The dominant position that China holds in global manufacturing means that for many years China has also been the largest global importer of many types of recyclable materials. Last year, Chinese manufacturers imported 7.3m metric tonnes of waste plastics from developed countries including the UK, the EU, the US and Japan.
However, in July 2017, China announced big changes in the quality control placed on imported materials, notifying the World Trade Organisation that it will ban imports of 24 categories of recyclables and solid waste by the end of the year. This campaign against yang laji or “foreign garbage” applies to plastic, textiles and mixed paper and will result in China taking a lot less material as it replaces imported materials with recycled material collected in its own domestic market, from its growing middle-class and Western-influenced consumers.
The impact of this will be far-reaching. China is the dominant market for recycled plastic. There are concerns that much of the waste that China currently imports, especially the lower grade materials, will have nowhere else to go.
This applies equally to other countries including the EU27, where 87% of the recycled plastic collected was exported directly, or indirectly (via Hong Kong), to China. Japan and the US also rely on China to buy their recycled plastic. Last year, the US exported 1.42m tons of scrap plastics, worth an estimated US$495m to China.
So what will happen to the plastic these countries collect through household recycling systems once the Chinese refuse to accept it? What are the alternatives?
Plastics collected for recycling could go to energy recovery (incineration). They are, after all, a fossil-fuel based material and burn extremely well – so on a positive note, they could generate electricity and improve energy self-sufficiency.
They could also go to landfill (not ideal) – imagine the press headlines. Alternatively, materials could be stored until new markets are found. This also brings problems, however – there have been hundreds of fires at sites where recyclable materials are stored.
Time to change our relationship with plastic?
While it is a reliable material, taking many forms from cling film (surround wrap) to flexible packaging to rigid materials used in electronic items, the problems caused by plastic, most notably litter and ocean plastics, are receiving increasing attention.
One way forward might be to limit its functions. Many disposable items are made from plastic. Some of them are disposable by necessity for hygiene purposes – for instance, blood bags and other medical items – but many others are disposable for convenience.
Looking at the consumer side of things, there are ways of cutting back on plastic. Limiting the use of plastic bags through financial disincentives is one initiative that has shown results and brought about changes in consumer behaviour. In France, some disposable plastic items are banned and in the Britain, leading pub chain Wetherspoons has banned disposable, one-use plastic drinking straws.
Deposit and return schemes for plastic bottles (and drink cans) could also incentivise behaviour. Micro-beads, widely used in cosmetics as exfoliants, are now a target as the damage they do becomes increasingly apparent and the UK government has announced plans to ban their use in some products.
Many local authorities collect recycling that is jumbled together. But a major side effect of this type of collection is that while it is convenient for the householder, there are high contamination levels which leads to reduced material quality. This will mean it is either sold for lower prices into a limited market, will need to be reprocessed through sorting plants, or will be incinerated or put in landfill. But changes to recycling collections and reprocessing to improve the quality of materials could be expensive.
The problems we are now facing are caused by China’s global dominance in manufacturing and the way many countries have relied on one market to solve their waste and recycling problems. The current situation offers us an opportunity to find new solutions to our waste problem, increase the proportion of recycled plastic in our own manufactured products, improve the quality of recovered materials and to use recycled material in new ways.
Mali is one of the least developed countries in the world, with nearly half the population living near the poverty line. In the past six years, the country has experienced civil war, jihadist terrorism and a coup d'etât. More than 500,000 Malians have fled the instability and violence.
Supported by France and the US, a coalition of Sahelian states – called the G5 – have been mobilised by the UN Security Council to secure Mali from jihadist advances. At stake for all these multinational forces are also wider interests of regional stability, including petroleum and mineral resources. Despite the increased militarisation of the country, jihadist insurgents continue to attack multiple Western and military outposts. This in turn has increased the need for their continued intervention.
Adding to the complex security mix is the fact that multinational companies are exploring petroleum reserves in Mali’s Taoudeni Basin. The basin stretches from Mali’s northern borders with Algeria and Mauritania southward to the river Niger – it contains vast oil and gas reserves. Estimates drawn up in 2015 suggest that Taoudeni has petroleum resources on a par with Algeria.
For the past four years Mali’s central government in Bamako has encouraged exploration of the basin. This suggests that a certain threshold of stability has been achieved and that the government believes that oil exploration can contribute to the region’s long term stability.
The reality is that it’s likely to do the opposite and fuel tensions rather than ease them. Fears that oil exploration will exacerbate tensions are based on the fact that oil companies need protection from the government and its partners to able to operate. This is likely to mean using foreign military forces to protect commercial activities.
The French have engaged in counter terrorism in the region since January 2013. Their original operation emptied Mali’s main cities of Al Qaïda of the Islamic Maghreb and other groups that had taken over during the 2012 civil war. But it failed to weaken the jihadist groups.
France now has 4,000 troops contributing to the G5’s 5,000 . There is also an American drone base, a UN peacekeeping force and the US has trained the Malian army. All have contributed to Mali becoming increasingly dependent on external forces to keep the peace.
Yet even with more sophisticated fire power, the military has failed to stem the growth of terror groups or prevent attacks. Jihadist groups seem to be garnering greater influence over local populations and thus greater permanence in the region. This is in part due to the fact that it serves as an alternative to the failing Malian government in some regions.
Since 2012, two groups are reported to control the northern part of the region. These include the Coordination of the Azawad Movement and Al-Qaïda of the Islamic Maghreb, and they have highly contradictory priorities.
The Coordination of the Azawad Movement is a secular movement responding to the marginalisation of Northern Mali and is a coalition of armed groups that rose up after the 2012 rebellion. The group was party of the May 2015 Algiers Peace Accords that attempted to end Mali’s three year-long civil war. Through these discussions, the group requested that 20% of the region’s energy and mineral production be reinvested in northern Mali.
In contrast, Al-Qaïda hopes to reinstate the Islamic Maghreb and rule the region as the caliphates did in the Middle Ages. To achieve this goal, the group has terrorised western symbols like the attack on a popular hotel in Bamako in 2015.
Oil development in the Basin
Since the first test wells were drilled in the 1970s the region has been perceived as a “last frontier” of unexplored West African oil. In 2004 the government under president Amadou Toumani Touré injected new energy into exploration efforts in a bid to become a member of Africa’s petroleum club. New petroleum legislation was passed and nearly 700,000 sq kms was carved up into 29 blocks across the country. These were offered as shared concessions to foreign petroleum companies.
So far over 15 companies from Australia, Canada, the US, Ireland, United Arab Emirates (UAE), France, Spain, Italy and Qatar have been involved in activities in what has become known as “the El Dorado” of petroleum reserves. Over the past four years the Mali government has also made a concerted effort to invest in the northern regions. Under programmes like the “emergency development programme for the northern regions” nearly $180 million has been put into the most vulnerable communities. Money has been primarily targeted at much-needed infrastructure.
It’s possible that petroleum earnings and the development plans may eventually contribute to peace and stability in the north of the country.
But it’s equally plausible that petroleum development could lead to a resource curse. This refers to situations in which government coffers are filled with petro dollars, none of which is invested in the communities where the oil is being extracted. The impact for local communities is often land degradation, a greater distrust of institutions and further disenfranchisement.
To avoid the resource curse and to map a more credible road to peace in the region, the focus should rather be on building the capacity of local communities to have a greater say in how the oil extraction can be pursued. And how the proceeds can be more equitably distributed.
The African Development Bank (AfDB) has developed a new initiative called the Technologies for African Agricultural Transformation (TAAT) initiative – a knowledge- and innovation-based response to the recognized need to scaling up proven technologies across Africa.
Already, 25 African countries have written letters to the AfDB confirming their interest and readiness to participate in TAAT, and help transform their agriculture.
It will support AfDB’s Feed Africa Strategy for the continent to eliminate the current massive importation of food and transform its economies by targeting agriculture as a major source of economic diversification and wealth, as well as a powerful engine for job creation. The initiative will implement 655 carefully considered actions that should result in almost 513 million tons of additional food production and lift nearly 250 million Africans out of poverty by 2025.
TAAT will execute bold plans to contribute to a rapid agricultural transformation across Africa through raising agricultural productivity along eight Priority Intervention Areas (PIAs).
The commodities value chains to benefit from this initiative are rice, cassava, pearl millet, sorghum, groundnut, cowpea, livestock, maize, soya bean, yam, cocoa, coffee, cashew, oil palm, horticulture, beans, wheat and fish.
“TAAT was born out of this major consultation and brings together global players in agriculture, the Consultative Group on International Agricultural Research, the World Bank, the Food and Agriculture Organization of the United Nations, the International Fund for Agricultural Development, World Food Programme, Bill and Melinda Gates Foundation, Alliance for a Green Revolution in Africa, Rockefeller Foundation and national and regional agricultural research systems, ” said AfDB President, Akinwumi Adesina, at a TAAT side event at the 2017 World Food Prize in Des Moines, Iowa.
“It’s the biggest consolidation of efforts to accelerate agriculture technology uptake in Africa. Technology will address the variability and the new pests and diseases that will surely arise with climate change,” he said.
Adesina explained that TAAT would help break down decades of national boundary-focused seed release systems. Seed companies will have regional business investments, not just national ones, he said. “That will be revolutionary and will open up regional seed industries and markets.”
TAAT, he explained, is to be implemented through a collectively agreed central delivery platform, coordinated by the International Institute for Tropical Agriculture, with national, regional and international agricultural research centres.
“TAAT is a transformative and landmark partnership effort. The African Development Bank, World Bank, AGRA, Bill and Melinda Gates Foundation, and the Rockefeller Foundation intend to mobilize US $1 billion to help scale up technologies across Africa.”
The Director, External Communications in the African Region of the World Bank Group, Haleh Bridi, described TAAT as a regional technology delivery infrastructure for agriculture, linking countries across agro-ecological zones.
Bridi stressed that Africa can learn from Asia, which had made “amazing strides” in its agricultural revolution. “This is why we are involved in the TAAT programme,” she said to resounding applause.
The Director for Agricultural Development at the Bill and Melinda Gates Foundation, Nick Austin, said, “Technology obviously evolves the journey to prosperity, the way economies transform and the way small-holder farmers engage.”
“Locally, there are varieties. Locally, there are new technologies and solutions to small-holder farmers. We are in the position to play a key role in bringing the best technologies available and supporting new ways in delivering this to farmers. We are delighted and excited to be part of this initiative.”
The President of Alliance for a Green Revolution in Africa (AGRA), Agnes Kalibata, stressed that African governments should drive technological development in agriculture.
“What TAAT is going to have to do is work with the governments. We have lots of institutions that are ready for these technologies. We should work with governments to ensure that the technologies are not just ready to work, but become available to their country people. I think that ensuring that the farmers get all the technologies they need to is going to be very important,” she said.
The President of the Rockefeller Foundation, Raj Shah, highlighted the impact of technology on agricultural yields.
Zimbabwe has been engulfed by fruit shortages after the government banned imports and other horticultural products with immediate effect.
Producers said while the ban would be welcome for some products it would shorten the availability of apples and pears whose production in Zimbabwe is constrained. Agriculture Minister Joseph Made told state media that the the imports wasted the much needed foreign currency”. This means that the importation of fruit and vegetables will be stopped immediately,” Made said. “We are finalising on the exact list of foreign-produced fruits that are occupying shelves in shops.”
Zimbabwe is battling worsening foreign currency shortages that have been epitomized by finance institutions running out of bank notes and the government struggling to mobilise foreign currency for key imports such as medicines, power and raw materials among others.
Data from Zimstats, the national statistics agency shows that as much as $80 million was spent on horticulture produce imports in 2016. Horticultural experts yesterday told Business Report that there was no need to import produce such as carrots, tomatoes and vegetables as they could be farmed locally.
“Why should we import carrots and tomatoes because by importing tomatoes we are essentially importing water,” said the Fresh Produce Marketers Association of Zimbabwe’s .Newton Jaravani.
“We are in agreement with government and our membership feels that where there are shortages people should engage local growers and we will be able to grow the fresh produce.”
Zimbabwe is still struggling to meet demand and relies on imports for some produce but traders warn that there could be more shortages following the latest ban. Mbare Musika, a trader at the biggest fresh produce market in Harare, said imports, mostly from the southern African region, “make up for a bigger share of horticulture products and fruits sold” at the market.
“We don’t have capacity on apples and we have a deficit of 20 000 tonnes a year,” Musika said. “We will engage government to explain the situation because right now no one can go without an apple.”
Credit - BUSINESS REPORT
THE Nigerian Government has taken steps to take over bank accounts without Bank Verification Number (BVN) as a Federal High Court sitting in Abuja has frozen all such accounts by stopping all outward payments, operations or transactions.
The court order may affect over 15 million bank accounts with deposits running into billions of naira as, according to the Nigeria Inter Bank Settlement System Plc (NIBSS), the organisation saddled with registering bank customers for BVN, out of the 45.85million bank accounts in the country, only 30,511,506 had been issued with BVN numbers as of October 8, 2017.
The Attorney-General of the Federation, Mr Abubakar Malami (SAN), had instituted an application seeking for an interim order directing all commercial banks in the country to disclose all individual and corporate accounts in their custody not covered by BVN.
The court, presided over by Justice Nnamdi O. Dimgba, gave the interim order in Suit no: FHC/ABJ/CS/911/2017 to all money deposit banks to disclose all bank accounts that are not linked with a BVN, declare the account numbers of such acounts, the branch in which the accounts are domiciled as well as the outstanding balances and advertise same in a widely circulated newspaper within seven days while giving owners of the account 14 days to identify themselves, failing which the funds in such accounts would be forfeited to the Federal Government.
The court, in an ex parte motion, said it gave the order because running a bank account without a BVN is “contrary to Section 3 of the Money laundering Act 2011 and Central Bank of Nigeria (CBN) guidelines.”
The government has been concerned that its move to unveil those hiding stolen funds in the banks was being frustrated by bank officials colluding with them by allowing them to run accounts without BVN.
Recently, the Acting Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, raised the alarm that some banks were helping corrupt government officials to operate secret accounts without BVN.
While delivering a lecture at a workshop organised by the Chartered Institute of Bankers of Nigeria in Lagos, on September 26, 2017, he said some bank officials were in the habit of “opening accounts for government officials even after the introduction of the Treasury Single Account, thereby allowing government funds to be diverted.”
According to him, “There are several bank accounts that are not linked to BVN and are still active.”
Similarly, the CBN had last week, in a memo signed by Mr Dipo Fatokun, Director Banking and Payment System, directed all banks to properly capture customers’ BVN data and ensure that a customer’s names on the BVN database are the same in all of his/her accounts, across all banks.
In the memo entitled the ‘‘Regulatory Framework for BVN and Watch-list Operations in Nigeria,’ the CBN said this became necessary to forestall fraudulent activities of bank customers.
The framework stated that “change of customer records shall be allowed as follows: Name change with supporting documents, subject to a maximum of twice a year; change of date of birth shall be allowed only once with supporting documents; minor correction due to errors supported with valid means of identification.”
According to the CBN framework, a watch-listed individual shall not be allowed to enter into new relationship with any bank.
The court also ordered that the banks “should disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and other relevant information related to the transactions made on the accounts.”
The CBN, had in conjunction with the Bankers Committee, embarked upon the deployment of a centralised BVN system and launched the project in February 2014 as part of the overall strategy to ensure effectiveness of the Know Your Customer (KYC) principles, and the promotion of a safe, reliable and efficient payments system. The BVN gives a unique identity across the banking Industry to each customer of Nigerian banks.
Credit: Nigerian Tribune
Zimbabwe’s foreign exchange situation is getting worse in spite of extensive touting of a ‘nostro-stabilisation’ loan the Reserve Bank of Zimbabwe says it got from Afreximbank. How do we know this? Watch the indicators from your bank.
On 11 October 2017, Ecocash, which some moons ago actively promoted its Mastercard, had this to tell its customers: “Due to the prevailing foreign currency challenges we regret to advise that with immediate effect, Ecocash will be suspending international transactions on the debit card…” Of course, they added the usual ‘we apologize for any inconveniences (sic) caused…” bla bla bla. This is not just true of Ecocash and its mother bank, Steward Bank. It’s true of many banks in Zimbabwe, including the foreign-controlled ones.
Foreign exchange is a resource. Unlike five years ago, the obtaining situation is that very few, a privileged few, have access to it. In its wisdom or lack of it, the Reserve Bank of Zimbabwe, and by extension, Government of Zimbabwe decided to plug the gap by printing a note (bond note) they assigned the same value as the United States dollar. In my previous writings, I argued that the bond note is in fact a local currency, so there is no need to dwell much on this.
Technically, a note (whether bond or promissory) is a signed document containing a written promise to pay a stated sum to a specified person or a bearer at a specified date or on demand. As such, strictly speaking, the Reserve Bank of Zimbabwe used bond notes and various other negotiable instruments like treasury bills to borrow real United States dollars from depositors.
Former Finance Minister Patrick Chinamasa recently revealed that $2,5 billion Treasury Bills were issued out as at June 30, with $127 million going towards paying the Reserve Bank of Zimbabwe debt and $263 million towards recapitalisation of State Enterprises and Parastatals. It’s up to citizens and various other institutions representing citizens to audit and assess how those funds were used.
But the important point is – they decided to use the force of law through Statutory Instrument 133 of 2016 Presidential Powers (Temporary Measures) Amendment of the Reserve Bank of Zimbabwe Act, which INSISTS that bond notes are acceptable legal tender, and that they have an equal value to United States dollar.
So, let’s take a step back! Adam Smith laid the foundations of classical free market economic thought through his 1776 work called An Inquiry into the Nature and Causes of the Wealth of Nations [often referred to as The Wealth of Nations]. It’s important because exchange rates are indeed a function of the wealth of nations.
Through what he termed “the invisible hand”, Smith suggested that an economic system is automatic, and, given substantial freedom, is able to self-regulate and drift towards self-efficiency. The self-regulation ability is of course limited by tax incentives, externalities, monopolies, political lobbying, and things like privileges given to one group of economic players at the expense of others.
The most relevant part of Smith’s work to my thinking is as follows: “As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can.
He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.”
I got into an engagement with Busisa Moyo of United Refineries about parallel market pricing. He argued that the rates were crazy and there is no basis (pricing model) for the rates. But he could not tell me either what the basis or pricing model was for insisting that the value of a bond note is the same as the United States dollar as intended by Mugabe’s decree. I argued there was a basis for parallel market pricing.
The basis is rationalism. Rationalism is the philosophy that knowledge or actions are driven by reason, logic and intuition. This philosophy brought into economics the notion of homo economicus, or economic man or rational man; which suggests that humans are consistently rational agents that pursue narrow self-interests to maximise utility (satisfaction).
Although the thinking around the rational man came centuries later through John Stuart Mill and others, Smith had noted this already when he pointed out that: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
We could argue as well that it is not from the benevolence of the Reserve Bank of Zimbabwe governor, the president or the minister of finance that they fix the rate of the bond notes to that of the United States dollar and insist the two currencies are equal, but from their regard to their self-interest – and if I may add, political self-preservation, which gives them access to power, money and control.
So what drives the parallel market rates. As I told Busisa Moyo, it’s a simple case of supply and demand. The scarcer the United States dollars, the higher the value of Zimbabwe dollars (defined as bond notes, digital bank balances and other instruments) you must offer for US dollars.
President Mugabe admitted on national television this year that he also now keeps cash at home (I am not sure which bank gives him that cash), he is just being a rational man. If you also keep cash at home, you are just being a rational man. If I keep cash in my home, I am just being a rational man. If the next guy hasn’t got the United States dollars cash, but badly needs them, and he wants to exchange them for the Zimbabwe dollar as (defined above), the rational man, in pursuit of his own self-interest and not charity, will have to charge a price for them.
If the one with Zimbabwe dollars want the United States dollars badly enough, he will have to pay or negotiate an exchange rate. It’s how things work in the market that officials have chosen to refer to in pejorative terms like a parallel market or black market. But the fact is – it is the real market. It is made up of rational, economic men and women who have woken up to the reality that in the face of United States dollars scarcity, the notion that bond notes have the same value as United States dollars, by decree or any other means is not only ridiculous, but a giant fraud!
Let us be honest. Let us face it. Even Mangudya would not give you $5,000 United States dollars cash from his personal hoard in exchange for 5,000 bond notes. We can challenge him and put him to the test. Those ministers of government would not do it either. Take your bond notes or RTGS and challenge anyone shouting the one is to one mantra and challenge them to give you United States dollars cash in exchange and see if they will.
The reason they won’t do it is because they are economic men, and as such are not stupid. In short, to echo Adam Smith: “As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value.”
The rational man thus seeks the greatest value from his capital. In short, it would be stupid to give away my $100 for 100 Zimbabwe dollars when John wants to pay me 140 Zimbabwe dollars for it, and while Peter is offering 150 Zimbabwe dollars for the same.
As a rational person, I will have to take the highest offer for my US$100. This is the basis for the pricing that we see real market – what officials want to call parallel market. As a matter of fact, it’s just a normal market which gets a bad label from our politicians, who are mere economic man pursuing their political self-interest.
To be clear, Zimbabwe no longer uses the United States dollar as currency. We now have a hotch-potch of digital bank balances, bond notes and bond coins.
I also argued that, “Robert Mugabe is the only President with the unique distinction of battering two different currencies in his lifetime and within a space of fifteen years. He did not just ruin the Zimbabwe dollar, but also tore apart the United States dollar as we knew it 2009 to 2013.”
When the Zimbabwe dollar died slowly in 2008, it was the rational and economic man and women of Zimbabwe, the people, who buried the corpse and brought in the United States dollars as we know them. Between 2013 and 2018, through warped policies, wanton spending, recklessness and gross ineptitude, Mugabe’s government chased away the United States dollar, leaving the Zimbabwe dollar in its trail.
But guess what, its repetition all over again. The government is battering and killing this Zimbabwe dollar, by overprinting it. And if you watch carefully, again, like in 2008, the people are bringing back the United States dollar again, at the right price officials like to call parallel market rates.
In short, they are busy killing the Zimbabwe dollar they brought back between 2013 and 2015, and the people are, once again, bringing back the United States dollar at the right price. They are the heroes, you know why? Because they are rational economic men and women! It’s the work of the invisible hand.