Feb 05, 2021

The year 2020 was one of the most challenging years for the aviation industry. The passenger traffic during the year fell by 67% year-over-year (YoY).

According to the research data analyzed and published by Comprar Acciones, between January 1 and December 20, 2020, airlines operated a total of 16.8 million flights. During a similar period in 2019, there were 33.2 million flights recorded, 97% higher than the 2020 figure.

Total Air Flight

The industry recorded 2.9 trillion passenger kilometers globally, compared to 8.7 trillion in 2019. As a result of travel restrictions, airline passenger traffic for the year dropped to levels last seen in 1999, erasing 21 years of growth for the industry. While domestic flights dropped by 40% compared to 2019, international flights sank by 68%.

Based on Cirium’s report, North America and the Asia Pacific got back on the path to recovery faster than all other regions. On the list of the top 10 busiest airports worldwide, USA had seven entries while China had three.

The busiest airport was in Atlanta and had 250,800 flights during the year. Chicago was second with 228,000 flights and Dallas was third with 227,200 flights. In China, the busiest airport was Guangzhou with 158,700 flights. It ranked sixth on the list.

Aviation Industry Net Loss Dropped From $118.5 Billion in 2020 to $38.7 Billion in 2021

According to IATA, 2020 was the aviation industry’s worst financial year on record. Total industry revenue for the year was $328 billion, down from $838 billion in 2019.

Passenger numbers fell to 1.8 billion during the year, a level that was last seen in 2003. Compared to 2019’s 4.5 billion, the numbers were 61% lower YoY.

While demand sank by 66%, load factor plummeted to 65.5%, the lowest level on record since 1993. Low demand, in turn, translated to a massive passenger revenue drop from $612 billion in 2019 to $191 billion.

In order to stay afloat, air carriers cut costs by 45.8%, from $795 billion in 2019 to $430 billion in 2020. Unfortunately, airline revenue was down 60.9%. Consequently, airlines were estimated to lose about $66 for every passenger carried in 2020, resulting in a net loss of $118.5 billion.

World Wide Air Loss Table

IATA projects that cash burn would continue up to the end of 2021, estimating a loss of $38.7 billion for the year. Overall revenue is projected to rise to $459 billion in 2021, $131 billion higher than the 2020 figure. But that would still be 45% lower than the 2019 total.

Passenger numbers are forecast to increase to 2.8 billion, a significant improvement, but still 1.7 billion less than in 2019. The passenger load factor will increase to 72.7%, well below the 82.5% pre-pandemic level. At the earliest, IATA projects that passenger levels will return to pre-pandemic levels in 2024.

Cargo operations were not as badly hit as the passenger business. In spite of a 45% decline in capacity, cargo revenue shot up from $102.4 billion in 2019 to $117.7 billion in 2020. Though the increase did not make up for the passenger revenue drop, it helped airlines sustain their struggling international business. It is estimated that the air cargo business will recover to pre-pandemic levels during 2021.

Asia Pacific Airlines to Post $7.5 Billion Loss in 2021

While the worldwide air travel market is still a long way from full recovery, regional discrepancies are significant.

Air carriers in Asia Pacific are expected to lead the global recovery process. The Asia Pacific flight volume shrunk by close to 45% YoY in 2020. It remained the largest market globally and even gained slightly in other regions.

At the end of Q3 2020, domestic air travel in China and Russia had fully recovered. Per IATA data, China was only down by 2.8% YoY in passenger kilometers flown on domestic markets, while Russia was 2.7% higher YoY. Comparatively, the US was 65% lower compared to 2019.

At the end of 2020, the East Asian and Pacific region had a remarkable recovery, rising to 73% of pre-pandemic flights. North America at the time was conducting 55% of pre-crisis flights and Europe by 39%.

Overall, airlines in Asia Pacific lost approximately $31.7 billion in 2020, while in North America, losses topped $45.8 billion. IATA projects a loss of $7.5 billion for Asia Pacific carriers in 2021, the smallest loss for the top three regions in the global aviation industry.

On the other hand, North American carriers are expected to lose about $11 billion and European carriers $11.9 billion. However, North America is expected to have a strong recovery based on the size of its domestic market and its carriers’ financial strength prior to the pandemic.

Feb 04, 2021

The board of Air Namibia has resigned after launching a scathing attack on the Namibian government for “usurping its functions” and interfering in the management of the state-owned airline, making it “extremely difficult for the board to execute its fiduciary role” as it sought to save the airline from liquidation.

All four board members tendered their resignations to Public Enterprises Minister Leon Jooste on February 3 after earlier issuing a statement that revealed they were at loggerheads with the government over efforts to rescue the airline. Air Namibia spokesperson Twaku Kayofa said the airline was now awaiting guidance from the government on the way forward.

Clarifying its actions concerning a EUR9.9 million (USD24.2 million) out of court deal on January 28 that averted Air Namibia's liquidation, the board earlier underlined it had always acted in the best interest of the airline and the shareholder.

This followed after the Finance and Public Enterprises Ministries last week appeared blindsided by the 11th-hour settlement reached with the liquidator of defunct Belgian lessor Challengair, which, if it had failed, would have resulted in the liquidation of the flag carrier on January 29 over outstanding payments of a 1998 lease of a B767-300(ER). The government had decided not to oppose the court case, and thereby the possible liquidation, saying it could not afford to fund the airline's turnaround, nor had it found a strategic partner for the carrier.

The board reacted with all guns blazing, saying the relationship between the two parties had degenerated to the point where the Ministry of Public Enterprises:

  • directly engaged employees and trade unions, by-passing the board;
  • negotiated contracts involving the company without the knowledge of the board;
  • procured advisory services on behalf of the company;
  • initiated a restructuring exercise, without prior knowledge of the board;
  • managed the appropriated budget earmarked for the company without involving the board. The Namibian Parliament had approved NAD948 million Namibian dollars (USD63.7 million) in the 2020/2021 fiscal year for Air Namibia. Still, the board to date had not been briefed on how these funds were disbursed, if at all, other than a monthly allocation for salaries.

The board believed it was in the best interest of the airline and the shareholder to avoid liquidation and to implement the re-start plan, adding it had always been clear that Air Namibia would require a “significant capital injection from the shareholder”.

However, the impression created that it needed NAD7 billion (USD461.6 million) to restart operations was incorrect, as this figure included forward debts until 2025 that were not payable now.

Instead, the airline’s restart plan would result in a “leaner, competitive, and sustainable airline” following the termination of all aircraft leases and non-profit-making routes, and the re-negotiation of most contracts. The airline’s paid-for fleet of six aircraft could be used to generate revenue without the burden of lease costs. The restart would preserve at least 50% of 636 jobs, which would otherwise be lost.

The board revealed the Namibian government had not agreed to support the settlement deal with Challengair financially. “Late evening of January 28, 2021, the shareholder communicated that it would not avail funds for Air Namibia to settle with Challengair. It had also become clear at the time that the Ministry of Public Enterprises, as the second respondent, had also taken the decision not to defend the matter. The inevitable consequence was, in all likelihood, a liquidation with all its disastrous consequences. Faced with the real prospect of liquidation, Air Namibia engaged and reached a settlement with Challengair for the debt owed to the latter,” the board explained. “The board considered the fact that the outstanding debt owed to Challengair was significantly lower than the assets of the company and that even if the most valuable asset was attached, the company would still continue operating.”

“The company had no direct position from the shareholder on their views regarding liquidation,” the board revealed. “The shareholder was engaged, and their position was to leave the matter to the board, so long as the impression was not created that the settlement agreement would bind the shareholder. The board signed with the full understanding that the agreement had no guaranteed backing of the state, and there is no single mention of the government/state/Ministry of Public Enterprises in the agreement. It should also be noted that the window of opportunity to file for liquidation still remains open.”

With the first EUR5 million (USD6 million) instalment due on February 18, there was sufficient time to explore alternative funding, the board said. It believed the payment plan had secured a window in which the government could finalise ongoing efforts to save the airline.

The board said liquidation would trigger defaults under lease agreements guaranteed by the government, which in turn would nullify all future options the government was considering, as insolvency constituted a breach of lease agreements. It said historical debts dating back 23 years would also need to be serviced, whether the airline was liquidated or not.

 

ch-aviation Logo

To fast track the response to the COVID-19 pandemic, a broad range of candidate COVID-19 vaccines are being investigated. The results of clinical trials being run on some of them have started to be released.

The Novavax vaccine trial is one of them. Phase 3 trial results from the UK and phase 2b results from South Africa were recently announced. Shabir Madhi was the lead researcher in the South African leg of the trial. The Conversation Africa’s Ina Skosana asked him to provide context.


What are your main findings?

Novavax vaccine trials run in South Africa and the UK indicate that its efficacy in the UK was 89% at least seven days after individuals had received two doses of vaccine.

In South Africa, the vaccine efficacy was 60% in people living without HIV. A small group of individuals living with HIV – about 150 – was included in the efficacy analysis. However, the study didn’t have the statistical power to evaluate for vaccine efficacy specifically in this population.

Why the major difference in risk between the UK’s 89% and South Africa’s 60%?

We’ve got two different studies that have evaluated the same vaccine. But they’ve evaluated them under very different conditions.

Firstly, conditions in South Africa and the UK are different in terms of the socio-economic environment, which could influence the force of infection by SARS-CoV-2.

Over and above that, the trials evaluated vaccine efficacy against two very different variants, which would differ in their susceptibility to antibodies induced by vaccination (as well as by natural infection from past infection by prototype SARS-CoV-2).

The South African efficacy readout is against the B.1.351 variant – 92% of all of the cases in the main analysis developed COVID-19 following infection by this variant.

The UK trial involved people infected with the B.1.1.7 and other variants.

The variants originating in the UK and the one in South Africa share a common mutation (N501Y) that has been associated with increased transmissibility of the virus. However, the variant found in South Africa has an additional three or four mutations involving immunodominant components of the spike protein that could interfere with the vaccine induced neutralising activity of the virus.

How is the Novavax vaccine different from others that have reported data on their efficacy?

Firstly, it’s a different vaccine based on a more novel technology. It’s a protein based vaccine. It involves the spike protein of the virus itself, which is produced and formulated as a nanoparticle type structure. Once injected, it stimulates the immune system to start producing antibody and also induces T-cell immune responses.

This is different to messenger RNA based vaccines. These aren’t delivering the actual protein, but delivering the blueprint coding for the spike protein.

It’s important to understand that it wouldn’t be scientifically robust to do any head-to-head comparisons between the study that was done in South Africa and studies for the messenger RNA vaccines, as well as the AstraZeneca vaccine, where there was a pooled analysis of data from the UK as well as in Brazil. The same thing goes for the Sputnik V vaccine.

Pasha 95: Key questions answered on the results of the Novavax vaccine trials. The Conversation Africa - Pasha, CC BY-NC-ND17.6 MB (download)

Efficacy of 95% was reported for the two messenger RNA based vaccines from Moderna and Pfizer. For the AstraZeneca vaccine, an average of about 70% efficacy in the pooled analysis from the UK and Brazil was reported. For the Sputnik V vaccine, it was around 85%.

Notably, however, none of these studies were done in settings similar to South Africa. And most importantly, the vaccine efficacy in those studies was evaluated against the prototype virus, which did not have the mutations evident in the B.1.351 variant against which the vaccine efficacy of the Novavax study was evaluated in South Africa.

What makes the Novavax vaccine stand out?

It’s the first vaccine that provides objective scientific evidence that it can protect people against the B.1.351 variant circulating in South Africa. This is true even though the vaccine efficacy is only 60% against all severe COVID-19 illness, with the majority of cases being mild to moderate.

The 60% efficacy reported for the Novavax vaccine needs to be benchmarked against the World Health Organisation and other regulatory authorities criteria, that any COVID-19 vaccine with at least 50% efficacy and which protects for at least six months would be considered to be useful from a public health perspective.

Unfortunately, the vaccine is only likely to become available in April or May. The government needs to engage with the relevant stakeholders to secure supplies earlier given the threat of the new variant.

Why was it important for South Africa to participate in this trial?

I believe the data we’ve released speaks to why it was important to be active in getting vaccine studies done in South Africa. Without them we would simply be clueless whether vaccines work in South Africa.

The first reason is that we’ve got different populations as well as different social and economic conditions. It was important to be able to evaluate vaccines within a context of high density of population and overcrowding. The types of infections that take place under those scenarios are very different from those taking place in high-income countries.

And then there are the health factors and differences in terms of prevalence of comorbidities. These include HIV, obesity and hypertension.

All these types of factors could influence the efficacy readout of the vaccines.

It took a lot of convincing both for Novavax as well as for AstraZeneca vaccine for their sponsors to eventually agree to bring studies to South Africa. And the studies were largely led directly by us in South Africa. We also had to convince funders to support the studies in South Africa. The Novavax study, for example, is co-funded by the Bill and Melinda Gates Foundation and Novavax. The AstraZeneca vaccine study is sponsored by the University of Oxford, but funded by the South African Medical Research Council and the Bill & Melinda Gates Foundation.

This is just to emphasise that companies were not rushing to Africa to get their COVID-19 vaccines evaluated on the continent. On the contrary, there seems to be little incentive for them to do their studies here, as it’s not seen as a market that will provide a return on their investments. Unless we are proactive in ensuring that studies are done in Africa, we will continue lagging behind in knowledge on how vaccines work in our own context. We are being compromised by not having more clinical trials done in Africa, especially for diseases which disproportionately affect Africans.

Has South Africa secured access to the vaccine because of its involvement in a trial?

The involvement in a clinical trial and the ability of a country to procure vaccines are completely different processes. The role players involved in these processes differ within a company as well as within a country.

As an investigator, my responsibility is to provide the scientific evidence as to whether the vaccine works or not. It would be a conflict of interest if, as an investigator, I started engaging with companies, even before the vaccine trials are done, to make a case, or at least to negotiate on behalf of the country, that South Africa should get vaccine if the vaccine studies are shown to be working.

This would be construed as an undue incentive on my part, and could lend itself to the potential for manipulating study results to come up with a favourable answer.

The data that’s been forthcoming from South Africa certainly should put it in a favourable position to engage with Novavax. But that type of engagement should have started when the vaccine trial started, rather than after the results were released.

I’m uncertain whether the South African government has as yet engaged with Novavax, which is a small biotech company in the US. However, Novavax has partnered with the Serum Institute of India to produce the Novavax vaccine. It would be important for the government to engage with the Serum Institute of India on accessing this effective vaccine.The Conversation

 

Shabir A. Madhi, Professor of Vaccinology and Director of the SAMRC Vaccines and Infectious Diseases Analytical Research Unit, University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Feb 02, 2021

The United Kingdom (UK) has slapped targeted sanctions on four top allies to President Emmerson Mnangagwa, among them security chiefs, accusing them of having a hand in the killing of Zimbabwean protesters.

According to a statement Monday by British Foreign Secretary Dominic Raab, those targeted are state security minister Owen Ncube and intelligence director Isaac Moyo.

Also targeted was Police Commissioner General Godwin Matanga and former leader the Zimbabwe National Army Presidential Guard Anselem Sanyatwe (now Zimbabwe ambassador to Tanzania).

"These sanctions send a clear message that we will hold to account those responsible for the most egregious human rights violations, including the deaths of innocent Zimbabweans.

"We will continue to press for the necessary political and economic reforms that will benefit all Zimbabweans," reads the statement by Raab.

The UK government believes the four were responsible for quashing demonstrations and killing innocent citizens since Mnangagwa's takeover in November 2017.

Six Zimbabweans were gunned down August 1, 2018 after the State deployed soldiers to quell post-election violence sparked by claims of rigging by the Mnangagwa led administration.

Some 17 more locals also died January 2019 when nationwide anti-poverty protests elicited a brutal reaction from the state leading to the deaths.

Several more were maimed during the violence episodes.

The sanctions on the Zimbabwean officials comes as a blow to Mnangagwa's efforts to re-engage the West after years of international isolation.

Ncube and Sanyatwe were already targeted for US sanctions in March last year.

 

Source: New Zimbabwe

Feb 01, 2021

When Nigeria's then-head of state Sani Abacha stole billions of dollars and died before spending his loot, it prompted an international treasure hunt spread over decades. The man hired to get the money back tells the BBC's Clare Spencer how the search took over his life.

In September 1999, Swiss lawyer Enrico Monfrini answered a phone call that would change his next 20 years.

"He called me in the middle of the night, he asked me if I could come to his hotel, he had something of importance. I said: 'It's a bit late but OK.'"

The voice on the end of the line was that of a high-ranking member of the Nigerian government.

'Can you find the money?'

Mr Monfrini says the official was sent to Geneva by the Nigerian president at the time, Olusegun Obasanjo, to recruit him to get hold of the money stolen by Abacha, who ruled from 1993 until his death in 1998.

As a lawyer, Mr Monfrini had built up a Nigerian client base since the 1980s, working in coffee, cocoa and other commodities.

He suspects those clients recommended him.

"He asked me: 'Can you find the money and can you block the money? Can you arrange that this money be returned to Nigeria?'

"I said: 'Yes.' But in fact I didn't know much about the work at that time. And I had to learn very quickly, so I did."

Sani Abacha2 AFP

o get started, the Nigerian police handed him the details of a few closed Swiss bank accounts, which appeared to be holding some of the money Abacha and his associates had stolen, Mr Monfrini wrote in the book Recovering Stolen Assets.

He said that a preliminary investigation published by the police in November 1998 found that more than $1.5bn (£1.1bn) was stolen by Abacha and his associates.

'Dollars by the truckload'

One of the methods used for accumulating such a colossal sum was particularly brazen.

Abacha would tell an adviser to make a request to him for money for a vague security issue.

He then signed off the request which the adviser would then take to the central bank, which would hand out the money, often in cash.

The adviser would then take most of that money to Abacha's house.

Some was even taken in dollar notes "by the truckload", Mr Monfrini wrote.

This was just one way Abacha and his associates stole huge amounts of money. Other methods ranged from awarding state contracts to friends at highly inflated prices and then pocketing the difference and demanding foreign companies pay huge kickbacks to operate in the country.

This went on for around three years until everything changed when Abacha died suddenly, aged 54, on 8 June 1998.

It is unclear whether he had had a heart attack or was poisoned because there was no post-mortem, his personal doctor told the BBC.

Abacha died before spending the stolen billions and a few bank details served as clues as to where that money was stashed.

"The documents showing the history of the accounts gave me a few links to other accounts," said Mr Monfrini.

Armed with this information he took the issue to the Swiss attorney general.

And then came a breakthrough.

Mr Monfrini successfully argued that the Abacha family and their associates formed a criminal organisation.

This was key because it opened up more options for how the authorities could deal with their bank accounts.

The attorney general issued a general alert to all the banks in Switzerland demanding that they disclose the existence of any accounts opened under the Abachas' names and aliases.

"In 48 hours, 95% of the banks and other financial institutions declared what they had which seemed to belong to the family."

This would uncover a web of bank accounts all over the world.

"Banks would deliver documents to the prosecutor in Geneva and I would do the job of the prosecutor because he didn't have time to do it," Mr Monfrini told the BBC.

'Bank accounts talk a lot'

"We would find out on each account exactly where the money came from and/or where the money went to.

"Showing the ins and outs on these bank accounts gave me further information regarding other payments received from other countries and sent to other countries.

"So it was like a snowball. It started with a few accounts, and then a large amount of accounts, which in turn created a snowball effect indicating a huge international operation.

"Bank accounts and the documents that go with them talk a lot.

"We had so much proof of different money being sent here and there, Bahamas, Nassau, Cayman Islands - you name it."

The size of the Abacha network meant a huge effort for Mr Monfrini.

"Nobody seems to understand how much work it entails. I have to pay so many people, so many accountants, so many other lawyers in different countries."

Mr Monfrini had agreed a commission of 4% on the money sent back to Nigeria. A rate he insists was comparably "very cheap".

Finding the money turned out to be relatively quick in comparison to getting it returned to Nigeria.

"The Abachas were fighting like dogs. They were appealing about everything we did. This delayed the process for a very long time."

Further delays came as Swiss politicians argued over whether the money would just be stolen again if it was returned.

Some money was returned from Switzerland after five years.

Mr Monfrini wrote in 2008 that $508m found in the Abacha family's many Swiss bank accounts was sent from Switzerland to Nigeria between 2005 and 2007.

By 2018, the amount Switzerland had returned to Nigeria had reached more than $1bn.

Sani Abacha3 AFP

Other countries were slower to return the cash.

"Liechtenstein, for instance, was a catastrophe. It was a nightmare."

In June 2014, Liechtenstein did eventually send Nigeria $277m.

Six years later, in May 2020, $308m held in accounts based in the Channel Island of Jersey was also returned to Nigeria. This only came after the Nigerian authorities agreed that the money would be used, specifically, to help finance the construction of the Second Niger Bridge, the Lagos-Ibadan expressway and the Abuja-Kano road.

Some countries are yet to return the loot.

Mr Monfrini is still expecting $30m he says is sitting in the UK to be returned, along with $144m in France and a further $18m in Jersey.

That should be it, "but you never know", he says.

In total, he says his work secured the restitution of just more than $2.4bn.

"At the beginning people said Abacha stole at least $4-$5bn. I don't believe it was the case. I believe we more or less took the most, took a very large chunk, of what they had."

He has heard rumours that the Abacha family are not so wealthy any more.

Or, as he puts it: "They are not swimming in money like they used to do in the past."

When he looks back, he seems satisfied with his work.

"When I speak to my very many children about this case, I tell them I found money and I blocked the money, I persuaded the authorities to go after these people and get the money back to the country for the good of the Nigerian people.

"We did the job."

 

Source: BBC

In November 2017 Zimbabwe’s military replaced Robert Mugabe as head of state with his long-time confidante Emmerson Mnangagwa. He declared Zimbabwe “open for business”, linking foreign relations with economic policy. As he stated

We look forward to playing a positive and constructive role as a free, democratic, transparent and responsible member of the family of nations.

International expectations (more so than those among local people) looked forward to translating these promises into policy. This was despite the fact that Mugabe’s departure had been anything but democratic.

But there have been few if any changes in Zimbabwe’s political trajectory. A deepening economic crisis combined with a brutal crackdown on the government’s domestic opponents has resulted in disappointments.

On the foreign policy front Mnangagwa has fared no better. In a recently published analysis we examine the status of Zimbabwe’s foreign policy. We identify what’s gone wrong in its efforts at rapprochement with Western countries in a bid to get sanctions lifted, and why its efforts at cosying up to China haven’t gone to plan either.

We conclude that Mnangagwa’s hopes of reorienting Zimbabwe’s foreign policy have been confounded by his government’s own actions. Its repressive response to mounting economic and political crisis increased rather than diminished its isolation. The more the Mnangagwa government fails to engage democratically with its own citizens, the more it will negate any prospect of re-engagement.

Relations with its neighbours

Since the Mugabe era the African Union and Southern African Development Community (SADC) have been tolerant of the Zanu-PF regime’s politics.

SADC’s annual summit in 2019 demanded an end to Western sanctions. But the continued repressive nature of Mnangagwa’s regime is not making this loyalty easy.

Tensions have begun to show. In August 2020, South Africa dispatched official envoys to Harare to press for restraint on the Mnangagwa government in its actions against opposition figures. The envoys weren’t greeted warmly. Instead they were subjected to a presidential harangue and denied the opportunity to meet the opposition.

A subsequent mission by South Africa’s governing party the African National Congress (ANC), acting as a fellow liberation movement, was as shoddily treated.

South Africa’s patience may be wearing thin. But, for its part, the Southern African Development Community has preferred to officially ignore developments by remaining silent. But while “business as usual” translates into continued political loyalty, it does not translate into increased economic collaboration.

The West

Two decades ago the US and European Union imposed sanctions on those linked to the government in response to human rights abuses. Mugabe’s regime reacted by blaming its economic woes on the West. Mnangagwa decried sanctions as western attempts to bring about “regime change”.

Unimpressed by the rhetoric, the US extended restrictive measures against targeted individuals and companies in August 2018. In March 2019, US sanctions were renewed.

In contrast, the EU demonstrated more willingness to reengage with Harare. In October 2019 the EU announced an aid package, bringing support during the year to €67.5 million. Aid to Zimbabwe since 2014 stood at €287 million in 2020. This made the EU Zimbabwe’s biggest donor. To ease the woes of the COVID-19 pandemic, it added another €14.2 million humanitarian assistance in 2020.

Mnangagwa, however, continued to blame the West for sanctions he compared with cancer. Responding to criticism the EU declared

Zimbabwe is not where it is because of the so-called sanctions, but years of mismanagement of the economy and corruption.

Similarly, the US Ambassador dismissed “any responsibility for the catastrophic state of the economy and the government’s abuse of its own citizens”.

US Senate Foreign Relations Committee chair Jim Risch called upon the Southern African Development Community’s 16 members states to

focus their energies on supporting democracy, not kleptocratic regimes.

Looking East

The deterioration of Zimbabwe’s relations with the West coincided with growing Chinese interest in access to African resources for its own rapidly expanding industries. Zimbabwe’s growing isolation offered a convenient entry point.

But, China’s greater involvement was spurred less by solidarity than by self-interest. And it’s singular importance in throwing a life-line to the Zimbabwean regime in need gave it enormous influence in directing the collaboration. Failure to mend relations with the West and other global institutions leaves Zimbabwe with no other partners for development and cooperation, thus vulnerable to manipulation by China.

An initial honeymoon started at the turn of the century, after Zimbabwe became isolated from the West through its fast-track land reform of 2000, and the increased repression of the political opposition. But China became increasingly concerned about Mugabe’s indigenisation policy. With Chinese companies the largest foreign direct investors, the announced enforcement of the 51% Zimbabwean ownership in assets exceeding US$ 500,000 from April 2016 caused discomfort.

Mnangagwa’s elevation to the presidency may have received China’s blessing as the best option available. Nonetheless, strains soon appeared. When it became increasingly apparent that Zimbabwe was unable to service its debts, China wrote off some of the liabilities in 2018.

What particularly rankled Beijing was that Harare’s incapacity to pay its debts was deemed to be due to the government’s misappropriation or misuse of Chinese funds. Accordingly, there was need to tighten controls. This culminated in the signing of a currency swap deal in January 2020.

Back in mid-2019 China’s embassy in Harare had already stressed that development relied mainly on a country’s own efforts. It expressed hope that the Zimbabwean side would continue to create a more favourable environment for all foreign direct investment, including Chinese enterprises.

Indications suggest that China’s patience with the ailing Zimbabwean “all weather friend” is wearing thinner. The new economic challenges following the COVID-19 pandemic might have shifted priorities in global supply chains. This is also affecting the Belt and Road Initiative, China’s massive global infrastructure project. This might reduce interest in what Zimbabwe has to offer by way of natural resources.

No stability, no money, few friends?

Zimbabwean foreign policy remains locked in the parameters of recent times past: looking to regional solidarity, estranged from the West, and increasingly dependent on China.

Yet China has its own very clearly defined interests. These focus on resource extraction in mining and agriculture for its own domestic economy. As a strategic and developmental partner, Zimbabwe is of minor interest.

Chinese-Zimbabwean relations serve an elite in the Zanu-PF government. They are accused of “asset stripping”. They exclude any oversight, civil society involvement, and lack transparency and accountability. The absence of visible benefits for ordinary Zimbabweans has engendered anti-Chinese sentiments.

Having failed to restore friendly relations with the West, and its “look east policy” not bearing fruits, has left the Mnangagwa regime with few options. Russia has entered the arena, showing increased interest in the extractive industries, arms trade and political fraternisation.

This sounds not much like an alternative to the current ties with China. The bedfellows remain more than less of the same. And an old adage comes to mind: with friends like these one does not need enemies.The Conversation

 

Henning Melber, Extraordinary Professor, Department of Political Sciences, University of Pretoria and Roger Southall, Professor of Sociology, University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Jan 31, 2021

South Sudan will switch to a new official time zone in February, the government has announced.

The country has been using Universal Coordinated Time (UTC) +3 and will switch to UTC +2 which is in her real location, according to the Cabinet.

"This means that the current time will be set back by one hour, the current 1:00am will be set to 00:00am, effective 1st February 2021," said Mary Hillary Wani Pitia, the Undersecretary of the country's Ministry of Labour.

In the statement on Friday, Ms Pitia said the usual working hours in a day will not be affected by the change.

Two weeks ago, South Sudan's Cabinet approved the switch to a new time zone, a decision drew criticism on social media.

But the government couldn't comment on it though it raised questions on why the country was focusing on petty things as opposed to majors.

Once the change becomes effective, South Sudan will no longer use East African Time, but will be in the same time zone as Egypt, Chad and Sudan.

Michael Makuei Lueth, the government spokesperson, told The EastAfrican on Friday that the country has not been using her real time according to Greenwich Meridian Time.

"The current time zone is not our actual time zone. We are in the 30th longitude and as such we are supposed to be two hours ahead of Greenwich Time zone. So, it was clear that the far East is 2.4 hours and the far west is 1.6 hours," he said.

The ongoing COVID-19 pandemic, and the policy measures to combat it, are having profound effects on the economic and social lives of citizens. They are threatening employment as well as the long-term livelihoods and well-being of millions around the world.

South Africa has not been exempted from the socio-economic effects of the pandemic. Its economy has been in decline since it entered a stringent lockdown as the main public health response to curb the spread of the virus in March 2020. This is reflected in its latest available statistics for both gross domestic product (GDP) and employment.

The country’s economy wasn’t in great shape even before the lockdown. It was hit hard by the global financial crisis in 2008, recording average growth just above 2% between 2008 and 2012. And now the National Treasury has forecast that the economy will contract by 7.8% in 2020 due to COVID-19 measures.

The unemployment rate in South Africa has been persistently high over time, hovering above 20% over the last decade. The official unemployment rate reached an all-time high of 30.8% during the third quarter of 2020.

Understanding the effects of the global pandemic on employment – at aggregated and sectoral levels – is therefore key for governments, policymakers, workers and employers. This should help minimise the long-term effects of the pandemic while ensuring the safety of individuals and the sustainability of businesses and jobs.

This article focuses on providing results from applied economic analysis on the sectoral winners and losers during the pandemic. We also identify the people who have been affected the most and evaluate the South African government’s policy response to minimise its effects.

So far the government’s response to address the impact of the pandemic has consisted of two main interventions: a stimulus package launched in April 2020 and in October 2020 a more long-term recovery plan. Our article focuses on the short-term stimulus package.

Simulation exercise

Given that data on sectoral GDP, aggregate GDP and poverty lag the employment figures, results from economic modelling such as the one we set out here can help provide some useful information in the meantime.

This article presents the results of our COVID-19 policy response simulations. The models trace a variety of channels through which the pandemic affected the economy.

The simulation exercise showed that the sectors and workers that were most affected by the COVID-19 pandemic were the mining/mineral sectors, the construction sector, the transport sector and most of the services sectors such as retail trade and accommodation.

But the spillover effects meant that in the end all sectors were affected. Reduced economic activities led to reduced labour and capital demand. This, in turn, led to reduced income to all agents in the economy. Households were not spared. In particular, households dependent on unskilled labour income suffered the most because these workers were the most constrained after the lockdown.

Mining and minerals were affected by the lockdown as well as the drop in the mineral prices on the world market. Based on the model results, we estimated that 864,000 were affected in a mild scenario of the COVID-19 crisis. In a severe expression of the crisis we estimate 1.3 million jobs being affected. This is in line with the results from the Quarterly Employment Statistics by Statistics South Africa. This showed losses in full-time employment of over 568,000 (-6,2%) year-on-year between June 2019 and June 2020 (at the peak of the COVID-19 lockdown) and losses of over 525,000 (-5.7%) in full-time employment year-on-year between September 2019 and September 2020.

Major impact

Overall, the effects of the simulated COVID-19 pandemic were quite harsh on both the production and demand sides of the economy. The decline in GDP growth (-10%) has been largely due to the marked slowdown in economic activity coupled with widespread disruptions in both international and domestic supply chains.

Lower GDP growth and increasing unemployment invariably translate to rising unemployment and poverty rates. When extending the analysis to poverty, the modelling results show some modest increase in poverty, increasing by 2.5 percentage points.

In addition, females, particularly the poorest female-headed households, were more negatively affected. This is because they derive a larger share of their income from a lower-skilled type of work.

As the country attempts to gain control over the pandemic, our findings point to the importance of interventions in at least three areas: protecting vulnerable populations, supporting vulnerable sectors and external trade diversification.

It is important to note that, given the paucity of information on the ongoing pandemic, results of this and any modelling exercises will be shrouded by uncertainty. Hence the directions and intensity of changes must be emphasised.

Implications for policy

The most interesting aspect of our findings from a policy intervention point of view is that the decline in employment and poverty is not uniform across skill levels and gender. As is often the case during economic crises, there are winners and losers, and in this case, it is the least skilled workers and poor females who suffer the most.

This suggest that when putting together a building back strategy government should promote investments in the services sectors, help these different sectors to set up protective barriers to allow the different activities to restart and importantly recover some of the lost jobs.

A support package to increase consumers’ purchasing power, and reducing the operating costs of these businesses and industries, would also be effective interventions.

As the country intervenes to cushion the poor, measures to resuscitate economic growth must be put in place at the same time. Policy options could include increasing public investments, accelerating the implementation of existing policies and diversifying the export and import basket. This could include increasing high value added commodities in total exports and increasing the share of primary products in total imports.The Conversation

 

Jessika Bohlmann, PhD (Economics), University of Pretoria; Helene Maisonnave, Professor of Economics, Université Le Havre Normandie; Margaret Chitiga-Mabugu, Director and Head, School of Public Management and Administration, University of Pretoria; Martin Henseler, Researcher, EDEHN - Equipe d'Economie Le Havre Normandie, Université Le Havre Normandie, and Ramos Emmanuel Mabugu, Professor, Sol Plaatje University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Pirate attacks against merchant ships off the African coast have been reported regularly over the past decade. And despite measures to suppress it, Somalia-based piracy remains a concern. On the other side of the continent, the Gulf of Guinea is now viewed as presenting a much more serious piracy problem.

Last year a record 130 crew members were kidnapped in 22 separate incidents, according to the International Maritime Bureau. The cluster of attacks in November and December has once again led to alarming headlines about the Gulf of Guinea being the world’s piracy hotspot.

But an increase in officially reported attacks does not necessarily mean that the actual number of attacks has increased. And individual cases must be analysed carefully. Attacks against small cargo ships trading solely in the Gulf of Guinea, for example, are often linked to criminal disputes or other illicit activities at sea. These incidents are very different from random attacks targeting merchant ships in international trade which are solely aimed at kidnapping seafarers to collect a large ransom and are, therefore, a profit-driven crime.

Similarly, reports about suspicious approaches against merchant ships off Somalia are still frequent. Most are related to smuggling operations between the Horn of Africa and the Arabian peninsula or simply to everyday fishing activities.

Pirate attacks may grab most headlines, but maritime security is important for wider reasons. Illicit activities at sea limit the potential benefits of economic activities linked to the sea – what’s referred to as the “blue economy”. This includes maritime trade, fishing activities, offshore oil and gas production or coastal tourism. Also, criminality at sea and on land are closely linked. Government agencies need to recognise this if security is to be improved.

Many problems, few resources

Piracy remains arguably the most visible symptom of insecurity at sea. But coastal states also have other reasons to be concerned about it.

Illegal fishing, for example, has a direct impact on coastal communities where artisanal fishing is one of the few opportunities to earn a living. Smuggling on maritime routes even affects government income directly. Virtually all African countries rely heavily on customs revenues. When fuel, cigarettes or agricultural goods are smuggled, no import or export duties are paid. Less money can then be spent on schools, roads or hospitals, as my research has shown.

Governments are also concerned about drug trafficking or weapons smuggling at sea, underlined by international agreements which have been adopted by the majority of African coastal states.

Limited monitoring of maritime trade allows for a steady flow of pharmaceutical products – including fake drugs – into Africa as well as lucrative exports of unlicensed timber or illegal wildlife products.

Despite the widespread impacts, maritime security has only come into the political focus over the past decade. African countries have initiated international meetings about it. The African Union adopted a maritime strategy in 2014 and held a follow-up summit in Togo’s capital Lomé in 2016. But progress has been limited. National governments have largely failed to take concrete actions. Strategies aren’t supported by financial and human resources.

Even Ghana, where a comprehensive maritime strategy has been under development for years, is still unable to provide reliable funding for patrol boat operations.

The way forward

Some examples highlight that it is possible to provide more security at sea. In West Africa, Nigeria is leading the way with its $195 million Deep Blue project, scheduled to be fully operational in the coming months. This project is primarily aimed at better surveillance and enforcement across the country’s Exclusive Economic Zone, an area that stretches out up to 200 nautical miles (around 360 kilometres) from the coastline.

Benin, Gabon and Tanzania have partnered with environmental organisations like Sea Shepherd to combat illegal fishing in their waters. Such non-traditional partnerships may help overcome short-term challenges and focus on urgent problems.

But it’s necessary to build capacity for the long term.

In many African countries, the blue economy could help to increase economic growth and development, although it should not be limited to economic gains. Acknowledging the needs of local communities and environmental sustainability are equally important. Investments can yield direct benefits which are five times higher than the initial outlay, according to a recent study. And the inclusion of Sustainable Development Goal 14 on ocean resources could strengthen efforts to recover from the economic impacts of COVID-19.

Despite some alarming headlines, there is no evidence to suggest that the coronavirus pandemic has had an immediate impact on security threats at sea. But growth forecasts have been slashed and governments are unlikely to prioritise spending on navies and other maritime agencies.

Security concerns on land are much more immediate threats, and even relatively limited stimulus packages are another burden for government budgets.

A closer analysis of sea piracy is important for law enforcement and longer-term prevention whether these are solely aimed at pirates or at organised criminal groups. It is also important for shipping companies because it affects the threat assessment when attacks are linked to criminal activities and aimed at specific ships rather than random targets.

Short-term solutions for long-standing problems are impossible. Even small steps, however, are important to improve maritime security in the medium to long term. That would be in line with the AU’s maritime strategy which highlights the blue economy’s potential contribution to economic growth and development across the continent.The Conversation

 

Dirk Siebels, PhD (Maritime Security), University of Greenwich

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Jan 27, 2021

Liberia's economy is stagnating under the impact of Covid-19. A contraction in growth and a banknote shortage have combined to undermine President George Weah's "pro-poor" agenda as he marks his third year in office.

"The government is frustrating us day-by-day," says Victoria Kamara, a customer of SIB Liberia bank on Broad Street in Monrovia, waiting for a fifth day in a row to try to withdraw money from her account. "We're tired in Liberia, people are tired, maybe they want us to go and steal," she adds.

Queues outside banks in the capital are commonplace as a banknote shortage forces commercial banks to restrict cash withdrawals.

Kamara, waiting patiently under an awning in a line snaking towards the bank's locked doors, describes how tellers refuse the withdrawal requested, suggesting a lower amount.

"We've come to get our salary," says Ambroise Jahwley, another customer. "Each time we come they say no US [dollars], no LD [Liberian dollars]. Sometimes they give you half of your money, sometimes 50 dollars, sometimes 40 dollars.

"I'm very disappointed in the government and the bank because we're not getting what we're supposed to."

Severe shortages

Weah presides over a country of 4.8 million people with a predominantly cash-based economy. Banknote shortages hit consumers' pockets.

Banks in Liberia commonly manage the supplies of cash in their vaults, especially ahead of heightened demand from customers at holiday periods.

Most banks will start to taper withdrawals and hold more deposits during summer to meet those demands, an executive from a pan-African bank told RFI in a briefing, without wanting to be named.

But this year is more severe and shortages of cash have continued. The banks are reliant on their supply from the central bank. For cash held in their vaults, they must slow loan-making activity to maintain some withdrawals for customers.

"Two seasons of the year - our independence (26 July) and Christmas - cause a big rush on banks," says Dixon Seboe, a representative for Weah's ruling Coalition for Democratic Change (CDC) party.

"But this situation shows that it has become more profound," says Seboe, who chairs the house committee on banking and currency. "It did not just happen at Christmas, it started about three or four months ago."

The US embassy in Monrovia put out an alert in December, warning travellers not to rely on getting cash from banks in Liberia, but to bring sufficient money when coming to the country.

Impacting economy

Traders at Monrovia's markets report lower sales and customers with no cash to spend, affecting demand for their products.

Isaac Doe, a clothes seller, does not directly blame Weah's administration. "We are experiencing challenges in business, but I don't want to say it could have some political or socio-economic motives," the 28-year-old says.

Few customers mingle amongst the aisles of mannequins displaying outfits at the China market building where Doe works.

Vendors sell dresses and skirts in stalls, and seamstresses sit at sewing machines whirring away on the ground floor, altering clothes.

"We have mutilated money cycling in the entire economy right now," says Doe, describing damaged and dirty banknotes, and problems trying to give customers change. "When you get to the bank, the bank is telling you, 'We don't have money.'"

Cynthia Lloyd, a trader in provisions, complains that part of the problem is that foreign aid organisations left the country, reducing overall demand.

Are the banknotes really missing?

The banknote shortage traces its roots back to the apparent scandal emerging after Weah took office, with about $100m of new Liberian banknotes allegedly going missing.

Banknotes were printed by a Swedish company with the approval of former President Ellen Johnson Sirleaf's administration. After Weah assumed office, reports emerged claiming large amounts of banknotes had gone missing after being shipped to Monrovia.

The government ordered an investigation by US consultancy firm Kroll Associates who carried out a forensic audit, concluding no banknotes were missing, but highlighting a series of inadequate controls at the central bank.

President Weah set up a special taskforce to handle the matter and the Liberian prosecutor charged Charles Sirleaf, Ellen Johnson Sirleaf's son, a former central bank official, as well as four others, with money laundering.

Sirleaf was freed, but former Central Bank Governor Milton Weeks was found guilty of being unauthorised to print the banknotes. The questions centred around whether authorisation for printing money had been granted by the legislature.

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