as high as 25 percent.7 Substantial self-provision of infrastructure is also the norm for low income consumers, relief from the failure of public providers often comes through the informal sector. The best known examples are private water vendors who use trucks or smaller receptacles to haul water either for distribution at central locations or to individual dwellings. In some places, private vendors served 90 percent of households, and in several places purchases of private water amounted to more than 30 percent of household income.

A fairly robust analysis of incremental reserves that would arise from moderate and achievable increase in financial returns through pricing reforms in Africa’s infrastructure, albeit dated, indicates that the net benefit on resource mobilized would amount to about one fifth and one third of public revenues as shown in Table 11 (Anderson,1989). Furthermore, such reforms apart from being easy to administer would entail negligible ‘deadweight’ or efficiency losses.

Sector Current contribution Potential Contribution as Percentage to Public Revenue of Public Revenue

Overall Incremental Effect

Electricity small or negative 5 – 10 per cent 5 – 10 per cent

Water small or negative 2 – 5 per cent 2 – 5 per cent

Telecoms varies but marginal 5 – 10 per cent 5 – 10 per cent

Roads 10 – 15 per cent 10 – 25 per cent 5 – 10 per cent
Source: Anderson (1987).

Apart from administered prices, several demand and supply-related factors, some of them interwined, have had a profound negative impact on infrastructure development in Africa. As in most other developing countries, governments in the region have assumed responsibility for almost all of these infrastructure services through state owned enterprises created precisely in order to make socially productive investments so as to eliminate impediments to the overall economic development. Almost without exception, the provision of infrastructure in Africa is the exclusive responsibility of the government.
Government own, operate and finance nearly all infrastructure. Thus, the record of success and failure in infrastructure is largely a story of government’s performance. However, these enterprises have established a poor reputation across Africa. Besides trying to provide a particular service to an acceptable quality, they are also expected to pursue a variety of social” goals, including the creation of employment and the subsidization of prices to consumers, ostensibly with the view to providing broad and affordable access to the poorer parts of society. These objectives have in reality imposed a variety of costs on the enterprises as a major employment mechanism has resulted in significantly bloated workforces. Similarly, the prevalence of widespread input and output subsidies creates significant wedges between product prices and costs and in the process confront these enterprises with soft budget constraints and dysfunctional government interference in sector activities and enterprise management functions that encourage gross inefficiency in production, distorted demand patterns and investment choices, induced endemic and expensive delays and cost overruns that encouraged widespread corruption in infrastructure construction and equipment and material purchases and minimized the market responsiveness of the sector to changing demand and supply conditions through excessive regulations. The subsidization of services in reality often allows the more affluent citizens to benefit disproportionately from artificially low prices by providing them with better access to these services. In Lusaka, Zambia, for instance, only 28% of the households in the poorest fifth of the population have access to electricity, compared to 70% in the richest segment. Similarly, it has been estimated that the poorest fifth of the population in Tanzania receives only about 10 per cent of the government subsidy for water, whereas the richest fifth receives about 40 percent. At the same time, these subsidization polices have invariably translated into smaller revenues. Public utilities have thus often found themselves in the difficult financial position of not being able to cover their operating expenses. It has not been possible in many cases to maintain existing facilities adequately, and new investments have consistently had to be postponed. At the same time, most governments have suffered from chronic budget deficits, which have kept them from filling the financial gap. In the end, countries have been left with inadequate infrastructural facilities, while the responsible enterprises, not motivated by commercial objectives, have had little incentive to improve their performance significantly. The Nigerian experience provides considerable support for the distortionary effects and the disincentives associated with excessive political interference in investment decision, pricing policy, plant location, equipment choice and employment structure resulting in higher costs and low earning ability of public infrastructure.

Economic theory justifies an important role for government intervention in efficient and equitable infrastructure use and provision. The arguments rest on several “traditional” notions of market failure, such as: externalities in consumption and production; scale economies; non-excludability; information problems about benefits alleviation. But infrastructure services are diverse and each exhibits these characteristics to varying degrees. Policies often fail when they do not make such distinctions within infrastructure.

There are several reasons why public provision of infrastructure services have not had the desirable impact in Africa.

First, under a public sector dominated regime, investments in infrastructure are often misallocate for various reasons. For example, most of the selected projects are not based on the articulated needs of the society. Hence, there is no informed prioritisation of project selection or implementation. Hence, projects of lowest priority could be preferred to those of topmost priority in terms of the real needs of the society at a given point in time. Another dimension relates to the obsession with new projects. In this regard, there is usually excessive concentration of resources on new structures and little or no allocation to maintenance of infrastructural facilities. Interestingly, however, infrastructure is the easiest prey for speeding cuts during periods of fiscal crisis, while priority is given to consumption-promoting expenditure and projects of short term benefit to the economy. Many on-going infrastructural projects are usually abandoned, only to be revived, if at all, at very exorbitant costs later on. Another major source of disenchantment with this policy stance relates to the quality of services. The delivery of high quality services is usually hampered by technical inefficiency and outright waste.
Inadequate maintenance leads to erratic service supply and distribution, while the low productivity of such facilities results in very high unit operating costs which are often times passed on to the consumers. The useful life of affected facilities are also shortened.
The World Bank (1994b), observed that low-income communities are not offered suitable transport and sanitation options that provide services they value and can afford. Rather, premature investments in capacity especially in water supply, railways, power and irrigation have often absorbed resources that could otherwise have been devoted to maintenance, modernisation or improvements in service quality. More significantly, because infrastructure investments are immobile and serve local markets, excess capacity cannot serve other markets and it remains under-used. And in some cases, large public projects have been overambitious, placing a costly burden on the economy. Also important is the twin problem of waste and inefficiency, that seems to claim a large share of resources that could be used for infrastructural services delivery.

The nature of public decision process with multiple, nebulously defined and often conflicting objectives which place less emphasis on nor provide adequate incentives for efficiency of operations is at the root of this problem. Arising therefrom, investment decisions and tariff policies are often driven primarily by political considerations. Many infrastructure projects in Africa should never have been embarked upon. Decisions to proceed with new projects are sometimes taken at the political level. It is not uncommon for the political element, for reason of prestige or with unjustified claims insist on an overdesigned capacity. Even within the state-owned enterprises, management is often appointed more on the basis of political loyalty than competence, and staffing profiles are more often dictated by political demands rather than felt needs. Costing and pricing decisions are also guided less by economic but more by political considerations. It is against this background that agitation have mounted for private sector involvement in the provision of infrastructure. This, it is hoped, would enhance the preference for economic considerations and demand-driven decisions process. Greater emphasis will be placed upon efficiency with its attendant positive effects on economic growth, enhance standard of living and poverty alleviation. The reduced pressure on government revenue will also facilitate internal and external equilibria and stimulate foreign investment. Overall, permission for private provision of infrastructure will suggest to international and national investors, or development institutions government’s commitment to sound fiscal management, efficiency and substantial role for the private sector (Kerf and Smith,
1996).

Redefining public-private sector interface in the provision of infrastructure services has become an important though controversial policy issue in the search for a more viable infrastructure sector in Africa. This is particularly vital since the efficiency, productivity and reliability of infrastructure provision impacts on the efficiency of domestic production and investment as well as the international competitiveness of the economy. A crucial variable is also the role of foreign capital. Foreign private involvement in Africa’s infrastructure has been quite limited as shown in Table 11 which presents private infrastructure projects word-wide between 1985 and 1995. A cursory examination of the table indicates that only sixty-four projects were recorded for Africa in the ten year period, compared to 223 for East Asia/Pacific and 252 for OECD countries. The project sum at $1.2 billion (less than 1 per cent) is equally deplorable and the reasons are not farfetched.

The region is yet to broaden its investment base beyond energy and mining which remain the prime attractions. Africa has the unenviable reputation of having uncompetitive product markets, thin capital markets, perceived high risks as well as legal, procedural and regulatory impediments. Public enterprises in infrastructure have a lower net worth and are
less attractive to foreign buyers, except perhaps in telecommunications. African governments until recently resist selling to foreigners. Investors are reluctant to take an equity position in infrastructure because governments have established consistent pricing
and other macroeconomic policies which continue to undermine infrastructure. Even in
countries where the sector is open to private participation, there is often the problem of
the inability of regulatory and legal institutions to provide credible commitments to create
opportunities for potential investors to cover their investment costs and make profit
including the risk-adjusted opportunity cost of capital. Macroeconomic and political instability as well as legal restrictions on foreign capital discourage the flow of direct
investment to this sector. Investors are wary of internal political volatility and the uncertainty of obtaining the enforcement of contracts.

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Trans-African Projects Planned.

Trans-African Development Company (Not-For-Profit) continues on its path towards raising 45 Billion Dollars to rehabilitate the 108,000 KM of trade related roads in Sub-Saharan Africa. As previously disclosed this is a result of a Study done for the World Bank by David Wheeler et al. The cost benefit analysis is quantified very well showing the impact on each country and the individual routes that need attention and prioritized them as well as classified each route as to the current condition they are in. TAD/TADCO is attempting to raise this money from “donor” countries as a way of giving appropriate aid to Africa and at the same time being able to access suitable and marketable natural resources within Africa and creating job growth and opportunity while allowing other NGO and Aid Organizations to effectively get the necessary aid to their targeted markets more efficiently.

Trans-African Development  Strategies  (TADS) has continued on its quest to build MAJOR Infrastructure projects throughout Africa. The most significant is the Planned 4-lane Pan-African Highway that will first run from North to South. The final route from the Mediterranean to the Indian and Atlantic Ocean Convergence has her to be finalized but the Highway project will include a path that will bring Electric Transmission Lines, a Railroad and a Fiber Optic Cable  as well as pipelines for Water and Oil and Gas (both Crude and refined) products.  Working conjointly with TAD/TADCO it is envisioned that the road rehabilitation project will have multiple interconnections to the 4-lane highway (as well as the railroad) allowing for access to sea ports around Africa for global trade opportunities

In keeping with TADS visions it has also noticed the Democratic republic of its interest in building a major Hydro Electric Plant with intentions to connect it to the Grid being formed along the Highway Project.

All TADS projects have independent outside source financing independent of any participation or debt structure to any African Country. No TADS Project is being financed by the African Development Bank (ADB or AfDB)  for undisclosed reasons by TADS. HOWEVER, while there are Private Enterprise Projects they do not have any pre-arranged interconnections to any countries infrastructure which are the subject of future negotiations. Further, the ownership of these projects by TADS is not mandated to be exclusive to TADS and its partners and is subject to each Individual Counties choice in how of if they wish to participate. BOT (aka BOOT)  as well as public listing on diversified international stock exchanges are also possibilities to be discussed with the various Countries involved.

This post has been made to further explain the Differences between TAD/TADCO and TADS as well as to expound on the various projects that are in progress  for both companies throughout Africa.

Craig Eisele

Democratic Republic of Congo (DRC) and Hydro Electric Power Plant Closer to Reality.

Trans-African Development Strategies is pleased to announce that it has forwarded through it’s intermediary in Brussels, to the officials of the Democratic Republic of Congo (DRC) its intentions and interest in building Africa’s largest Hydro Electric Power Plant Facility.

Trans-African Development Strategies has indicated it is open to various forms of completing this deal and is close to formalizing an agreement with an International Consortium to fund this project in its entirety pending satisfactory agreements with the Government of the Democratic Republic of Congo. It is envisioned that this Power Plant will supply most or all of DRC’s electric needs as well as those of several neighboring countries when completed.

It is also anticipated to request discussions sometime after the New Year or early 2008, with ESKOM concerning potential interconnections from this Power Plant to facilitate the full electrification of Sub Saharan Africa.

It is hoped that this project along with the Trans-African Development Company project for Road “rehabilitation” and the Trans-African Development Strategies 4-lane toll highway (to run from Central African Republic to Zambia and beyond along with other projects proposed) will be discussed with President Joseph Kabila on his upcoming trip to the USA October 26, 2007.

Craig Eisele Creates Trans-African Development Strategies, Inc.

Craig Eisele Creates:

Trans-African Development Strategies, Inc.
 

            Trans-African Development Strategies, Inc or “TADS” is a New “Private” NGO focused on Infrastructure Development in Africa.

            The purpose of TADS is as follows:

1.    To provide Infrastructure development throughout Africa, whereas the Countries of Africa incur NO DEBT.

2.    To rehabilitate the 108,000 km of roads in Sub-Saharan Africa as identified in a study for the World Bank in 2006 (co-authored by David Wheeler) to facilitate development of trade throughout the Continent of Africa.

3.    To establish a modern limited access 4-lane “Highway” extending from the Mediterranean Cost of Africa and ending in South Africa (hopefully Cape Town, and 1 to 2 kilometers wide the full length of approximately 10,000 km.

4.    To encourage investment in the major portions of Infrastructure in the areas of Communications, Transportation and Power along the path of the “highway listed above in Item #3 and itemized below.

5.    To facilitate the development of a Trans-African Railroad

6.    To facilitate the development of a series of Pipelines to include Oil and Gas (refined and crude products) and Transportation of Water resources to areas in need.

7.    To bring a Fiber Optic Cable through the CENTER of Africa allowing Communication, Video and Internet into areas beyond the coastlines of Africa.

8.    To erect an Electric Transmission line from North to South through the Center of Africa.

9.    To develop electric Generation facilities including Hydro, Solar, Wind, Nuclear and Natural Gas along this same route.

10.  10 To assist in the development of Manufacturing Facilities and secondary and tertiary processing facilities for Natural resources to maximize value added services within Africa and to substantially add and foster job creation.

11.  To Assist in the building of Schools and Hospitals along this same pathway.

12.  Assist in the development of large scale commercial farming and ranching operations.

13.  To repeat Items 3 through 12 on at least one possibly 2 East to West Trans Continental Paths in Africa intersecting with the Primary Route of North to South and tying the Continent of Africa together with World Class Facilities.

We are certain that this will allow Africa to not only be self sufficient, but also Increases Wages to alleviate Poverty, reduce human suffering increase health care availability, and foster educational benefits throughout Africa and allow other NGO’s to better server those people who are in need but are not getting the aid they now desperately need because of the lack of infrastructure.

We also believe that the increase in GNP and GDP will spawn an increase in Tax Revenues and the ability for the countries to be able to access international financing for other projects that each individual country deems appropriate for its population.

TADS expects to raise 100 Billion Dollars of “AID” for the Roads and Highway Projects paid over the next 7 years. With Direct Spending on African Labor and materials to exceed 40 Billion Dollars up to 70 Billion dollars over the 7 year period. A Strategy to obtain these funds has been developed and refined over the last 2 years. While meet with skepticism by many the project is real and attainable despite the nay-sayers and those who would detract form the ultimate goal of a “New and Brighter Future for Africa.”

This estimate does not include anything except the road and highway projects.

TADS has a REAL Vision for Africa and invites anyone wishing to see this vision realized to participate in anyway they feel is appropriate.

While this is the first in a series of Announcements, more information will be provided over the near future.

 

Craig Eisele

Managing Director

Trans African Development Strategies, Inc.

 

The Humanitarian Impact of Urbanisation in Africa

Tomorrow’s Crises Today – the Humanitarian Impact of Urbanisation
UN Integrated Regional Information Networks

NEWS
21 September 2007
Posted to the web 21 September 2007
Nairobi
Somewhere, some time this year, a baby will be born on the 25th floor of a city hospital or the dirt floor of a dark slum shack; a first-year college graduate will rent a cramped apartment in lower Manhattan or a family of five will finally concede their plot of farm land to an encroaching desert – or sea – and turn towards Jakarta or La Paz or Lagos in search of a new livelihood and a new home. The arrival of this family or graduate or baby will tip the world’s demographic scale and, for the first time in history, more than half the human population will live in cities.

At present, 3.3 billion people live in urban centres across the globe. By 2030 this number is predicted to reach five billion, with 95 percent of this growth in developing countries. Over the next three decades, Asia’s urban population will double from 1.36 billion to 2.64 billion, Africa’s city dwellers will more than double from 294 million to 742 million, while Latin America and the Caribbean will see a slower rise from about 400 million to 600 million, according to the UN Population Fund (UNFPA).

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While megacities appear more frequently in headlines and on development agendas, overall growth in urban centres of 10 million or more inhabitants is expected to level out. Instead, over the next 10 years, cities of less than 500,000 will account for half of all urban growth.

Two sides of the urban coin

All this growth is not necessarily a bad thing. As David Satterthwaite of the International Institute for Environment and Development (IIED) points out, the speed at which a city grows – if it is responding to economic opportunities – is a benefit, not a problem. “A very large part of the economic value in any country is being generated in the urban areas,” Satterthwaite says. “Even in [developing] nations, where 60 to 70 percent of the population is in rural areas, you still have more than half the economy – and often more than that – generated in urban areas.”

The problem is not growth, but unplanned growth. In 2001, 924 million people, or about 31 percent of the world’s urban population, were living in informal settlements or slums, 90 percent of which were located in the developing world. By 2030, the number of worldwide slum dwellers is projected to reach two billion. In the Bangladeshi capital of Dhaka, 3.4 million of the city’s 13 million residents live in 5,000 slum and squatter settlements. Sixty percent of Nairobi’s city dwellers are packed into more than 130 informal settlements occupying only 5 percent of the city’s total land area, while the squatter settlements of Mumbai are growing 11 times faster than the city itself, with 300 people arriving from the countryside each day.

What this translates to is abject poverty, disease, and appalling conditions. Take Dhaka: every time the river level rises, it floods the illegal clusters of tiny stilted huts built on the flood plain with smelly water full of factory effluence. In Delhi, the water problem is one of scarcity as slum dwellers fight each other to gain access to the one working standpipe in their area and often go without for days at a time. Malnutrition is often highest in slums, as unemployment means people are too poor to purchase produce that could be grown on the land.

Defining a ‘slum’ and the ‘urban poor’ invariably focuses on what people lack – access to education, social services, employment, safe and affordable water, sanitation and housing, and residential status. In many cases, they live in sub-standard housing, in public spaces, or in squatter settlements near major urban areas.

It is generally assumed that urban poverty levels are lower than rural poverty levels, but the absolute number of poor and undernourished in urban areas is increasing. “In general, the locus of poverty is moving to cities … a process now recognised as the ‘urbanisation of poverty’,” the UN Human Settlements Program (UN-Habitat) noted in 2003.

If the locus of poverty is moving to cities, development aid has been reluctant to move with it. CARE USA chief Helene Gayle makes a blunt assessment of urban development capacity: “The NGO community is dependent on outside donor funding [and] its priorities often depend on where donors have put their focus,” with the result that “neither the NGO community nor the donor community has co-evolved in the direction of facing urban poverty as rapidly as urban poverty has occurred”.

‘More threatening than the village’

Throughout the 20th century, city growth was largely fuelled by rural to urban migration. Today, however, cities are mostly growing from within – more people are born than are dying in urban centres. This process of urbanisation – what demographers call ‘natural increase’ – is partly an indicator of medical advances across the developing world and of better access to healthcare in urban areas specifically.

But the fact that mortality rates are generally lower in cities masks a health crisis in slums. Worse, those most affected by this urban healthcare divide are children. A 2006 analysis in the International Journal for Equity in Health found that in 15 sub-Saharan African countries the difference in child malnutrition within cities was greater than the urban-rural divide.

As the UN’s 2006/2007 State of the World’s Cities report notes: in Ethiopia, child malnutrition in slums and rural areas is 47 percent and 49 percent respectively, compared with 27 percent in non-slum urban areas; in Niger, child malnutrition in slums and rural areas is 50 and 52 percent, against 35 percent in non-slum urban areas; and in the slums of Khartoum, the prevalence of diarrhoea among children is 40 percent, compared with 29 percent in rural areas. “Living in an overcrowded and unsanitary slum,” the report concludes, “is more life-threatening than living in a poor rural village.”

Access to water

Access to water and sanitation in urban areas, like access to healthcare, is generally better than in rural areas. But again, comparing aggregate urban and rural numbers hides the fact that – for example – in the Mbare neighbourhood of Harare, Zimbabwe, 1,300 people share one communal toilet with six squatting holes.

As urban populations increase, the number of people without access to improved water sources is also rising, doubling from 108 million in 1990 to 215 million by 2010. In dense city environments – and in even more dense slum environments – communicable diseases can quickly become epidemics, making the consequence of unsafe water and poor sanitation much more severe than in rural areas. And more people are affected due to city concentrations.

In addition to the outwardly identifiable impacts of poor access to water, sanitation, and health services (pneumonia, malaria, diarrhoea, tuberculosis, HIV/AIDS), a dearth of services also perpetuates poverty. The urban poor spend a higher percentage of their income on treating illness, and are more vulnerable to lost wages and have less job security when they are forced to miss work – all of which erodes their coping capacity, and can keep potentially mobile families trapped within a cycle of poverty.

Unnatural disasters

In the last quarter-century alone, 98 percent of the people injured or affected by natural disasters were living in 112 countries classified as low income or low-middle income, according to the World Watch Institute’s 2007 State of the World Report.

And while tsunamis and earthquakes continue to grab the headlines, flooding and landslides affect a much larger number of the urban poor. While the 2004 Boxing Day tsunami accounted for about 90 percent of that year’s natural disaster death toll, the 2.4 million people affected was a relatively small number compared with the 110 million people hit by flooding in Bangladesh, India and China the same year, according to the International Federation of the Red Cross (IFRC) 2005 World Disasters report.

With little available land in urban areas, the poor, by necessity, live on floodplains, unstable cliff sides and in the shadow of industrial facilities. In the developing world an earthquake or a hurricane is not a disaster, but a catalyst for disaster – exposing poor infrastructure, substandard housing, haphazard city planning, and often nonexistent response measures – all of which constitute the true disaster for the urban poor.

Urban warfare

Poverty has long been considered a key driver of violent crime. In recent years, however, this relationship has been challenged as too simplistic. A 2004 article on urban violence and insecurity in the journal Environment and Urbanization identifies inequality as a primary driver, noting that “interpretations based on statistical modelling have demonstrated that with regard to national-level data on murder rates, inequality is more influential than poverty, with income inequalities being generally more marked in urban than in rural areas”.

A World Bank study on violence in Latin American urban areas showed that homicide rates ranged from 6.4 per year per 100,000 in Buenos Aires to 248 in Medellin, Colombia. Rio de Janeiro, São Paulo, Mexico City, Lima and Caracas account for more than half their countries’ national homicides.

More difficult than measuring crime within urban areas has been differentiating between underlying structural causes (like unequal power relations), and trigger risk factors (such as alcohol and drug abuse), which can often precipitate gender-based violence.

The danger in mapping and measuring urban violence is that perceptions of violence are then reinforced; because statistically-speaking, urban centres (and especially slums) are subject to more crime, violence can become institutionalised, and more dangerously, a stereotype of slum dwellers as criminals is perpetuated.

From shanty to State House

In 1990, the UN Development Programme (UNDP) released its first Human Development Report. The fifth chapter dealt exclusively with the humanitarian effect of urbanisation in the developing world. Addressing the role of local and national governments in service provision for the urban poor, the report’s authors recommended that governments “shift from directly providing services to enabling others to provide them – be they formal and informal producers, community-based and non-governmental organisations or the urban residents themselves”.

By 2007, this outsourcing paradigm had come full circle. As author Rasna Warah noted in her assessment of the Kenyan government’s role in urban development, “The answer to Nairobi’s slum problem lies in stronger and more integrated intervention by government ministries and agencies.”

The promotion of healthcare, education, access to water and sanitation, together with the prevention of violence and the response to natural disasters, depends on active and accountable local and national governments. Indeed, underneath almost all aspects of urban development and poverty reduction are issues of governance.

At the most basic level, good governance involves recognising slum and squatter residents’ legal right to exist, and formalising this right through land tenure, ownership, city zoning regulations, etc. The realisation that government was missing from urban planning coincided with the realisation that the urban poor had been, at best, passive recipients and at worst, completely absent from the planning and implementing of slum upgrading projects; and that the urban poor were in the best position to advocate for their rights vis à vis local governments, and design and implement slum-upgrading schemes.

At present, urban development actors are struggling to define their roles, and to establish a more cohesive, active approach to urbanisation. CARE chief Gayle sees her NGO as a link between governments and communities: “We are not saying that we are marching on the halls of power within countries necessarily, but instead really looking at how we help at the grassroots level to give people a sense of their own ability to engage and make their government accountable to them.”

Cities of half-light

The UNFPA 2007 World Population Report states: “Cities concentrate poverty, but they also represent the best hope of escaping it … The challenge is learning how to exploit [a city's] concentrated population.”

Over the next months IRIN will produce in-depth articles and interviews examining how this challenge is being met. The interviews will include conversations with leaders in the urban development field – from the heads of international NGOs to academics – and slum-dwellers themselves. The in-depth articles will explore issues of urban healthcare, resource scarcity, violence, disasters and the role of governance.

Is the rural model of top-down donor funding workable in urban areas? Is Millennium Development Goal 11 to improve the lives of 100 million slum-dwellers attainable? Does the fact that more than half the world’s population will now be living in cities represent a turning-point around which development practitioners and governments can begin to narrow the already wide gap between urbanites, or is it just a number?

For the urban poor the stakes are high. As the IIED’s Satterthwaite warns, “What we have now is a perfect example of what the future scenario is if we continue failing to change governments’ and international organisations’ response to urbanisation. Half of urban populations have infant and child mortality rates 20 times what they should be, with at least half of the urban populations housed in squatter settlements. We would obviously begin to see strong resistance movements creating civil unrest and possibly civil war.”

[ This report does not necessarily reflect the views of the United Nations ]

The Perennial LIE About Agreeement Between US, China and Africa

Trialogue Identifies Agreement and Divergence on Chinese and American Approaches
allAfrica.com

NEWS
19 September 2007
Posted to the web 19 September 2007

By Courtney Hess
Washington, D.C.
The “divergent” interests of the United States and China “can be reconciled to Africa’s benefit,” according to representatives from Africa, China and the United States who took part in a trilateral exchange of views over the past year.

However, stark differences in approach can also produce diplomatic and economic complications that need to be regularly addressed, according to participants in the trialogue process, which was launched in August 2006 to promote conversation on the differing American and Chinese approaches to investment and aid on the African continent.

Participants in the discussions included academics, policy analysts and current and former government officials. They met in South Africa in August 2006, in China in March and last week in Washington, DC for their third and final gathering.

China’s rapidly expanding economy has fueled a growing interest in Africa’s natural resources, which has pushed up prices of raw materials Africa produces and has led to massive increases in Chinese trade and investment throughout the African continent. China has also become one of Africa’s largest aid donors – all but two countries have been Chinese aid recipients. In November 2006, during a summit with African leaders, the Chinese government pledged to double its aid to Africa by 2009, matching a similar pledge made at the 2005 G8 Summit, where leaders of the largest developed countries promised to double aid to Africa by 2010.

Among the conclusions trialogue participants shared during sessions at the Council on Foreign Relations and the American Enterprise Institute (AEI) was the hope that Africa can benefit economically from growing competition between the two majors powers. The African delegation introduced a set of principles [aimed at ensuring that growth produces benefits for Africa. “More and more democratic and peaceful, Africa today battles not against colonialism or neo-colonialism, but against exclusion from the global economy, diseases and poverty,” the African delegation’s document says. The principles address how business should act, how international assistance should be managed and how African governments should respond to globalization.

Participants in the trialogue made clear that they did not reach consensus on all the issues they discussed. “We sometimes had to agree to disagree,” Princeton Lyman, a former U.S. ambassador and policymaker and co-chair of the American delegation said, adding that the process nevertheless produced invaluable insights into policy thinking for all the parties involved. The summary document lists areas of agreement, areas of discussion and areas of divergence. During the presentation of the trialogue process at AEI, Patrick Mazimahaka, deputy chairman of the African Union Commission, criticized Beijing’s policy of aiding African governments without pre-conditions, citing China’s cooperation with Sudan. “In terms of democratization and good governance in Africa,” he said, “we have been asking China to review its policy of noninterference.”

China is also facing criticism over labor standards and environmental concerns along with product safety and quality control for corporations working in Africa. However, AEI conference participant Deborah Brautigam, a professor at American University, believes China may be instituting higher corporate standards, citing Beijing’s recent consultations with the International Finance Corporation. Brautigam called on African countries to insist upon these standards when negotiating with the Chinese.

Several Trilateral Dialogue participants said they favor the creation of an official forum for Chinese, African, and American dialogue on interests and challenges in Africa. Many see American and Chinese interest in Africa as a positive opportunity. According to Michael Spicer from Business Leadership South Africa, “There is a feeling of new beginning, a dawn of a new era – there’s optimism,”

DOCUMENTS:

Summary of the Africa-China-U.S. Trilateral Dialogue

Business Principles for a Strong Continent

Call to the West to STOP Controlling African Development… or Another Reason Why China is Winning in Africa

Environment, development and Africa
Special CFACT feature article published in the magazine of the European People’s Party

The following article was recently published in the special “Energy, Environment and Politics” Autumn 2006 edition of “European View,” the magazine of the European People’s Party in Brussels. The full magazine can be read online at http://www.epp.eu/dbimages/pdf/_copy_4. .As European nations adjust their internal and external policies regarding energy, the environment, and economic development to accommodate the needs and desires of the new European Union, there is a great opportunity to ensure that the new policies will be beneficial to the developing world, and in particular to African nations that were once European colonies. Clearly, most Africans have not benefited much from the worldwide economic boom that has lifted many in the Pacific Rim and other formerly poor nations out of poverty and into the middle class. Indeed, Africa today has about 13% of the world’s people but accounts for only 2% of world gross domestic product – and the trend is downward, not upward. Reversing this trend will be good news for worldwide economic growth and for the environment. By playing a significant role in turning Africa around, Europe could likewise reap significant benefits. The answer to Africa’s needs, however, is not more handouts, or even aid forgiveness, as was recommended at the June 2005 G-8 summit in Gleneagles. Rather, it is in creating a new class of entrepreneurs from among the poorest Africans and affirming the value of market principles, a reliance on sound science, and a re-commitment to the Judeo-Christian principle that “all men are created equal, endowed by their Creator with certain inalienable rights, [among which] are life, liberty, and the pursuit of happiness.” This paper will show that, despite Europe’s presumed good intentions, Africans are increasingly uncomfortable with the vestiges of the colonialist mentality, whether it be environmental mandates or restrictions on economic development (sometimes the two are intertwined). These holdover policies and practices are hurting economic growth – and thus the development of indigenous environmental movements – all across Africa. Unless Europeans undertake a major change in course, there is evidence that Africa may be seduced by new, possibly less scrupulous, trading partners. Fortunately, there is a path that fits in with the stated desires of many Africans — a new approach to development that focuses on people-to-people, rather than government-to-government, relationships. By taking this path, Europe can greatly expand economic and political freedom in many African nations and also regain prestige and respect among African people themselves ? while also realizing significant financial benefits for individual European investors. Self-Determination for Europe – But Not for Africa? As Europeans turn toward creating a common approach to major policy issues, the temptation is to be Euro-centric, especially when addressing issues such as energy, economic development, and environmental policy. Meanwhile, African nations today are beset with major obstacles to achieving the kind of political and economic freedom upon which good societies are built. Among these problems are low savings and investment rates, unstable economic and political institutions, limited quantity and quality of infrastructure and human capital, the prevalence of disease, and negative perceptions on the part of international investors. History shows that, rather than advancing freedom, a prerequisite for truly constructive development, the demands of Western institutions when addressing these issues have typically downplayed the role of the individual and instead pressured (or allowed) governments to institute policies that further limit individual rights. As a result, the West has become to Africa like the overprotective mother who refuses to let her children grow up and then blames them for not exhibiting all the vestiges of maturity. Worse, Western policies have often left Africans enslaved once again by locally grown dictators (of the sort that first sold their brothers and sisters into slavery). A major reason, according to economist William Easterly, for the failure of Africa to prosper has been that planners at the World Bank, the United Nations, and other Western institutions of power have never motivated people on the ground to carry out the good intentions formulated in their “marvelous plans.” Easterly’s insights belie the premise, laid down by Nobel laureate Amartya Sen, that “the expansion of freedom is … both the primary end and the principal means of development.” Indeed, many Africans today recognize that the West’s good intentions have had negative results. They see the root cause of these misfires in the failure, both yesterday and today, of the West to listen to the voice of freedom-seeking Africans. Instead, the West has sought to impose its own priorities upon Africa. Afonso Dhalakama, president of Centrist Democrat International Africa, notes that most of the economic development in sub-Saharan Africa during the colonial period focused on meeting the needs of colonial powers. In the push toward independence that followed World War II, the departing Europeans typically (and blindly) turned over power to communist movements or parties that continued to stifle the cries of most Africans for both political and economic freedom. Today, there are new threats to Africans’ dreams of freedom, none more daunting than that posed by China, whose president has stated, “Chinese cooperation [with Africa] does not depend on good governance and democracy in African countries.” Dhalakama’s great fear is that Europeans, by insisting that Africans do everything Europe’s way, are opening the door wide for the Chinese to exploit Africa’s resources to fuel China’s development and further frustrate the advance of democracy in Africa. Dhalakama urged Europeans today to assist Africans in developing political parties that will be responsive to the will and the needs of their own people and to support Africa’s growing economies by undergirding and strengthening national polities. Europe will benefit from providing such assistance, but could lose heavily by failing to strengthen indigenous and free African institutions. Expressing a similar viewpoint, former Eritrean finance minister Gebreselassie Tesfamichael responded to the June 2005 Live 8 campaign (and the nearby G8 summit in Gleneagles) with these highly charged words: The fundamental problem in Africa is not lack of resources, but the failure of political leadership. The modern African state is a colonial creation, extractive in its design. Its mission was not to serve the people, but to dominate and exploit them. Despite independence, and despite improvements brought by numerous democratic elections, the nature of that state remains intact. Tesfamichael also expressed his frustration that the international aid community insisted in imposing its own guidelines for Africa to follow in pursuing development. “We wanted something different. We wanted a partnership rather than a donor-client relationship,” and so Eritrea refused to follow guidelines mandated by the International Monetary Fund. Instead of micro-management from thousands of miles away, Eritrea conducted reforms dictated by the realities on the ground and grew its economy by 7% a year during the period 1992-97. Cameroonian journalist Jean-Claude Shanda Tonme likewise wondered how Live 8′s supporters had so clearly failed to understand that “Africa’s real problem is the lack of freedom of expression, the usurpation of power, the brutal oppression,” and that none of these problems can be solved with debt relief, food aid, or an invasion of experts. World energy statistics bear out the perception that Africa’s resources are being exploited today nearly as much as in the colonial era. World Energy Council Deputy Secretary General Jan Murray reported in 2001 that two-thirds of all energy consumption in Africa came from high-polluting and disease-causing appropriate technologies – wood, charcoal, dung, and crop residue – that Europe now disdains. Moreover, Africa’s per capita energy consumption was very low, and most of the commercial energy the continent produces was being consumed elsewhere. In short, little of Africa’s commercial energy was being used to advance freedom on the continent. Europeans clearly understand the value of energy resources. Andris Piebalgs said in the inaugural issue of European View, “Without reliable, affordable and safe energy, our economy would simply come to a halt. In other words, we depend on energy for our prosperity.” But European policies toward Africa have ignored (or rejected) the potential for building prosperity in Africa based on such a model. Africa has huge reserves of oil and gas and coal and the potential for hydropower and even nuclear power to provide locally usable energy, yet Europe has balked at helping Africans develop these resources. The West has also taken a peculiarly jejune, yet pharisaic, attitude toward Africa’s manifold health problems. For example, malaria was virtually eradicated in Europe and the United States through the use of the pesticide DDT, but for decades the West has imposed a virtual ban on DDT use for any purpose. Meanwhile, malaria attacks 400 million Africans a year, killing well over a million and leaving countless others debilitated for life. Semiannual indoor residual spraying of small amounts of DDT is a proven weapon that dramatically reduces the incidence and severity of malaria without harming the environment, but Western financial institutions, in collaboration with environmentalists, have long insisted that Africans rely solely on bed nets and expensive after-infection treatments to fight this killer. It has taken a worldwide campaign, led by Nobel laureates Archbishop Desmond Tutu and Dr. Norman Borlaug, Greenpeace co-founder Patrick Moore, American civil rights pioneer Roy Innis, and others – sparked by African voices – to effectuate a major change in policy in the United States (in May 2006) on the use of DDT to fight malaria. The World Health Organization has also switched sides on DDT, but the battle continues. Many African nations still fear that the World Bank or individual European nations will not renege on past promises to ban agricultural imports from nations using DDT to protect human lives. Africans are also at odds with the West over agricultural issues that range from protectionist tariffs and farm subsidies (in Africa as well as the West) that leave African farm goods uncompetitive in Western markets, to the angst over biotech foods. Neither the EU nor the U.S. budged an inch at the recent World Trade Organization talks in Geneva, though changes have been discussed for years. Economist Thomas R. DeGregori has been a major voice supporting green biotechnology as a way to help Africa raise yields and protect plants from disease. DeGregori argues that media-led opposition to the use of green biotechnology in Africa has deep roots in misguided beliefs about science, agriculture, and food production that go back two centuries. Kenyan biotech advocate Florence Wambugu likewise contends that Africa must pursue biotechnology both to feed its growing populations and to solve its environmental problems. Africans, she insists, “must [be allowed to] participate as stakeholders” in biotechnology and other emerging technologies so that they can have some control over their development and use. Africa desperately needs to increase its food supply: Malnutrition rates are falling worldwide but are rising dramatically in sub-Saharan Africa. Whether biotech is or is not the way to go, actions to suppress agricultural biotechnology in Africa provide yet another example of how non-Africans are making decisions that affect the very survival of Africans. On yet another front, the highly acclaimed Equator Principles, which require Western financial institutions to meet the social and environmental policies of the World Bank, may well be discouraging much-needed economic development in Africa’s undercapitalized nations. The Chinese, of course, have not adopted these principles – nor have many rogue nations with which they are gaining influence. As Africa Develops – Is Anybody Listening? Thanks in part to the almost universal access to cellular telephones and the Internet, Africa is maturing politically and economically, even in countries where oppression is widespread. As Africans, even in remote locations, gain ready access to real-world information (from war news to stock quotes), the old American pop song becomes applicable: “How you gonna keep ?em down on the farm after they’ve seen Paree?” European influence in Africa is thus at a true turning point. Many Africans are tired of 400 years of colonialism and its ongoing vestiges in the post-colonial era, and others are responding to their cries to “let my people go.” Europe stands to benefit greatly by supporting increased political and economic freedom in African nations. A major reason is that Africans for centuries have been educated in European academic institutions, learned European customs and languages, and interacted daily with European businesses, governments, and non-governmental organizations. There is tremendous untapped potential. C. K. Prahalad argues that we must stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers. Serving the world’s poor will provide wonderful opportunities for innovations that focus on conserving resources through eliminating, reducing, or recycling wastes, because the poor cannot afford to pay for wastage. These innovations can then be transferred to markets in the developed world. Better still, as poor consumers and entrepreneurs gain experience in market mechanisms, they may well be able to transform their societies and economies dramatically in a very short time frame. Bringing an end to, or even greatly shrinking, African poverty is a daunting proposition. Yet changing the way Europe and the West look at and deal with Africa’s poor requires some major changes in perspective and philosophy – beginning with a re-assessment of the nature of man and of the state. The American Revolution was largely influenced by the writings of John Locke, whose political philosophy promoted individual rights and limited constitutional government as the basis of freedom and economic security. Building on Locke’s vision, Thomas Jefferson penned these immortal words found in the U.S. Declaration of Independence: We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness ? that to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. Nearly a century later, Jean-Jacques Rousseau, believing Locke’s worldview would divide humanity by focusing on self-interest, individual rights, and property, set forth his own “Social Contract” in which the “General Will” of the people is embodied in the power of the state. Thus the state can both create and distribute rights to whom it pleases – and is in effect the ultimate authority. In defending the American vision, James Madison agreed that the hearts of men are wicked but believed that in a free society the evil machinations of various factions would be canceled out through the political process, leaving the good to triumph. Recently, the ideals of Locke, Jefferson, and Madison were incorporated into the Cornwall Declaration on Environmental Stewardship, an eloquent document which encapsulates a Judeo-Christian view of environment and development, but whose principles are applicable well beyond the faith community. Cornwall states that many people mistakenly view humans as principally consumers and polluters rather than as producers and stewards and thus ignore the human potential to add to the Earth’s abundance. Thus, many oppose economic progress in the name of environmental stewardship, failing to recognize the simple truth that the more prosperous a society, the more likely it is to make environmental protection a high priority. Cornwall further asserts that free and prosperous (and informed) citizens have the potential for very beneficial management of the Earth’s resources, and that nature does not fully “know best.” This recognition, after all, forms the very basis for holding any faith in beneficial environmental stewardship. Locke and his modern-day disciple, Peruvian economist Hernando de Soto, would hold that the private ownership of property is a key motivator for sound stewardship of land, water, and other resources. Common sense and empirical data both show that people take better care of property when they have an ownership interest. Finally, Cornwall argues that some environmental concerns are without foundation or greatly exaggerated, while other critical environmental issues are ignored or downplayed. A major reason for this (for example, eschewing DDT’s benefits in combating malaria) is the failure – whether conscious or unconscious – to consider the environmental impacts on specific human populations in setting environmental policies. Thus, based upon Cornwall’s prudent perspectives, perhaps the most vital thing that Westerners can do today in Africa is to humbly accept Prahalad’s observation that the poor are “resilient and creative entrepreneurs and value-conscious consumers” from whom we can learn much and gain much. Westerners need to stop dictating and start listening to the hopes and aspirations and plans of these thoughtful and energetic human beings who yearn for freedom to build out their own visions for tomorrow. This means Europe and the West must move from a Rousseauian to a Lockean mindset – one that seeks to address the needs of individuals rather than one that pursues political policies and agendas to impose on them. The stakes are high. African nations could simply allow the Chinese and other like-minded entrepreneurial neo-colonialist states access to its markets, generating economic development but without any commitment to expanding human freedom or protecting the environment. One thing is certain: Africa will not long remain under the heavy thumb of their European “parents” who deny them the freedom to make their own decisions about things that matter. A New Approach to African Development Europeans might take a serious look at the new Millennium Challenge Corporation (MCC), a creation of the U.S. State Department. Under this new program, the U.S. has set guidelines for aid eligibility that require nations to meet standards for ruling justly, investing in individual people, and encouraging economic and political freedom (including freedom for women). The rules require nationwide stakeholder meetings to identify in-country barriers to development, ensure the participation of civil society, and make public the intended uses for aid dollars. These reforms should foster greater accountability for those in charge of aid-funded projects. In Madagascar, the MCC approved a US$110 million grant to help formalize that nation’s land tenure system, modernize its land registry, expand land title services to rural citizens, improve the national banking system, and establish a body that identifies investment opportunities for rural citizens to reach markets and trains farmers and other entrepreneurs in production, management, and marketing techniques. These are all institutional reforms that address afore-stated problems of low savings and investment rates, unstable economic and political institutions, and the limited quantity and quality of infrastructure and human capital. If implemented, these reforms, which require accountability at every step in the process, should increase the confidence of individual investors that their profits will not be stolen and thus expedite investment and business development. The Committee For A Constructive Tomorrow, an international NGO which works in the U.S., Europe, and other nations on issues of environment and development, is also pursuing a program that utilizes Lockean principles in a constructive manner. CFACT is developing a new international development program that is modeled in large part on work done on a very small scale by faith-based and other charitable organizations on the ground in developing nations, and in part on activities reported on by Prahalad and others. The program begins with encouraging people in local communities to devise their own plans for economic growth and environmental protection and then joining with them as partners and advisors to help them achieve success. This Social Entrepreneurship and Free-Market Environmentalism Demonstration (SEFED) program builds on the time-honored principle that, unless people who live in developing nations take ownership of their economies and their environment, the next fifty years of foreign “assistance” is likely to be no more successful than the last half century’s efforts. SEFED’s initial efforts have confirmed that de Soto was right on the money when he stated … The cities of the Third World and the former communist countries are teeming with entrepreneurs … The inhabitants of these countries possess talent, enthusiasm, and an astonishing ability to wring a profit out of practically nothing…. Most of the poor already possess the assets they need to make a success of capitalism. The SEFED program provides an avenue by which Westerners all too accustomed to dealing with the poor from a charitable, paternalistic viewpoint (or worse, from the old opportunistic exploitation viewpoint) can learn to interact with intelligent, motivated, yet still poor, entrepreneurs and community builders as equal partners, supporting projects conceived of and being developed principally by people whose lifestyles have not included the myriad of amenities to which most Westerners are accustomed. Conclusion: Time for a Change In sum, all that is really needed for Europe to reverse four centuries of unfruitful mentoring of African economic, political, and societal development is a change of heart and of attitude – and the actions that naturally should follow such a rebirth of vision. People who can plead for species preservation on grounds that even the least impressive (from our viewpoint) species may hold the key to significant benefits for humankind and the planet should be able to see the same potential in every human being. There is so much to be gained, both personally and economically, from expanding our horizons and partnering with people who previously may have been overlooked (or looked down upon), and Europeans are in a particularly advantageous position to take full advantage of these opportunities. The time has come and is indeed near past when Europeans (and others in the West) can begin to ask themselves, what do Africans really want and how can we work together for mutual benefit to ensure that they get what they truly need? The alternatives to this approach all forebode trouble. Inaction or continued (hard-headed) paternalism will surely allow unscrupulous developers to enter Africa, further despoil the environment and further frustrate the desire of many Africans for freedom and respect as full partners in economic development and environmental protection. But a new engagement with Africans at the ground level will enable them to make their own economic and environmental decisions – decisions that, given Africa’s long history with Europe and the recognition that all humanity wants a healthier, wealthier future and a cleaner world, could foster real change for the better. The keys, then, are, first, the humility to listen to the ideas and visions of the poor; and, second, the willingness to visualize and assist in bringing to fruition the economic growth and increased political and social freedom that will help the poor achieve their goals. The rewards from such an approach can be great – both for Africa and for Europe, too. Special thanks to CFACT senior policy analyst Duggan Flanakin who greatly contributed to this article.

Africa: Infrastructures Are Priority For SADC Regional Integration

Infrastructures Are Priority For SADC Regional Integration

Agencia de Informacao de Mocambique (Maputo)
NEWS
17 August 2007
Posted to the web 17 August 2007
Lusaka
Developing transport, communications, and energy infrastructures is a priority for economic regional integration of the Southern African Development Community (SADC).

All heads of state and of government of the SADC member countries agreed on this at the opening session of the organization’s 27th summit in Lusaka on Thursday.

Regional integration is high in the agenda of the summit, along with the crisis in the neighbouring Zimbabwe.

Zambian President Levy Mwanawassa, who started his rotative mandate as the organization’s chairperson, taking over from Lesotho Prime Minister Pakalitha Mosisili, said that he is very much aware of the challenges and of his responsibility to the organization and to the entire region.

In his inauguration speech as the new SADC chairperson, Mwanawassa said that it is ‘with great sense of humility that I accept this honour and I assume the chairpersonship of SADC and I assume it in the name of the government of Zambia. I am aware of the huge challenges of leading the implementation of the common SADC agenda and the priorities set up in the Regional Indicative Strategic Plan’.

One of this plan’s priorities is to develop infrastructures, which is seen as a basic element for the regional integration.

The plan is focusing on the relief of poverty and equity distribution of wealth among the SADC member countries.

SADC executive secretary Tomas Salomao said that the summit, that is running under the theme ‘Development of Infrastructures in Support of Regional Integration’ stressed the importance of the meeting, supporting the words of the outgoing Mosisili, during a plenary, also attended by former Zambia Presidents Kanneth Kaunda and Frederick Chiluba.

In his speech, Mwanawassa urged all region leaders to work together to meet the commitments taken during the last summit, in Maseru, on flexibilising the regional integration, because ‘ only thus the organization will continue progress in the ways achieved since its creation, with all member countries mobilizing resources for a common end’, he said.

‘We must continue working together next year to improve our capacities , and use regional integration as a way to attain high levels and sustainable socio-economic and levels, which are key elements for the SADC region to increment its influence, both in the African continent and internationally’, said Mwanawassa.

He said that to attain this target, one must necessarily work together and mobilize resources and the capacity for all countries through the creation of a SADC Development Fund, agreed upon during the extraordinary summit in Midrand, in South Africa, in October 2006.

The fund is to cover the infrastructures development programme, that is part of the New Partnership for African Development Programme (NEPAD), and this will stimulate intra and inter-regional communications.

Zambia has already embarked on a number of projects to improve roads, aiming at the development of its communications network with other SADC member countries.

Speaking of the regional integration, Mwanawassa admitted that ‘all SADC members states are, one way or another, committed in trade negotiations at sub-regional, regional and multilateral levels that, most probably, will generate significant results in the future’, and for that end, ‘it is the task of the member states to ensure the instruments of trade agreements may contribute to the promotion of the interests of Africa’, he said.

Among the challenges SADC is facing at the moment are the consolidation of the Free Trade Area, which highly depends on modernization or innovation of production infrastructures, the continuation of some trade barriers between some of the member countries, due to their multiple participation in various programmes in SADC and other African regions’ integration programmes, and also the issue of food security, that affected Southern Africa lately, among others.

Mwanawassa called for the respect for the calendar for a full Free Trade liberalization.

He also called for the setting up of an organization of a full institutional mechanism to flexibilize the processes toward a Customs Union as some of the priorities of his country’s chairpersonship of the organization.

Africa: New SADC Chair to Prioritise Infrastructure

New SADC Chair to Prioritise Infrastructure

BuaNews (Tshwane)
NEWS
16 August 2007
Posted to the web 16 August 2007

By David Masango
Lusaka
The new chairperson of the SADC, President of Zambia Levy Patrick Mwanawasa is to prioritise a number of focus areas during his term, including regional infrastructure development.

He takes over the chairmanship of the Southern African Development Community (SADC) from the Prime Minister of Lesotho Pakalitha Mosisili.

President Mwanawasa, will focus on among others, developing regional infrastructure, the SADC Fund and establishing a Free Trade Area (FTA).

“In order to achieve this goal [of infrastructure development in support of regional integration], road, rail air transport, telecommunications and energy development are going to be the main catalysts of our integration process,” he explained.

In his acceptance speech during the 27th SADC Ordinary Heads of State and Government Summit, which officially kicked off in Zambia Thursday, Mr Mwanawasa said he was aware of the enormous challenges of guiding the overall implementation of the SADC common agenda.

President Mwanawasa said the SADC Regional Indicative Strategic Development Plan entails amongst others, strong infrastructure development.

He explained that SADC had registered “remarkable” successes since its inception because all member states mobilised their resources and cooperated closely to shape a common destiny.

“Together we must ensure that all SADC institutions fully exploit existing opportunities and explore new ones in order to promote and accelerate regional integration in a dynamic manner,” he emphasised.

Regarding the SADC Infrastructure Development Fund, Mr Mwanawasa explained that it drew its strength and support from the New Partnership for Africa’s Development initiative.

“We therefore have to focus on those infrastructure programmes and projects that facilitate quick and efficient linkages in our communication systems.

“This requires prioritising the development of the regional trunk road network, strategic air transport facilities and the most effective telecommunication network that will enhance intra-regional travel and communication,” he explained.

The consolidation of the FTA, he said remained elusive partly due to the inherent production structures, which he said had remained by and large unfavourable, and the continued existence of intra-regional trade barriers between member states.

This situation is compounded by the existence of a number of overlapping and sometimes conflicting regional integration programmes in the region and Africa at large.

He praised the work being done by the SADC Joint Ministerial Task Force of Ministers of Trade and Finance to come up with recommendations to move forward, in regional developments and relations with other regions.

He cited the negotiations with the European Union on Economic Partnership Agreements as an example of this.

He promised to work tirelessly with members and other partners, where necessary, during his tenure in office to ensure that SADC finds a solution to those challenges.

“In particular, my priorities will include ensuring the full operationalisation of a Free Trade Area in which SADC members fully implement commitments with respect to the tariff liberalisation schedules as well as addressing the elimination of non-tariff barriers,” he said.

The chairperson also acknowledged the improvement in peace and security in the region and congratulated Lesotho, Madagascar, Tanzania and Zambia for holding successful elections.

“These elections will further entrench the tenets of democracy and good governance in our region,” said Mr Mwanawasa.

Other challenges that the chairperson is faced during his term in office include food security, the environment and natural resources.

He called on member states to implement the Dar-es-Salaam Declaration on Food Security, which entails that governments allocate 10 percent of their national budgets to agriculture and increasing the use of organic fertiliser, amongst others.

The chairperson pointed out that climate change was a threat to food security and development as it amongst others negatively affected food production; caused floods that damaged crop and infrastructure and caused droughts.

Mr Mwanawasa said the abundant natural resources and wildlife found in Africa, if fully exploited, could contribute considerably to the region’s socio-economic well-being.

He also pledged to fight HIV and AIDS, and to improve gender equality.

African Countries Should Design and Implement Development Policy Via Its Unique Characteristics.

Tailor Development Approach to Local Conditions

East African (Nairobi)
OPINION
14 August 2007
Posted to the web 14 August 2007

By Benjamin Mkapa
Nairobi
Developed countries have used a broad range of economic approaches in their development strategies.

In fact, the current success of China, India, Brazil and certain other developing countries is attributable to the fact that they chose appropriate strategies rather than economic policies prescribed by those driving globalisation.

A government should design and implement a development policy that takes into account its country’s unique characteristics.

The state’s continuing role in supporting sustained capital formation and productivity, providing appropriate incentives to the private sector, improving public infrastructure and providing basic social services such as public education and health, must be recognised rather than being left to the vagaries of the free market.

ONE CANNOT talk of globalisation and its impact on development without mentioning the role of the international financial structure in allowing its worst effects to strike developing countries and LDCs.

Since the mid-1990s, the impact of financial crises on output, growth, employment and real income has caused severe setbacks in economic development, reduced the scope for public investment in health and education and increased poverty in the affected countries.

It is important to note that, while countries in Asia, Africa, and Latin America were severely affected by the financial crises of the late 1990s and the early part of this decade, the economies of developed countries were barely affected.

IN FACT, the effects of the various financial crises on developing countries allowed governments and corporations from the developed North greater access to many of our economies, since domestic companies failed and governments became cash-strapped.

It is notable that those developing countries that disregarded orthodox economic policy advice to combat their financial crises managed to get over the crises early.

Global interdependence should be fostered in the context of a global co-operative governance framework. Since the 1980s, co-operative multilateral governance for economic development has been sidelined in favour of approaches that institutionalise the dominance of developed countries.

Public institutions controlled by developed countries, like the World Bank, IMF, Organisation for Economic Co-operation and Development and the WTO became the preferred sources of international economic policy advice and control, while the core global economic governance institution with universal membership, the UN, became increasingly marginalised.

The UN must be supported to resume its role as the core global economic governance institution.

IN ADDITION, it must be emphasised that reform of national policy and institutions is critical to their integration in globalisation. There must be good national political governance based on a democratic political system, respect for human rights, the rule of law and social equity.

This is a decisive moment for LDCs and indeed, all developing countries, to commit themselves to the strategy of self-reliance to reduce poverty by increasing their own efforts and making the most of their resources.

In particular, this requires the integration of their various diasporas in resource mobilisation plans, implementation of programmes that liberate the poor through property rights reform and the formation of new links with other nations in the South, particularly the newly industrialising economies like India, China, and Turkey.

As the Malawian saying goes, “He who splits his own firewood warms himself twice.”

LDC governments should focus on learning more from those whose history and developmental experiences closely resemble their own, notably Asia, and the reforms in the investment environment that have transformed India and China into today’s economic powerhouses.

LDCs must redirect their resources to build infrastructure, integrate markets, and promote regional trade. Intra-African trade, for example, is only 12 per cent of total trade, the lowest for any region in the world.

LDCS MUST invest in agriculture and aggressively support small- and medium-scale entrepreneurs, who are vital creators of wealth and employment and a key target for poverty reduction.

Some of the imbalances of globalisation and challenges of development are better addressed in a regional context. Regional integration should, therefore, be pursued as an agent of fair global economic integration.

In addition, strong regional policies and institutions are important elements in improving governance of the global economy.

How can we not learn from the power of the EU in determining the course of international economic relations?.

ONE OF the findings of the South Centre, a Geneva-based inter-governmental organisation, is that South-South trade barriers are very high. Trade liberalisation among countries in the South would lend them clout in the struggle for better globalisation.

Benjamin W. Mkapa is former President of Tanzania and President of the Geneva-based South Centre.

Can African Development Be Accomplished By Trade??

Development Through Trade

Business Day (Johannesburg)
OPINION
6 August 2007
Posted to the web 6 August 2007

By Nkululeko Khumalo
Johannesburg
HIGH-ranking officials, including US Trade Representative Susan Schwab, and representatives from African countries that are beneficiaries of the Africa Growth and Opportunity Act (Agoa), descended on the Ghanaian capital Accra to attend the Sixth Agoa Forum on July 18-19.

Agoa is a non-reciprocal preferential trade scheme whereby the US offers the 38 eligible countries (including all Southern Africa Customs Union member states) duty and quota-free access to its market. The scheme covers more than 6000 products.

The forum is meant to celebrate Agoa’s achievements and seek to help the beneficiaries maximise existing market access opportunities, and involves Africa’s business community as well as the civil society organisations. While Agoa has had a very positive effect since it came into force in 2001, it is high time African countries started thinking about the future of their trade relationship with the US beyond 2015, when the current arrangement expires.

This is imperative, particularly for Sacu countries that are among the biggest Agoa beneficiaries. Though Sacu is the US’s second largest trading partner in Africa (Nigeria, whose exports are mainly petroleum products, occupies the first spot), there is no contractual agreement to guarantee and extend the market access opportunities they currently enjoy.

Further, the current relationship does not include the fastest growing area of trade, namely trade in services. Nor are there legally binding pacts to regulate important issues in bilateral economic relations, especially investment and intellectual property rights.

The US-Sacu free trade agreement (FTA) negotiations that began in June 2003 aimed to address this situation. Through the FTA, Sacu sought to achieve Agoa-plus liberalisation (by locking in and possibly extending current market access); address non-tariff barriers affecting their US-bound exports; spur regional integration in Sacu; and strengthen relations with the US, possibly as an insurance against potential failure of the Doha Round.

The US, on the other hand, aimed to use the FTA to eliminate barriers to its goods and services exports in the Sacu market, strengthen intellectual rights, build alliances for the WTO negotiations, and level the playing field vis-€-vis the European Union, which benefits from the Trade, Development, and Cooperation Agreement they signed with SA.

However, owing to differences between the parties on a range of issues, including the scope and anticipated depth of commitments, the parties finally decided in April 2006 to abandon the FTA in favour of a less contentious and politically palatable piecemeal approach (which they hope will lead to a fully-fledged FTA in future).

In terms of this plan, Sacu and the US will sign a Trade, Investment and Development Cooperation Agreement (Tidca) that would enable them to consult one another with a view to facilitating two-way trade and investment, conclude mutually beneficial agreements , and work towards reaching an FTA. The parties are reportedly making headway and were expected to sign the Tidca on the margins of the Agoa Sixth Forum.

While the Tidca idea seems workable, there is a danger that it may end up replacing the original ambition to have an FTA instead of being a necessary building block towards it. There are concerns that it might simply provide an excuse for failure to resume negotiations when the US Trade promotion Authority is renewed in future.

To be meaningful, the Tidca should have a clear agenda on how the parties envisage the resumption of actual FTA talks. Sacu countries, in particular, should ask themselves whether they intend to wait for Agoa to expire — in which case they will have less bargaining power — before they consider the FTA or not.

In my view, it would be in Sacu’s interest to actually drive the Tidca process to ensure that they lay a solid foundation for an FTA whose terms are favourable to them. The argument that services and trade related issues should be excluded from the FTA because the region does not enjoy harmonised policies is beginning to ring hollow in light of the SADC-EU Economic Partnership Agreement negotiations. All Sacu countries have no objections to negotiating on these issues, barring SA and Namibia. Tellingly, even Lesotho, a least developing country that is not required to make any commitments on services and regulatory issues in terms of WTO rules, is apparently not threatened by them.

Clearly, the Agoa Sixth Forum was a good opportunity for both celebration and deep reflection, especially for Sacu. African countries do not have much luxury to procrastinate — the Doha Round remains semi-paralysed and Agoa and even the Generalised System of Preferences (another preference scheme catering for developing countries in general, not just Africans) are not permanent. Therefore Agoa should not be seen as a viable alternative to a contractual agreement, which typically should have a development component.

Finally, it is not clear which course Agoa beneficiaries will take post-2015, but what is certain is that unilateral preference schemes have an expiry date.

Nkululeko Khumalo is senior researcher: trade policy at the South African Institute of International Affairs.

Op/Ed: Three Hard Truths About the World’s Energy Crisis

Three Hard Truths About the World’s Energy Crisis

East African Standard (Nairobi)
OPINION
7 August 2007
Posted to the web 6 August 2007

By Jeroen Van Der Veer
Nairobi
When it comes to the future of energy, the world needs a reality check.

Contrary to public perception, renewable energy is not the silver bullet that will solve all our problems. Indeed, in the decades ahead, three hard truths will generate turbulence in the global energy system.

We all know that global demand for energy is growing, but the reality of how fast has not really sunk in. The first hard truth is that demand is accelerating. Energy use in 2050 may be twice as high as it is today or higher still. The main causes are population growth, from six to more than nine billion, and higher levels of prosperity.

China and India are entering the energy-intensive phase of their development. This is the point when people buy their first television set or car, board a plane for the first time and start to consume much more transport fuel and electricity.

And most people in China and India have never boarded a plane! The pace of change is startling. Last year, China enlarged its electricity capacity by roughly the equivalent of Great Britain’s entire stock of power stations.

The second hard truth is that the growth rate of supplies of ‘easy oil’, conventional oil and natural gas that are relatively easy to extract, will struggle to keep up with demand.

Just when energy demand is surging, many of the world’s conventional oilfields are going into decline. The problem is not the availability of resources as such. Overall, the International Energy Agency believes that there could be roughly 20 trillion barrels oil equivalent of oil and natural gas in place.

This includes conventional and unconventional resources, such as oil shale and sands. In theory, this is enough to keep us going for about 400 years at the current rate of consumption.

Carbon emissions unacceptable

In practice, though, less than half can be recovered with existing technology. The world now produces 135 million barrels oil equivalent a day of oil and natural gas. We could still raise that number with new technologies, but only gradually and certainly not indefinitely.

The third hard truth is that increased use of coal will cause higher carbon dioxide emissions possibly to levels we deem unacceptable. The IEA believes that coal use could grow by around 60 per cent in the next 20 years.

The main reason that countries turn to coal is energy security. China and India will continue to exploit their domestic coal reserves to be less dependent on oil and gas imports. So will the US, which now generates more than half its electricity with coal.

But burning coal for electricity generates twice as much carbon dioxide as burning natural gas. Gasifying coal, instead of burning it, reduces emissions, but still this is not enough to solve the problem.

In our battle against greenhouse gas emissions, taking the carbon dioxide out of fossil fuels, especially coal, is crucial. It will be a huge challenge: To keep greenhouse gases in the atmosphere well below 550 parts a million, the upper most bound of where science tells us we should be.

Shell works with models that assume carbon capture and storage is installed at 90 per cent of all the coal and gas-fired power plants in the rich countries by the year 2050, and at 50 per cent in non-OECD countries.

Time is short: It will take a decade to test the technology in pilot projects before we can move to larger-scale projects. So what about renewables such as wind and solar energy?

The share of renewables in the global energy mix could go up from its low base of about one per cent to about 30 per cent by the middle of the century. The number of wind turbines, for instance, may grow from about 30,000 today to one million and their capacity will be significantly larger than the ones we have built.

This assumes that the hunt for technological breakthroughs to make renewables cheaper will be successful. But even then, fossil energy will still make up most of the remaining 70 per cent.

However, this is out of sync with what opinion polls show that most Americans and Europeans believe that renewable energy will have replaced most fossil energy by 2050. As the hard truths make clear, this simply is not going to happen.

That is why energy efficiency is important. More than half the energy we generate every day is wasted. In an average car, about 20 per cent of every unit of petrol goes into moving a car forward, the rest is lost as heat.

For an aircraft during take-off, the figure is eight per cent. Only 35 per cent of burnt coal in a power plant becomes electricity, the rest is lost as heat. What is the point of producing more energy if we continue to waste most of it?

Instead, we should aim to become twice as efficient in our use of energy by the middle of the century. That is entirely feasible, provided that the will is there.

The world’s energy system is entering a turbulent phase, and the only question is: How turbulent? A unified world could respond more effectively than a fragmented one.

The writer is the Royal Dutch Shell Plc CEO

Should Africa Continue to Be Treated Like a “Victim” By the World

Is It Time to Stop Treating the Continent As a Victim?

SciDev.Net (London)
OPINION
1 August 2007
Posted to the web 2 August 2007

By Katharine Vincent

It is commonly upheld — at least by the media — that Africa is a frontline victim of climate change.

It is true that at the continental scale Africa may suffer because of it is geographic and economic vulnerability. But branding Africa as a victim does a disservice to the many examples of small-scale resilience and adaptive capacity in evidence throughout the continent.

Furthermore, perpetuating the ‘Africa as victim’ myth runs the risk of deflecting attention away from a systematic investigation into how such resistive measures could be expanded to reduce vulnerability.

A more realistic picture

The year 2007 marked the release of the long-awaited fourth assessment report of the Intergovernmental Panel on Climate Change (IPCC), which looked at the impact of climate change on different parts of the world and their adaptation and vulnerability to its effects.

The report confirms that Africa is one of the most vulnerable continents and will be exposed to the adverse impacts of climate variability and change. Agricultural productivity is likely to be constrained by water stress and a decrease in the land area suitable for farming — with a reduction in yields of up to 50 per cent predicted for some parts of the continent by 2020.

But the report also highlights evidence that African people are coping with and adapting to climate variability and change. Although it does not indicate whether these responses will be sufficient in practice to deal with the rate and magnitude of projected change, they provide grounds for optimism.

Still, the press response to the report, both internationally and in Africa, has emphasised the vulnerability of the continent over its potential adaptive capacity.

It is important to recognise that there will be adverse effects, but portraying the continent as helpless legitimises a sense of resignation to the fact that climate change will merely contribute to ongoing poverty and leave Africa on an unavoidable downward trajectory.

Groundwork to reduce vulnerability

The outlook need not be so bleak. We should be attempting to understand the complex coping and adaptation strategies that are in operation and to identify where these are working and where they need to be improved.

Researchers investigating coping and adaptive capacity at different levels on the continent — from household efforts to national strategies covering both social and biophysical systems — have compiled a cohort of studies that exemplify emerging generic processes.

Farmers, for example, are flexible in their livelihood choices, which enable them to respond to weather conditions on a year-by-year basis. In a dry year they may seek alternative pasture for their cattle and irrigate their crops. If a drought is long lasting, male members of the household might migrate to the city in search of alternative employment.

Emerging recognition of the bottlenecks constraining effective adaptation has also promoted research into tools that can be used to reduce vulnerability. For example, seasonal climate forecasting enables both commercial and subsistence farmers to respond on an annual basis to anticipated weather conditions.

Farmers in several southern African countries, including South Africa and Zimbabwe, are currently benefiting from improved information on seasonal weather conditions.

Ecologists and social scientists working on the coupling of physical and social systems have highlighted the need for adaptive co-management that recognises the interrelationship between the physical and human environment. A variety of institutions, working at local through to national and regional levels in Africa, are embracing this attitude.

They are taking a more holistic approach to development, to reducing the risk of disasters, and to mitigating and adapting to climate change. This includes provision of national weather services and of a growing number of disaster-management agencies, which are being set up following the introduction of national disaster-management policies and plans.

Confronting the situation

Faced with the media’s despair, we can hardly blame African policy-makers for feeling helpless against climate change and for not believing that adaptation can be achieved. As a result, policies focusing on national climate change are scant and weak where they do exist, although the issues are recognised to varying degrees in formulating policy in related spheres, such as water supply, agriculture and disaster management.

Taking a more proactive approach to adaptation — recognising the continent’s strengths and identifying weaknesses and obstacles in the way of achieving it — is a much more constructive response to the IPCC’s fourth assessment report.

It is one that should encourage Africans to seek the most effective means of help from themselves and others, thereby ensuring that vulnerability in the face of future climate change is reduced.

Katharine Vincent is a postdoctoral researcher with the ReVAMP research group at the University of the Witwatersrand, Johannesburg, and a contributing author to the IPCC fourth assessment report.

Do New Trade Deals Mean Africa “Loses” while EU “Gains”??

New Trade Deals – Continent to Lose Out As EU Gains

East African (Nairobi)
ANALYSIS
24 July 2007
Posted to the web 24 July 2007

By Gichinga Ndirangu
Nairobi
As Africa’s leaders met in Accra, Ghana, last week to consider ways of consolidating continental unity through increased trade, pertinent questions were being raised over the impact that a new trade arrangement between the European Union and the 75-member ACP trading bloc will have on regional integration.

At least four regional trading blocs in Africa – Comesa, Ecowas, EAC and SADC – are working towards establishing Customs Unions to reduce their dependence on the EU market and take advantage of regional economies of scale.

But as the clock ticks towards the end of 2007, the deadline for concluding negotiations between the ACP and EU, uncertainty looms on what will happen if the deadline is not met and the impact that a deal will have on the trade fortunes of individual countries within the regional blocs.

A deal between the ACP and EU will usher in a new trade framework based on reciprocity that will require agreement on uniform tariffs on at least 80 per cent of goods traded. This will effectively end years of preferential access enjoyed by the ACP countries, under which their goods entered the EU market duty-free even as EU exports to ACP markets attracted tariffs.

The current negotiations have been necessitated by the imminent expiry of the waiver granted by the WTO, which allowed the EU-ACP preferential trade arrangement to continue until the end of 2007. This has been viewed as discriminating against non-ACP members and in violation of WTO trade rules; it is also implicit that the EU wants a share of the pie by increasing exports to the ACP markets on more favourable terms.

But the entry of EU goods on more favourable terms has raised concerns that more efficient EU firms and subsidised agricultural goods will out-compete local enterprises involved in value-added production and farmers, thus limiting the benefits of regional integration to individual countries.

THE EU believes that the economic partnership agreement (EPA) negotiations will strengthen regional integration through more predictable trade policies, but the limited time left to conclude negotiations and the serious capacity constraints facing many ACP countries have raised concern that they actually risk slowing down regional integration.

A major concern is the isolation of members of the same regional trading blocs forced to negotiate under different EPA configurations, which now creates the risk of members of one regional bloc committing to different tariffs and trade liberalisation measures from those agreed upon under regional blocs.

For instance, Tanzania, though a member of the East African Community, is negotiating under the Southern African Development Community (SADC) while Kenya and Uganda negotiate under the Eastern and Southern Africa (ESA) configuration.

Yet, even as EPA negotiations raise mounting concern over their potential impact on the African trade blocs, the reality is that integration efforts in most regions have been slow due to cumbersome border controls, inefficient Customs administrations and poor transport infrastructure, which have limited intra-regional trade to an average 10 per cent for individual countries.

BUT DESPITE these difficulties, regional trade for some countries, like Kenya, has grown. A total of 49 per cent of Kenya’s exports are now destined for other African countries, dominated by the Comesa region, while the EU takes up 25 per cent of the country’s exports.

However, the EU still remains an important market destination for many ACP countries as a result of limited intra-regional trade. For instance, whereas the EU absorbs 49 per cent of Ghana’s exports, the country exports an insignificant 2.6 per cent to neighbouring Benin – a situation replicated in many other African countries.

Even as the EU market remains a prime destination, it is ridden by uncertainties over constantly changing criteria of eligibility, especially from EU consumers and the private sector. Strict sanitary and phyto-sanitary measures, pesticide traceability criteria and other health certification standards are among the most challenging non-tariff barriers to trade facing exports into the EU.

Under EPAs, the different regional configurations will be expected to liberalise at least 80 per cent of their trade over an average 12-year period, even though many African countries favour a time frame pegged on the achievement of specified development indicators rather than arbitrary timelines. This approach is intended to allow local enterprises prepare adequately for competition from EU firms.

The Economic Commission for Africa (ECA) has warned that the EU stands to benefit the most from a reciprocal trade arrangement with the ACP countries. In particular, the EU would benefit from improved access to regional markets, while African countries are likely to lose out on intra-regional trade.

FOR INSTANCE, intra-regional trade in the Comesa region is expected to decline by 5.8 per cent, which translates into a loss of $242 million. On its part, the EU stands to increase exports to Comesa to the tune of $1,152 million under a new trade arrangement based on reciprocity.

The situation is replicated in West Africa, where the ECA estimates that Ecowas countries could lose trade worth $365 million to EU competitors, who are expected to increase their exports by an estimated $1.87 billion into this regional market.

These trends emphasise the relative efficiency of EU firms over local enterprises, which will result in increased presence of EU products in their markets, hence eating into the share of individual country exports within these markets.

Indeed, with an anticipated elimination of existing tariffs on at least 80 per cent of the ACP’s trade with the EU, it is estimated that regional trade in ACP countries will decline by about 22 per cent, which will translate into a loss of jobs and investment in different regions.

Rwanda is, for instance, expected to increase its imports from the EU from the current 27.4 per cent to 32.2 per cent, even though a large number of these imports could be sourced locally and hence help augment trade in industrial goods. The ECA warns that, “This threatens to weaken regional integration efforts as Comesa countries could significantly lose out to the benefit of the EU countries, especially Belgium, France, Germany and Netherlands.”

KENYA’S DEVELOPMENT strategy, which is increasingly shifting emphasis to regional markets, is also expected to experience the effects of the EU’s foray into key regional markets like Comesa, which accounted for an estimated 67 per cent of the country’s manufactured exports (excluding agro-processed products) in 2003 compared with 9 per cent to the EU market.

Currently, Kenya’s trade with Comesa stands at nearly Ksh80 billion ($1.2 billion), an increase of Ksh19.3 billion ($288 million) over the 2005 earnings totaling Ksh60.7 billion ($906 million). This has made the region Kenya’s most significant trading partner.

However, as the main destination for Kenya’s agricultural exports, the EU remains a significant market, accounting for 25 per cent of total exports, while Africa takes up 49 per cent. A full 37 per cent of Kenya’s total exports to Africa go to the Comesa region.

THE KENYA Institute of Public Policy Research and Analysis (Kippra) estimates that Kenya stands to lose 15 per cent of its regional trade under an EPA. It adds that Kenya will lose out to the EU, especially in exports of manufactured products to the EAC and Comesa.

“This will undermine the country’s trade in value-added goods and increase dependence on primary exports, narrow the range of products that Kenya currently trades in as well as the diversity of its trading partners,” observes Kippra.

Given the fears that a broad liberalisation of trade with the EU could adversely impact on intra-regional trade, negotiators must try for a less ambitious liberalisation, excluding higher-value products traded among individual African countries, even as the EU seeks a more ambitious regime encompassing broad tariff reduction.

Gichinga Ndirangu is a lawyer and trade policy analyst based in Nairobi

A “REAL” Vision for African Development!

A “REAL” Vision for African Development!

A proposal by Craig Eisele and the Trans-African Development Company.

First and foremost I must say that “most” of the “Aid” to Africa is needed and serves a good purpose. HOWEVER… I believe, that the most important “aid” to African Development is not being given in the manner in which it is most needed.

Given the Statement released at the Last AU Meeting in Accra this month (July) and the focus on Regional Integration and the Ultimate Goal of African Integration and Unity I feel that this proposal, I put forth today, is in keeping with these stated Goals and Ideals. I hope the leaders and governments of those Countries read this and believe in it half as much as I do and commit to making this “Vision” a reality… for the future of Africa is at stake.

It is no secret that the “Keys to Investment” (as well as economic prosperity) are Power, Communications and Transportation. No society can develop without these three key components… and the lack of these components also hinders (actually cripples) the ability to have an effective (let alone vibrant) “manufacturing” sector of the economy. Manufacturing brings most jobs to the most people. Without these Components poverty, and despair become the norm. Nowhere is this more prevalent than in Africa today… yet that can change dramatically and substantially within 10 years IF we can do what I propose.

So what can be done for Africa that is “really” in Africa’s Best interest… and even in the best interest of the world at large. If you believe my introductory statements above, then I will hope you agree that what Africa needs, more than anything, is a MAJOR COMPREHENSIVE Development of its Infrastructure. A form of Governmental/Private development needs to be initiated. A Developmental Project that will NOT create any Debt to any Country. A project that will have a portion of it as private (but publicly traded components) as well as a segment or portion under “Governmental Ownership and Control” …. specifically, the Highway Portion of the project.

I envision this Comprehensive Infrastructure Development Project as follows:

It is through the building of a “Highway” and “rehabilitation” of the major trade roads in conjunction with the establishment of a “uniform” railroad; Development of the Power Generation and Transmission sector and the Ability to Communicate with the outside markets and the world for Technology, education, ideas and innovation that matters the most. If this is done, then I believe, that not only will the economic benefits proliferate throughout the ENTIRE Continent of Africa, but that the overall health education and welfare of the vast Majority of Africans can be established quickly and effectively.

The world has tried to “fix” or otherwise address problems throughout Africa without the basic means of delivering their “aid” to Africans. Kofie Annan, in his recent quest for better Agricultural production, has indicated in a footnote that transportation is necessary for the Agricultural Sector to flourish. It is evident that Africa can not only grow sufficient food for every person in Africa and have more than enough for a productive export market for basic food products, but there is no effective way to get that food to markets before it decays throughout its own Country or to even a neighboring Country …. let alone the rest of the Continent or the world.

OK… sorry I am impassioned on this subject and sometimes I get carried away in what I want to say… so here is MY Vision for the Future of Africa that I firmly believe will not only be able to create a 100 plus million strong “Middle Class” of Consumers within Africa, but will exceed the Millennium Development Goals that CANNOT be met without the program that I will articulate below. ANY person who believes that the MDG’s can be met without this and believes Africa can be self-sufficient within 20 years without this project is at the least incredibly nieve’ or worse delusional.

Africa today is in a unique position of building infrastructure from the ground up using 21^st century technology that can be effective for the next 50 years with minimal maintenance and upkeep before major upgrades will be required… by that time the “tax base” and revenues generated by the individual countries will be sufficient to upgrade that Infrastructure the same as all industrialized countries currently can do today and without international “aid”.

My Vision on How to best accomplish the MDG’s (and so much more) and actually give Africa an opportunity to be something more than a depository for international aid, is listed below in three phases that are to be implemented simultaneously:

1. Phase 1: Obtain a right of way one kilometer wide from each Country that the first segment of a “highway” will go through. This is envisioned as a Trans Continental Highway similar to the ones that Most Industrialized nations have and close to the US Model of Interstate Highway System. However the FIRST segment must be constructed to prove its worth.

I have already received expressed interest from 3 of the first nine countries that this first segment will go through.

ALL of this Construction MUST be done by a Private Company with focus on costs and efficiency and completion and MUST be done at NO COST to any country. The Highway Component of this Infrastructure along this “right of way”, will be transferred to COMPLETE Ownership by the AU (African Union) and the individual Countries for the revenue generated to be used for routine Maintenance, security and general governing purposes.

It is hoped that each country will take advantage of this “highway” to create planned communities, cities and Industrial parks along this path. Planning for Potable water, Electricity and sewage and trash and looking for synergies between industries and natural resources along the way is imperative to maximize economic benefit and the quality of life for the citizens. I suggest a 50-kilometer “zone”or buffer on either side of this project for the planning to be professionally engineered and developed for maximum effectiveness.

I would like to see a fleet of NEW Trucks and tractor-trailers built by someone like Peterbuilt ON THE CONTINENT of Africa. Given that Peterbuilt has a factory that produces 5000 trucks a year in a single factory today in the USA, it is obviously more cost effective to build a NEW plant in Africa for the Construction of these trucks… AND, I would be willing to not only help them build such a plant but to BUY the first 5,000 trucks for exclusive use on this highway. The Domestic Market in Africa and the export potential is worth this type of investment IF we build such a “highway”. Just look at South Africa now who is building cars for export to Europe!

Simply the creation of such a Highway by itself gives access to huge economic benefits that those countries involved are not able to see without this “highway”.

Now the scary news for some… the cost for this 4-lane highway is estimated at 45 to 50 Billion dollars (35 to 40 Billion Euros). Given the 60 billion to be spent on Aids in Africa the next 5 years by the US Government… I DO NOT expect the US Government to pay the entire cost for this highway… but I do expect them to substantially contribute to this highway. And yes, I do expect them to mandate that a certain amount of this money be spent with US Companies as I expect any other country “donating” to this project will also expect benefit from their “donation”. But, the majority of labor MUST be African and local subcontractors within Africa MUST be incorporated into this project to maximize the benefit within Africa and create an economic benefit far greater than the highway itself in the short run. Further… wages must be at least 2 times the current local wages.

I consider this “Highway” a bargain at twice the price. But again the key is to let a “PRIVATE” company under the auspicious of a “Not-for-profit” subsidiary to build it to keep cost LOW and assure that the monies spent are mostly on the “Highway” and then transfer ownership as indicated above. Using the Non Profit Company forces greater transparency in the process and assures a corruption free development.

I consider this HIGHWAY a moral imperative for aid by countries claiming they want to help Africa. This Highway however should be incorporated into “Phase 2” of this project as listed next… making the total cost over 7 to 10 years close to 100 Billion Dollars or 75 Billion Euros. But Combined, the benefits as indicated by David Wheeler would be many times that amount on a regular and recurring basis… and that was a study just on Trade… if you factor in the self-imposed mandate I am offering that 80 percent of labor and available raw materials be purchased in Africa… the economic benefit on a local level is staggering. I also proposed to make pay for workers 2 to 3 times the current wages being paid locally for the greatest benefit to the local economy.

1. Phase 2: Joining ALL the Sub Sahara Countries. I mentioned a study by David Wheeler earlier. In this study (which I consider extremely enlightening and beneficial) he and his group, in a study done for the World Bank, were very specific in identifying the existing roads, the quality of these roads, the trade that exists on those roads, and the economic benefit that repairing these roads would bring based upon Trade alone.

Phase 3: Components to be added along the “right-of way”. The right of way does not mean that these components can link into any country or their infrastructure… only that the Skeletal Structure of this build can be available and ultimately subject to “Interconnect Agreements” with each country. It is obvious that those agreements will need to be worked out on an individual basis and that those will involve complicated negotiations… but the idea that these “Components” of the Infrastructure are available ultimately makes the interconnects a matter of reality for all parties. The Components I am hoping to build along this “right-of-way” are as follows:

• • • Power: I would not want to establish a sewing factory in most places in Africa because of the unreliability of Power. Power is one of the 3 key components to attract investment and to develop a healthy economy. While Eskom (South Africa Power Company) has make strides in building out, to the northern neighboring countries, Electric Transmission lines, it is no where near sufficient to satisfy the needs of those other countries.
    • It is my hope that we can attract a Company like GE to build a factory IN AFRICA that will produce Wind Power generators for deployment along the “ right of way”. I envision the installation of Four thousand (4,000) 3.6 Megawatt wind turbines to run alongside of this “right of way”. As the highway will be newly build the transport of the blades and the Generators themselves, for these turbines will be possible. Given the world wide demand and the 2 year wait because if existing manufacturing facility constraints I feel this facility would be a great idea and whoever builds such a facility will “lock-up” the market in Africa for these wind turbines.
    • What is the COST of this electric Transmission line and 4,000 Wind Turbines and a few Gas Turbine Generators for specialty manufacturing such as smelting or processing of Ores from Mining or processing wood from Lumbering operations… about 25 billion dollars… and how do I expect it to be paid for… simply, it will ultimately be paid for by a sale of Equities in a Public Company that will be traded on at least 6 International stock exchanges around the world.

    Railroad: What is the sense of having an abundance of natural resources that can create jobs not just in the mining of such resources but in the processing of ores and ultimately the production of finished goods throughout Africa…. but that is the case now in Africa. Highways alone cannot handle all the requirements of economic development… a railroad is necessary to move huge quantities of goods to ports and markets around Africa and the globe and currently there is no standard rail system in place to do that… but that can change by use of a double track rail system capable of carrying rail cars set to various widths (gauges) but with the main gauge of standard gauge and a secondary gauge in many areas of “cape gauge”.

The initial Cost of a MODERN Rail System with RF readers and GPS (which can also be utilized on the “highway” for truck locations etc.) with a Modern State of the Art “Central Operations Center” electronically controlling all operations of the system I have been able to estimate at 35 to 40 billion dollars… again as with the Power Project Component, I plan on this to be financed by Equity issuance in a Publicly listed Company on international stock exchanges.

Fiber Optic Cable: So much as has been done to bring Fiber to the coast of Africa that it is like saying that only the coastal areas of Africa are worthwhile… I propose a Fiber Optic Program through the interior of Africa with FREE access to the WWW for Schools established along the corridor that this project will go through… the estimated cost (high actually) for 10,000 kilometers (6,000 miles) of Fiber Optic Cable is under 500 million dollars. And Yes, I have a plan for that financing as well but it is NOT via Public Offerings.

Pipelines: As with the section I wrote on Railroad there is extensive wealth of Oil and Gas that is locked within the Continent of Africa… not easily accessible without the “highway” and even if it was accessible the transport is next to impossible without this being a major component of the right of way I am proposing. This pipeline should be used for “Crude” as well as “Refined” as the “Power” Component listed above will make it realistic and economical for Oil Companies to develop their field, refine a portion of their products IN AFRICA and sell those products in Africa as well as export to the world. Remember that Major Oil Companies have already said that existing Oil Production is not sufficient for the demand expected in 2030… so 200 a dollar a barrel prices are realistic generation will allow for refineries within Africa. This is also a case for the development of the Wind Power generation listed above as the revenue from Oil will be more important and better used from sale then for domestic consumption… a fact most industrialized nations are facing now and are rushing to use renewable energy to sustain their economies in the future. Cost: I have no Idea…. nor do I care… as the price of Oil and Gas makes this component economically feasible and a necessity for Oil and Gas Companies. So simply… they will have to pay for this.

But I also want to add the most precious commodity… a Water pipeline… this commodity is required by every country… and its availability… or unavailability is of extreme importance to every country on the continent. As Natural and renewable energy becomes the norm and oil and gas is in short supply the need for water will only continue to grow around the globe. Currently it is not economical to ship water around the globe… but agriculture and populations within Africa will need this in ever greater numbers and quantities… so the addition of this component is looking forward to the basic future of the Continent of Africa.

 

 

Well this is my Vision for Africa. One that I see creating 75 million jobs on the continent within 20 years. One that will bring development, the creation of wealth The Industrialization of Agriculture and reduction of hunger, one that will bring new opportunities in improving the human condition in Africa in areas such as education, health and the reduction of poverty to levels comparable to industrialized nations… but honestly it requires a commitment by the industrialized nations to actually want to improve Africa for the people of Africa… it requires a commitment of 100 billion dollars over the next 7 to 10 year to build the Phase 1 and 2 components of this project… to build the road structure necessary for the delivery of goods and services necessary for an economy that can be vibrant and not a welfare state … A Commitment that will allow Africa to grow itself into an Industrialized Continent capable of taking care of itself. Where the aid that may still be necessary in Medical and Education can be delivered to those that need it and done so in an expeditions fashion and minimal delays… A Continent that can feed itself, getting food to the people who need it will take days, and not months…. But again the Industrialized nations around the world MUST DONATE this to the Continent so as not to saddle the continent with excessive debt and where dribbling of aid that currently takes place is supplanted but a surge in aid with the objective of significantly reducing that aid as Africa grows and prospers from this project.

 

I have more than this… but I feel this is sufficient… the “Highway” will need to be expanded to run through at least 43 countries. While the rehabilitation will be a temporary substitute for that, it will be necessary to grow such a “highway” of 4 lanes or more of high speed from the benefits that the first 2 phases of this project I am proposing will be able to generate.

While this is my “Vision” for Africa… it is also a Moral Imperative that this take place for the benefit salvation of 800 million Africans.

This article is not a “puff” piece article… it is my drive in life to make this a reality… and so far I am extremely encouraged by the response I have gotten. Yes. There are the Naysayers. Those that say Africa will never develop. Those people and organizations that only see Africa as a giant war zone… Those that have no real comprehension of the real Africa, its people or its potential…. And those that say the project is simply too big to be accomplished… and yet I say to them “Pashaw!” ok… maybe that is too nice… but it is a nice way of saying that this project CAN AND MUST be done… and I expect to work on this for the rest of my natural life to assure that it is done and done right…. That being NO DEBT to already impoverished Countries!!!

If you have read this and are in a position to help make this a reality then I encourage you to write to me at the address listed on “About Craig Eisele” section of this blog. If you are not able to help and support this idea or concept… then please leave a message to let others know that this project has broad support.

I am willing to meet and discuss this with ANY Governmental or NGO group or organization that truly wants to help Africa and wants to see them flourish. Anyplace, Anywhere, Anytime… I will always try to be available to make this project succeed… heck I have even established a methodology to that 92.5 percent of ALL funds donated to this project are used for the Construction with complete transparency to the world… not how is that for a capitalist….

President Kufuor Urges U.S. Investors to Look Beyond Oil

Kufuor Urges U.S. Investors to Look Beyond Oil

BuaNews (Tshwane)
NEWS
19 July 2007
Posted to the web 19 July 2007
Accra
Ghana’s head of state has urged private sector operators from the United States to increase their investments in Africa beyond the extractive industries of oil and precious minerals.

Addressing the Sixth African Growth and Opportunity Act (AGOA) Forum Wednesday, President John Agyekum Kufuor identified agriculture, processing, manufacturing and tourism as some key areas that they could put their money into.

This, said Mr Kufuor, would assist in technology transfer and build the continent’s capacity to become more competitive and effective partners in trade.

Additionally, investors chould also look at the re-location of industries and outsourcing Information Communication Technology (ICT) contracts to the region, he told the three-day forum.

The meeting is also providing a platform for trade ministers from 39 AGOA-qualified countries in sub-Saharan Africa, representatives of the private sector, civil society groups and US officials to discuss ways of increasing US-Africa trade.

The African Growth and Opportunity Act is a US Trade Act that enhances US market access for 39 Sub-Saharan African countries.

The Act originally covered the period from October 2000 to September 2008, but amendments signed into law by President George w. Bush in July 2004 further extended AGOA to 2015.

The theme for this year’s AGOA Forum is: “As Trade Grows, Africa Prospers: Optimizing the Benefits Under AGOA.”

AGOA opens up the US market to eligible countries to export more than 6,400 duty-free and quotation-free products, estimated at more than 10 trillion USD without reciprocity.

Imports from Africa under this initiative totalled 44.2 billion USD last year, a five-fold increase over 2001, when the programme began. The increase involved mostly crude oil and apparel exports.

The programme ends in 2015 and this, President Kufuor said, must be extended by five years to give Africa space to take full advantage of the opportunity.

“Given the time constraint and the very serious capacity challenges, we must admit, Africa can hardly exploit the benefits of this huge initiative anywhere to the full.

“I will therefore appeal, first to the US Government to extend the time of AGOA to 20 years, then to the countries in Africa as well as our development partners in the US to design and implement a specific and efficacious vehicle targeted at empowering African nations in terms of capacity building.”

President Kufuor said AGOA benefits must not be seen only from the perspective of the African.

He quoted the statement made by President Bush, while signing the AGOA Acceleration Act in 2004 that, “When America sells to Africa, it means employment for somebody in America” and said the programme, should therefore work both ways to everyone’s advantage.

The Head of the US Delegation, Susan Schwab, said the US was determined to serve as a strategic partner with Africa and would not stop, until the continent has realised its enormous potentials.

She noted that if the region could increase its share of the global trade, which stands at two per cent, by a single percentage, it would be generating 70 billion USD annually.

This would be about three times the amount of development assistance it has been receiving.

Ms Schwab spoke of the need for enhanced intra-African trade and South-South trading and re-affirmed the US commitment to reducing agricultural trade distortions.

Ms Schwab, who is the Trade Adviser to President Bush, described the future of Africa as full of hope saying, there was now a new breed of political leaders who were determined to turn the economic fortunes of the continent around. – BuaNews-NNN

Interesting OP-ED Piece on “The Hurdles Barring Continent’s Economic Renaissance”

The Hurdles Barring Continent’s Economic Renaissance

The Nation (Nairobi)
OPINION
19 July 2007
Posted to the web 19 July 2007

By Alex O. Awiti
Nairobi
ACCORDING TO A RECENT report of the UN Economic Commission for Africa, the continent’s annual growth rate was 5.7 per cent in 2006. This reflects a continued upward trend since 1998.

Is Africa, often dubbed the shackled continent, finally taking off? Not really. The fundamentals necessary to give African economies the traction for sustained growth are not in place. The continent could slide back into decline, a prospect that has grave implications for global sustainability and security.

High population growth rates, deteriorating land resources, a penchant for violent conflict, a notoriously variable climate and climate change, pose the most intractable threats to Africa’s ability to sustain, much less accelerate, the current economic growth rate over the long term.

The continent’s population is projected to increase from the current 800 million to 1.8 billion by 2050. Its “booming economy” has only had minor backward and forward linkages with agriculture, manufacturing and service sectors, limiting its contribution to job-creation.

ABOUT 70 PER CENT OF AFRICA’S population depends on land for a living due to lack of employment opportunities. Under the medium population projections, per capita arable land in eight African countries, including Kenya, will decline to 0.07, the benchmark land scarcity limit, by the year 2025.

Another six African countries, including Rwanda and Malawi are projected to be only fractionally above the 0.07 ha benchmark. Below 0.07 hectares, farmers must employ highly intensive, efficient and generally expensive agricultural methods such as use of inorganic fertilisers, pesticides and irrigation. Soil degradation constitutes a significant loss of natural capital, valued at an estimated $1 to $3 billion per year according to the 2002 Comprehensive Africa Agriculture Development report.

In the Nyando river basin, soil losses amount to $42.7 million annually based on a conservative value of $15 per ton of soil. This disastrous haemorrhaging of natural resources is a major threat to economies and livelihoods.

The impact of climate change will be greater in Africa. Crop failure from climate change will result in a $25 billion loss. 600,000 km2 of arable land will be ruined. Millions of Africans face droughts and floods with unrelenting regularity, thanks to the El Ni-o/La Ni-a phenomena, increasing their vulnerability to hunger, disease and poverty.

Last year, the El Ni-o phenomenon triggered outbreaks of Rift Valley Fever causing livestock deaths, thus causing significant economic losses to the fragile pastoral economies of eastern Africa.

China is Africa’s most fervent investor. But it could also be the tripwire for Africa’s potential failure to attain sustainable economic growth. Its offer of billions of dollars in unconditional aid to African governments risks driving back into debt countries that have only just benefited from debt relief.

Africa is a tinderbox of fragile ecosystems and resource scarcity lit by the spark of ethnic rivalry and bad governance.

The conflict in Darfur, the Rwanda genocide of 1994, and the incessant ethnic clashes in Kenya all have roots in resource scarcity. According to the World Bank, half of the indicators point to a risk of conflict for the average country in Africa. Investment climate surveys portray Africa as a high-risk place for business.

Doomsayer! You might say. Not quite. The key insight to be gained is that there is real work to be done by the African polity to get the continent on a firm and confident trajectory of sustainable economic growth. At the risk of pontificating, here are some suggestions.

Culturally tuned policies aimed at advancing women’s health and rights must be implemented to manage the high population growth rate.

AFRICAN STATES MUST BUILD political institutions that generate dynamic stability. Internal security must be guaranteed to enable a stable civil environment that upholds security of persons, property, and equality before, the law.

Africa’s economic future is intertwined with the continent solving its crumbling energy and transportation infrastructure. Landlocked countries like Burundi, Chad, Ethiopia and Uganda are spending 40 per cent of their export earnings on transportation and insurance. These issues must be made a priority.

Mr Awiti is a postdoctoral fellow at The Earth Institute at Columbia University, New York.

Mbeki “Lectures” on African Unity and Integration.

In Defence of Yar’Adua’s Speech – Unity And Integration in Africa

Vanguard (Lagos)
DOCUMENT
17 July 2007
Posted to the web 17 July 2007

By Thabo Mbeki

A LECTURE DELIVERED BY THE PRESIDENT OF SOUTH AFRICA, THABO MBEKI, AT THE UNIVERSITY OF CAPE COAST, GHANA, 4TH JULY 2007:

Guy Arnold observes in is book: Africa – A Modern History, that: “At the beginning of the 1960′s, Africa was the world’s most precarious region, its vast geographic centre was ‘empty’ of power, its northern and southern extremities (Algeria and South Africa) in the grip of forces that appeared irreconcilable to the rest of the continent. Its newly independent States with their fragile infrastructure and miniscule economies desperately required help, but help that would not be accompanied by political demands and ‘strings’. Political power depends upon economic strength, and economic strength was what Africa lacked. There were also complex psychological problems associated with independence: African nationalist leaders had to demand and take independence, they could never appear just to receive it. Moreover, the scars of colonialism ran deep for, as Nigeria’s Dr. Azikiwe had said back in 1948: ‘My country groans under a system which makes it impossible for us to develop our personalities to the full.’ And, as another young nationalist said to a European at this time: ‘You have never known what it is to live under colonialism. It’s humiliating’.” (P55, ibid)

Indeed, the former colonial powers were not prepared to let Africa find a development path on her own. In the midst of the Cold War, the western countries, unashamedly and unapologeti-cally, interfered and intervened directly in the internal affairs of independent African countries, resorting, in some instances, to violence and assassinations of those deemed to be against their interests.

Thus, neo-colonialism was not merely a descriptive political term but an actual lived experience of many Africans who had to content with this new insidious, but, still deadly phenomenon.

The fragile infrastructure and miniscule economies that Arnold talks about meant that many African countries were forced to agree to economic aid measures which were, however, accompanied by political demands and manipulations as well as both political and economic strings, which, in some instances, had invariably defined the destinies of some of our countries. Those African leaders bold enough to refuse these forms of neo-colonialism became the targets of the powerful nations of the North and their collaborators on the continent. It would, indeed, be disingenuous to suggest that the same phenomenon is non-existent today.

By the end of the 1970′s, a number of African States had tried, with less success, to take full control of their economies. At this period, many African countries were faced with adverse terms of trade, rising debt, poor and deteriorating infrastructure as well as declining economies. As a result, these countries sought more aid, got into more debt and found themselves increasingly at the mercy of former colonial powers.

Undoubtedly, the western powers liked what they saw because there were limited possibilities for African countries to escape their economic stranglehold.

Clearly, the problems experienced by African States, between the 1960′s and the 1980′s, stem from a number of factors, which include:

The emergence of neo-colonialism which meant few African countries could independently embark on any political and economic development route outside those designed, approved and managed by the erstwhile colonial powers;

The Western powers never envisaged independent African countries to decide their own development paths, rather, they sought to create dependent client States which could be manipulated according to the strategic and economic requirements of these western countries;

Through a number of measures, both political and economic, former colonial powers maintained their ‘spheres of influence’ consistent with old colonial divisions, hence, the zoning and entrenchment, thereof, of our continent as Anglo-phone Africa, Franco-phone Africa and Luso-phone Africa.

The weak and fragile economies of the newly independent countries left them vulnerable to the variety of political mechanisations of imperial powers;

The coincidence in the 1960′s, of the advent of African independence, with African States still being weak, and, the height of the Cold War, made it possible for new actors to enter the African scene in the form of the USA and the USSR. These two powerful players used the continent as one of their sites for their global confrontations at the time when the continent was trying to shake-off the shackles of colonialism. Today, the lives of many Africans attests to the fact that the wounds of those Cold War confrontations are yet to heal;

The colonially-imposed boundaries became fetters in the processes of nation-building, serving as flashpoints of internal conflicts and instability as well as fuelling inter-states conflicts;Debt, aid, manipulations by aid donors and unfavourable trade terms, especially for exports, falling agricultural outputs, natural disasters and others, became an albatross on many African countries;

Conflicts, wars, military interventions and autocracy became widespread, supplanting democracy.

World recession in the 1980′s had a negative impact on the continent’s weak economies;

Economies became either stagnant or declined during this period.

Clearly, for three decades, the combination of these negative factors conspired to deny our countries, individually and collectively, the possibilities of development and economic growth and, thereby, postponing the attainment of a better life for millions of Africans. Unity and integration, as envisaged by Nkrumah, could not happen under these conditions.

It is clear, then, that there are a number of conditions necessary for the attainment of the higher level of unity and integration of Africa. One of these conditions is that all of Africa had to be free. However, with many parts of the continent not free, even in the1970′s, especially most of southern Africa, the matter of integration became practically feasible only in the last decade of the twentieth century.

Chairperson,

In 1991, 51 independent African states gathered in Abuja, Nigeria, to establish the African Economic Community (AEC) as an integral part of the OAU. The following are the objectives of the Community:

To promote economic, social and cultural development and the integration of African economies in order to increase economic self-reliance and promote an endogenous and self-sustained development;

To establish, on a continental scale, a framework for the development, mobilisation and utilisation of the human and material resources of Africa in order to achieve a self-reliant development;

To promote cooperation in all fields of human endeavour in order to raise the standard of living of African peoples, and maintain and enhance economic stability, foster close and peaceful relations among Member States and contribute to the progress, development and economic integration of the Continent; and

To coordinate and harmonise policies among existing and future economic communities in order to foster the gradual establishment of the Community.

To realise these objectives it was agreed that, among others, the existing economic communities will be strengthened and new ones established; agreements would be finalised with the aim of harmonising and coordinating policies among existing and future sub-regional and regional economic communities.

Further, there would be the liberalisation of trade through the abolition, among Member States of Customs Duties and Non-Tariff Barriers so as to establish free trade areas in each regional economic community.

The countries also agreed to adopt a common trade policy, ensure a common external tariff and establish a common market. Of importance, there was to be a gradual removal, among Member States, of obstacles to the free movement of persons, goods, services and capital and the right of residence and establishment.

The 51 African countries then agreed to implement these and other decisions in six stages over a transitional period of 34 years.

The First Stage of a period of five years, for instance, was for the strengthening and establishment of regional economic communities. The Second Stage of eight years was to deal among other things, with the gradual removal of tariff barriers and non-tariff barriers and gradual harmonisation of customs duties.

Then, the Third Stage of ten years had to deal with the establishment of Free Trade Areas while the Fourth Stage of two years would address the harmonisation of tariff and non-tariff systems among the various regional economic communities with a view to establishing a continental Customs Union by means of adopting a common external tariff.

The Fifth Stage would establish an African Common Market for a period of four years and also include the harmonisation of monetary, financial and fiscal policies as well as ensuring the free movement of persons.

The Sixth Stage of five years would be used for the consolidation and strengthening of the structures of the African Common Market, the integration of all sectors, namely economic, political, social and cultural; the establishment of a single domestic market and a Pan-African Economic and Monetary Union, the establishment of a single African Central Bank and the creation of a single African Currency. This Stage would also see setting-up of the structure of the Pan-African Parliament and election of its members by continental universal suffrage.

Of course, as we have seen with the matter of the establishment of the Pan-African Parliament, some of these processes may in fact come earlier than envisaged. But a review of the various regional economic communities (REC’s), which are the building blocks of our integration, will reveal that some of our regions have not advanced beyond the first stages identified by the prescriptions of the African Economic Community (AEC) as outlined in the Abuja Treaty.

For instance, there is uneven development of the REC’s, resulting in some of these bodies being unable to implement the prescriptions of the Abuja Treaty. Accordingly, it would be difficult to argue successfully that we have strengthened all the REC’s.

The Economic Community of West African States (ECOWAS) has made remarkable progress on many of the prescriptions of the African Economic Community. The region has signed a protocol on free movement of persons including the abolishment of visas for citizens of ECOWAS; has approved the free movement of goods, established an ECOWAS common external tariff, removal of all non-tariff barriers of a monetary nature and introduced the ECOWAS travellers cheque. So clearly, this is great achievement in the direction of integration.

My own region, the Southern African Development Community (SADC), which has not achieved as much as ECOWAS, has adopted an overall strategy so as to realise the lofty vision of the African Economic Community as contained in the Abuja Treaty. SADC has adopted the Regional Indicative Strategic Development Plan as well as Strategic Indicative Plan for the Organ on Politics. These two strategic plans are consistent with the vision of continental integration and focus on policy harmonisation as directed by the Abuja Treaty and help with the acceleration of SADC integration agenda.

There are views that, because we have difficulties in implementing the Abuja Treaty, we should abandon our attempts to strengthen the building blocks of our integration and go straight to integrating at continental level. I must say, I have never heard of a builder who abandons the foundation and start with the roof of a house because the building site is full of rocks.

Further, it is clear that the African countries that met in Abuja, Nigeria in 1991, understood very well that integration should happen hand in hand with development. Hence, the emphasis on drawing programmes aimed at the facilitation of better economic activities and the removal of barriers to economic growth and development.

Accordingly, integration is a means through which all Africans should and must collaborate to harness diffused energies and competencies, utilise our vast natural resources and internal economic strengths so as to give our continent a comparative and competitive advantage in the world market.

Because our individual economies are small, our hope for a better market share in the global economy lies in our combined efforts. That is why the Abuja Treaty is such an important benchmark which we should use as we address the many prescriptions it contains among which is the urgent challenge of strengthening regional economic communities.

Clearly, the integration of Africa will be easier and faster when we have, among others, dealt with the many challenges identified by the Abuja Treaty because this is a Treaty drafted from the practical experience of the African people and expressed by a leadership that is undoubtedly committed to the integration of Africa.

If we are to look at the experience of European integration we will realise that part of the challenge faced in this process of integration was to address underdevelopment. Accordingly, the European Union (EU) set up what they called Structural Funds to give financial support to under-developed and economically weak EU regions and countries.

These Structural Funds comprised of the European Regional Development Fund (ERDF), European Social Fund (ESF), European Agricultural Guidance and Guarantee Fund, Pre-Accession Aid and the Cohesion Fund. Between them, they now make-up a major part of the EU budget.

Through these Funds, the EU has managed to help with the further development of the economies of countries such as Spain, Portugal, Ireland and Greece as well as the poorer regions of countries such as Sweden and England.

Clearly, Africa is different from Europe in many respects, especially with regard to their respective economic development.

Today, the annual budgets of many African countries are made-up mainly of foreign aid money. Usually, as we know, the donor countries exert pressure on the recipient countries to pursue particular policies.

In this regard, the question that Africans should ask is: what impact will the donor-recipient unequal relationship impact on our process of integration. Will we achieve an integration that benefits the ordinary people of Africa, or would this process ensure easy control of Africa by powerful nations since these outsiders had an influence on the integration path of the continent.

However, these are challenges, which we cannot avoid but should be examined fully and honestly by all of us. Whatever difficulties we encounter we should not lose sight of our main objective of unity and integration. Accordingly, at all times we should consistently and faithfully pursue the prescriptions of the Abuja Treaty and the objectives of Constitutive Act of the AU, develop our economies and ensure that integration and development proceed side by side.

Chairperson,

Some observers talk about the coincidence of historical processes represented by the adoption of the Abuja Treaty with the evolving of a very important era in modern African politics, represented by an unprecedented democratisation process and the deepening of that democracy by measures taken by Africans themselves with the participation of the masses of our people.

Although in the 1990′s our continent still experienced a number of wars and conflicts, the decade was characterised more by the return of democracy to many countries such that by the end of the decade, multi-party elections and democratic governments were more a norm than an exception. At this period, with the exception of the Western Sahara, all of Africa was free.

The economies of many of our countries were beginning a process of recovery, registering better rates of growth than had been the case for almost three decades. The masses of our people were themselves, in the midst of socio-political changes, redefining their role in society, away from the docile and pliant citizens to being active agents of change.

Emboldened by these developments, we made bold to declare the 21st century an African Century where our collective energies, the processes and programmes that we have adopted would defeat the wretched conditions of the African people as they confidently march towards a prosperous future.

We entered the new century having transformed the OAU into the African Union and adopted its development programme, the New Partnership for Africa’s Development. Many of the NEPAD programmes are being implemented and because we are dealing with a century-old colonial legacy, it will obviously take years for some of these projects to begin making a visible impact on the lives of our people. But the indisputable fact is that: we are on the march!

On Sunday, in Accra, we launched the Pan-African Infrastructure Development Fund – part of the NEPAD initiative – with the governments of South Africa and Ghana, as well we African Development Bank playing a central role together with private sector financial institutions from our continent.

We are indeed happy that the launch of this Fund, starting with an initial amount of US$625 million took place when Africa is celebrating Ghana’s 50th anniversary of independence.

The Fund, which will invest mainly in four key areas of Energy; Transport – including rail, roads, ports and airports; Telecommunication; and Water and Sanitation will clearly have a positive impact on the lives of many people.

We are happy that the initial investors are from Africa because they have demonstrated, in a practical way, that we as Africans have both the determination and the ability to meet the challenges facing our continent. As we embark on the projects identified by this Fund, we will need the skills of people such as these that have gathered at this university because we obviously need a lot of expertise to build infrastructure on our continent.

We will also need our brothers and sisters who are in the Diaspora to be part of this initiative as well as the hundreds of thousands of the skilled Africans who left the continent during the difficult years of the past.

In this regard, we have a duty to strengthen our universities, ensure that they have requisite resources to produce graduates with high kills and attract back into the continent, thousands of those skilled Africans who left for the developed countries. This is part of the building blocks that we must use to attain the important steps identified in the Abuja Treaty for our integration. We may not have the billions the EU has in its Structural Funds, but African initiatives such as the Infrastructure Fund affords us the space, among others, to ensure that Africans own their assets and we are able to determine our own loan terms that will help develop our countries rather than put debt albatross in the necks of succeeding generations of Africans.

Dear friends,

In one of the epic dialogues of his latest masterpiece, Wizard of the Crow, the Kenyan writer and thinker, Ngugi wa Thiong’o, has this line of thought:

“Why did Africa let Europe cart away millions of Africa’s souls from the continent to the four corners of the wind? How could Europe lord it over a continent ten times its size? Why does needy Africa continue to let its wealth meet the needs of those outside its borders and then follow behind with hands outstretched for a loan of the very wealth it let go? (p681 wa Thiong’o, Ngugi, Wizard of the Crow, 2006, Harvill Secker, London).

The pathos embedded in our history as captured in this moving dialogue invokes the need for Africans to look hard at the mirror of history and at the challenges entrenched in the womb of the present.

We have already started this irreversible process to redress the failures of history. We dare not fail!

Chairperson,

The AU Ordinary Session to which I referred at the beginning and which was ably chaired by President Kufour, adopted the important Accra Declaration. We agreed to accelerate the economic and political integration of Africa and move towards the formation of a Union Government with a view to ultimately realise the objective of the United States of Africa as envisaged by the founding fathers of the Organisation of African Unity, and in particular, the visionary leader, Dr. Kwame Nkrumah of Ghana.

The meeting recognised the need for common responses to the major challenges of globalisation facing Africa and boosting regional integration processes through an effective continental mechanism. We also agreed to open-up narrow domestic markets to greater trade and investment through freer movement of persons, goods, services and capital so as to accelerate growth an reduce weaknesses of many of our Member States.

Further, the meeting also recognised that the Union Government should be built on common values that need to be identified and agreed upon.

In all these processes, it is agreed that the African peoples should be involved in order to ensure that the African Union becomes, in reality a Union of peoples and not just a ‘Union of states and governments’. Both these masses of our people as well as the African Diaspora should be involved in the processes of economic and political integration of our continent.

Chairperson, if we implement fully all these decisions that will clearly advance our processes of integration and development then we will have the right to say to Ayi Kwei Armah that indeed the beautiful ones are now being born!

NOTE BY CRAIG EISELE:

    I hope that President Mbeki has been apprised of the Trans African Development Company project plan for Africa… it seems we share some of the same visions.  

8 BILLION Dollars of Power Investments Planned for Nigeria

Investors to Sink $8 Billion into New Power Projects

Vanguard (Lagos)
NEWS
17 July 2007
Posted to the web 17 July 2007

By Hector Igbikiowubo

INVESTORS are working out financing arrangements to sink $8 billion into new power projects capable of generating some 8000 Megawatts (Mw) of electricity – part of a wider plan to address perennial supply.

The National Electricity Regulatory Commission (NERC) has also disclosed it is working on fresh incentives to attract investment in the development and construction of independent power plants.

Dr. Ransome Owan, Chairman of the NERC made the disclosure while briefing newsmen in Lagos recently, explaining that based on the number of licenses issued to investors, 8000 Mw is expected to be generated.

“Based on the number of licenses issued so far, the quantum of electricity to be generated is about 8,000MW of power. By our standards, every 1,000MW costs a billion dollars. So the 8,000MW is equivalent to $8bn worth of investment.

“If you use the exchange rate of N130 to $1, it would amount to over N1.04trn. so that is the investments that Nigerian companies are willing to put up to help us solve the power problems.”

He pointed out that the Commission is currently reviewing new applications which relate to alternative sources of power supply such as coal, wind and solar energy.

“On Friday; an application came in for a coal power plant in Enugu. So we are having expression of interests in alternative power, which includes wind power and solar energy. Although the latter have not formally come to us but we believe in the near future, our energy mix will be improved.

“I believe we need to improve on our energy need other than hydro and gas to coal power, wind power and other renewable such as solar to improve our energy mix and energy security.”

Dr. Owan, an American trained technocrat of no mean repute also disclosed that in line with plans to attract more investment into the sector, the Commission is considering tax holiday of sort as well as floating a utility bond on the stock market which investors could have access to at very low interest rates.

“We are doing a number of things to support our IPPs. One of them is, we are coming up with a package of incentives, which includes tax holidays, customs, importation of spare parts, even intellectual property that they would need, techniques, which would help them reduce their tax burden and give them some tax breaks.

“The second area that we are working on is to try and come up with a power utility bond, that we can introduce into the capital market that would allow the Nigerian population and institutional investors such as PENCOM and estate managers and other hedge funds managers and use them as utility bonds and help us provide more money for the sector.”

Dr. Owan noted that power was a capital-intensive industry and that investors were finding it difficult accessing funds from financial institutions to execute power projects, adding however, that with such utility bonds, which would be backed by the Federal Government, it would be easier to attract more investments and attain set national power goals.

“If power has debt equity involved, there is plenty of debts, but there is lack of equity, and if we trade the power utility bond and it is backed by the Federal Government, we can use that as an instrument to leverage and get private investors and PENCOM to buy these bonds and give us the money in naira, and our IPPs can access that money at a lower interest rate that is currently possible, and that would help to reduce transaction cost,” he said.

Dr. Owan disclosed that the Commission has opened discussions with sister government agencies including the Security and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), the Ministry of Finance, the Federal Inland Revenue Services (FIRS) and the National Assembly.

He said these are stakeholders which have to support the plans of the Commission if it was to succeed in attracting investment to the power sector within the shortest possible time.

The Chairman explained that no percentage of tax relief has been determined yet, noting that this has to be done through negotiations.

“We do not have a percentage amount yet because it is subject to negotiation. Any tax holiday that is less money to the treasury, so those who have the responsibility like the Finance Ministry and FIRS must have to agree to make it into a law. But we are going to use a benchmark of what other industry people are enjoying, and ask for similar treatment.”

Western Firms Scramble for Africa’s Wealth as Africa Struggles

Africa Slumbers As Western Firms Scramble for Its Wealth

The Nation (Nairobi)
NEWS
8 July 2007
Posted to the web 9 July 2007

By John Mbaria
Nairobi
As Western – and now Chinese – companies gather around the greatest concentration of Africa’s natural resources, countries on the continent are yet to embark on positioning local businesses to share in the windfall, analysts say.

Although many international companies in Africa are of Western origin, China seems to be determined to challenge this hegemony, particularly as far as securing oil concession and other businesses in many African countries are concerned.

Analysts add that in doing this, China is not only driven by its own energy predicament, but also by a realisation that Africa is a place Western capital has not entirely “colonised”.

The US’ Energy Information Administration estimates that the continent holds 8 per cent of the known global oil resources and 11 per cent of the world’s production. This might seem a low percentage, but when it is taken into account that much of Africa’s oil is neither discovered nor exploited, one appreciates the fact that it is a substantial resource.

But as global economic growth rises with the US needing an estimated 119.2 million barrels a day and China 14.2 million by 2025, it is believed that Africa’s oil resources will increasingly become a strategically important resource. Already, the “scramble” for this resource has begun in such countries as Chad, Guinea, Nigeria, Uganda, Angola and Sudan, while others such as Kenya, which do not have known oil deposits, are being targeted for exploration.

Global capital

The million-dollar question is how different African countries will position their economies to benefit from not just oil royalties and taxes, but also in terms of attracting global capital to invest in industries and ventures that will create significant multiplier effects and lift millions from poverty and depravity.

As Kenya’s case shows, Africa has not even started to make this a priority. The Sunday Nation has keenly observed that in areas with the greatest concentration of natural resources in Kenya, the local people and, by extension, the country as a whole, has not even started to appreciate their worth.

Africa is asleep in as far as creating modern business ventures from its resources is concerned. For instance, long before subsidiaries of multinationals came in to bottle and offer “designer” water in the market, springs and streams were regarded as a communal resource to be used by all. And until very recently, locals would merely go to the nearest forest to collect as much fuel wood as their backs could carry.

And although some communities used wildlife for protein while others had long traded in ivory, many in Kenya had not learnt to commercialise its “aesthetic” value. But as Africa sleeps, American, European and Asian companies have based “roaring” businesses on its resources. With a history of innovation, better resource exploitation technology and the ability to strike very lucrative deals with the local elite, such capital is moving fast and furious, and might eventually root out what remains of Africa’s social system of yester years.

The new international concerns investing in Africa’s oil and other resources are completing a pattern started in the colonial period and which is almost intact in many African countries. For instance, perched in the periphery of Kenya’s principal forests or concentrated in the vicinity of principal national parks and pristine springs and streams are remnants of the colonial business order.

But now newer companies have set in – credit to the apparent triumph of globalisation – to give the Kenyan economic landscape a newer, refurbished and increasingly exclusive look. Today, we can talk of Coca-Cola’s designer water Dasani, Brooke Bond’s Green Label tea, Kakuzi’s more efficient kilns, Homegrown’s multi-million-dollar horticultural outfits around Naivasha and in Nanyuki or the luxurious spread of African Safari Club’s exclusive resorts in Mombasa’s North Coast.

This scenario is replicated in many African countries. For example, while on a tour of areas around Lake Malawi last year, I learnt that the locals can no longer access much of the lake as it is almost envelope’ by companies that have put up a stream of exclusive tourist lodges and private estates. Malawi newspapers had reported complaints by the traditional chiefs who threatened to mobilise their subjects if the situation was not rectified. The lake is the second largest in Africa after Victoria.

All this has been going on despite a reawakening in many parts of the continent. But interestingly, there is a world of difference between how Western analysts and their counterparts in Africa view this scenario.

Those in the West seem to believe that the continent’s resources are up for grabs by international businesses and that the only “outlandish” threat is China which, they say, will be an economic superpower in the near future.

For instance, writes Assis Malaquais, an associate professor of government at St Lawrence University, New York: “China’s attempt to quench its own growing energy thirst in Africa will hardly be welcome by the US.”

He goes ahead to explore global security scenarios that China’s quest for Africa’s oil portends and concludes; “the stage is set for a colossal tug-of-war between the United States and China over Africa’s oil resources.” Reading through his article, one gets the impression that Africa and its people do not feature anywhere in making decisions on who is to benefit from the continent’s oil and other natural wealth.

On their part, local analysts, especially the lobby groups, feel that the trend in which Africans’ needs and views are disregarded when it comes to strategically positioning their resources portends grave danger for future peace on the continent.

Many cite rising levels of hopelessness, debilitating poverty and stunted economies, thanks to mismanagement, outright looting and increasing global emasculation as the fodder nurturing mass anger and resentment. They cite the case of the oil-rich Niger Delta of Nigeria where there has been a long running and well documented confrontation between the local people and government forces.

African governments should move fast to ensure all the agreements they make with international companies on exploitation of natural resources cater for the local people’s interests. Such deals ought to be fashioned in such a way that they will enable the nurturing of local talent and capacity for future takeover.

Protectionism, some analysts believe, may help to secure local interests in the short term, but ultimately what Africa needs is to develop its own ability to be truly competitive. The continent needs also to develop from its own resources.

ICT Africa Investment Summit

ICT Africa Investment Summit

Accra Mail (Accra)
NEWS
12 July 2007
Posted to the web 12 July 2007
Accra
African stakeholders in the ICT sector are gathering in Accra today, Thursday 12-14 July 2007 for the annual ICT Africa Investment Summit where issues of investment and service delivery in the broadcasting and telecommunications industry will fall under the spotlight.

Telkom’s Senior Executive for Business Development, Wayne Song, will chair the topic Broadband infrastructure projects and applications in Africa.

This topic will examine some of the broadband infrastructure projects and applications through the following sub-topics: broadband via satellite, satellite system, the Nepad infrastructure projects, challenges of implementing infrastructure projects in Africa: experience from SAT-3 operations.

The summit is an annual forum where Africa stakeholders in the ICT sector come together to address issues that are critical to securing increased investment in the broadcasting and telecommunications infrastructure and service delivery in the continent.

“It makes perfect sense for Telkom to be involved in such conversations as they are aligned to our growth strategy which seeks increased footprint into the continent,” said Song.

The summit also highlights the investment opportunities in the sector and identifies options for accelerated development of the ICT infrastructure in Africa. The summit brings together diverse stakeholders in the sector ranging from policy makers, regulators, operators, service providers, potential investors, financial institutions and consumers.

As a leading telecommunications service provider, Telkom has previously attended the summit. In this regard, Telkom has, in the past two years consecutively, won The Kemilinks International ICT Award for the Best National Fixed Line.

Kemilinks International is the coordinator for the ICT Africa Investment Summit. The awards were established to promote the use of ICT in Africa and to encourage best practice. They have been designed to recognise and reward those organisations and individuals that have demonstrated excellence in promoting the use of ICT for the overall development of the African continent.

Other topics for discussion will include rising to the challenge of the broadband gap in Africa, convergence and digitalisation: issues arising for Africa, spectrum planning and allocation: what are the stakes in Africa, country strategies in deployment of broadband networks in Africa, investing in broadband infrastructures: funding sources and strategies, ICT infrastructure development in Africa: issues arising.

“Telkom’s expansion strategy commits Telkom to increasing its broadband footprint in the African continent. Our latest acquisitions of both Multi-Links and Africa Online are a case in point,” stated Song.

Do Rich Nations Hold Key to Africa’s Success??

Continent Leaders, Rich Nations Hold Key to Africa’s Success

New Vision (Kampala)
COLUMN
11 July 2007
Posted to the web 12 July 2007

By Dr. Tajudeen
Kampala
SATURDAY July 7, 2007 marked the halfway point in a journey whose destination and time of arrival was set by 189 heads of state and governments from most countries of the world, including all the 53 member states of the African Union (AU).

It also included the only African country that is not a member of the AU, Morocco.

It was a large bus of hope that the leaders invited the peoples of the world but especially the poor, the marginalised, the sick, the weakest to join with promises that come 2015, the bus will deliver them to a better life and give them more concrete reasons to have faith in leaders, states and society.

The Millennium declaration was transformed into concrete, achievable, measurable; time- bound commitments known as Millennium Development Goals (MDGs). A journey of 15 years should have reached its midway point by July. So are we halfway to all the targets set in the eight goals?

If we are on target there will be no cause for alarm even though the driver and even some of the passengers may demand more effort to save more time. There is no harm in arriving early as long as we arrive safely. If we are not in the midway town, questions have to be asked why. Did the vehicle have a puncture? Or even worse was it involved in a headon collision or did it crash? Is the driver ok? Or did any of the passengers fall off or felt seriously sick needing emergency attention?

If the bus is still on the road but travelling slowly, we have to ask what can be done to make the journey smoother and safer, to catch up for lost time. The MDGs bus is happily not involved in any serious accident. It is still running across different regions of the world but the road-blocks are more in some places than in others.

Even within the same region there are varying speeds because in some parts the drivers seem to dose off whereas in others they are on full alert.

It is in Africa that the bus has been facing many road-blocks. Some of these were deliberately constructed by armed robbers of development (such as inept political leadership, corrupt elite and insensitive government and docile population) while others were artificially created by uncooperative users of the road (such as rich countries that continue to rob poorer countries through unfair trade) while some of the obstacles could be the result of what in Hausa is termed ‘gudu ba gyara’ – reckless driving.

The general global picture from the UN General-Secretary’s MID-term Report shows that Africa is the only continent where the MDGs risk not being met. Unfortunately, Africa is the region that needs the MDGs and really more than the MDGs than any other region of the world. But the general picture hides the growing success stories that show that it is not all bad news.

There are countries that are doing quite well on a number of the goals even if they may not meet all of them. Across the continent in education, most of the countries have seen huge rises in enrolment in primary schools as a result of debt relief and new prioritisation of the education of our children by many governments. Uganda, for instance, has raised the gear from universal primary education to the secondary level; Kenya is considering the same. Malawi has proven that where there is a will there is a way and even Africa’s sleeping giant, Nigeria has reintroduced compulsory universal basic education.

On maternal death in childbirth, infant mortality and education, Mozambique(returning to peace just in a decade) and Rwanda (that ended genocide only 12 years ago) are making steady progress. Uganda’s pioneering leadership in HIV/Aids awareness, advocacy, prevention and treatment are catching on in many countries that are actually beginning to do better than Uganda.

All this is good news and shows that it can be done and more can be achieved. South Africa is the only African country to have made a promise to achieve the MDGs not in 2015 but by 2014. Given the enormous resources of the country, it cannot be a congratulatory effort but it will be welcome.

Resource-rich African countries and those with big economies like Nigeria, South Africa, Kenya, Angola, DRC, Egypt, Libya, should really be judged by the MDGs because they and should do much better than that. Even the poorer countries like Ethiopia can do better if they set their priority right. If Ethiopia has resources to occupy another country it can certainly do better at home.

The main internal and external obstacles to not achieving the MDGs remain the political will of our leaders and the insincerity of the political leaders of the rich world. The covenant on the MDGs was a very simple one.

If poor countries deliver on goal 1-7, i.e. hunger, poverty, health , education, governance and rights issues and livelihood the richer countries will also deliver on Goal No 8: improved quality and quantity of aid, debt relief and reform of the unjust global trading system that penalises the poor. We need to hold our governments accountable for our side of the bargain.

But even as we are succeeding in that respect, our gains will not translate into sustainable development and social progress if the West and other rich countries of the world do not deliver on their own promise.

Mutual accountability of the political leaders of the world to their citizens (who are the passengers on the bus) is what will grease the rusty bits, service the engine and refuel the MDGs bus at mid-term so that it can coast home successfully by 2015.

Continent’s Energy Crisis to Take Centre Stage At Lisbon in December

Continent’s Energy Crisis to Take Centre Stage At Lisbon

Ghanaian Chronicle (Accra)
NEWS
11 July 2007
Posted to the web 11 July 2007

By Joseph Coomson

AFRICA’S WORSENING energy situation would take centre stage at the revived (European Union (EU)-Africa Summit in December this year in Lisbon.

As one of the policy initiatives to be discussed, the EU-Africa Partnership on Energy is expected to help solve the energy problems of Africa.

On both continents, energy security, access to secure, sustainable and affordable energy services, and the sustainable and efficient management of energy resources are prerequisites for development and prosperity.

Even though Africa has abundant energy resources, it currently has the world’s lowest rate of access to modern energy. Africa has been having serious energy shortages than Europe. Countries such as Zimbabwe, Ghana, Nigeria, and Togo among others are in dire need of energy.

It is estimated that 600 million Africans do not have access to electricity, and use wood for cooking and heating. 400,000 Africans, mainly women and children also die every year of respiratory diseases related to the indoor air pollution from using wood and other traditional fuels.

According to Commission of the European Communities statement which was released last month in Brussels, the investment needs are huge – according to the World Bank, ensuring 100% access to electricity in Sub-Sahara Africa by 2030 would require an annual investment of – 8.27 billion.

“Already now Europe and Africa are closely interlinked in the energy sector: Europe benefits from African energy exports, and Africa benefits from European technical and financial support in the energy sector,” the report said.

It stressed that the increasing global concerns on energy security, energy access and climate change have clearly reinforced the links between the energy future of the two continents, and created the need for joint approaches.

Against this background, the envisaged Africa-EU Energy Partnership will be an innovative platform for an enhanced political energy dialogue between Africa and the EU.

“Via the Energy Partnership, Africa and Europe will share knowledge and experience, develop common policy responses and stimulate specific action that addresses the energy challenges of the 21st century,” the statement stressed.

The Partnership will address security and diversification of energy supply, both for Africa and Europe, promote access to affordable, clean and efficient energy services, stimulate energy markets and aim to increase financial and human resources in support of Africa’s sustainable energy development, while promoting enabling frameworks for investments as well as market transparency and stability.

It would involve key players, such as the private sector and International Financing Institutions, and find ways to include emerging donors’ in the dialogue on energy sector development in Africa.

The summit would work towards the achievement of concrete objectives to strengthen the existing Africa-EU dialogue on access to energy and energy security, to scale up investment in energy infrastructure, including promotion of renewable energy solutions and energy efficiency, to amplify the development-oriented use of oil and gas revenues, to promote transparency and enabling frameworks as well as to mainstream climate change into development cooperation.

The Partnership would also build on existing instruments, such as the overall framework of the EU-Africa Infrastructure Partnership and its Trust Fund, the European Union Energy Initiative (EUEI) and its ACP Energy Facility (currently -220 million), the national and regional indicative programmes under the 10th EDF and the thematic programme on environment, management of natural resources including energy.

Other initiatives to be deliberated upon are the EU-Africa Partnership on Climate Change, EU-Africa Partnership on Migration, Mobility and Employment, EU-Africa Partnership on Democratic Governance and creation of a Joint EU-Africa political and institutional architecture.

The postponement of the EU-Africa Summit in 2003 was seen as a major political disappointment and Commission on European Communities welcomed the EU-Africa partnership is now back at the highest political level – where it belongs, the Commission of the European Communities statement had said.

The summit which was revived by the AU chairman, President John Agyekum Kufuor is an opportunity for the political leaders of the two continents to make strong action-oriented political commitments on current key international issues, notably climate change, migration, sustainable energy, governance and security, and to set the political course for the EU-Africa strategic partnership.

African and EU Heads of State and Government, representing 80 countries and almost 1.5 billion people will then sign a Lisbon Declaration – an EU-African consensus on values, common interest and strategic objectives.

Trans African Development Project Contact Information

 

 

 

 

 

 

 

Please refer to the below referenced post for  new information.

 

http://craigeisele.wordpress.com/2011/05/24/update-on-corporate-cperations/

 

Information requests for the Trans African Development project can be made at the following E-mail Address:

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