Africa has long been considered a continent with growth potential. Although this is the case, the question remains, is the continent developing at a sustainable rate?
According to World Bank statistics, intra-African trade was at just 11% of the continent’s total trade between 2007 and 2011. In 2015, intra-African trade was worth just $170 million, when the potential stands at trillions of dollars .
While intra-African investment is critical to Africa’s future economic growth, it still remains significantly low despite the positive results it can yield. Intra-African trade fails because of volatile political climates and governance challenges in some countries. Potential trading partners cannot collaborate because of jurisdiction red tape.
Intra-African trade is essential so that African countries can do business with each other frequently in order to grow the economies of the continent and raise Africa’s global competitiveness. Recently, I attended the Africa CEO Forum, an event which seeks to find future solutions for the benefit of the continent’s development by bringing together governments and industry captains to engage on what is possible and intra-Africa trade was a topic in which many were interested and dominated the conversations in some of the sessions and hallways.
While Africa is often an overlooked investment target for many global multinationals as a result of infrastructure and policy challenges, it is upon businesses that are Africa born to reinvest in the continent. I have always believed in the opportunity that exists in Africa and that is the reason why we, at Tsebo Solutions Group have implemented a robust plan that has seen us build the business relationships we have on the continent. Although we believe that African economies will continue to grow despite the various market challenges, governments can catalyse easier trading practices to alleviate the burden of governance issues and border control challenges that many countries on the continent still face.
The World Bank forecasts growth of 3.2% for the year, up from 2.4% in 2017. It also predicted slightly higher growth for 2019 of 3.5% . This provides a window of opportunity for businesses to strengthen trade
relationships with counterparts on the continent to build sustainable trade. As an African business, we saw the need to focus on harnessing the power of doing business on the continent, not only to cement our footprint as a facilities management provider that understands Africans, but to support and strengthen the growth of the continent.
Intra-African investments are critical to Africa’s future economic growth as it creates greater opportunities to uplift the people of Africa as it has more of a direct impact on poverty by creating more job opportunities for the poor. Tsebo Solutions Group employs over 39 000 staff and more than 50% of the business’ turnover is fed back to our staff in wages. This has created a unique opportunity to not only grow our service delivery capabilities in Africa, but to uplift people across the continent.
However, it is important to note that expanding into Africa requires a deep understanding of the countries and their unique characteristics.
As a business, we believe that we can only reach our full growth potential by continuing with our Africa journey. With a customer base of nearly 1 billion people in Africa, the continent is set to grow only if African business continue to trade with each other and governments realise the importance of the private sector in opening growth opportunities.
Clive Smith, Chief Executive Officer, Tsebo Solutions Group
Africa has made great progress in the fight against malnutrition. Between 2000 and 2016 Senegal, Ghana, Rwanda, Ethiopia, Togo, Cameroon and Angola reduced undernourishment, child wasting, child stunting and child mortality by up to 56%.
As a result of these countries’ efforts, the proportion of hungry people on the continent dropped from 27% to 20% between 1990 and 2015.
The benefits of improved nutrition are widely known and appreciated. Improved nutrition increases the incomes of households. This in turn raises the demand for food, enriches livelihoods and leads to more employment opportunities.
Many past initiatives to produce more food in Africa and combat malnutrition have focused on increasing the availability of staple foods like maize, rice, wheat or cassava.
But too little attention has been paid to diversifying diets and on how policymakers can ensure that low-income households can access the variety of foods they need to be healthy.
Staple food prices
It’s clear from food policy research that the continent needs to learn from past mistakes across the world. There have been a variety of approaches to tackle malnutrition.
In the 1960s and 1970s, it was widely claimed that lowering the price of food staples, the most inexpensive source of energy in the diet, would alleviate malnutrition. Globally, the price of food reduced significantly after the 70s. But it turned out this was not a silver bullet.
In the 1980’s vitamin A, iron and iodine deficiencies were added to the list of scourges frequently associated with low protein diets. A lack of nutrients was behind the severe impact on child development and pushed up stunting and wasting levels. But it was clear that simply producing more low-cost, energy dense foods that were widely consumed could not solve the malnutrition problem. Greater emphasis needed to be placed on foods with high per unit protein and micronutrient content such as animal-sourced foods, fish, fruit and vegetables.
In the last decade more, attention has been paid to how to promote nutrition-sensitive agriculture. This puts nutritionally rich foods and dietary diversity at the heart of fighting malnutrition. But there is a lack of agreement about the best way to do this at scale and in ways that drive widespread economic development.
Governments and policymakers face two problems. Firstly, they are trapped in a short-term mode of planning. This neglects long-term development objectives that ensure sustainable growth in household incomes and a steady improvement in the overall availability of food.
Getting out of this will require a food security policy with a clear vision and defined timelines to achieve long-term development targets. In addition government also needs to forge alliances with private sector actors to lead to changes in food systems. This will generate livelihood opportunities and a year-round supply of affordable and diverse food for all people.
Secondly, most policy actions for nutrition happen at the national level. They have significant potential for widespread behavioural change that can benefit nutrition. Restricting the advertising of unhealthy foods or incentives for healthy foods is a good example.
Yet, national policies have the potential to bring about large-scale positive change needed for nutrition sensitive-development programmes. National policies can also undermine such change by influencing what is grown, processed and marketed. But national development policies often prioritise other sectors: agriculture, poverty alleviation, economic growth at the expense of nutrition.
The challenge is that nutrition programmes are hard to design.
Some nutrition-specific interventions have worked in reducing malnutrition. Examples are supplementation, complementary feeding for children and food parcels. Complimentary baby foods have provided essential nourishment for children between the ages of six months and two years old and has been shown to save lives and reduce stunting.
But to make even more progress in fighting malnutrition, policymakers need to be smarter and sharper with nutrition-sensitive planning. For example, by anticipating that the demand for nutritious foods will increase if incomes increase, should help with the plans to meet this demand through programme development and intelligent investment.
Asia in the 1970s and 1980s is an example of how things can go badly wrong if not planned well. During the Green Revolution the price of staple foods reduced quicker than prices of vegetables and pulses. This meant that vegetables and pulses became less affordable for low income households. In some cases, these foods became entirely unaffordable.
If African food policy only focuses on supplying cheap starches then the demand for nutritious foods will exceed the supply. The prices of these nutritious foods could be pushed beyond the reach of those the policy was designed to help.
One solution is to invest in value chains that meet multiple development objectives: ones that increase employment, improves incomes and makes more nutritious food available. The aquaculture industry is a good example as is diary, fruit and vegetables.
For most Chinese people, the Spring Festival is a time to honour family ties, friendships and acquaintances.
This is what producers of this year’s Annual Spring Festival Gala on China’s national broadcaster, CCTV, probably had in mind when they agreed to include a comedy skit about the growing ties between China and African countries called “Celebrating Together” (同喜同乐).
In a celebration of Sino-African friendship, what could go wrong? In fact, quite a lot.
The 13-minute long skit opens with dozens of African performers, alongside antelopes and a lion, dancing to the tune of Shakira’s “Waka Waka”, all rejoicing over the opening of the China-built Nairobi to Mombasa Railway. They are joined by a group of Kenyan train attendants and the female lead, a Gabonese actress speaking fluent Mandarin.
And, then, a well-known Chinese actress in full blackface comes on stage wearing a colourful yellow dress, fully equipped with oversized butt pads, carrying a fruit plate on her head and leading a cheerful monkey played by an unidentified African actor.
In less than 12 hours, descriptions of the skit were all over international media – always ready to run a “China, the foe” story. Turning to the Twittersphere, the public opinion thermometer of the 21st century, journalists found a divided audience: many called it racist, others argued it was not.
The skit might not have been ill-intentioned. But it was both culturally and racially insensitive. It also reeked of propaganda and relied on all the stereotypes about Africa that Chinese media claim to be debunking in their public diplomacy activities in the continent.
Chinese representation of Africa
It is not the first time that a Chinese state-sanctioned production has misrepresented Africa and African people in such a grotesque way. Last summer, the movie “Wolf Warrior 2”, the highest-grossing Chinese film ever, managed to bring together in a single movie all the clichés of Hollywood’s white-saviour subgenre: an unnamed African country affected by a deadly disease descends into chaos as civil war erupts. That is, until a Chinese mercenary comes to the rescue.
All film scripts in China must be pre-approved before production starts and they must get a final green light before they’re released. CCTV’s Spring Festival Gala also goes through multiple stages of supervision. Sometimes movies and TV acts are tossed out because a red flag is raised. That clearly didn’t happen this time.
Neither “Wolf Warrior 2” nor the Spring Festival Gala were conceived with global audiences in mind. They are cultural artefacts that speak to domestic audiences and, as such, they are tuned to the so-called “main melody”, a concept often attributed to China’s President in the 1990s, Jiang Zemin. Cultural products that dance to the main melody need to be aesthetically attractive to the masses, but remain politically aligned with the doctrine of the Communist Party.
China has a different repertoire for global audiences. As part of its quest to improve its image overseas, Beijing has promoted the expansion of companies like CGTN, Xinhua, China Daily and StarTimes. All have a strong presence in Africa, where they claim to be presenting a different view of the continent and its people.
These efforts are hit hard every time a gaffe, such as the CCTV’s skit, goes on air.
Savannas and safaris
Chinese media portray Africa in stereotypes not dissimilar to the rest of the world. The continent is routinely treated as a single unit, erasing its linguistic, racial and cultural diversity. It is often associated with cliched images such as savannas and safaris and its transformations over the last 30 years reduced to a market logic under the tagline “Africa rising”.
While misrepresentations of Africa are not an exclusive problem of Chinese media, two things set China apart.
As the release of “Black Panther” has shown, many in the US are ready to engage in an open discussion about how the US movie industry has, for decades, failed to address racial biases.
In China, criticism of the CCTV African skit on social media has been censored. This is not surprising, given that, every year, Chinese censors work hard to erase negative comments of a show that has gone from being a must-watch for many Chinese families to a source of memes and jokes for younger generations.
This suggests that China needs to have a conversation about racial insensitivity, which is too common and too often dismissed as cultural specificity. The cultural specificity argument goes like this: while something might be considered offensive in the “West” (for example, blackface), it is not in China, and, therefore, there is no need to feel offended by it.
Hard to say sorry
For a long time Beijing has kept a double narrative going in its media strategy – one for domestic consumption and another one for global audiences. This worked in a pre-Internet era.
If China wants to be viewed as a responsible global actor, it needs to find appropriate ways to prevent controversies such as the one created by the offensive CCTV skit. It could, for example, seek out African specialists at Chinese universities to offer expert advise.
More importantly, when errors are made – and Chinese leaders need to accept that nobody is infallible – Beijing needs to be ready to acknowledge them.
Foreign companies, and sometimes foreign media, are forced to issue an apology when their actions are deemed to hurt Chinese people. Will CCTV be offering one? For now, that seems unlikely. Speaking to the press, the Ministry of Foreign Affairs has dismissed the controversy and taken the usual path: attacking those who brought up the issue.
Next time Beijing may want to change its approach. By apologising, it would show the world that it is becoming an empathetic global power.
Levels of armed conflict flux and wane. In 2017, levels of high fatality violence in Africa were significantly lower than during the immediate post-Cold War period. This trend has occurred in spite of the recent increases in terrorist associated fatalities in key countries such as Nigeria and Somalia. Even terrorist fatalities have declined since 2015.
But the continent is still witnessing an increase in social turbulence, unrest and protest. This is being driven by development, urbanisation and modernisation, all of which are inevitably disruptive. Development has been driven by the fact that, since 1994, Africa has experienced the longest sustained period of growth since decolonialisation in the sixties.
The other major factor driving unrest is the fact that democracy is expanding on the continent. Pressure is mounting on autocracies. We therefore shouldn’t be surprised by widespread violence in countries ranging from the Democratic Republic of the Congo (DRC) to Burundi and Uganda. And in countries run by small elites or a family – such as Gabon, Cameroon and Equatorial Guinea.
In the long term only rapid, inclusive economic growth combined with good governance can make Africa less volatile.
But how can it achieve this? What’s needed is a combination of sound economic policies, an attack on corruption and theft by ruling elites, a deepening of democracy and a rethink of the approach taken to the threat of terrorism.
At current population growth Africa needs average economic growth rates in excess of 7% per year for several decades if it’s to reduce poverty and increase average levels of income. This is unlikely. Current forecasts estimate average rates of growth of around half of that.
Perhaps more importantly, Africa needs to find ways of reaping its demographic dividend – that is decreasing the number of dependants, mostly children, compared to persons of working age (15 to 65 years of age). Traditionally this is best achieved through improvements in female education, but the provision of water, sanitation and access to contraceptives can play a huge role. This is reflected in a recent study we did on the future of Ethiopia that has seen more rapid reductions in fertility rates than other countries at similar levels of development.
Africa also needs to place employment in formal sector at the centre of government policy. This, in turn, requires diversification of African economies as well as much higher levels of foreign investment and engagement.
When it comes to investment and development aid the Institute for Security Studies found that middle income countries are making progress in attracting foreign direct investment, but poor countries remain aid dependent.
Although aid is going out of fashion in favour of measures to involve the private sector, it will remain important for low income countries. It allows governments to deliver services such as water, sanitation and education more than they would otherwise be able to do. These investments in human capital development will deliver large benefits and will have long term positive effects.
Another area of focus should be on supporting the rule of law and the delivery of effective taxation systems. Basics such as national identity systems, effective border control and a functioning criminal justice systems are often absent.
Democracy, extremism and security responses
Many people across a wide range of countries on the continent are stepping up their demands for more democracy. Despite many setbacks, democratisation continues to advance year on year.
Doing these two things simultaneously – building government capacity and responding to demands for democracy – is difficult. Marginalisation, a lack of voice, a lack of accountability often lies at the heart of instability in a continent that has experienced autocracy and bad governance for decades.
Regional organisations (such as the Southern African Development Community and the Central African Economic Monetary Community need to take accountable governance seriously.
Unless this happens, there’s a real danger that the draw of extremist groups will escalate.
Accountable governance should also extend to the security sector where reform is perhaps the single most important component in countering violent extremism. the continent’s military, policy, gendarme and intelligence systems are generally not held to account, they act with impunity and are often the source of many problems. Instead of protecting and serving they kill, loot and rape.
Both the ISS and the UNDP have concluded that action by security forces – such as the killing or arrest of a family member – often serves as the tipping point that triggers the final decision to join an extremist group.
In addition, Africa seems to have bought into the US war on terror approach which is to rely on the military. In fact, terrorism requires an intelligence, prosecution, and rule of law approach. African countries would be well advised to revert to an intelligence and policing response rather than a military response to terrorism.
Radicalisation is also fuelled by corruption, theft by ruling elites and tax havens. Africa needs to work with the rest of the world to end tax havens, tax avoidance and money laundering.
Fight for a rules-based world
African countries need to intensify their efforts towards a rules based world, including reform of the UN Security Council, which sits at the apex of global security governance.
But the continent needs to stop hiding behind the Ezulwini consensus – this is the common position taken by African countries on UN reform that advocates for two permanent seats with veto rights and five non-permanent seats for Africa - and start thinking outside the box.
Real reform is possible, but it would require a different approach, including ending the system of veto and permanent seats.
Jakkie Cilliers, Chair of the Board of Trustees and Head of African Futures & Innovation at the Institute for Security Studies. Extraordinary Professor in the Centre of Human Rights, University of Pretoria
Uuumm .. that’s a toughie. But we really should know so we can drop it into conversation in a casually cool way – I always find listing the 54 African countries by GDP in 2017 makes me pretty popular – and I want to give you too the chance to gain a reputation for exciting repartee.
What do we know ? Based on the dodgy exchange rates being used in Egypt until November 2016 and in Nigeria/Ethiopia/Angola etc all year – Nigeria was the largest economy in Africa in 2016, followed by Egypt and then SA. All of Africa had a similar GDP to India, but was not as big as California. That goes a long way to explaining relative news coverage.
Source: IMF with a little help from Renaissance Capital
What about 2017 ? “We have a problem here Captain” as Scottie would have said because we just worked out that the IMF is using an average exchange rate for Nigeria of 304/$ for its GDP estimates.
Now I like the IMF resident a lot – but I think this is hard to justify. The I and E fx window rate has averaged 368/$ from 25 April to 11 October. What about Jan-Apr? Do we use the parallel market rate that hit as weak as 520/$ in early 2017, or the Naira rate quoted on Bloomberg which was 313/$ ?
In the graph below, we show both Nigeria using the IMF figure, and Nigeria using a 367/$ average. If you believe the IMF, Nigeria was number 1. If you think 367/$ is more realistic, it was number 2 and SA swept past both Egypt* and Nigeria to take number 1 slot again. Humble South Africans can once again stand tall, arm in arm with President Zuma, a man who has helped ensure per capita GDP in 2017 is not above the lofty heights it achieved in 2007. To be fair to Zuma, Brexit has helped push UK per capita GDP back to below 2006 levels. This must be a deliberate part of the UK charm offensive to rebuild links to the old Empire so that will help make Britain great again. *at least Nigeria has an IMF implied exchange rate, Egypt doesn’t let the IMF publish one, so you are relying on us for that figure
Meanwhile Ethiopia cleverly timed its devaluation until just after the IMF publication so it can lay claim to 8th place .. when the deval probably means it is 9th behind Kenya.
Source: IMF with a lot more interference from RenCap in this one
What about GDP per capita ? Nigeria, Kenya, Ghana, Ivory Coast are all in roughly the same place – just ahead of Bangladesh – with wealth levels double that of Rwanda or Uganda. Of these, Kenya, Ghana and southern Nigeria are best placed to industrialize in the same way that southern Bangladesh has.
I tested this last chart on twitter and the instant response is … “not Equatorial Guinea”. Fair enough, the average per capita GDP may bear no relation at all to GDP per person once the boss has nabbed all the oil wealth. But the point is, India is mid-way between countries like Egypt, Nigeria, Ghana and Kenya, and positive themes should be found in a few of them.
Re the Kenyan elections – what we heard at our East Africa conference is that President Kenyatta would probably win a re-run, especially if Odinga boycotted the second round.
Source: IMF, Renaissance Capital, World Bank (for Somalia population)
CONCLUSION: GDP per capita has probably bottomed now in Egypt, Nigeria and a fair few others. The next move should be up again as we enter 2018. Nigeria may have lost out to SA in terms of being the largest economy in Africa in 2017 (let’s see what happens to the ZAR by year-end) but this SA resurgence won’t last for too long. We continue to see Morocco, Egypt, Tunisia, Ghana and Kenya as among those best placed to industrialize in the coming years.
China has played a significant role in promoting development in Africa, and its Belt and Road Initiative would allow more African countries to better connect to global trade networks, several scholars told Xinhua in recent interviews.
The China-proposed Belt and Road Initiative, which aims to build a trade and infrastructure network connecting Asia with Europe and Africa along and beyond the ancient Silk Road trade routes, is a key project being implemented by the Chinese leadership to the benefit of African countries and beyond, said Kioko Mutua, a lecturer at the Institute of Development Studies at the University of Nairobi.
"For Africa, this is an opportunity to open much more to the world and let the world open to Africa," said Mutua.
In Africa, it is commonly believed that the initiative is worth supporting because it fits in well with plans by African countries to develop mega infrastructure projects, which are seen as critical to trade, especially increasing exports to the rest of the world.
"The Belt and Road Initiative is the biggest achievement amongst China's most impressive achievements in the last five years because it would shape the next phase of global trade for ages to come," said Ken Ogembo, who lectures at Kenyatta University in Kenya.
According to the Kenyan scholar, the Belt and Road Initiative stands to play a key role in balancing global trade and boost China's image in Africa.
"The coming out of China as a development partner in Africa in particular has endeared it to the people and helped to position its global image and influence," Ogembo told Xinhua.
Ogembo noted that a survey by CNN last year found that China was more popular than the United States among African students. In Kenya, a similar study revealed that more people prefer dealing with the Chinese than the Americans.
"China's overseas engagement has first led people to know who the Chinese are rather than being told, and is also portrayed as caring for the interests of Africa," Ogembo said.
While expressing appreciation for China's contribution to Africa's economic growth and social development, there is a general belief that China should play a bigger role in Africa and in global governance.
"The world expects China to do more in enhancing infrastructure overseas, providing aid to assist in combating diseases, peacekeeping and dealing with natural disasters by virtue of its growing role as a major global player," said Mutua.
Kenya’s recently annulled elections will soon be re-run, but the long-term questions they raised about election management are still unanswered. The spotlight is on the work of international observer teams, but there are also much wider questions of electoral capacity – problems that extend to the top of the African Union, and thence across the whole continent.
African democracies are in the process of co-ordinating a generation jump in applied technology. So far, they have actually done a remarkable job by global standards. After all, something like electronic voting is still not used in the UK, where people in raincoats wait patiently while someone with a pencil draws a line through their name on a paper spreadsheet. The rain-sodden voter drips into the polling booth and makes a choice, casts their vote with a pencil on a sheet of paper, and shuffles outside again while putting up an ineffectual umbrella. Nothing has changed for 100 years.
It’s Africa that has led the way – and the West isn’t the place to look for immediate answers for all the problems of running a 21st-century election. One such problem is the use of multiple forms of electronic voting. Voter identification by electronic means is given priority in Nigeria, but even there, it’s not implemented consistently: there are different systems provided by different companies, all submitting tenders on a competitive basis.
The African Union needs to devise a standard set of requirements and attributes for electronic voting across the continent. It’s no longer enough to have a protocol that says paper votes have to be placed into clear plastic ballot boxes. But the African Union has fallen behind. Its previous head, Nkosazana Dlamini-Zuma, was hardly technologically minded; in fact, her successor has apparently stressed the commission urgently needs an email system fit for purpose.
Dlamini-Zuma has now returned to line up for the presidency of her home country, South Africa, whose cabinet is renowned for its technological illiteracy. There are very few images of its current president, Jacob Zuma, working on a laptop or PC, and possibly none of him actually pressing the keys. (His next door neighbour, Zimbabwe’s Robert Mugabe, has seemingly never been pictured with a laptop at all.)
But if the presidents might have trouble sending simple emails, the thousands of local observers at each election will need special training of the sort never attempted before. They need to know not just how the system works, but how it can be made not to work – or at least, to work in ways that do not reflect the electorate’s will. Only after that does the question of international observer capacity come into play.
Mastering the system
It’s fair to say that although EU observers to Kenya were deployed far in advance of the election and had good geographical coverage, the team was not replete with electronic expertise. And it’s not as if there was no advance knowledge that this would be an electronic election.
Well before the elections began and before the EU observer team was deployed, senior members of both the EU team and the Kenyan opposition were given access to a detailed paper I prepared on the problems of electronic observation. And there was ample evidence from the 2015 Nigerian elections that these things could be bumpy rides. To be fair, electoral commissions need to upgrade their capacities as well; whatever happened in Kenya, whether wicked or incompetent, it was clear electoral officials were not on top of their game, unlike their Nigerian counterparts, who managed to resolve their problems in the end.
Electoral commissions need to open up all stages of the electronic process to knowledgeable observers, and especially the verification stage. This is where subtle algorithmic adjustments can be inserted to preserve close parity between voting patterns on the ground and “verified” results that “just” deliver very narrow victories to a ruling party.
At least electronic cheating can only really work persuasively in close elections. The days of 90% victories are almost (if not quite) over, but they will be followed a rash of elections “won” by about 2%. Margins of about 4%, as in the Kenyan elections, will have to be open to expert interrogation. As it turned out, Kenya’s elections were annulled on grounds of non-electronic irregularities, but neither the opposition nor the electoral commission seemed able to make sustained cases for or against electronic abuse.
Still, it is Africa that has come almost of age in electronic and digital voting. The West’s elections look like Sony Walkmans in the age of the smartphone. Even that comparison might be a bit flattering: in the UK, going to vote is like cranking up an LP on a turntable to 78rpm. Let’s hope Africa’s new leaders and technocrats will make the generational jump more smoothly in the future, and keep showing the creaky old West the way.
Dangote Cement ,Africa’s largest cement producer, has announced its unaudited results for the six months ended 30th June 2017, posting a 12.6 percent increase in sales volume across Africa.
In the financials released on the floor of the Nigerian Stock Exchange indicated that the increase in sales volume showed a growing capture of Pan-African market as Dangote Cement continues to gain grounds.
Revenues from operations in Nigeria increased by 34.5 percent to ?291.4 billion while Pan-Africa revenue increased by 63.7 percent to ?124.4B from ?76.0B mainly as a result of increased volumes and foreign exchange gains when converting the sales from country local currency into Naira.
Analysis of the half year result revealed that sales volumes of African operations increased by 12.6 percent to 4.7 million metric tons with Sierra Leone making a 53 kt maiden contribution.
Record of sales from its operations scattered around the African continent revealed that a total of 1.1million ‘metric tons of cement was sold in Ethiopia, almost 0.7 million metric tons sold in Senegal, 0.6 million metric tons sold in Cameroon, and 0.5 million tons in Ghana.
Also, 0.4 million metric tons of cement was sold in Tanzania and 0.3 million tons in Zambia. Sales volumes from Nigerian operations fell from 8.8Mt to 6.9Mt, occasioned by the onset of rains which stalled many construction projects.
Reflecting on the half year results, Dangote Cement’s Chief Executive Officer, Onne van der Weijde expressed satisfaction that the company’s revenues have continued to grow despite low sales from the Nigerian operations noting that the revenues grew on the strength of sales from other African operations
Said he: “Our revenues have continued to grow despite the lower volumes seen in Nigeria, especially because of the recent heavy rains. Our margins have improved significantly, helped by improved efficiencies and a much better fuel mix in Nigeria.
“We are using much more gas and increasing our use of coal mined in Nigeria, thus reducing our need for foreign currency and supporting Nigerian jobs.
”Our Pan-African operations are growing well and increasing market share. We saw our the first sales from Sierra Leone in the first quarter and our new plant in the Republic of Congo will be in production at the end of July, further increasing our footprint across Africa and strengthening our position as its leading manufacturer of cement.”
The Company reports that it estimated that Nigeria’s total market for cement was 10.2 million tonnes (Mt), 23.2% lower than the estimated 13.3Mt sold in Nigeria in the first half of 2016. Of total market sales in the first half of 2017, just 0.1Mt was imported.
“As a result of the slower market, our Nigeria operation sold nearly 6.9Mt of cement, down 21.8% on the 8.8Mt sold in the first half of 2016. We estimate our market share to have been about 64.5% during the first six months of 2017.
Dangote Cement is a high-growth, low-debt, internationally diversified company that has just paid a dividend amounting to nearly 75% of 2016 net profits to shareholders. “The recent publication of our credit ratings highlights the financial strength we have achieved through our unwavering focus on the profitable expansion of the business, underpinned by our belief that we must remain prudent in our financial management.”, Mr. Weijde stated.
Cities in sub-Saharan Africa are growing fast. Nigeria alone is projected to add 212 million urban dwellers by 2050, equivalent to the current population of Germany, France and the UK.
But focusing on population growth leads many to overlook the other unusual features of African cities. Urban economies across the region are markedly different from those of other cities around the world: they are more expensive to live in, more informal and less industrial.
In a recently published paper, we explore how these distinctive traits are increasing vulnerability.
Environmental risks range from everyday hazards such as waterborne diseases (cholera, diarrhoea, dysentery) to larger, less frequent disasters (tropical storms, flooding, fires). Their impact is much greater where people and governments can’t afford to invest in basic infrastructure.
In our research we demonstrate that African cities are too often developing in ways that perpetuate poverty and marginalisation. The amount of money that people have to spend on basic necessities, the precarious nature of their employment and their exclusion from the formal economy mean that they have limited resources to cope with environmental risk.
There are ways around these problems, but they need governments to work much more collaboratively with people living in informal settlements and working in the informal economy.
African cities are expensive
For many, African cities are inextricably linked with poverty. It therefore seems counter-intuitive that the cost of living is higher in urban Africa than in other cities in the global South.
One estimate suggests that food and drink cost 35% more in real terms in sub-Saharan African cities than in other countries, while housing is 55% more expensive.
This means that urban dwellers have to spend more of their income to enjoy the same quality of life. The average urban household in sub-Saharan Africa spends 39% to 59% of its budget on food alone.
Of course, there is considerable variation across the continent. Cities in The Gambia, Mauritania, Madagascar and Tanzania remain relatively affordable. Those in Angola, the Democratic Republic of Congo, Malawi and Mozambique are the most expensive.
The high price of basic goods and services means that people living in African cities have little money to spend on reducing risk, such as upgrading their homes, preventative health care or buying insurance.
African cities are not industrialising
Urbanisation has historically been closely linked to industrialisation. From Detroit to Manchester to Shenzhen, the rise of a vibrant manufacturing sector fuelled rapid population and economic growth in cities.
In sub-Saharan Africa, urbanisation is taking place without industrialisation.
One explanation for this unusual trend is that higher living costs mean that the labour force requires higher wages than competing cities in Asia. This makes it difficult for African cities to attract international capital.
In other cases, the export of commodities such as oil and diamonds have generated high income for a small share of people in countries such as Angola, Nigeria and Libya. The wealthy beneficiaries then create urban employment through demand for non-tradeable services such as retail, transport and construction.
Whatever the driver, urbanisation without industrialisation means that jobs and livelihoods too often remain low-skilled and poorly paid. Without the opportunity to develop skills and organise collectively, workers exert little influence over working conditions.
Instead, urban residents continue to depend on precarious livelihoods in the agricultural and services sectors. This means that they are susceptible to environmental shocks, such as extreme weather that can make it impossible for street vendors, waste pickers and other informal workers to ply their trade.
By comparison, manufacturing jobs have a number of spin offs. They offer income security and skill development. Local employers in the public and private sector benefit from new knowledge and skills, while workers can accumulate capital. This offers a path out of poverty. Few African cities are enjoying these positive spillovers.
The lack of industrialisation also means that there’s little political incentive for governments to invest in risk reducing infrastructure like sewers, drains and all weather roads.
African cities have a large informal economy
In many cities in sub-Saharan Africa, the informal economy is larger and more dynamic than the formal economy. The informal economy responds to demand when commercial banks are not willing to offer loans or when there isn’t enough housing. When formal jobs in industry or services are scarce, the informal economy absorbs much of the labour force. In Cotonou (Benin), Lomé (Togo) and Ouagadougou (Burkina Faso), for example, the informal sector accounts for over 80% of non-agricultural employment.
Yet, in many African cities, government policies discriminate against these workers. For example, street vendors and waste collectors are often banned from using public spaces. They may even suffer harassment from government officials.
Yet they play a central role in increasing the resilience of the city. Waste pickers recycle large amount of material, reducing pollution and maintain city cleanliness. This helps prevent diseases, particularly those spread by bacteria, insects and vermin that might otherwise feed or breed on garbage.
Street vendors play a critical role in providing and producing food, particularly to poor people living in urban areas.
The informal economy is not perfect. Informality creates risks for consumers and workers. A lack of state oversight makes it difficult to enforce regulation, such as water treatment standards or minimum wages. Waste pickers in particular face severe health risks due to their work. Informal housing is often in hazard prone parts of the city.
But there can be little doubt that informal service provision or informal livelihoods are better than none at all.
Successful strategies to reduce risk therefore need to be developed in collaboration with informal workers in sectors such as food, water, housing and solid waste management. Similarly, partnerships with communities living in informal settlements can ensure that the voices of vulnerable urban residents are heard, and their needs are addressed.
Only through a more flexible and inclusive approach will African cities be able to manage the risks associated with their unique economic development path.