Since taking office in June, Lamido Sanusi, the Nigerian Central Bank Governor, has undertaken a series of substantial reforms to the Nigerian financial sector in an effort to improve the image of Nigerian banks and the Nigerian economy as a whole.  His underlying goal is to build confidence among potential investors and attract foreign capital and investment.  

The latest of Sanusi’s aggressive anti-corruption moves was announced today – in line with the standards in other countries, new regulations have been introduced in Nigeria which require banks to report any “large” cash transactions (defined as over £1,000) between accounts belonging to “politically exposed people.”  These people include government officials, politicians, executives of state-owned companies, judges and court officials, soldiers, etc.  The goal is to identify potential bribe payments and fight corruption, fraud, and money laundering. 

Sanusi has made few friends in his aggressive campaign to clean up Nigeria’s banking system.  In his shakeup of the banking sector commencing in August, he fired the top executives of five major banks and sent several bank executives to court for fraud charges.  In an interview with the BBC, Sanusi asserted that a gradual approach to reform would not work and that better transparency and improved disclosure were critical to an effective financial system in Nigeria. 

Wangari Maathai is a prominent campaigner for the environment, women’s rights, and democracy.  She has dedicated her life, and at times risked her life for, sustainable development in Africa. 

Maathai was born in 1940 in Nyeri, a rural village in Kenya, to a family of illiterate peasant farmers who lived without running water or electricity.  She grew up with the forest in her back yard and trees were to become a focus of her life.  Her parents made an atypical choice to send her to school and at 13 she joined a Catholic boarding school.  She excelled at her exams and went on to study biology at university in Kansas with a scholarship from the US government.  She later returned to Kenya, became the first woman in the region to get a PhD, and became a professor. 

She grew up during Kenya’s period of colonial rule and witnessed how the British culled the forests to create tea plantations for export.  Such abuse of the country’s natural resources continued post-independence with Kenya’s corrupt domestic ruling class.  Because of the deforestation she observed, Maathai was inspired to plant trees and started a grassroots scheme that paid women to plant trees.  Maathai persuaded an international organization to pay the women two pence for each tree they planted. 

The so-called “Green Belt” movement that Maathai founded in 1977 expanded in scale to plant whole forests across Kenya with the support of the United Nations Development Program.  To date, Maathai’s Green Belt movement has planted 40 million trees throughout Kenya and has evolved more broadly into a women’s civil society organization.  

Maathai has a history of speaking out publicly to fight her causes.  She first caused trouble with the ruling elite when she protested against President Arap Moi’s plan to develop Uhuru Park, the only park in Nairobi, into apartments, a skyscraper, and a giant statue of himself.  As a result of her efforts, she received death threats and was imprisoned.  But Maathai never gave in, and with growing pressure on Moi from international protests and the support of Al Gore, she was released and the project was abandoned.  She also stopped Moi from cutting down Karura Forest. 

Maathai also campaigned for women’s rights.  She supported women whose sons were imprisoned and tortured for opposing the regime and, along with other protesters, was severely beaten by the police.  Her ability to get Moi to back down on many issues inspired other Kenyans to dissent.  When Moi’s regime ended, Maathai was democratically elected to Parliament. 

 In 2004, Maathai won the Nobel Peace Prize, becoming both the first African woman and the first environmentalist to win the prize.  She is also a UN Goodwill Ambassador for the Congolese rainforest and Co-Chair of the Congo Basin Forest Fund, an organization created in 2008 to sustainably manage the forest.  The Congo Basin Forest gets little attention compared to its bigger brother the Amazon, but it is the world’s second largest rainforest and represents 26% of the world’s tropical rainforest.  It is hugely important in sequestering carbon, sustaining local livelihoods in the ten countries it spans, and hosting diverse wildlife. 

Maathai views the environment and development not as conflicting forces but as one and the same challenge.  Her view is that the world’s poor are the ones most vulnerable to climate change and environmental degradation.  This is because the rural poor rely the most on the natural resources around them – they produce their own food, their agriculture is dependent on rainfall, they rely on river water for drinking, and they depend on firewood collected from the woods for fuel.  Maathai’s latest book, The Challenge for Africa, explores African identity, democracy, and civil society.  

Source: Developments Issue 46 + The Independent September 28, 2009.

According to the United Nations, one billion people in today’s world go hungry.  How is this possible that so many people remain unfed, given all the technological and agricultural advances that have been made in the past fifty years?   The Green Revolution made it possible for food production to match population growth and, in theory, for no one to go hungry.  

The Green Revolution began in Mexico in the mid-1940s with efforts to increase wheat production through the breeding and development of new high-yield varieties (HYVs) of wheat that are resistant to plants and diseases and yield two to three times more grain.  This program, led by the “father of the Green Revolution,” Norman Borlaug,  was later expanded to India and Pakistan in the 1960s and China in the 1980s.  It was widely considered to be successful in preventing further food shortages.   

In addition to the development of HYVs (mostly of wheat and rice), the Green Revolution also involved the financing of the accompanying agrochemicals and capital equipment needed to grow the new varieties, including pesticides, fertilizers, and irrigation systems. 

Unfortunately, the success of the Green Revolution has not been replicated in Africa, where hunger remains widespread, drought is a common cause of food shortage, and agricultural productivity growth has actually slowed.  Why is this the case?  There are a number of factors. 

Firstly, most HYV crops require irrigations systems, which remain scarce in Africa; most African farms lack the technology to support HYVs.  Many crops in Africa are still rain watered, making them particularly susceptible to drought.  Moreover, the lack of infrastructure makes the cost of moving fertilizers to farms very high as well as making it difficult to bring the grain to the market once it is harvested.  In addition, the soil quality is poor in many regions. 

In addition to such physical and technological factors, many argue that political factors such as food aid come into play.  The dumping of surplus crop produced in western markets which harbor excessive farm subsidies is said to undermine and undercut third world agricultural markets, making Africa dependent on food imports and aid.   Ironically, despite agriculture being the backbone of most African economies, Africa is today a net food importer.  

But it is worth nothing that famine is not simply about the quantity of food, but the distribution of that food.  In many instances, there is not an actual lack of food in a country, but a lack of the means to acquire that food among certain segments of the population, usually due to the failure of public action, political issues, or other social constructions.  Amartya Sen has argued that the large historic famines were results of socioeconomic dynamics rather than an absolute shortage in food supply.  

Sources: ActionBioscience.org interview with Dr. Norman Borlaug, AfricanGreenRevolution.com, and The New York Times.

Oftentimes the focus of development discussions is on industrialization and manufacturing, which are seen as necessary for growth and modernization to occur.  Agriculture is given a backseat.  This shows itself in donor spending: less than 5% of aid in 2007 was spent on the agriculture sector.  Nor is there much support for agriculture within developing countries themselves; government spending on agriculture in developing countries is only 4% of public expenditure on average, reflecting the “urban bias” of many governments whose political constituencies reside in the largest cities. 

And yet so many of the world’s poor live in rural areas and rely on agriculture for their livelihoods.  While there is a worldwide trend toward urbanization, 75% of the world’s poor still live in rural areas.  There are an estimated 500 million small farms in developing countries, collectively supporting 2 billion people.  

In Africa in particular, agriculture is extremely important to the economy  In many African countries, agriculture is the biggest private sector business.  Agriculture accounts for approximately 30% of GDP in Sub-Saharan Africa, 40% of its exports, and 80% of its employment.  Whereas developed countries often have large scale, capital-intensive, mechanized farms, in Africa labour-intensive smallholder farms account for 95% of agriculture and are an important source of employment.  There are an estimated 80 million smallholder farms in Africa.  

The International Fund for Agricultural Development (IFAD), an agency of the United Nations founded in 1977, seeks to increase investment in smallholder farms in Africa, whether it be through micro financing, agro-processing, or market access.  Currently 45% of IFAD funding goes to Africa.

Source: www.IFAD.org and Developments Issue 46  

We take electric lighting in our daily lives completely for granted.  But in Sub-Saharan Africa, many people don’t have access to any electricity at all.  In fact, 74% of the African population doesn’t have electricity, and that goes up to 90% when we look at the rural population alone.  

People living “off-grid” rely on alternative sources of energy, such as candles, charcoal, kerosene, and biomass.  These fuel-based forms of lighting are expensive for families to purchase, and obtaining fuel for cooking is a daily struggle.  It is estimated that African households and small businesses collectively spend $17 billion on fuel-based energy each year.  Many households spend up to 30% of their disposable income on lighting, leading to so-called “energy poverty.”  Moreover, fuel-based lighting causes indoor pollution, pose a fire hazard, and produces greenhouse gas emissions. 

Efforts are being made to address this problem.  Lighting Africa is a programme set up by the World Bank and the International Finance Corporation (IFC) to encourage the global private sector lighting industry, as well as local businesses and entrepreneurs, to develop modern lighting solutions for off-grid customers in Africa.  The goal is that for the same amount of money households currently spend on kerosene, they could instead purchase more efficient lighting technologies such as LED bulbs, flashlights, solar lamps, fluorescent lights, and human-cranking technologies.  Lighting Africa has an annual budget of $12 million. 

Source: www.lightingafrica.org and Developments Issue 46 (2009).

If you liked Jared Diamond’s Guns, Germs, and Steel, you will find a thorough continuation of his analysis in David Landes’ 500-page tome, The Wealth and Poverty of Nations (the title, of course, being reminiscent of Adam Smith’s seminal work).  This book is not specifically about Africa – rather, it recounts the economic history of the entire globe – but it is highly educational in that it takes an historical perspective on modern developmental issues.    

David Landes is a Harvard economic historian who seeks to answer the weighty question, why are some nations rich and others poor?  He explores the underlying reasons behind such inequality, tracing the distribution of wealth back to its historical sources.  Landes explores in depth how today’s advanced western nations (particularly the US and the UK) became rich through an examination of the industrial revolution, technological innovation and invention, geographic exploration, empire and colonialism, politics, war, culture, and religion.  

He explores the economic history of Europe, the US, China, and Japan in great detail, sometimes to the point of boring even the most dedicated of readers.  In his analysis, Landes emphasizes the role of culture and religion in development, sometimes at the risk of sounding biased and racist (particularly when he makes seemingly blanket judgments against Islam and Middle Eastern culture).  He also highlights the limitations of China, pointing out the fact that China discovered many technologies before the West (e.g. the clock and expert sea navigation) but failed to realize their potential and turn them into a benefit for the masses. 

Landes recognizes the limitations of classic trade theory and the frequently underlines the irony of today’s advanced nations advocating free trade when they previously used protectionism to develop.  He points out that comparative advantage is not fixed and “Today’s comparative advantage may not be tomorrow’s.”  Wise words. 

On July 6, 2009, the UK Department for International Development (DFID) released its white paper on international development, entitled “Eliminating World Poverty: Building Our Common Future.”  It presents the UK government’s strategy on poverty reduction and sustainable development. 

The white paper opens with addresses from Gordon Brown, the Prime Minister, and Douglas Alexander, the Secretary of State for International Development.  The report notes the progress that has already been made to lift people out of poverty and asserts DFID’s ongoing commitment to development and the Millennium Development Goals despite the current economic client at home.  

DFID’s philosophy is that aid should be used to fight poverty, not for political and commercial self-interest.  Since the June 17, 2002 International Development Act, which made poverty reduction the focus of DFID, tied aid has been outlawed in the UK.  This is in marked contrast with other leading bilateral donors, such as the United States Agency for International Development (USAID), which ties its aid to the purchase of US goods and services. 

The DFID white paper emphasizes the interdependence of today’s world and the role development plays in international security.  The white paper prioritizes development in fragile and conflict states whose troubles have flowed over into the international arena; witness the pirates in Somalia and poppy-growers in Afghanistan.  This, along with the rapid spread of the financial crisis worldwide, and the common problem of climate change, means that reducing poverty and promoting development is in the UK national interest.  

The main goals as outlined in the white paper include: achieving sustainable growth in the global downturn, with measures to promote free and fair trade; pressing for an equitable global deal on climate change at the upcoming UN Climate Change Conference in Copenhagen in December 2009; focusing new aid on conflict states and investing in security, justice, and peace building; keeping UK promise to reach the UN target of .7% of national income devoted to aid by 2013; increasing money to international institutions such as the UN, subject to performance, and pressing for reform in the World Bank and IMF; and improving transparency and independent evaluation within DFID.  

DFID has also rolled out its new UKaid logo, which is desigend to make it easier for the public to see when and where DFID is spending money on development.  A copy of the white paper can be found at the DFID website. 

Source: DFID White Paper, Overseas Development Institute

Global Witness, a policy and advocacy organization that campaigns to expose and put an end to corrupt exploitation of natural resources and resource-fueled conflict, released a report last week regarding the contribution of foreign companies to the ongoing conflict in North and South Kivu in the eastern region of the Democratic Republic of Congo near the border with Rwanda and Burundi. 

Here a number of minerals are mined, including gold, coltan, and tin ore, from mines that are controlled by armed militias, be they rebel or government soldiers.  Both groups have been accused of using extortion and forced labor in the local communities to extract minerals from the mines in the most primitive fashion.  The proceeds from these activities fund the armed groups and contribute to the ongoing conflict.  

Global Witness identified a number of foreign companies that use suppliers who are trading with warring parties.  By trading in war minerals and thereby providing funding to armed groups, these companies are contributing to the violent conflict.  Two of the companies named are London-based companies: Amalgamated Metals Corporation Plc, which owns Thaisarco, a Thai tin smelter, and Afrimex, which has been accused of making payments to rebel groups and buying minerals mined using forced labor and child labor. 

The UK is the largest bilateral donor to the Democratic Republic of Congo, so there is a certain irony in the fact that DFID is working to reduce armed conflict in the region whilst some British businesses profit from the conflict.  The situation in Congo is a good example of the so-called “resource curse,” whereby developing countries with an abundance of high-value natural resources (particularly oil and minerals) tend to have slower economic growth and a higher likelihood of armed conflict.  

Rather than engaging in productive economic activities and having to depend on their citizens for tax income, resource-rich states lose accountability and become rent-seeking societies, with rival groups competing to gain access to the resource rents.  Efforts have been made in recent years to counteract this process from the outside by instituting sanctions against certain commodities originating from conflict zones, most notably the Kimberly Process established in 2003 to regulate the diamond market and stem the flow of so-called “blood diamonds” out of the likes of Angola.  

Democracy is taking a downward slide in Niger, a landlocked Saharan country with a population of 13 million.  Niger’s president, Mamadou Tandja, is 71 years old and has been president since 1999, when he was first elected; he was peacefully re-elected five years later in 2004.  The Nigerien Constitution has a legal limit of two terms for the president. 

However, Tandja is seeking to change this, to the chagrin of the Nigerien people.  Tandja has proposed a referendum on August 4^th for the people to vote on his proposed third term in office.  The referendum was opposed by the Constitutional Court, who ruled against it, leading Tandja to dissolve the Court.  His actions have been dubbed a “slow moving coup d’état” by the opposition. 

Tandja has shut down opponents in the free press, arrested opposition leaders, and put a stop to an “illegal” strike called by the opposition.  There have been widespread protests in Niamey, the capital, and his opponents are proposing a boycott of the August 4^th referendum. 

The US and EU have condemned Tandja’s moves, the EU has suspended some of its aid to Niger, and ECOWAS (the Economic Community of West African States) has threatened Niger with sanctions.  These current events illustrate the fact that democracy equals not only free and fair elections governing the attainment of power, but also effective checks and balances regulating the exercise of power.  Many African nations are weak on the second point.   

Source: BBC and New York Times

On Saturday, President Obama made a one-day visit to Ghana, in which he strongly emphasized the responsibility of the African people for the future of African nations and discouraged blaming the legacy of colonialism for Africa’s ongoing problems. Obama asserted that Africa needs strong institutions and good governance and said “Africa’s future is up to Africans.”

African responsibility must accompany US aid money, which itself must be reformed. In his speech, Obama said: “By cutting costs that go to Western consultants and administration, we will put more resources in the hands of those who need it, while training people to do more for themselves… Aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it is no longer needed.”

Source: New York Times and BBC.