Movemeback Pulse

Actionable African insight delivered to you on pulse


Pulse #24 - Pause for reflection: Nigeria on a knife edge, a reminder Africa’s economic success is rooted in good policy and governance

The Data Room
After Nigeria was in the news last week for an economic success story with the acquisition of fintech startup Paystack, this week reminded us that business means nothing without good policy and governance. A 2016 Nigerian National Bureau of Statistics report showed that on average, Nigerians paid six bribes per year, amounting to $4.6bn in purchasing power parity terms (at the time); and that of all adult Nigerians who had direct contact with a police officer in the 12 months prior to the survey, 46% paid that officer at least one bribe. Nigeria’s police force was also ranked the worst of 127 countries in the 2016 World Internal Security and Police Index.
Numbers in the Spotlight
($53.6mn) is how much Uganda plans to spend towards the construction of three roads in DRC, in an attempt to build relations

of COVID-19 confirmed in Africa (as of last week)

1,300,000 adults
(1.3mn) who were previously unbanked have reportedly been given bank accounts in Ethiopia in the last month, following its demonetisation process

100,000 women and children
in Zambia have allegedly suffered lead poisoning as a result of pollution caused by Anglo America, according to a new class action lawsuit

of China’s chrome ore imports (a key ingredient in stainless steel) was supplied by South Africa last year

56 protestors (at least)
were killed by armed forces during a peaceful #EndSARS protest, at the Lekki toll gate, in Nigeria
Effective internal and regional security, and foreign policy

Nigeria was shocked this week, when gunfire broke up peaceful #EndSARS protests at Lekki Tollgate, an upmarket area in Nigeria’s commercial capital, Lagos. Multiple accounts and videos emerged of peaceful protestors sitting, singing the Nigerian anthem and waving their national flag, before being shot at by camouflaged armed forces. Misinformation ensued, from the Lagos state Governor claiming 1 person died, vs. Amnesty International’s count of 56, to whether street lights were turned off before the shooting, to who was responsible for giving the fatal orders for shooting to begin - with President Buhari remaining largely aloof. Meanwhile Facebook admitted to incorrectly labelling #EndSARS content as misinformation.

The cosmopolitan, urban, young origins of the #EndSARS protests and its spread to wider society, with other African nations expressing similar disillusion with authorities and government, bears hallmarks of the ‘Arab Spring’. As Nigeria and Africa consider how to move forward, this is perhaps a time for pause and reflection on how hope that the 2011 uprising across North Africa & Middle East would deliver political reform and social justice, resulted in millions killed, displaced or in need of humanitarian assistance. Well considered and deliberate decision-making is needed for a better Nigeria.

Intra-continental connectivity, collaboration & trade

Uganda plans to spend 200bn shillings ($53.6mn) to contribute to the construction of three roads in eastern Democratic Republic of Congo (DRC), following a pact to improve relations between the neighbours. Eastern DRC, which borders Uganda, Rwanda and Burundi, has long been a hotspot for insecurity with various militias. Having experienced testy relations for two-and-a-half decades (including armed conflict in 1990s), the roads are expected to help build long-term stability and double trade volumes between Uganda and landlocked DRC. Better relations may also favour DRC’s efforts to join the East African Community, marked its request in June 2019

Home-grown digital infrastructure & platforms

Cameroon has been forced to suspend a phone tax that would have seen device owners pay a 33% levy on the phones or tablets they purchase from October 2020 as import duties, following widespread outrage online. SSA’s mobile phone industry accounted for 9% of GDP in 2019 - making it a prime target for cash-strapped governments. As mobile phone and internet penetration rates continue to increase, expected to reach 50% and 39% respectively by 2025, the sector is likely to be an increasingly attractive tax source. However, with internet connectivity largely achieved via mobile phone in Africa, continued attempts to raise taxes from mobile use will likely be viewed as an attack on digital rights, and lead to increased push back. #EndPhoneTax

Scaleable energy access

Kenya has completed the construction of its Menengai geothermal power plant, adding 105MW of capacity, and tripling its geothermal production capacity to 672MW in just six years. Kenya has emerged as one of the global leaders in the use of geothermal resources, and appears to be making strong strides towards its aim to achieve universal electricity access by the year 2022, with access at ~75% in 2018 (vs. the Africa average of ~43%). Whilst expensive and risky to explore, East Africa’s geothermal potential in the Rift Valley of 20,000 MW, remains largely untapped, with only Ethiopia (aiming to reach 1,000 MW by 2021) currently joining Kenya as a notable East African player. 

Access to financial services and products

Ethiopia has seen a 1.3mn increase in the number of banked adults in just 1 month, following its demonetisation process (where it introduced a new currency, forcing those holding cash to use banks to swap old notes for new). This is one of many reforms Ethiopia has taken recently to boost cashless payments, leading to a 31% increase in the number of accounts to 51mn over the past year alone. Other measures include preparing to open up banking to local phone companies by allowing locally-owned non-financial institutions to offer mobile money services. With South Sudan now contemplating following in Ethiopia and Kenya’s footsteps, we could see increased financial inclusion across the Horn of Africa.

Baseline healthcare & disease protection

A class action lawsuit has been filed against mining company Anglo American, alleging the company caused widespread lead poisoning to over 100,000 children and women of childbearing age, from a mine it operated until 1974 in the Zambian town of Kabwe. Lead exposure has long been known to be highly poisonous, causing health problems ranging from learning difficulties to infertility, brain damage and death. After the recent battle fought in Kenya saw $12m awarded to a community poisoned by lead pollution from a nearby factory, could we see more communities standing up against corporate polluters?

End-to-end value chain capture

South Africa has proposed an export tax on chrome ore - hoping to incentivise producers to transform the raw material into ferrochrome inside the country. Roughly half of its chrome ore is exported for smelting into ferrochrome, which is then processed into stainless steel. South Africa is the world leader in chrome production (>40% of global production), and last year supplied 83% of China’s chrome imports. Its neighbour, Zimbabwe, was forced to lift a similar ban in 2015, as stockpiles grew due to lack of smelting capacity, high production costs and power shortages. Given South Africa’s unreliable electricity supply, the Government will also need to tackle energy efficiency to make this a success.

Essential infrastructure, personal living-space & utilities

Airtel and Ericsson have partnered on a ‘Product Take-Back’ program in Zambia, to collect and sustainably recycle electronic waste - a cause of environmental and health hazards, due to the release of a large range of toxic chemicals and non-biodegradable components. Africa is often the last stop for cheap for outdated 'zombie' appliances discarded from Europe and then illegally resold. Most gadgets used in Africa are second hand, resulting in most becoming obsolete soon after purchase and a rapid increase of e-waste in Africa. The Continent generated 2.9mn tonnes of e-waste in 2019, but recycled just 0.9%, compared to Europe and Asia at 42% and 12% respectively. With increased urbanisation, the problem of e-waste will only go in one direction without increased efforts to reverse the trend.

Exporting culture & identity

Egyptian archaeologists have unearthed more than 80 colourful coffins gilded wooden statues and in South Cairo, thought to have been buried more than 2,500 years ago. The announcement came in the same week that Egypt unveiled new visitor facilities on the plateau outside the Great Pyramid of Giza in Cairo and the Great Sphinx (Egypt’s most visited heritage site and the only remaining wonder of the ancient world), including the first restaurant at the site, and a fleet of new environmentally-friendly buses. With tourism accounting to 12% of Egypt’s GDP, the Government has been keen to re-open the sector. However, as many countries continue to advise against non-essential travel, these new developments may not be enough.

High value skills development and talent repatriation

Around 50,000 of South Africa’s jobless youth are set to benefit from a range of free courses, aimed at developing 4th industrial revolution skills among the youth. Around a third of South Africa’s population are aged 18-24, and South Africa suffers one of the world's highest youth unemployment rates at 58%. Meanwhile, President Kagame of Rwanda made the case for increased investment in youth digital skills training, noting that “most children entering primary school today... will work in jobs that do not yet exist”.
Proportional representation in politics, business and community leadership
15th October saw the African Union celebrate the end of the first ‘African Women’s Decade’ - in which they said “most African countries took giant steps to elevate the status of women”. Notably, African female participation in political decision-making has increased, with Rwanda, Namibia, South Africa and Senegal ranked in the top ten countries in the world with the highest number of women’s representation in Parliament. There is still a lot to be done, particularly as Covid is expected to disproportionately affect women, due to their higher participation in informal and low-paid work. Equitable participation of women in Africa’s labour markets could have huge economic consequences, resulting in an increase in GDP of as much as 50% in Niger
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