Category Archives: Economy

Ghana: A critical look “Ecology versus Economy”

Ghana is about to trade 5 percent of its bauxite deposits to China for $15 billion. In a guest commentary by environmental advocate Joshua Amponsem, he questions the motives and long-term impact of such a move.

As an environmental activist, I have come to appreciate that nature gives us everything. Our basis of life is dependent on nature and thus, it’s important that we see nature as our source of life rather than a resource for mere exploitation. It is this second line of thinking, which I believe has the people of Ghana troubled as the country’s vice president enters into an agreement to acquire $15 billion from China. The weariness of the citizens is very strong as the country strives to stop illegal small-scale mining which was largely driven by Chinese immigrants in Ghana.

The deal which has been described as a joint partnership between Ghana and China, and later termed a “joint venture” by the vice president, has received intense criticism from the public. As per the details provided by the government, the $15 billion will be a joint venture where China will receive less than 5 percent of Ghana’s bauxite reserve as said by the vice president at the China-Africa Joint Research and Exchange Programme on the theme: Building resilient industries and infrastructure for economic transformation in Africa: The role of China. He said, “This agreement will not add to our debt stoke but will rather help boost development because it is a win-win venture.”

How Ghana intends to use the billions

China has built a reputation when it comes to partnerships involving the exchange of money for natural resources in developing countries. And such partnerships have often been later regretted by many under-developed and developing countries that have entered into such agreements. Ghanaian citizens are worried, social commentators are not sure of the outcome of the partnership.

Generally, the government is planning infrastructure development with this money. The projects made known so far span across supporting the government’s one-district one-factory initiative, road construction, railway development – including a railway line from Takoradi to Kumasi (two trade cities in the country), interchange, purchase of vehicles and other resources for the security service, building regional hospitals, and an inland port along the Accra Kumasi road. The plan for the money is to strengthen the country’s infrastructure sector and enhance trade within the country.

The big question

If China finds it profitable to trade $15 billion for less than 5 percent of Ghana’s Bauxite, then it is important that Ghana develops a sustainable strategy to reap the same amount from their natural resource while regulating it at their own pace rather than trading it away.

What happens when the $15 billion runs out? Will the country keep trading its natural resources to acquire money for development? What is Ghana’s approach to becoming self-sustainable? It is important for the leadership of Ghana and its people to realize that the country will not be built on the foundation of extractive industries. These riches have not translated into wide-ranging job creation, social welfare or stability.

Economy versus Ecology

It comes across very often that environmental activists do not understand the need for economies to grow. However, this is not the plain truth. The quest to develop economies via unregulated and unsustainable exploitation of natural resource does not build our economies – it destroys our life source (fresh air, water, food, and functioning ecosystems) and gives us nothing more than a short term representation of wealth.

Building the economy should not rip up our quality environment which translates to quality health conditions and less cost on healthcare. Already, our forests, water bodies, and arable lands have suffered severe damage which is (and will) cost us millions of Ghanaian cedis. Polluted air, water, and food mean that a higher percentage of income will have to go into healthcare.

The bigger picture should be our focus – the very reason why there have been initiatives like “green economy” and “sustainable development.”

The land – especially for a country like Ghana where 57 percent of its total land area is classified as agricultural land – provides us with healthy and nutritious crops. These lands need to be protected and used wisely.

Also featured on DW ECO – http://p.dw.com/p/2hDl7

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ANGOLA: ILLIGAL WILDLIFE TRADE HIGHER THAN ARMS SMUGGLING

United Nation’s Environment Programme (UNEP) and Interpol has revealed through a report on Environmental Crime that inability to prevent and halt wildlife/environmental crime will make it impossible to achieve the Sustainable Development Goals (SDGs).

During this year’s World Environmental Day, all strength and vigor was headed towards Angola – Africa’s biggest ivory and bush meat market, as stated by a recent report by Karren Alan from Angola.

On such a world recognized day, with the slogan ‘Go Wild for Life’, world’s environmentalists and conservationist were all in to develop strategies to fight illegal wildlife trade in the World. With Angola as the leading illegal wildlife trade country in Africa, UNEP celebrated World Environmental Day in Angola.

In phase of such celebration, Angola’s is putting up efforts to end illegal bush meat and wildlife trade to show their commitment towards the global goals. In Angola, it is literally a war between poachers and conservationist. A report by UNEP, shows that 100,000 African elephants were killed (by poachers) between 2010 and 2012 – this also tells how crucial it is for environmental and conservation investors to consider Africa as a top place to develop eco-tourism and other related initiatives that will enhance the closure and end of the poaching revolution.

According to Karren Allan, a reporter from Luanda, a project termed ‘Okavango Wilderness Project’ and Angola’s National Geographical Society expeditionary team have been studying the illegal trade of wildlife. The Okavango Wilderness Project is already proposing a reserve of about 175,000 kilometer square – a monitored but yet protected/reserved field where wildlife will have a better habitat to live and grow without being threatened by poachers. More so, such developments is accompanied with high infrastructural and administrative costs. The project also stated that there are existing wild regions with lots of wildlife which can be protected before it gets very late.

The leader of the National Geographical Society had mentioned that fighting the illegal wildlife trade is ideally a cause of conservation and sustainability. Additionally, he revealed the cost of some bush meat in the country. According to him, a monkey costs 6 USD while it costs 60 USD to purchase a cut of snake.

In recent times, through support from international agencies and the Government of Angola, commenced an initiative to recruit soldiers and military personnel as wildlife guards in an effort to end the wildlife trade while promoting conservation. Culprits found trading/smuggling ivory are to face a 3 years jail sentence which has been backed by law, however, the initiative is not yielding its full potential – citizens says.

According some citizens and history, bush meat became a favorite during the times of war in Angola. People will resort in bushes and feed on bush meat; after the war, they see no reason to restrain from consuming bush meat. The concept of conservation is not well understood by citizens and the income generated from trading bush meat is so lucrative such that it wouldn’t be easy to just end the era. Per UN and Interpol report, illegal wildlife trade is cumulatively functioning on a larger industrial scale and is possibly dominating arms smuggling.

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Globally, Africa’s economy is noted to be a fluctuating one – performing differently from predicted outlook and projections. This has, and is still, impeding the rate of investment and economic growth of Africa’s business sector.

Evidence based research predicted decades ago that some African countries, like Nigeria, South Africa, Ghana, Kenya and Zimbabwe could be competing world’s leading economies and possibly would not require foreign aid for development. However, situations keep changing and Africa’s economy usually, seems not to meet expectation. Forecasts about Africa keeps dwindling from pessimism to optimism and back to pessimism. So what are we doing wrong?

The cause of the dwindling continental economy can be traced to be influenced by western investors and the changing global commodity price. In recent times, the private sector of the African economy has been functioning super effectively. Although there are few challenges, the economic growth of the continent have been somehow dependent on the performance of the private sector. Entrepreneurs are drifting from service provision towards production of goods. Yet, there is little coverage of these great transformation by researchers and media (local and international), reporters and businesses. It was only until the year 2000 Journal of African Business

There have been media spotlights on just some few entrepreneurs, Aliko Dangote (Nigerian Cement Manufacturer) and Mo Ibrahim (Sudanese telecoms tycoon). On business research, academicians have not really focused on Africa’s private sector. This has limited the level of understanding of business readers, investors and consultants on business in Africa, particularly the private sector.

Gone are the days where Africa use to trade unprocessed commodity and raw materials. For instance, countries like Ghana and Ivory Coast built their economy on smallholder farming and trading Cocoa and Gold as a raw mineral at global market. Now, there are a lot of entrepreneurs within the private sector in Africa which is performing very well. Some of these entrepreneurs are making their names in Forbes Magazine and global economic forums.

Now, we have multinational firms! South Africa’s telecom giant, MTN; Shoprite and DSTV, Ecobank, Nigeria’s UBA – all booming market in several African countries. Since mid-1990 to the 2000s, there have been a revolution which surges African economy to attract foreign investors. Start-Up in technology is uprising in Africa now and a lot of young start-ups manufacturing products from local raw materials.

Research must focus on these young start-ups. These are the companies that needs spotlight and focus. Academia must study these projects and publish their progress and challenges. That’s the medium to get a better outlook of Africa’s economy to outsiders. Businesses in Africa should also include writers and publishers in their management. Frequent publishing on large media outlets attracts customers, investors and helps to create a better image of the company.

Joshua Amponsem

June 13, 2016

In Africa, rural-urban migration is a common practice which results in over population in urban centers and mounting pressure on social amenities. Increasing trends of rural-urban migration is creating slums in cities. Previously, such migration trends symbolized economic transformation and improvement for cities and countries – as there was a large human resource available in cities for the many employment and economic opportunities; but now, Africa’s migration refers to no transformation but just a lifestyle.

Report conducted by the Organization for Economic Co-operation and Development (OECD), African Development Bank (AfDB), and the UN’s Development Programme (UNDP) on African’s economy has projected that Africa will have to convert urban areas into a catalyst for developmental change, backed by functional policy and frameworks.

On this study and respective report (African Economic Outlook), Director of the OECD’s development centre – Mario Pezzini, said “What matters is policies and strategies. That’s what will make the difference. Why do you have some areas and regions where things work and others not? Policies matter. You may have certain conditions, but you can build on them or not, and that depends on the policies and institutions you create.”

The study itself mentioned that, authorities must create inclusive growth, jobs, better housing and social safety nets, and improve links with rural areas to boost development in urban areas, now home to about 472 million Africans. Already, statistics predict that more than half of Africa’s population will be living in the cities by 2050, barely three decades from now – looking at the increasing rate of migration and economic status of the continent. If policies factor marginally on the development of the infrastructural and employment (income generation) sector, then cities could fail in accommodating this scenario. This will lead to loss of resources and resulting in a large number of population resorting to unhealthy living conditions – slums in cities.

From 1950 to 2016, there have been a 26% increase in the population of people living in urban centres in Africa. Comparatively, the rate of migration towards urban centre in Africa is unprecedented. 110 years until Europe attained a similar livelihood shift of about 25% in the urban center – even lesser than what Africa is achieving in a period of 66 years – merely half of that of Europe’s. For a continent with such fast rising migration trends, it represents an opportunity for investments towards job creation and also infrastructal investment as population rises. According to Mario Pezzini, creating conditions and services, does not only provide a better quality of life, which is crucial, but also creates opportunities for economic development. He added that, if you don’t create infrastructure, the jobs will not be available.

In view, the report estimated an average 5-7% GDP (Gross Domestic Product) or at least 100 billion USD budget on infrastructure to help bring such urban opportunities into reality. Such funds could be sourced from diverse revenue sectors, including taxes and foreign aids. Currently, net financial flow to Africa stands at an estimate of about 200 billion USD with development assistance funds increasing to 56 billion USD.