Tackling inequality by ‘lifting stones’

Richard Munang and Robert Mgendi

Sierra Leone Telegraph: 25 January 2018:

“If you wish to move mountains tomorrow, you must start by lifting stones today”—so goes an African proverb, crystalizing the solutions to the continent’s socioeconomic inequalities.

Africa is second only to Latin America in economic inequalities. Dollar millionaires in Africa doubled to 160,000 between 2000 and 2015, while people living on less than $1.25 a day—the poverty threshold—increased from 358 million to 415 million between 1996 and 2011, according to the Brookings Institution, a US-based research group and think tank.

Brookings Institution adds that by 2024 the number of African millionaires will rise 45%, to approximately 234,000.

The effects of climate change compound Africa’s worsening inequality, constricting productivity in economic sectors that are critical to inclusive growth.

Climate experts therefore posit that a first step in denting inequality is for governments to channel investments into sectors that can create socio-economic opportunities, enhance ecosystems’ resilience and combat climate change by offsetting carbon emissions.

African governments agree with climate experts on the sectors to target for investments. Meeting in Libreville, Gabon, last June, under the auspices of the African Ministerial Conference on the Environment (AMCEN), the continent’s environment ministers identified two sectors requiring investments to bridge the inequality gap: energy and agriculture driven by ecosystem-based adaptation (EBA).

An EBA-driven agriculture relies on biodiversity and ecosystem services to help people adapt to climate change effects. The ministers said that both sectors can boost agricultural productivity through value addition and curtail postharvest losses, which are currently about $48 billion per annum.

In addition to the huge postharvest losses is the $35 billion African governments spend annually on importing food. Reversing postharvest losses would mean recovering lost food while saving billions that could be invested in other sectors.

Labour productivity on the continent is currently 20 times lower than in developed regions, notes the UN’s Sustainable Development Goals Report 2016.

An optimised agro-value chain and its ancillary chains of clean energy and logistics could create high-value jobs and increase labour productivity. Deploying clean energy to power EBA-driven agriculture will achieve the twin goals of combating climate change and creating economic opportunities.

An example of such an integrated approach can be found in Cameroon’s Jakiri municipality, where UN Environment, based on its EBA for Food Security Assembly (EBAFOSA) policy-action framework, is supporting efforts to use an off-grid micro-hydro power to support the processing of EBA-produced cassava and Irish potato into varied product lines. The farmers subsequently use a mobile app to link these products to markets and supply chains.

The off-grid micro-hydro power offsets carbon emissions in energy generation, incentivizes EBA use for climate adaptation and creates income opportunities along the agriculture, clean energy and ICT value chains—all enhancing socio-economic resilience.

Studies show that EBA-driven agriculture increases production by 128%. For instance, in Jakiri, 10 youth groups of 700 each were engaged in ICT, clean energy and marketing since 2016. They created many green jobs for young people, while giving over 5,000 women access to value addition services. The youth groups reduced postharvest losses and enhanced income stability and food security.

A growing middle class

The 350 million Africans in the middle class could potentially enhance ongoing efforts to achieve a single market. Minimizing postharvest losses in a consolidated agro-market dominated by raw commodity exports could rake in an extra $20 billion annually, according to the World Bank.

Experts project the raw commodity value added, currently $150 billion, to increase to $500 billion by 2030. Such a market could significantly boost agricultural industries. At 12% of its total trade, Africa has the lowest rate of intra-regional trade for any region. (Europe’s rate is 65%, North America’s 45% and Southeast Asia is 25%).

Forty countries have so far adopted an EBAFOSA initiative known as a compliance standard in their energy and agriculture sectors. The initiative guarantees quality control along the value chain, in addition to consolidating the markets of all 40 countries, including Cameroon, Côte d’Ivoire, Kenya, Nigeria, Tanzania and Uganda.

The compliance standard builds on the acclaimed International Organization for Standardization standards and other national standards already in use in different countries to ensure that certified products can be exported to other markets. For example, under EBAFOSA’s standard, attiéké, a Côte d’Ivoire staple food made from processed cassava, is to be marketed in Kenya and the rest of East Africa.

Africa’s development experts anticipate the consolidation of a continental food market in the coming years, hoping that Africa’s 54 countries will eventually adopt the compliance standard.

Plans for a consolidated African food market may face headwinds, including restrictive intra-Africa air travel. Although in 2002, 44 countries signed the Yamoussoukro Decision to promote seamless intra-Africa air travel, many countries still restrict their air services markets to protect local airlines, especially state-owned carriers.

Also, African countries have some of the strictest visa requirements in the world. Only 11 of Africa’s 54 nations offer 100% access to other Africans. This contrasts with the European Union, where member states’ citizens enjoy 100% freedom of movement within the EU countries.

Strict visa requirements constrict deployment of continental labour and complicate efforts to create income opportunities and combat poverty. The poor are disproportionately vulnerable to climate change, as they lack the resources to adapt to, or quickly recover from, climate shocks, reports the World Bank.

The African Union’s plan for a visa-free continent for Africans by 2020, if fully implemented, will foster human capital flow for income generation and, by extension, increased climate resilience.

To address development needs, Africa cannot rely only on traditional public assistance, including the rapidly dwindling official development assistance (ODA), according to the African Development Bank. Currently ODA accounts for only 3% of the continent’s GDP, which accentuates the need for innovative approaches to financing development projects.

In its 2015 African Adaptation Gap report, UN Environment proposed domestic and innovative financing approaches, suggesting among other things that African central banks leverage the continent’s cash reserve to strengthen their lending capacity and adopt a unitary credit policy that guarantees commercial loans are issued to enterprises whose operations mitigate carbon emissions and enhance ecosystem resilience. EBA-driven agriculture like Jakiri’s will boost food security and create income opportunities.

What should be Africa’s next steps in tackling inequalities?

Another African proverb sets the tone: “To get lost is to learn the way.” While Africa lags behind other regions in bridging inequalities, it has also demonstrated that it can learn.

Many landmark policy frameworks, such as the AU Agenda 2063, the Yamoussoukro Decision on open skies, the Sirte Declaration on the African Central Bank and recently the 16th AMCEN Decision on Innovative Environmental Solutions, coupled with practical policy implementation frameworks such as EBAFOSA, prove that the continent is making the right choices.

For these policies to work, however, Africa must start lifting the stones of implementation. In other words, Africa must begin to implement strategies that create incomes out of its catalytic sectors while combating poverty and its accompanying climate vulnerabilities.

About the authors

Dr. Richard Munang is UN Environment’s Africa regional climate change programme coordinator. Mr. Robert Mgendi is UN Environment’s adaptation policy expert. These are the authors’ views, not necessarily those of the institution they represent, writing in Africa Renewal