New Infrastructure Vital for South Africa to Combat COVID-19 and Save Lives!

South Africa Says Lenders Commit $21 Billion to Building Projects

Banks, development finance institutions and multilateral organizations have committed 340 billion rand ($21 billion) to infrastructure projects in South Africa that could create 290,000 jobs, the government said.

The projects range from water supply to housing, energy, agriculture and roads. They were named in a July 24 government gazette, paving the way for the beginning of private investment in a 2.3 trillion rand program over the next decade.

Infrastructure investment has been identified by South Africa’s President Cyril Ramaphosa as a key plank in his bid to revive a stagnant economy that’s been further damaged by the coronavirus pandemic. While the state has traditionally funded most infrastructure in South Africa, surging debt has seen the government turn to private capital.

The projects need sovereign guarantees and an increase in debt limits, Kgosientsho Ramokgopa, the head of infrastructure investment in the presidency, said at a press conference today.

For more on the initial announcement, click here

Still, the commitments are a step forward in attracting investment into the country, which faces infrastructure deficits ranging from piped water to housing and power plants.

Of the 276 projects being considered by Ramokgopa’s department, the initial list totaled 50 with an additional 12 “special projects.” The projects are “shovel ready,” he said, with work likely to begin within three months.

“We will come with the next wave of projects,” he said. “The state needs to reciprocate by providing those guarantees.”

Private funding

Some of the projects, such as the next stage of the Lesotho Highlands Water Project, are already in process. Ramokgopa was not clear on whether the total investment amount included previously announced expenditure.

“What we need are projects that are financed independently by private investors who then earn a return through operating the projects,” said Theobald. “Those are genuinely fiscal neutral and growth positive.”

Ramokgopa did say one project to build 45,000 housing units was completely privately funded.

The commitments are as follows:

  • Transport: 47 billion rand, creating 50,000 jobs
  • Water and sanitation: 106 billion rand, creating 25,000 jobs
  • Housing: 138 billion rand, creating 190,000 jobs
  • Agriculture: 7 billion rand and 4,000 jobs
  • Digital: 4 billion rand and 700 jobs
  • Energy: 58 billion rand, creating 6,000 jobs

Reported by EIRNS, researchers at South Africa’s National Income Dynamics Study (NIDS) group released a Coronavirus Rapid Mobile Survey (CRAM) on Wednesday, July 15, which provided a bleak picture of the reality currently facing that nation under lock down, conditions which are representative of much of Africa and the Global South.

Conducted over a two-month period during May and June, the extensive (20-minute) survey was conducted by phone this year, with 30 researchers contacting over 7,000 people/homes. Of the hundreds of questions asked — with conversations getting personal to the point of provoking tears — the final report breaks the responses into three categories: Employment, Hunger, and Health.

  • On employment: 30% of income earners who had a job in February did not earn an income in April 2020 (the month South Africa’s hard lock down started and before relief efforts kicked in). As could be expected, job losses were highest in already-disadvantaged areas which could least afford it.
  • On hunger: 47% of respondents reported that their household ran out of money to buy food in April 2020. 1 in 5 respondents told researchers that someone in their household had gone hungry in the last seven days, and 1 in 7 respondents reported that a child had gone hungry in the last seven days. In households with children, 8% reported “frequent” child hunger (3 or more days in the last 7 days) in their household, and 1 in 25 (4%) reported “perpetual” hunger (almost every day or every day), with cases of “food shielding” (adults not eating so their children could survive), evidenced by “adult” hunger surpassing child hunger by almost 8%.
  • On health: 78% couldn’t (or wouldn’t, whether out of fear or poverty) see a doctor at least once during May or June, while 23% reported they were unable to access needed medications. The situation in South Africa is compounded by the unaddressed crisis of AIDS, with victims being unable to access critical care because of COVID-19 overload, a condition which could only be worse if the patient were pregnant.

While the authors do not note it, the survey is the first known to bring together these three aspects of the crisis, providing an accurate physical-economic picture of this harsh reality.

Fruitful Cooperation: Ethiopia and China’s Belt and Road

Celebrating the inauguration of the new Addis Ababa to Djibouti railway on October 6, 2016, which I attended

 

China-Ethiopia dialogue highlights sustainable investment under BRI

BEIJING, Dec. 1 (Xinhua) — Ethiopia is hoping to attract more sustainable investment from Chinese enterprises as fruitful cooperations have been carried out under the Belt and Road Initiative (BRI).

At the China-Ethiopia High-Level Dialogue on Sustainable Investment held in Beijing on Friday, both Chinese and Ethiopian officials expressed their hope to consolidate collaborations to boost the achievements of sustainable development goals (SDGs).

Aschalew Tadesse Mecheso, a senior official with Ethiopian Investment Commission (EIC), said Ethiopia looks forward to more investment in the sectors of information and communication technology and light industries so as to create more jobs for young people who account for around 70 percent of the country’s population.

Aiming to facilitate knowledge exchanges and build networks to promote sustainable investment in Ethiopia, the event attracted over 200 participants from governments, industries, development agencies and think tanks.

Guo Xuejun with the Ministry of Foreign Affairs took the Addis Ababa-Djibouti Railway as an example of the fruitful cooperations between the two countries under the BRI.

Apart from the railway that has significantly shortened the time of transporting goods from Ethiopia to Djibouti, he also mentioned a new economic cluster that is emerging along the railway with the construction and development of several industrial parks.

China looks forward to working with Ethiopia to initiate more connectivity projects that are high-quality, sustainable, resilient, affordable, inclusive, accessible and broadly beneficial, Guo said.

The country is also dedicated to promoting trade and investment liberalization and facilitation, opposes protectionism and aims to make greater contributions to the implementation of the 2030 Agenda for Sustainable Development, he said.

Beate Trankmann, Resident Representative of the United Nations Development Programme (UNDP) in China, said the BRI’s key projects, which focus on connectivity and integration, could help unlock the funding and know-how to fulfill the SDGs, if relevant investments follow sustainability criteria and principles of the SDGs.

At the event, organized by the UNDP and supported by the Ministry of Foreign Affairs, China’s embassy in Ethiopia and the EIC, investors also discussed the opportunities and challenges to invest in Ethiopia

It Cannot Be Denied: China Helping Africa Realize Its Dream

Ethiopian Prime Minister Abiy Ahmed (L), Djiboutian President Ismail Omar Guelleh (C), and Sudanese President Omar al-Bashir (R) on Dec. 9, 2018, inaugurate a Chinese-contracted major road project as the Ethiopian government aspires to connect strategic towns in western Ethiopia. (Xinhua/Michael Tewelde)

November 28, 2019

China to help Africa realize “African dream” early: Chinese state councilor

Xinhua|-November 23, 2019  

China is willing to make every effort to help Africa get out of the “underdevelopment trap” and realize the “African dream” at an early date, Chinese State Councilor and Foreign Minister Wang Yi said here on Saturday.

Wang made the remarks while attending the Group of 20 (G20) Foreign Ministers’ Meeting in Nagoya, Japan.

According to him, lack of fund is the biggest challenge to Africa’s development, with an annual infrastructure investment gap of 100 billion U.S. dollars. China’s infrastructure projects in Africa generate more than 50 billion U.S. dollars in revenue every year, he said.

For example, the Mombasa-Nairobi Standard Gauge Railway has created nearly 50,000 local jobs, driving Kenya’s economic growth by about 1.5 percent, Wang said, adding that China-Africa cooperation is part of South-South cooperation and is mutual help between friends and brothers.

China attaches great importance to the debt issue, actively helps African countries improve their debt management capacity and provides necessary support when they encounter difficulties, Wang said. The two sides have made positive progress in jointly building the Belt and Road with high quality, he added.

The Belt and Road Initiative is highly compatible with the 2030 Agenda for Sustainable Development, the African Union’s Agenda 2063 and development strategies of African countries, forming a strong synergy for promoting common development, Wang said.

In order to better help Africa achieve sustainable development, it is necessary to focus on solving the three major development bottlenecks, namely lagging infrastructure, lack of talent and capital shortage, while solving the three livelihood issues of employment, food and clothing and health, he added.

In this regard, China will adhere to the principle of upholding justice while pursuing shared interests and the principle of sincerity, practical results, affinity and good faith, and work tirelessly to help Africa develop, Wang said.

China has helped Africa build more than 10,000 km of roads, over 6,000 km of railways and a large number of libraries, schools, hospitals and other livelihood facilities throughout the continent, greatly promoting local development, Wang said.

Meanwhile, more than half of the eight action plans and supporting financing announced at the Beijing Summit of Forum on China-Africa Cooperation last year have been implemented or seen concrete arrangements.

He called on developed countries to honor their commitments to Africa and provide tangible assistance in capital and technology among others. China is ready to work with all parties to give full play to respective advantages, jointly promote peace, stability and development in Africa and help African countries realize the “African dream” at an early date, he said.

Read: China Helps Africa To Realize African Dream

 

Ethiopia To Create 20 Million Jobs

Ethiopia to create twenty million jobs
November 25, 2019
Economy

Ethiopia to create twenty million jobs

In the coming ten years the government of Ethiopia aims to facilitate the creation of twenty million jobs in different sectors.

By 2025 we strive to create 15 million jobs. And by 2030 we do our best to get to a point where we have 20 million jobs, “said Ephrem Tekle (PhD), Jobs Creation Commissioner of Ethiopia.

“The vision is to create 20 million jobs because there is this greater challenge of addressing the need of young people, which will require us to build the right set of skills,” he said.

Explaining on how the government plans to create the jobs, Dr. Ephram indicated that information technology including mobile technology is one of the sectors that is expected to generate many jobs for the growing number of you youth in Ethiopia.

He also stated that agriculture mainly irrigation based will be the major job creation area. Tourism, hospitality, miming and manufacturing sectors are also among the priority job creation areas identified by the Ethiopian government.

Currently two million youth in Ethiopia enter the job market every year meanwhile only half of them are getting jobs, according to the state agency report.

Some ten million youth are looking for job in Ethiopia, according to Dr. Ephrem, who spoke at the panel discussion on the sidelines of Fintech Africa Summit in Addis Ababa on Thursday.

In Ethiopia it is estimated that there are around 1.6 million civil servants (government employees) and some 1.9 million recruited by the private sector.

For a full report on Ethiopia’s job creation plan as part of its new economic agenda read me post: Ethiopia Launches New Economic Reform Agenda

Nuclear Energy Will Create Jobs and Raise Skill Levels in Africa

Left-Claver Gatet, Rwanda Minister of Infrastructure. Right-Alexy Likacheve, Director General of Rosatrom. Speaking at the Russia-Africa Summit in Sochi.

October 27, 2019

The article below from {World Nuclear News}, reports on important agreements with Russia to build nuclear power plants in Africa. Beyond providing energy, nuclear plants will provide jobs and new shill levels for the tens of million of young Africans entering the work force.  Along with China, Russia is assisting African nations in building vitally needed infrastructure, which they need to become industrialized, with productive manufacturing and agriculture sectors. This is very good news for the African continent.

Read: Nuclear Energy Can Bridge the Skills Gap in Africa

Excerpts below:

Speaking at the round table session titled The Contribution of Nuclear Technologies in the Development of Africa,  Alexey Likhachov  said:.

“We are talking about solutions related to raising the level of education, energy security, applying nuclear solutions to medicine, agriculture, as well as other scientific research and development. Every dollar invested in our projects in any country, brings two dollars in localisation to that country. This significantly increases the country’s GDP.”

Rosatom said a job is created for every 0.5 MWe of electricity produced at a nuclear power plant, meaning that a 1000 MWe plant provides employment for more than 2000 people. Human capital development is both “a condition and a consequence” of nuclear power plant construction projects, it added.

Through joint educational programmes, the Russian state nuclear corporation is attracting applicants from African countries to its partner universities in Russia, it said, and Rosatom has already awarded up to 50 scholarships to students from Rwanda and Zambia. They are among hundreds of other African students from countries such as Algeria, Egypt, Ethiopia, Kenya, Nigeria and South Africa, it added.

Development

Claver Gatete, Rwanda’s minister of infrastructure, said: “In order to grow our industries from 17% GDP to 30% GDP, and to achieve our ambition of becoming a high-income country by 2050, we want to take advantage of nuclear to enhance our socio-economic development.” Rwanda sees a clear link, he said, between nuclear technologies and the country’s vision of development.

Citing data from the World Economic Forum, Rosatom noted that 15 to 20 million young people are to enter Africa’s workforce in the next two decades, meaning that 15% of the world’s working-age population will be in Africa, with 60% under-25.”

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Glazyev Warns Africans About IMF Looting Policies

The Russian economist Sergei Glazyev, who was for years an economic adviser to President Putin and is today minister in charge of integration with the Eurasian Economic Union, spoke to the gathered leaders at the Russia-Africa forum
in Sochi, and warned them about the policies of the International Monetary Fund (IMF). According to Moscow Times, Glazyev reported that IMF policies had led to about $1 trillion in capital flight from Russia, and another $1 trillion or so from the other 14 post-Soviet countries over the last 30 years.

Glazyev said the IMF has adopted a similar approach in Africa as the former Soviet Union. “Of course, Africa has been exploited for much longer. We have been living in this financial and economic environment for only 30 years.” Moscow Times added that “Glazyev also advised African countries to keep full control over their natural resources and infrastructure, in line with his advocacy in Moscow for greater economic self-sufficiency.”

China is NOT Exploiting Africa, But Investing in its Future: The Case of Nigeria

The article below, “Nigeria’s balanced and diverse relationship with China is key to sustainability,” provides a useful examination of the healthy bilateral relationship that China has developed with Nigeria, especially during the administration of President Buhari.  It is also important to note that Nigeria has officially joined China’s Belt and Road Initiative in January of this year. (excerpts below followed by a link to complete article)

1)    Infrastructure

Nigeria has one of the largest infrastructure deficits in the world; two thirds of the population still does not have access to safe water and over half of the population has no access to reliable electricity. Logistics costs are also extremely high; it costs more to transport a good from Lagos in Nigeria’s South to Kano in the North (1000km), than it does to ship a good from Shanghai to Lagos (over 12,000 km).

Nigeria’s government is investing in infrastructure, but external funding is needed. As cited in the National Integrated Infrastructure Master-plan (NIIMP) developed by Nigeria’s Ministry for Planning in 2015, it is estimated that the country requires $3 trillion over the next 30 years, with $500 billion required in the first 10 years. This estimate, which has wide sectoral scope, is reached by comparing Nigeria’s core infrastructure stock of around 20-25% GDP to international benchmarks of around 70%. Yet, even as the government increased its budget allocation for capital expenditure to 30% in 2017, this remains at least 80% short of the annual amount prescribed by NIIMP.

Alongside self-funding new infrastructure, Nigeria has also looked to the World Bank, European Commission and African Development Bank as sources of infrastructure capital. Yet while they might have the risk tolerance and investment horizons, their capital remains diluted over a number of countries. In its 60 years of operation in Nigeria, the World Bank has invested on average $100 million on infrastructure a year – significant but still a drop in the ocean versus Nigeria’s needs…

3)    Manufacturing    

While Nigeria is the richest economy in Africa, with the largest population and one of the better educated work forces, 4 in every 10 people still remain unemployed. Nigeria needs more inclusive industrialization that creates jobs for all, as opposed to focusing solely on sectors such as oil. Opportunities lie in the manufacturing sector, which creates more jobs through stronger forward and backwards economic linkages than any other sector.

Nigeria is again leveraging its relationship with China here. Some Chinese manufacturers have started relocating production to Nigeria, partly in response to rising wages in China and to take full advantage of the size of Nigeria’s domestic market. Sun Ceramics is one such example; they produce ceramics the size of 10 football fields every day, employ over 1,000 locals and also source all their raw materials from Nigeria. If it weren’t for Nigeria’s difficult business environment, Chinese firms claim they would commit greater amounts of investment.

Stronger ties to stand the test of time.

Nigeria, however, has managed to…build a balanced and more diverse relationship with China. Nigeria’s relationship with China extends beyond resources and infrastructure to security, financial planning and sharing of best-practice in manufacturing, to name a few areas of cooperation. Particularly in the realms of security cooperation; the Chinese have found an area that helps win them local support on the ground in Nigeria given a near-universal desire to eliminate insurgent forces. Nigeria also recognizes that the size of its domestic market offers the largest opportunity in Africa for Chinese companies; and that has helped to improve the balance in the relationship.

It is this combination of balance and diversification that is key to a sustainable relationship with China.

 

Read: Nigeria’s Balanced and Diverse Relationship with China

Presidents Kagame and Museveni Discuss; Democracy, China, Infrastructure, and Jobs

President Paul Kagame: Time for Europe To Invest in Industry and Infrastrucure

December  26, 2018)

In an exclusive interview with Austria’s {Die Presse} news daily, Rwandan President Paul Kagame stated that “Europe has invested billions upon billions of dollars in Africa. (But) something must have gone wrong…. Part of it is that these billions had a return ticket. They flowed to Africa and then back to Europe again. This money left nothing on the ground in Africa.” The European money was invested in the wrong place, he said.  Instead it should go to investments “in industry, infrastructure, and educational institutions for Africa’s youth, whose number is growing fast. That is the only way to create a  demographic dividend.” It would be a better way of preventing migration of young Africans to Europe, which the Europeans were so much worried about. Europe could cooperate with China, Kagame hints: “China is active in Rwanda, but not in an inappropriate way. The new roads in Rwanda are largely built with European money. Sometimes there are Chinese subcontractors.”

 What Africans do not need, is Europeans trying to give them lessons on democracy, Kagame said. The European model of democracy is a failure, Europe is in a profound political crisis, as shown by the recent mass protests and other aspects, this model cannot be one for Africans to follow. Europe finally has to give up its attitudes of fake generosity, and begin accepting Africa as a real partner, he said.

Presidents Museveni of Uganda and Kagame of Rwanda

China Creating Tens of Thousands of Jobs for Ugandans in Infrastructure Projects

Ugandan President Yoweri Museveni revealed in an interview with {Xinhua} with its focus on infrastructure development, the country wanted to attract more invest-ment from China: “We are likely to advance the project of the Standard Gauge Railway (SGR)… in the government-to-government (talks).” Extending the Chinese-built SGR line from the Kenyan seaport of Mombasa, which is expected to reach the border areas with Rwanda, South Sudan, and the Democratic Republic of Congo, to Uganda would make sense as a catalyst of economic growth. To finance its infra-structure development agenda, Uganda looked at China because of the country’s favorable lending terms compared to some of the Western global financiers.

Other major infrastructure projects in Uganda will benefit from Chinese support as well: A few months ago, the Kampala-Entebbe Expressway, linking the capital Kampala to Entebbe Airport, the country’s gateway to the world, was completed. China financed the construction of the mega road  project, the first of its kind in the country. China is also financing the expansion of Uganda’s Entebbe International Airport. Official figures show that after completion of the first phase of expansion, the cargo center can handle up to 150,000 metric tons of goods, compared to the previous 69,000 metric tons.

In the northern part of Uganda along the River Nile, the world’s longest river, China is constructing the 600MW Karuma Hydropower Plant. While touring the facility in July, President Museveni said he was amazed by the progress noting that the plant will not only address Uganda’s inadequate power supply, but also that youths have become skilled through the construction process.

Farther upstream on the River Nile, in the central Ugandan district of Kayunga, construction of a Chinese-funded 183MW Isimba Hydro-power plant that is nearing completion according to the Chinese engineers on site, power generated by the plant is expected to come onto the national grid early next year.

The power development plan is crucial for the Uganda’s industrialization policy, which has designated over 22 industrial parks across the country where investors can set up base, taking advantage of the incentives that come with establishing their factories in the parks. In October, President Museveni launched the first phase of a $620 million Chinese industrial project in the eastern district of Tororo. The project has dubbed the Uganda-China Free Zone of International Industrial Cooperation, undertaken by the Dongsong Energy Group, will manufacture glass, steel, and organic-fertilizers, creating about 3,000 jobs at peak when completed in 2020.

President Museveni, in March of this year launched another Chinese-owned Mbale Industrial Park. The park owners, Tian Tang Group, said it will attract more than 30 investors with a total investment of about $600 million and an annual output value of $1.5 billion. The park will directly employ about 12,000 locals.

 The $220 million Kehong China-Uganda Agricultural Industrial Park, is another park that will play a critical role in transforming the economy. According to government figures, almost 80% of the country’s population derives its livelihood from agriculture.

 When fully operational, Kehong China-Uganda Agricultural Industrial Park is expected to produce about 600,000 tons of agro-products annually to meet the domestic and regional market demands.

 It will also create 25,000 jobs as well as making opportunities for training local people available, according to the managers of the park.