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A trio of summits held in 2015 is likely to shape the future of sustainable development in Africa over the coming years, analysts say.
Former UN secretary-general Kofi Annan, who is chair of the Africa Progress Panel, identified energy and finance as the twin keys to any meaningful gains in 2016 and beyond for the continent, where 600 million people – more than half the population – still have no access to electricity or clean cooking facilities.
In July the Addis Ababa Action Agenda, adopted at the Third International Conference on Financing for Development (FFD3), set out some of the financing framework for progress over the next 15 years. Then, in September, UN member states formally agreed a range of Sustainable Development Goals (SDGs) to be achieved by 2030. Finally at, the Paris talks on climate change, the international community agreed to keep global temperature increase “well below” 2°C.
The implications and results of all these deals will take time to filter through but early impressions have been cautiously favourable. “The FFD3 process that was concluded in Addis Ababa is a great success for Africa,” says Sarah Lawan of the US-based Brookings Institute. She cites the presence in the outcome document of many instruments owned and led by Africa, including the African Union’s Agenda 2063 (the 50-year continental transformation blueprint), the New Partnership for Africa’s Development, the Comprehensive Africa Agriculture Development Program, and the Program for Infrastructure Development in Africa. However, critics say Africa will suffer from the failure to agree to a new UN tax body.
Africa’s lack of energy means it has a tiny carbon footprint, Annan writes in Africa Progress Report 2015. “No region has done less to contribute to the climate crisis, but no region will pay a higher price for failure to tackle it.” However, if the right technology, finance and ingenuity are applied, Africa could become part of the global political leadership in breaking the link between energy and emissions, he says. “It is indefensible that Africa’s poorest people are paying among the world’s highest prices for energy: a woman living in a village in northern Nigeria spends around 60 to 80 times more per unit for energy than a resident of New York City or London. Changing this is a huge investment opportunity.”
African nations do not have to lock into developing high-carbon old technologies, Annan argues, but can expand power generation and achieve universal access to energy by leapfrogging into new technologies. In Paris such a goal came closer to fruition with the launch of the African Renewable Energy Initiative, to develop at least 10GW of new renewable energy generation capacity by 2020, and at least 300GW by 2030, potentially making the continent the cleanest in the world. Solar, hydro, wind and geothermal energy will all feature, with thousands of small-scale “virtual power stations” distributing electricity via mini-grids.
The initiative, which is tentatively forecast to cost at least $500bn over 20 years, is billed as “by Africa, for Africa”, and is intended to reduce Africa’s present reliance on coal. “We are ready to engage in massive solar and wind energy production to attain 100% electricity reach for our people,” says Judi Wakhungu, Kenya’s environment cabinet secretary. The president of the African Development Bank (AfDB), Akinwumi Adesina, says: “The continent has been short-changed by climate change. But we must ensure that it is not short-changed by climate finance. AfDB will triple its climate finance to $5bn a year by 2020.”
New business models are emerging. One example comes from Kenya. M-KOPA has brought together solar and mobile technology to bring affordable solar units to off-grid villages. Customers pay a small deposit for a solar home system that would usually retail for $200, including a solar panel, three ceiling lights, a radio and charging outlets for mobile phones. The balance is repaid in small instalments on a pay-as-you-use basis through M-PESA, a widely available mobile-payment platform that is used by a third of the population.
Some governments are partnering with the private sector to extend the reach of electricity. The Ignite Power project in Rwanda brings together several private companies, the government and philanthropic agencies. The project aims to install off-grid technology through a pre-paid system that can power lights, radios and televisions, and charge mobile phones.
Despite such positive examples, progress remains slow. While poor households stand to save over time from adopting new technologies, the initial costs of solar panels are too high for many. This market failure – with consumers, investors and the wider economy losing out in the absence of institutional mechanisms to link supply and demand – could be corrected through a combination of public policy action, business innovation and international cooperation, stakeholders say. To this end, African governments must build credible tax systems and international financial institutions must start scaling up investment in the potentially huge opportunity afforded by the energy gap.
Reforming inefficient, unfair and often corrupt utilities that have failed to develop flexible energy systems is another priority. In 2012, Africa lost $69 billion from illicit financial flows. G8 and G20 countries must act on past commitments to strengthen tax-disclosure requirements, prevent the creation of shell companies and counteract money laundering.
Seeds of hope
In 2015, 12 African countries, including the Democratic Republic of the Congo (DRC), Ethiopia, Kenya, Liberia and Malawi set themselves a goal to replant 100m hectares of forest in the next 15 years. It follows the successful planting of millions of trees and bushes in parts of Tigray, Ethiopia, and elsewhere where droughts, overgrazing and deforestation have devastated and eroded landscapes. Where land has been replanted with trees and bushes, farming communities have seen rapid improvement in soils, water supplies and increased food security.
Several NGOs and companies have also continued to make significant progress. For instance, the Ethical Tea Partnership (ETP) has launched the Malawi 2020 Tea Revitalisation Programme (Malawi 2020) in response to concerns about low wages and poor living conditions in the sector, which is mostly run by smallholders. Together with the Tea Association of Malawi, Oxfam, IDH (the Sustainable Trade Initiative), and GIZ (German Development Agency), ETP is leading a coalition of stakeholders from across the entire tea value chain to create a competitive Malawian tea industry where workers earn a living wage and smallholders thrive.
Small-scale initiatives included the UK natural cosmetics company Neal’s Yard Remedies raising money to build a solar-powered well deep in the Kenyan bush so that women collecting its organic frankincense no longer have to carry three or four days’ supply of water on the walk to the wild-growing trees. However, serious human rights violations continue to mar Africa, with Human Rights Watch publishing detailed reports on no fewer than 32 African countries – roughly one in five – including Kenya, Mozambique, DRC, Angola, Zimbabwe, Gambia and Sudan.
Traditional CSR gains in the Middle East have been few in 2015, with the conflict in Syria and Iraq, as well as violence in Yemen, and the resulting refugee crisis overshadowing the region, along with continuing fallout from the failed Arab Spring of 2011.
Corporate activity on the environment, human rights and social responsibility – such as it is – tends to be cosmetic and driven by PR departments rather than a genuine desire for progress, analysts say. On the plus side, several community development and civic society programmes – started and fostered by and for local people – have made inroads.
Heba AlNasser, Academy Asfari Fellow on the Middle East and North Africa Programme at the Royal Institute of International Affairs, Chatham House, says multinational and national companies in the region view CSR as a luxury, or at best a marketing opportunity. “It usually entails one small office with perhaps one or two staff and involves high-profile charity initiatives like giving out hundreds of school bags, for example.”
Working conditions remain woeful in many cases. AlNasser cites the Qualifying Industrial Zones (QIZs) in Jordan. These are free-trade areas that house huge manufacturing plants, often major garment and footwear brands, for export to the US and Israel. The workforce comprises thousands of female “guest” employees from Asia, who earn about 25% less than their counterparts in the national clothing industries. Gender inequality and gender based violence proliferate, according to the Institute for Global Labour and Human Rights.
“I have visited some of these sites and things haven’t entirely improved, despite promises to the contrary. They are vast buildings, often very dark, and people routinely work more than 14 hours a day,” AlNasser says. “Multinationals that pay lip service to CSR in the region are exploiting people in this way, and through tax exemption.” At the same time the influx of refugees, many of whom are desperate for work permits, has boosted the black market. Local people are increasingly buying into government claims that CSR is somehow unnecessary in this climate.
However, despite – or perhaps because of – this official inertia, local non-profit initiatives have been springing up in Jordan, Egypt, Lebanon, Palestine and elsewhere. These have formed outside the traditional donor/NGO frameworks and share a belief in communities as assets rather than as groups lacking a specific commodity or service, AlNasser says.
These “organic civic initiatives” cover four areas: health, education, training and micro lending. They must register with government departments but are much easier to start up and are less subject to official scrutiny than NGOs. One of these schemes focuses on youth development. It carries out research and runs volunteering programmes, as well as devising innovative learning processes and capacity building. To generate income, it provides services and consultancies to various UN agencies, governmental organisations, INGOs, NGOs and youth groups in the Arab states.
Another is a social enterprise based on exchange tourism. City dwellers sign up for a one-day trip to a rural area in the south of Jordan, where the locals escort them through different stops and activities that reflect their everyday life. These range from tomato picking to bread baking, cosmetics making and knitting. The revenues generated from the trips are invested in an interest-free micro loan fund, an art and culture programme and an education fund for local people.
And in one Middle Eastern capital where public recreational facilities are lacking, an online crowd funding campaign has enabled a skateboard park to be built with help from volunteers. It was opened early in 2015 and many of the skaters come from broken homes or refugee families. “The idea was neither to turn into marketing channels for the corporate sector nor to be implementers for donors’ policies; we wanted to create something from the people to the people, as community owned as possible,” one of the founders says.
AlNasser takes encouragement from these projects. “On the one hand, there is a growing sense of engagement with global issues and causes facilitated by the technological advancement and the rise of social media platforms,” she says. “On the other hand, there is a growing sense of detachment from frameworks and institutions – and from international donors’ money.” However, these flourishing forms of civic activism are increasingly bringing people together in the Middle East in a constructive way, she concludes.
Saudi Arabia has made headlines in 2015 for a host of human rights abuses, as well as energy policy announcements. The oil-rich nation was widely condemned for a series of arrests, public floggings and death sentences, including for religious dissidents and political opponents.
In August, Riyadh Valley Company, the investment branch of King Saud University, invested heavily in solar start-up Solexel, which makes ultra-thin silicon photovoltaic (PV) panels that convert solar energy into electrical power. Solexel’s modules are not only relatively cheap and light but can better withstand heat and they work well in dusty conditions, according to Abdelhakim Hammach, managing director at Riyadh Valley. “We need to enable as much technology transfer and know-how into the kingdom as possible,” Hammach, whose company was created to channel funds into alternative energy investments, told the Financial Times.
Since 2012, when the late King Abdullah announced plans to diversify Saudi Arabia’s energy mix, progress has been slow on the renewables front, owing to government bureaucracy, technical setbacks in the extreme heat, and petroleum subsidies. The King Abdullah City for Atomic and Renewable Energy announced in January that a $109bn solar project, which would generate 41GW of energy capacity by 2032, would be stalled by a further eight years.
Saudi Arabia consumes more than a quarter of its oil output, which totals around 10m barrels a day. The population has risen threefold in the last 30 years but energy usage has outstripped the UK’s, which has more than double the number of people, according to BP’s annual Statistical Review of World Energy. High domestic energy demand has led the country to consume more than a quarter of its oil production, while the sharp fall in oil prices is putting pressure on the authorities to maximise revenue from exports. Even oil minister Ali al-Naimi has said the kingdom aims to become a “global power in solar”, which is “more economic than fossil fuels”.
Oil prices, one of the biggest macro forces affecting growth and development in the Middle East, were also one of the main discussion points at the World Islamic Banking Conference (WIBC) in Bahrain in December. Dr Hani Findakly of the Clinton Group urged delegates to help unlock resources from Awqaf – the Islamic institution broadly defined as charitable funds held in trust – as these represent a potentially huge source of investments in the MENA region.
The Awqaf system, which he estimated as worth over $1.5 trillion globally, could be used to energise economies and employment. “It is high time to recognise the critical importance of one of the largest resources in the Islamic world: much of it is in idle assets, spread across the globe from Morocco to Egypt, to Saudi Arabia and across Asia in Singapore, Malaysia, Indonesia, among others,” Findakly said. This could be tapped to transform the economies of many countries by funding start-ups and venture-capital businesses, thereby accelerating innovation, job creation and dynamic growth.CSR sustainable development Kofi Annan climate change global warming Sarah Lawan carbon footprint solar hydro deforestation ethical stakeholders NGO engagement Activism renewable energy Dr Hani Findakly