Pulse #33 - Playing Catch Up: Covid-19 vaccines waiting game, Nigeria to reform oil bill, Michelin star for Senegalese chef, and $120mn for football talent
In this week's Pulse... Africa struggling to secure Covid-19 vaccines, Nigeria finally ready to pass 20-year-old oil reform bill, Mozambique reeling from the effects of natural disasters and armed violence, African cuisine gets Michelin nod, Egyptian billionaire developing African footballing talent, and more
The Data Room
When will you get vaccinated? As the race to inoculate people against Covid-19 gains traction in nearly all wealthier countries, most African nations will likely achieve widespread vaccination in early 2023. Africa will be left behind by countries such as the US, UK and much of the EU, which expect to inoculate their most vulnerable citizens by mid-March 2021, according to a report by The Economist.
Numbers in the Spotlight
(USD130bn) is size of chocolate industry which relies on cocoa, two-thirds of which is produced in Ghana and Ivory Coast
(USD42bn) lost through theft of oil and oil products by Nigeria in the last decade
(USD25bn) mobilised by the AfDB for scaling up and accelerating climate change adaptation interventions across the Continent
(USD1.7bn) in humanitarian aid to the conflict-hit Sahel region
(USD1bn) mobilised by the AFREXIM Bank to reimburse African countries for revenue losses resulting from lowering cross-border tariffs under AfCFTA
(USD120mn) invested the development of African footballing talent, by Egyptian billionaire
affected by Cyclone Eloise, which has hit Southern Africa.
is how much more African nations will pay than EU for Oxford-AstraZeneca’s Covid-19 vaccine
On The Continent This Week
Scaleable energy access
Will danfos, kekes and okadas be cheaper after the passing of Nigeria’s oil reform bill? Taking an omnibus (danfo), tri-cycle (keke) and bike (okada) taxi is probably the most overt way millions of Nigerians experience oil-induced price fluctuations. For them, any oil reform should translate into lower transport fares. Nigeria’s parliament expects to pass a bill mid this year aimed at reforming the structure, governance, and fiscal rules of the country’s oil industry, which has been beset for years by corruption and inefficiency. Abuja relies on oil earnings for more than half of its revenue and 90% of forex. But Africa's top oil exporter often experiences scarcity of oil products, and could earn more after tackling theft, which has cost $42bn in losses in the last 10 years. Parliament should now consult other stakeholders for stronger governance mechanisms, definition of roles, and more clarity about the vision for managing government revenues in the Bill.
Baseline healthcare & disease protection
Why does Africa have to pay more than wealthier countries for Covid-19 vaccine? Less than half a year after the World Health Organization warned against “vaccine nationalism” and “price gouging” once a Covid-19 shot was found, South Africa may not be the last African country to fall victim to the vices. The pricing mechanism that will see South Africa buy doses of Oxford-AstraZeneca’s vaccine at a price 2.5 times higher than most European countries, will probably apply to the remaining African countries attempting to source through the WHO-backed Covax facility and bilateral deals. Many wealthier governments had struck bilateral deals such as investment in R&D with coronavirus vaccine manufacturers, enabling them to receive doses at lower rates and in larger quantities. As countries wait for vaccines, they should focus on instituting efficient country-wide distribution channels.
Home-grown digital infrastructure & platforms
Alphabet’s internet balloons come down with hopes of digitalising rural Africa. Africa’s flying hopes of improving internet connectivity in rural areas have suffered an emergency landing after Alphabet announced that its project to provide internet from high flying balloons has burst. Named Loon, the project trialled in Kenya aimed to help bridge the digital divide by beaming internet from floating cell towers in inaccessible areas and locations deemed commercially unviable. But the project’s business model has proved unsustainable. On a positive note, Google is offering Kenya $10mn for pandemic recovery. But the end of Loon also creates a business opportunity for local business, especially through PPP’s with the government. Limited geographical connectivity makes the internet unaffordable to many in Africa, where 1GB of data currently costs an average of 18% of monthly income.
High value skills development and talent repatriation
Egyptian billionaire invests $120mn in the development of African footballing talent. The colonial extraction mindset applied to many natural resources in Africa may soon start coming to an end in the footballing industry, after the continent’s seventh richest man, Mohamed Mansour, invested $120mn to take control of the Right To Dream academy and expand into Africa. Developing through the structures of an academy will shield African players from exploitation by agents and clubs. Having produced 20 Ghana internationals so far, Right To Dream will now build an academy in Egypt, for boys and girls, with a first intake intended for 2022. But the academy will be more rewarding to Africa if intake covers the entire Continent. While footballers with African heritage have proved successful at the highest level, very few of them come from outside West and North Africa.
African countries to be paid to implement AfCFTA. To ease the implementation of AfCFTA, AFREXIM Bank is offering to compensate African countries for revenue losses resulting from lowering cross-border tariffs, via a $1bn facility that will be in place by year-end. Launched on January 1, the world’s largest free-trade area seeks to boost intra-African trade by slashing or eliminating cross-border tariffs on 90% of goods. Although the forecast short-term tariff revenue decline from AfCFTA is small (less than 1.5%, while total tax revenues may fall by less than 0.3%), the $1bn facility has been established to incentivise governments that rely on duties for income. However, it is not clear how exactly exporters will be reimbursed. Mechanisms should equally be devised to guard against perverse incentives such as the marking of domestic goods as imports.
Effective internal and regional security, and foreign policy
A week of gains against militants in the Sahel.The firing of Nigeria’s military chiefs by President Muhammadu Buhari over their inability to tackle violent crime capped a reasonably fruitful week for the Sahel region’s fight against militants. Mali’s army and French forces have killed at least 100 Islamic extremists this year, while Central African Republic troops terminated 44 rebel fighters participating in a push to encircle the capital Bangui and overturn newly re-elected President Faustin Archange Touadera. However, stronger multilateral effort is required to reverse the insecurity that has created 2mn internally displaced persons in the Sahel. Although donors have pledged $1.7bn in humanitarian aid, more still needs to be done to provide the military with the right equipment, funding and better welfare.
Access to financial services and products
$25bn to fight climate change in Africa. The African Development Bank (AfDB) is mobilising $25bn for scaling up and accelerating climate change adaptation interventions across the Continent. A new UN report shows that increasing temperatures and sea levels, changing precipitation patterns and more extreme weather are threatening human health and safety, food and water security and socio-economic development in Africa. The new AfDB scheme comes at a time when huge gaps plague financing for climate change adaptation and resilience in Africa. Adaptation financing gap in Africa is estimated between $7-14bn per year. But it is important for the AfDB to ensure parity between mitigation and adaptation finance for interventions to have optimal impact.
Exporting culture & identity
African cuisine earns Michelin star. Just a week ago TikTokers trolled Africans over African cuisine through a #FufuChallenge, in which people recorded themselves purchasing and trying fufu, the West African staple food. Some TikTokers tried fufu and spat it out to the chagrin of Africans. But it seems Africans are now having the last laugh. Senegal-born chef Mory Sacko has received a Michelin star for a cuisine centred on African culinary traditions, proving that African cooking is just as steeped in rich culinary traditions as are other feted cuisines from across the world. Famous for a style of cuisines that mix African and Japanese influences, Sacko is the latest addition to a growing list of chefs and food entrepreneurs of African heritage today raising the profile of African flavours and dishes to a clientele that has long given them short shrift. His success inspires more young Africans to consider African cooking as a profession.
Essential infrastructure, personal living-space & utilities
Mozambique on the brink: Armed Violence, food insecurity, Covid-19, and now cyclone Eloise. The United Nations is appealing for more resources to provide food, tents, drinking water, hygiene kits, Covid-19 prevention materials, mosquito nets, and blankets in response to devastation meted to Mozambique by Cyclone Eloise. More than 250,000 people have been affected, with several thousand displaced. While the cyclone has also impacted South Africa, Zimbabwe, Botswana, and Eswatini, Mozambique suffered its vilest wrath. The disaster finds Mozambican State in one of its most fragile conditions as 3mn people suffer food insecurity and armed groups have forced more than 565,000 to flee their homes. Humanitarian actors need to prioritise the country for emergency interventions
End-to-end value chain capture
Ivory Coast and Ghana brace for tougher cocoa production conditions from the EU. Ivory Coast and Ghana are bracing themselves for stricter production conditions imposed by the EU to tackle deforestation, child labour and farmer poverty. The 27-member bloc, which buys 67% of Ivory Coast’s cocoa, is developing a law to improve cocoa production standards. A rigorous implementation of the law could deprive Accra and Abidjan of the lucrative EU market in the short-term as it will take years before production structures can adapt to the new conditions. Ivory Coast and Ghana, which produce two-thirds of the world’s cocoa, introduced a $400 a tonne living income differential on cocoa sales for the 2020/21 season, but have since struggled to sell their beans as chocolate demand has been hit by Covid-19. Farmers make less than $1/day in the $130bn chocolate industry which relies on cocoa. However, the EU needs to consult widely with cocoa farmers to impose realistic conditions that reflect the socio-economic conditions of Ghana and Ivory Coast.
Proportional representation in politics, business and community leadership