<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/GettyImages-849638596-820x547.jpg" alt="" class="wp-image-526465" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/GettyImages-849638596-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/GettyImages-849638596-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/GettyImages-849638596-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/GettyImages-849638596-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/GettyImages-849638596-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/GettyImages-849638596-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">NEW YORK, NY &#8211; SEPTEMBER 19: H.E. Olusegun Obasanjo, former President of Federal Republic of Nigeria speaks at The 2017 Concordia Annual Summit at Grand Hyatt New York on September 19, 2017 in New York City. (Photo by Riccardo Savi/Getty Images for Concordia Summit)</figcaption></figure>



I believe in the unlimited potential of Africa. I believe that Africa can have a new story.



As a former President and a leader, I worked hard to ensure that this belief was embedded in the institutions that represent us at a global level, like the African Union and NEPAD. I am proud that they capture that belief in their visions and strategic plans.



Africa&#8217;s natural wealth has long been coveted by global markets. Our oil, gas, minerals, and precious metals fuel industries worldwide, and as demand surges, our strategic importance only grows. We possess the resources to lead the global renewable energy revolution and hold the key to the critical minerals essential for the energy transition. We have the natural assets to lead the world in renewable energy production and the deposits of the critical minerals that enable the energy transition lie beneath our earth.



Yet, this abundance stands in sharp contrast to our people&#8217;s plight. Despite our vast natural wealth, we are home to the world&#8217;s poorest populations &#8211; a paradox that demands our urgent attention and action.



However, our greatest asset lies not beneath the earth, but in our people. Africa&#8217;s human capital, particularly our youth, represents an unparalleled opportunity. By 2050, our population is projected to reach 2.5 billion &#8211; over 25% of the global total. More than half of these Africans will be under 25 years old, presenting a demographic dividend in a world grappling with ageing populations.



Our ability to leverage the power of that democratic dividend is the challenge that will define the future of our continent. We will only realise the full value of our natural wealth if we nurture our population by empowering them with the skills that we need to retain value and grow our economies domestically. But we equally face a catastrophe if we fail to take ownership of that opportunity. A 2.5 billion population that is facing limited opportunities, disempowered, and desperate presents a significant challenge to peace and security. Even with the impact on socio-political and economic prosperity, which affects the continent and also the global development landscape.



The stark reality that 9 out of 10 of our children cannot read with comprehension or perform basic mathematics by age ten is not just alarming—it&#8217;s a global emergency. This educational deficit, if left unaddressed, threatens to perpetuate a cycle of underdevelopment and lost potential. As leaders and parents, we bear no greater responsibility than to confront this challenge head-on. We must candidly acknowledge that we are falling short in this crucial task. It&#8217;s imperative that we, as a continent, collectively recognize this failure and take immediate, decisive action to rectify it. The future of Africa, and the world depends on our ability to equip our young people with these foundational skills.



This is not just an education problem. If we do not address it, we will not achieve our goals for healthcare, food security, climate change, inclusive economic green growth, trade, gender equality, economic empowerment, and governance. They are all interconnected with our ability to develop and build our human capital. Basic literacy and numeracy are the foundations on which the delivery of every single development objective outlined in Agenda 2063 will be achieved.



The African Union knows and understands the importance of education. That is why 2024 has been declared the African Union Year of Education. At a country level, there is encouraging work being done by the Ministries of Education to deploy innovative and scalable African solutions to this problem.



Some of these solutions are as simple as teaching a child at the appropriate level while consistently assessing and instructing them at their current levels. It works, as simple as it may sound. Schools that have made investments in structured pedagogy have also demonstrated remarkable success.



But this is not enough. My friends and fellow leaders have not yet seemed to fully grasp the urgency and severity of the situation. There is an urgent need to accelerate action and deliver it at scale. The consequences are clear if we do not, as is the opportunity if we confront this head-on and use it to catalyse investment in the education that our citizens need.



We are at an inflection point. The children being born today will be the five to ten-year-olds that reap the benefits of our work if we can deliver change, and they will become the 25-year-olds powering our growth and development by 2050. We owe it to them to give them the tools they need to deliver our dreams.



I call upon my fellow heads of state, former and current, to collectively commit to acknowledge our shared responsibility in ensuring that the young people of our beloved continent have the capacity to achieve their full potential, in line with the African Union’s Agenda 2063 goals and vision for the Africa we want. This goal is not merely aspirational; it is the bedrock upon which future academic success and societal progress will be built. This is not a decision for the future, but one that we need to act upon with the utmost urgency and pragmatism. Through meaningful collaboration, implementation of robust continental accountability mechanisms and measurement, and peer review structures, we can scale up innovative work happening at local and country levels across the continent and really move the needle forward on the economic security of our continent.



By focusing our efforts and resources on ensuring every child is equipped with basic literacy, numeracy, socioemotional, cognitive thinking skills, and more, we lay the foundation for a bright future. Imagine an Africa where every child, regardless of their background, has the tools to think critically, innovate, and contribute meaningfully to society. This focus on foundational learning will have a ripple effect across all sectors of the development framework of Agenda 2063. We will see increased economic productivity, enhanced technological innovation and adoption, improved health sectors, and stronger democratic participation. By 2063, Africa could stand as a beacon of human capital development, with a



highly skilled workforce driving sustainable economic growth, groundbreaking scientific advancements, and cultural renaissance.



Let us seize this moment. Our vision is within reach. Let us first acknowledge that we are collectively responsible for Africa’s future. With the right investment, action, and sustained focus, we can strengthen our chances of reaching our shared vision for the Africa we want. It is imperative that together, we strengthen the future of our beloved continent by empowering the brilliant minds of tomorrow.

The 2017 Concordia Annual Summit – Day 2

An Equipped Foundation for African Children: The Key to Unlocking Africa’s Sustainable Future

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/blog-2099x600-compc-women-lead-record-number-of-central-banks-c-johannes-eiseleafp-via-getty-images-820x234.jpg" alt="" class="wp-image-525024" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/blog-2099x600-compc-women-lead-record-number-of-central-banks-c-johannes-eiseleafp-via-getty-images-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/blog-2099x600-compc-women-lead-record-number-of-central-banks-c-johannes-eiseleafp-via-getty-images-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/blog-2099x600-compc-women-lead-record-number-of-central-banks-c-johannes-eiseleafp-via-getty-images-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/blog-2099x600-compc-women-lead-record-number-of-central-banks-c-johannes-eiseleafp-via-getty-images-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/blog-2099x600-compc-women-lead-record-number-of-central-banks-c-johannes-eiseleafp-via-getty-images-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/blog-2099x600-compc-women-lead-record-number-of-central-banks-c-johannes-eiseleafp-via-getty-images-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Credit: Johannes Eisele/AFP via Getty Images</figcaption></figure>



Women are leading more central banks than ever before, thanks to appointments in the past year, but recent gains still leave the share of female governors far short of parity.



The number of women in governor roles rose to 29 this year from 23 last year, though that left the share of female leaders at just 16 percent of the world’s 185 central banks, according to an April&nbsp;<a href="https://www.omfif.org/gbi2024/?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">report</a>&nbsp;by the Official Monetary and Financial Institutions Forum. Greater gender balance in senior positions may help increase the diversity of thought and checks and balances, in turn contributing to increased economic and financial stability and improved performance, IMF&nbsp;<a href="https://www.imf.org/en/Publications/Policy-Papers/Issues/2024/01/12/Interim-Guidance-Note-on-Mainstreaming-Gender-at-The-IMF-543779?utm_medium=email&amp;utm_source=govdelivery">research shows</a>.



Appointments this year in Bosnia and Herzegovina and Papua New Guinea are examples of how smaller economies are driving more progress on gender balance, according to OMFIF, a London-based think tank for monetary, economic and investment issues.



This year’s rise was the biggest gain in more than a decade of surveys, but&nbsp;the&nbsp;<a href="https://www.imf.org/en/Blogs/chart-of-the-week?utm_medium=email&amp;utm_source=govdelivery">Chart of the Week</a>&nbsp;shows how central banks still have much room to make progress toward greater parity in the ranks of top policymakers steering the global economy.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2024/08/29/women-lead-record-number-of-central-banks-but-more-progress-is-needed?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2024/08/10062931/cotw-female-central-bank-governors-newsletter_original.png" alt="chart showing the number of female central bank governors from 2014-2024"/></a></figure>



The tally adds to evidence of the struggle of women at central banks as well as in the economics discipline, where they remain underrepresented even after steady gains.



A first-of-its-kind&nbsp;<a href="https://www.imf.org/en/Publications/WP/Issues/2023/05/05/Who-are-Central-Banks-Gender-Human-Resources-and-Central-Banking-533096?utm_medium=email&amp;utm_source=govdelivery">IMF survey</a>&nbsp;of the European Central Bank and its Group of Seven counterparts showed last year that fewer than half of employees at those institutions are women, but on average only a third of women are economists or managers. This survey underscores how policies to eliminate gender gaps have been only partially successful.



ECB Executive Board member Isabel Schnabel has cited a substantial gender imbalance in economics—one that the institution is determined to change among its own staff. Schnabel noted in a 2020&nbsp;<a href="https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200928~97c7e2ba27.en.html?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">speech</a>&nbsp;that the barriers aren’t insurmountable, and that mentoring opportunities and ensuring childcare can help narrow gender imbalances.&nbsp;



The latest additions to the list of countries naming a woman as central bank chief came in January, when&nbsp;<a href="https://www.cbbh.ba/Content/Read/119?lang=en&amp;utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">Jasmina Selimović</a>&nbsp;began a six-year term in Bosnia and Herzegovina and&nbsp;<a href="https://pmnec.gov.pg/prime-minister-marape-announces-historic-appointment-of-ms-elizabeth-genia-as-the-first-woman-governor-of-the-bank-of-papua-new-guinea/?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">Elizabeth Genia</a>&nbsp;was appointed to the top job after serving as acting governor. Last year,&nbsp;<a href="https://www.rba.gov.au/about-rba/people/gov.html?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">Michele Bullock</a>&nbsp;became the first woman to lead the Reserve Bank of Australia.



Cambodia, Georgia, Moldova and Montenegro also appointed women as the heads of their monetary authorities last year, according to OMFIF’s 2024 gender balance index.&nbsp;

blog-2099×600-compc-women-lead-record-number-of-central-banks-c-johannes-eiseleafp-via-getty-images

Women Lead Record Number of Central Banks, but More Progress is Needed

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/PFS-820x547.jpg" alt="" class="wp-image-522347" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/PFS-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/PFS-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/PFS-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/PFS-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/PFS-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/PFS.jpg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo by Mark Stebnicki</figcaption></figure>



From millet, teff and sorghum to cassava, cowpea and sweetpotato, Africa is home to a diverse range of nutritional, hardy and versatile crops with the potential to be used to make everything from baby food to bread and even beer.



Yet, the ability to fully take advantage of indigenous and locally adapted crops to meet growing demand for convenient and long-lasting products is held back by the continent’s underdeveloped food processing sector.&nbsp;



This reality confronted me during a visit to a rural village in Zambia where I stumbled across a shelf stacked with Chinese-produced biscuits. Traveling tens of thousands of miles to arrive in this remote farming community, this humble packet of biscuits is emblematic of a continent that remains overly reliant on costly food imports.&nbsp;



As the new CEO of Partners in Food Solutions (<a href="https://www.partnersinfoodsolutions.com/" target="_blank" rel="noreferrer noopener">PFS),</a>&nbsp;a nonprofit that works to support Africa’s growing food processing sector with the skills and expertise it needs, I believe unlocking this potential can release vital economic benefits, a wider range of nutritious foods and a reduced reliance on food imports.&nbsp;



Africa’s population is growing and urbanizing at the same time that the devastating impacts of climate change are disrupting food security and livelihoods. This means the demands on Africa’s food systems to provide sufficient food and jobs while catering to changing food preferences are steadily increasing.&nbsp;



However, Africa’s food processing sector is still lagging behind. This is fuelling an already high reliance on food importation and in the process, forgoing much-needed economic benefits such as job creation, upskilling and market growth.



Currently, Africa spends upwards of&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-01-24/africa-needs-up-to-65-billion-loans-yearly-to-curb-food-imports" target="_blank" rel="noreferrer noopener">$60 billion</a>&nbsp;a year on food imports. This money could otherwise be invested in boosting domestic production at a time when the continent’s food systems are facing mounting pressures. Access to expertise, increased investments and crop diversification are key to facilitating the transition to more local food processing across Africa.



We can achieve this by first ensuring access to the right support for food processing companies. The chance to use and learn from world-leading expertise can support sustainable food systems while helping businesses and entrepreneurs grow.&nbsp;



For example, when Zambian food processing company COMACO was struggling to achieve 80 per cent extraction of grade A polished rice from paddy rice, PFS connected them to an expert rice milling volunteer from Swiss-owned multinational Bühler, who helped the company troubleshoot the issue and identify solutions.&nbsp;



This kind of technical support can help food processing companies in Africa attain international food safety and quality certifications, increase their processing capacities, extend the shelf life of their products and more. It also creates a ripple effect that benefits smallholder farmers by creating greater demand for raw ingredients.&nbsp;



Secondly, we can drive economic development by investing in the necessary infrastructure for a thriving food processing sector. This includes equipment and machinery as well as training and market access.



Africa is home to the world’s youngest population and by 2035, will have the world’s largest workforce, yet there are&nbsp;<a href="https://ilostat.ilo.org/blog/african-youth-face-pressing-challenges-in-the-transition-from-school-to-work/" target="_blank" rel="noreferrer noopener">not enough</a>&nbsp;jobs available and many young people are turning away from agricultural careers. An innovative and profitable food processing sector can provide an appealing option for the continent’s growing youth population.&nbsp;



Lastly, the diverse crops available across Africa can meet the demands of an urbanizing population with changing food preferences.&nbsp;



Africa spends significantly on imports such as grains, often used for flour to meet demands for food products such as bread. In 2021,&nbsp;<a href="https://www.agflow.com/agricultural-markets-news/uganda-wheat-import-market-of-100-million/" target="_blank" rel="noreferrer noopener">Uganda</a>&nbsp;imported nearly $100 million worth of wheat, for example.&nbsp;



Rather than imported foods or crops, the continent’s food processors can instead be supported to leverage traditional African crops. Cereals such as sorghum and millet are nutritious and suited for processing into healthy and easily accessible food products to address Africa’s nutritional challenges.



Additionally, these crops are more resilient to droughts and extreme weather events, which have become more frequent across the continent. Leveraging international partnerships through initiatives such as the&nbsp;<a href="https://www.state.gov/the-vision-for-adapted-crops-and-soils/" target="_blank" rel="noreferrer noopener">US State Department’s Vision for Adapted Crops and Soils (VACS)</a>&nbsp;can help achieve crop diversification goals. VACS aims to build a resilient food system grounded in diverse, nutritious, and climate-adapted crops such as sorghum, millet, Bambara groundnut and yams.&nbsp;



Facing the dual challenge of a rapidly growing population amid escalating climate change, Africa’s historic reliance on food imports must be reduced. Supporting a homegrown food processing industry would not only unlock economic growth but also empower farmers and provide a food secure and resilient future for millions of young Africans.&nbsp;



To fully benefit from these opportunities, more investment and recognition of the food processing gap in Africa’s existing food system is urgently needed. Governments and businesses in the agrifood sector must champion collaboration to accelerate food systems transformation in Africa.

Africa’s food processing sector holds the key to a food-secure and prosperous continent

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1292" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/Nomthi-Nelwamondo-05.04.2024-2PP-1-scaled.jpg" alt="" class="wp-image-521967" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/Nomthi-Nelwamondo-05.04.2024-2PP-1-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/Nomthi-Nelwamondo-05.04.2024-2PP-1-300x189.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/Nomthi-Nelwamondo-05.04.2024-2PP-1-820x517.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/Nomthi-Nelwamondo-05.04.2024-2PP-1-143x90.jpg 143w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/Nomthi-Nelwamondo-05.04.2024-2PP-1-768x484.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/Nomthi-Nelwamondo-05.04.2024-2PP-1-1536x969.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Nomthi Nelwamondo, Chief Information Officer at MTN South Africa</figcaption></figure>



Diverse and inclusive teams perform better, are more creative and make better decisions. They are 70% more likely to develop solutions that provide the business with access to new markets and drive innovation. Diversity unlocks collaborative approaches and alternative viewpoints that shift perspectives and transform product and team dynamics. Yet, women remain significantly under-represented in technology roles both locally and globally.



In South Africa, it is estimated that only 23% of technology roles are held by women and globally, only 25% of leadership positions in the sector are occupied by women. A McKinsey study with LeanIn.org found that while 86 women are promoted to managerial roles for every 100 men, in technical roles, the ratio drops dramatically to 52 women for every 100 men.



Globally, women hold just 14% of tech leadership roles, but in South Africa, this metric is shifting. Women are increasingly stepping into CIO positions, becoming the change agents the industry needs, and reimagining the boundaries that have traditionally held them back.



This spirit of change is embodied at MTN South Africa, where we have embraced female leadership in the CIO role for the first time. This milestone marks a significant evolution in the role, as I navigate the dual demands of maintaining operational excellence and driving transformation. The CIO role requires both strategic oversight and tactical execution – a juggling act that I believe comes naturally to women. We are accustomed to balancing work, professional development, and family responsibilities, which translates into an ability to focus on multiple priorities simultaneously.



Despite this progress, women are still under-represented in the sector. The reasons are multi-faceted spanning societal expectations, inflexible working conditions, and environments that historically limit growth. However, this is changing. Women today can thrive in technology and



leadership roles without compromising other aspects of their lives. The challenge is not women’s ability to succeed in technology, but their visibility in the sector.



Historically, there have been few role models for women in technology leadership. The roles of CIO, CTO, CISO, and CEO have traditionally been dominated by men. Even in South Africa, which is considered one of the most progressive countries globally regarding gender parity in leadership, women only hold 35% of board positions and 25% of executive roles. As the dynamic shifts, women can now see that these roles are within their reach, and their insights and skills are immensely valuable.



I come from a family with three brothers and a father who believed in my potential. They never doubted my ability to become a CIO, and neither did I. I knew I could overcome the limitations imposed by outdated attitudes, and so did MTN South Africa. At MTN, we are committed to championing the development of women’s careers and ensuring that the best person is hired for the job, regardless of gender.



This commitment creates opportunities. Stepping into this role has allowed me to reshape it, optimising teamwork, delegation and wellbeing. I recognise the importance of balance in a high-stress environment, so I lead by example, delegating tasks to team members and sharing the load to ensure we all have time to recharge.



This is just one example of how MTN South Africa is demonstrating next-generation operational maturity. As we celebrate our 30th&nbsp;anniversary, it’s crucial to highlight our pivotal role in the evolution of technology in South Africa, and now, today, the advancement of women in this space. MTN South Africa is deliberate in its decisions regarding our female colleagues and the opportunities they receive. Thirty years ago, we may not have focused on empowering young girls, but today, our commitment to gender equity runs parallel to our country’s democratic journey. Both are growing, expanding their reach, and redefining the potential of South Africa and its people.



As we reflect on 30 years of democracy, it is time to celebrate the strides women have made in breaking down barriers and excelling in roles where they can thrive. Moving forward, we must continue to create opportunities for women in technology so that they can lead, inspire, innovate, and transform the industry.

Nomthi Nelwamondo 05.04.2024-2PP 1

The advancement of women in technology: Overcoming under-representation and igniting gender diversity

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1565" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/0L2A1262-1-scaled.jpg" alt="" class="wp-image-519322" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/0L2A1262-1-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/0L2A1262-1-300x229.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/0L2A1262-1-820x627.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/0L2A1262-1-118x90.jpg 118w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/0L2A1262-1-768x587.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/0L2A1262-1-1536x1174.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Thembinkosi Mkalipi, Acting Deputy Director General (DDG) for Labour Policy and Industrial Relations at the Department of Employment and Labour</figcaption></figure>



The 2023-2024 Commission for Employment Equity (CEE) Annual Report (24th CEE Annual Report) published by the Department of Employment and Labour (DEL) marks a significant milestone in the nation’s ongoing journey towards workplace equality and inclusivity.



This year&#8217;s report not only highlights the progress made but also sets a hopeful tone for the future of employment equity in South Africa.



One of the most commendable aspects of the 2023-2024 EE Annual report is its clear demonstration of the positive impact of the Employment Equity Act. The Act’s primary goal is to promote equal opportunity and fair treatment in employment through the elimination of unfair discrimination and the implementation of affirmative action measures. This year’s report shows that these measures are bearing fruit, with a notable increase in the representation of designated groups across various occupational levels.



The report also underscores the importance of the amendments to the Employment Equity Act, which aim to reduce the regulatory burden on small businesses and empower the Minister to regulate sector-specific EE numerical targets. These amendments are crucial for ensuring that the principles of equity are applied consistently across all sectors, thereby fostering a more inclusive economy.



Moreover, the 2023-2024 report highlights the significant strides made in gender equality. There has been a marked increase in the representation of women in professionally qualified/ middle management positions, reflecting a positive shift towards gender parity in the workplace. This progress is a testament to the effectiveness of targeted affirmative action measures and the commitment of both the government and the private sector to fostering an inclusive work environment.



Another noteworthy aspect of the report is its emphasis on accountability and compliance. The introduction of the EE Compliance Certificate as a prerequisite for access to State contracts is a strategic move to ensure that businesses adhere to the principles of employment equity. This measure not only promotes compliance but also incentivises businesses to prioritise diversity and inclusion in their workforce.



The Employment Equity Compliance Certificate seen as a catalyst of driving change and a crucial component of South Africa&#8217;s efforts to promote workplace equality. This certificate is mandatory for businesses irrespective of their size that wish to engage in contracts with any State entity, ensuring that companies doing business with the government adhere to employment equity principles.



To obtain the certificate, all employers must meet several criteria. Noteworthy is that for designated employers that employ 50 or more, they must submit an annual EE report, comply with their own annual EE targets towards the five-year sector EE target, adhere to the National Minimum Wage (NMW) or have an exemption granted not to pay the NMW for the previous 12 months, and have no unfair discrimination awards against them from the Commission for Conciliation, Mediation and Arbitration (CCMA) in the previous 12 months.



The EE Compliance Certificate is valid for 12 months from the date of issue. This means businesses need to maintain compliance continuously to renew their certificate annually.



The certificate aims to strengthen compliance with the Employment Equity Act and promote real transformation in the workplace. By making the certificate a prerequisite for state contracts, the government incentivises businesses that promote equity and transformation in their workplaces by prioritising diversity and inclusion.



The amendments to the Employment Equity Act also aim to reduce the regulatory burden on small businesses, ensuring that the compliance requirements are manageable and do not hinder their operations.



It is significant to highlight that the process of issuing the EE Compliance Certificate will be automated. To apply Online for the Employment Equity Compliance Certificate, businesses must follow a structured process to ensure they meet all necessary criteria. Here are the steps involved:



First, businesses that employ 50 or more employees must submit an annual Employment Equity report. This report should detail the company’s progress in implementing employment equity measures and achieving set targets.



Second, businesses must comply with their own annual EE targets towards the five-year sector EE target. This involves setting and working towards specific goals that align with the broader sector targets established by the Department of Employment and Labour.



Third, businesses must adhere to the National Minimum Wage (NMW) or have an exemption granted not to pay the NMW for the previous 12 months. This ensures that all employees are compensated fairly according to national standards.



Fourth, businesses must have no unfair discrimination awards against them from the Commission for Conciliation, Mediation, and Arbitration (CCMA) in the previous 12 months.



This criterion ensures that companies maintain fair and equitable practices in their operations. Once these criteria are met, businesses can apply for the EE Compliance Certificate through the DEL’s online system.



If a business fails to meet the Employment Equity compliance criteria, the Department of Employment and Labour can impose several penalties. For a first-time offense, the business may face a fine of the greater of R1.5 million or 2% of its turnover. If the business has previously contravened the provision, the fine increases to the greater of R1.8 million or 4% of its turnover. For repeat offenders, the fines can reach up to R2.7 million or 10% of annual turnover, whichever is greater.



Additionally, businesses that fail to comply may be referred to the Labour Court, where penalties can be imposed. The court considers various factors when determining the appropriate penalty, including the extent and duration of the non-compliance, the employer’s intentions, and investments in workforce development.



Non-compliant businesses may also be excluded from State contracts, as the EE Compliance Certificate is a prerequisite for engaging in contracts with any state entity. This exclusion can significantly impact a business’s opportunities and revenue.



Ensuring compliance with the EE criteria is crucial for businesses to avoid these penalties and contribute to a more equitable and inclusive workplace. Businesses can play a crucial role in advancing employment equity by implementing a variety of strategies. Developing comprehensive diversity and inclusion policies is essential. These policies and practices should promote diversity and inclusion at all levels of the organisation, addressing recruitment, retention, promotion, and workplace culture.



Conducting regular equity audits is another important step. By regularly assessing the company&#8217;s practices and policies, businesses can identify areas where inequities may exist and use the findings to make informed changes and improvements.



Providing training and education on diversity, equity, and inclusion helps employees understand the importance of these values and how to incorporate them into their daily work. Fostering an inclusive culture is also crucial. Encouraging an inclusive workplace culture where all employees feel valued and respected can be achieved through open communication, employee resource groups, and celebrating diverse backgrounds and perspectives.



Implementing fair recruitment practices ensures that recruitment processes are free from bias and unfair discrimination. This can include using diverse hiring panels, standardising interview questions, and actively seeking candidates from underrepresented groups.



Supporting career development by providing opportunities for advancement, particularly for those from underrepresented groups, is vital. This can include mentorship programs, leadership and management training, and clear pathways for promotion.



Setting and tracking diversity goals is important for accountability. Establishing specific, measurable goals for diversity and inclusion and regularly tracking progress towards these goals helps ensure that leadership is held accountable.



Engaging with the community by partnering with community organisations, educational institutions, and other stakeholders supports broader diversity and inclusion efforts. This can include internships, scholarships, and community outreach programs.



Promoting work-life balance through flexible work arrangements, such as remote work options, flexible hours, and generous parental leave policies, helps attract and retain a diverse workforce.



Ensuring pay equity by conducting regular pay audits ensures that employees are compensated fairly and equitably. Addressing any pay disparities that are found is essential for maintaining fairness in the workplace and promoting the principle of equal pay for work of equal value. By implementing these strategies, businesses can create a more equitable and inclusive workplace, benefiting both employees and the organisation as a whole.



The 2023-2024 Employment Equity report is a beacon of progress and hope. It reflects the collective efforts of the government, businesses, and civil society in creating a more equitable and inclusive workplace. As South Africa continues to build on these achievements, the future looks promising for employment equity, with the potential to unlock greater economic growth and social cohesion. The journey towards full employment equity is ongoing, but the strides made thus far are indeed worth celebrating.



The 2024 Employment Equity roadshows, organised by the Department of Employment and Labour, are currently taking place across South Africa. These workshops, which began on August 6th and will run until September 18th, 2024, aim to address and promote diversity and inclusion in the workplace under the theme &#8220;Bridging the Equity Gap Through Diversity &amp; Inclusion&#8221;. The roadshows focus on the current status of employment equity, updates on EE amendments, and insights into unfair discrimination cases. They are designed to engage employers, HR practitioners, trade unions, and other stakeholders in meaningful discussions to foster a more equitable work environment.

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Employment Equity Progress Report highlights the collaborative efforts of government, businesses, and civil society in fostering a fairer, more inclusive, and diversified workplace

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1366" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-scaled.jpg" alt="" class="wp-image-459065" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/GettyImages-1166232739-1536x1024.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Mthuli Ncube, Zimbabwe&#8217;s finance minister, sits in the audience during a plenary session on day two of the 28th World Economic Forum (WEF) on Africa in Cape Town, South Africa, on Thursday, Sept. 5, 2019. The World Economic Forum on Africa meeting runs from 4-6 September. Photographer: Waldo Swiegers/Bloomberg via Getty Images</figcaption></figure>



The&nbsp;current global financial architecture faces significant challenges in addressing the financial needs for climate action, sustainable development, and debt management. The calls for reform are growing louder, seeking to create a more equitable, inclusive, and sustainable financial system.



Increasing the representation of developing countries, particularly African nations, in global economic decision-making processes is crucial for the continent&#8217;s development and prosperity. We therefore commend the International Monetary Fund (IMF) for creating a third chair (board membership) for sub-Saharan Africa to improve its voice and representation.



Climate change is one of the most pressing issues of our time, with far-reaching consequences for our planet and its inhabitants.&nbsp;Addressing climate action requires a multi-faceted approach that involves individuals, communities, organizations, and governments.



<h2 class="wp-block-heading" id="h-tackling-public-debt-in-african-countries">Tackling public debt in African countries</h2>



We need to build a prosperous, inclusive, and resilient Africa through renewed partnerships and strong institutions. However, a troubling trend has emerged: governments worldwide are grappling with mounting public debts, limiting their ability to invest in core social services that their citizens so desperately need.



The average public debt in Africa is around 65% of GDP, amounting to $1.1 trillion, with some countries having much higher debt levels. Alarmingly, nearly 40% of African countries are in, or at high risk of, debt distress. To make matters worse, 60% of African nations now spend more on servicing their external public debt than on healthcare.



The existing global debt architecture is ill-equipped to address the pressing needs of African countries. Urgent reforms to the G20 Common Framework are required to make it more effective, transparent, and fit for purpose. Furthermore, we appeal for the suspension of debt service for all countries entering Common Framework restructurings and a comprehensive review of the&nbsp;<a href="https://www.imf.org/en/About/Factsheets/Sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries">IMF-World Bank Debt Sustainability Analysis Framework</a>&nbsp;to prioritize solvency over mere liquidity.



The path ahead is not without its challenges. Achieving the Sustainable Development Goals (SDGs) by 2030 will require an estimated $1.3 trillion per year, while the costs of addressing climate change alone are projected to reach $2.8 trillion by 2030 in Africa. Sadly, even as these financing needs grow, official development assistance to Africa declined by 3.5% in 2022, while borrowing costs have soared in the tighter global monetary environment and private capital remained sidelined.



<h2 class="wp-block-heading" id="h-addressing-the-widening-financing-gap-in-africa">Addressing the widening financing gap in Africa</h2>



Africa&nbsp;has made significant progress in financing its development through domestic resources in recent years. However, this funding is inadequate to close a widening financing gap.



To bridge the funding gap, African countries need to boost domestic resource mobilization (DRM) by increasing financial resources, improving public spending efficiency, leveraging large pension fund markets and sovereign wealth funds, curbing illicit financial flows out of the continent, and harnessing partnerships. New sources of tax revenue should be sought, including those from digital payments, informal sector taxes, and sin taxes, among others.



Africa must explore innovative solutions and leverage the ongoing&nbsp;<a href="https://www.un.org/sustainabledevelopment/financing-for-development/">Financing for Development</a>&nbsp;processes to secure adequate financial and technical resources to support Africa&#8217;s participation and engagement in the tax reform process.



Deepening Africa’s capital markets for resource mobilisation will enable countries to source additional financial resources from the private sector and the pension fund industry. The use of Public-Private Partnerships (PPPs) will also allow African countries to finance critical infrastructure projects with resources from the private sector.



By leveraging carbon credits, countries can unlock benefits supporting sustainable development, economic growth, and climate resilience while contributing to global efforts to combat climate change. There is scope for the issuance of green and blue bonds linked to climate change to raise additional resources for development. Climate insurance at both sovereign and micro-level goes a long way in mitigating the negative impact of climate shock to vulnerable communities for example Zimbabwe and Malawi recently received pay-outs from the African Risk Capacity Group (ARC), for the insurance they took against the 2023\2024 agricultural season.



Africa’s significant diaspora community enables various countries to issue diaspora bonds and related instruments to raise additional funding. Sovereign wealth funds have also proved to be a critical economic pillar in driving economic development in some countries. There is, therefore, a need to create sovereign wealth funds across Africa, not only to harness natural resource revenues to achieve inter-generational equity but to harness the full potential of state-owned enterprises. The example of Temasek, a sovereign wealth fund in Singapore, presents a successful case for achieving optimal contributions from state-owned entities and beyond. Such sovereign wealth funds will also help to improve the credit rating of African countries.



<h2 class="wp-block-heading" id="h-funding-sustainable-development">Funding sustainable development</h2>



Scaling up resources from International Financial Institutions (IFIs) is vital for African countries to address economic challenges, including those exacerbated by geopolitical tensions. These resources should be more concessionary, long-term, and inclusive. In particular, the Poverty Reduction Growth Trust (PRGT) and the Growth and Sustainability Fund (GSF), under the IMF, need reform to better serve Africa and developing countries.



Affordable finance is crucial for sustainable development, and strengthening multilateral development banks (MDBs) is essential to increasing lending capacity and supporting development projects. By strengthening MDBs, we can unlock more resources for sustainable development, bridge the financing gap, and achieve the SDGs.



Furthermore, innovative financing tools and mechanisms can help reduce financing costs, making it easier for countries to access affordable finance for development. The balance sheets of IFIs can also be utilised to provide guarantees for crowding in resources from the private sector.



Debt swaps can be valuable for managing debt and alleviating financial stress. By exchanging debt for new obligations with more favourable terms, countries can manage their debt more effectively, reduce financial stress, and create space for sustainable development and economic growth.



 Alongside debt relief, African nations are also calling for support in developing tools and instruments to lower extreme financing costs. The recent UN General Assembly resolution 78/230 emphasizes the need for a UN Framework Convention on international tax cooperation, which is a positive step in the right direction. Concrete action is needed to achieve results from the UN Framework Convention on International Taxation in order to establish a globally fair and transparent tax system. This will ensure the achievement of a more just and equitable global tax system.



African countries should begin implementing the Domestic Minimum Top-Up Tax (DMTT) to ensure that multinational companies contribute their fair share of taxes in Africa and minimize transfer pricing leakages. For example, Zimbabwe and South Africa have begun implementing the DMTT provision, which will ensure that multinational cooperation pays at least 15% of corporate tax.



Hon. Professor <a href="https://www.weforum.org/agenda/authors/mthuli-ncube/">Mthuli Ncube</a>



Minister of Finance, Economic Development and Investment Promotion,&nbsp;Ministry of Finance, Economic Development and Investment Promotion of Zimbabwe

Day Two Of The 28th World Economic Forum on Africa

How to finance Africa’s future economic development

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-820x547.jpg" alt="" class="wp-image-513423" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/GettyImages-1235310967-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">JOHANNESBURG, SOUTH AFRICA &#8211; SEPTEMBER 15: Mpho Parks Tau (Department of Economic Development) at the Arbor Day celebration at Diepsloot Memorial Park on September 15, 2021 in Johannesburg, South Africa. National Arbor Week calls on all citizens to plant indigenous trees as a practical and symbolic gesture of sustainable environmental management. (Photo by Sharon Seretlo/Gallo Images via Getty Images)</figcaption></figure>



I was heartened by Department of Trade, Industry and Competition Minister Parks Tau’s commitment to engage the private sector in identifying priority areas to accelerate economic growth and implementing coherent industrial policy.&nbsp; We have many common goals, South Africa’s economic well-being being the most obvious. We are here to help find solutions to any obstacles that stand in the way of achieving those goals.



In the spirit of collaborating for growth, shortly after his appointment the Minister reached out to BLSA and its members, among others, requesting that we share high-level issues faced by big business. There were few surprises – the challenges and frustrations that have accumulated over years of stagnant economic growth and alarming de-industrialisation have been repeatedly highlighted by BLSA.



But our members, which include some of South Africa’s biggest employers, have also made sensible, practical recommendations, and it was encouraging to see the alignment coming through in the Minister’s Budget Vote speech and those of his deputies.



This commitment is an opportunity to build on the successful collaboration to date — and it fosters business confidence, which is one of the key ingredients needed to get South Africa’s economy growing again.



BLSA welcomes the focus on creating a more predictable and stable regulatory environment, clarifying industrial policy and sector support, coordinating economic policy to enable more effective policy implementation, and ensuring greater transparency between the DTIC and the private sector.



Currently, complex and inconsistent regulatory requirements deter business operations and foreign investment, while frequent changes in legislation increase the cost of doing business and the compliance burden. Streamlining regulations to ensure they are clear and consistent will go a long way to address this and, as been suggested by some of our members, a one-stop regulatory body could be established to simplify compliance processes. Involving universities and deploying artificial intelligence and research capabilities could assist with large-scale policy modernisation.



In terms of industrial policy and sector support, it has been argued that the focus to date has been too broad, thus limiting its effectiveness.&nbsp; It makes sense, therefore, to concentrate on fewer sector priorities and revitalise the industrial policy action plans (or the masterplans) for targeted sectors, starting with the green economy. In the process of revitalising the sector masterplans — which are the often-complex industrial and trade strategies to promote local industry and improve competitiveness — the focus should be on designing the framework to be adaptable to allow for ongoing monitoring and course correction as conditions change.



There is a powerful opportunity for industry-government collaboration in the evolution of the special economic zone (SEZ) programme, which currently lacks both the required investment and a nationally integrated work programme. Incentives should be co-ordinated with other programmes/ instruments run by the DTIC, be more evenly applied, and be made visible to the foreign investors and export market players and future tenants who are the prospective users of the SEZ system.



The masterplan approach has the potential to be an effective industrial policy tool, but its success depends on addressing the challenges identified around evidence-based decision-making, balancing objectives, resourcing, and cross-stakeholder alignment. Securing alignment and buy-in for the masterplans across different government agencies and the broader business community will be key.



BLSA has previously highlighted the need for greater economic policy coordination. Several issues have been widely acknowledged as causing unnecessary friction and increasing the cost of doing business in South Africa. These include, but are not limited to, exchange control regulations, crime, skills shortages, unnecessary regulatory red tape, the need to broaden internet connectivity, and the well-documented challenges related to energy security, reliable electricity and water supply, and the ports, rail networks and logistics hubs.



We acknowledge that many of these factors engage with mandates of other government departments. However, the work conducted by the DTIC has wide influence, impacting about one in eight formal private sector jobs in the country. The department also plays a critical role in promoting investment, facilitating trade, stimulating industry, and supporting globally competitiveness and inclusive growth. We would argue there is logic in the DTIC leading a whole-of-government approach to these matters as the lead interface with industry and organised business.



Harmonising policies between departments and sectors would establish regulatory certainty as a key element of South Africa’s value proposition to global investors and trading partners. The DTIC could lead this process as part of the “Invest SA” mandate and as an implementation thrust of the draft Country Investment Strategy tabled in 2022. Some specific areas of focus here are: cross-government/industry collaboration to lower perceived sovereign lending risk to South African projects; constructive, growth-accelerating approaches on empowerment standards and practices for foreign direct investment in priority sectors; and addressing uncertainty around masterplans and their interaction with other national instruments.



In addition, the country needs trade instruments, globally and regionally, to be harmonised and optimised. The AGOA (African Growth and Opportunity Act) trade access negotiations are an opportunity to harmonise US market access with industrial policy instruments from the US that play to South African strengths (for example in the low carbon industries).



Another opportunity is industry-government strategic alignment on positioning with the EU on CBAM (Carbon Border Adjustment Mechanism) — the rate at which carbon-intensity is to be taxed should be paced and aligned with South Africa’s carbon tax regime and be commercially literate in both design and application to maximise both low carbon outcomes and developmental objectives.



The African Continental Free Trade Area (AfCFTA) presents yet another excellent opportunity for South African exporters and should also drive increased traffic of goods through our ports and airports. With some sectors/industries unable to make the business case for investment due to the market size in South Africa, extending the market into the African continent would be a game changer.



There is consensus on the need for greater transparency and accountability between the DTIC and the private sector. Our suggestion is to develop a public accountability system that tracks and publishes progress on key initiatives. A publicly accessible dashboard could be implemented that highlights the status of projects and government commitments.



South Africa has for too long battled with low growth, high unemployment, widening inequality and poor and failing infrastructure. While impressive policies have been crafted to reignite the economy, all too often implementation has failed — thus damning one of Africa’s largest and most industrialised economies.



We look forward to an integrated and outcomes-based approach from the DTIC, which can form a sturdy cornerstone of South Africa’s broader economic strategy.



Minister Tau can rely on business to be available for meaningful dialogue. More than that, the private sector has skills, experience and the will to work with the government and civil society to fix blockages and help ensure delivery. What matters now is pragmatism, undertaking research, testing new ideas, and embracing the course of action that will best deliver for the country. That is how to foster confidence, which will in turn lead to investment and expanded economic activity. I am optimistic about what we can achieve together.

MEC Parks Tau hosts Arbor Day Celebration in South Africa

What business wants from the DTIC

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="753" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner.png" alt="" class="wp-image-513383" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner.png 1920w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-300x118.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-820x322.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-160x63.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-768x301.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/MoralEconomybanner-1536x602.png 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /><figcaption class="wp-element-caption">Image: <a href="https://www.dreamstime.com/street-protests-nairobi-kenya-july-month-long-over-government-william-ruto-continue-youth-seeking-better-leadership-image326684651" target="_blank" rel="noreferrer noopener">Joshua Wanyama/Dreamstime</a></figcaption></figure>



<h2 class="wp-block-heading" id="h-recent-protests-in-kenya-signal-a-shift-from-ethnic-based-to-interest-based-politics-which-could-have-broader-implications-for-the-region">Recent protests in Kenya signal a shift from ethnic-based to interest-based politics which could have broader implications for the region.</h2>



The recent protests in Kenya mark a turning point in Kenya’s, and perhaps Africa’s, political trajectory. Changes were already apparent in Kenya’s last elections, which showed a growing number of Kenyans turning away from ethnic-based voting towards class and interest-based voting. The tax protests take this a step further, giving voice to those who felt ignored and disenfranchised by the government’s decisions. The crowd, through their protests, have exerted an influence beyond the traditional patronage networks. How did this happen? Will it have a lasting impact? And will it spread to other African countries?&nbsp;



In 1971, the British historian E.P. Thompson published an&nbsp;<a href="https://www.jstor.org/stable/650244" target="_blank" rel="noreferrer noopener">article</a>&nbsp;titled ‘The Moral Economy of the English Crowd in the 18th Century.’ It argued that the riots, especially bread riots, that plagued 18th-century British politics reflected not so much the disorder of agitators, looters and hooligans, as contemporary politicians liked to paint them, but the attempt by ordinary poor people to enforce the laws and customs that protected their livelihoods and made life affordable for them. Their targets were traders and magistrates who ignored the rules for their own profit. The state nevertheless saw them as a threat and responded with repression. It took decades for the protesters to organise themselves politically and campaign successfully for the vote as a more effective way for their voices to be heard.&nbsp;



The recent Kenyan protests were linked to similar concerns, in this case rising prices caused by tax increases, but with one big difference: it was not just the poor protesting but the middle classes, the mobile phone-owning, digitally-mobilised youth of Gen Z. This is much more politically threatening to the status quo.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1108" height="658" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph.png" alt="" class="wp-image-513381" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph.png 1108w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-300x178.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-820x487.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-152x90.png 152w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-768x456.png 768w" sizes="auto, (max-width: 1108px) 100vw, 1108px" /></figure>



While the immediate target was to rescind the proposed tax increases, which would have immediately impacted the cost of living for all Kenyans, the protests were&nbsp;<a href="https://www.theguardian.com/commentisfree/article/2024/jul/01/kenya-protests-finance-bill-government-debt" target="_blank" rel="noreferrer noopener">focused</a>&nbsp;as much on the endemic corruption amongst the political and business elite, including Ruto’s immediate circle, as on the IMF, which approved the tax increases to pay off the accumulated debts of the past. The elite’s affluent lifestyle, flaunted on social media and impervious to the tax hikes, simply rubbed salt in the wound.&nbsp;



Above all, protesters were making the point that the taxes proposed in the budget were&nbsp;unfair.&nbsp;Not only were they retrogressive, impacting more heavily on the poor, but they were designed to raise money to repay loans from which the elite had grown fat and from which the middle and lower classes had derived little tangible benefit. Sure, there was now another train line to Mombasa; but that didn’t provide them with jobs, or help them cover the rising cost of living.&nbsp;



President Ruto initially&nbsp;<a href="https://foreignpolicy.com/2024/06/28/kenya-protests-ruto-imf-taxes-poverty-broke-social-contract/" target="_blank" rel="noreferrer noopener">condemned</a>&nbsp;the protests as the ‘treasonous’ actions of ‘criminal’ elements and sent in the army to ‘restore order’, killing some&nbsp;<a href="https://www.aljazeera.com/news/2024/7/12/kenya-police-chief-resigns-after-criticism-over-protest-crackdown#:~:text=Kenya&amp;apos;s%20national%20rights%20watchdog%20said,resignation%20was%20%E2%80%9Cvery%20significant%E2%80%9D." target="_blank" rel="noreferrer noopener">39 protesters</a>&nbsp;in the process. There is still an&nbsp;<a href="https://trtafrika.com/insight/kenya-anti-tax-protests-how-businesses-became-collateral-damage-18181320" target="_blank" rel="noreferrer noopener">argument</a>&nbsp;over whether the looting of shops and burning of the Parliament building was caused by hired vandals brought in to discredit the protests and provide a justification for repression, or by some protesters simply expressing their anger or taking advantage of the situation. In practice, it doesn’t matter: the damage was done and the country was shocked.



Ruto is finding out that in a society with a degree of accountability, protest that deteriorates into disorder is what Thompson calls a ‘social calamity’: it destroys existing social and political relations on which political stability is built. Under an authoritarian government, those in power have little compunction in deploying force to repress dissent: they rule by fear, and this simply reinforces the intimidation of society. Opposition leaders and dissidents can be rounded up, beaten, imprisoned or killed without it threatening their dominance.&nbsp;



But where the government is by consent, the authorities need to protect their legitimacy. The question is, whose consent? Kenya is a democracy, and Ruto became President in an election in 2022 declared adequately free and fair. The budget was approved by a democratically-elected Parliament. And yet people still took to the streets in protest.&nbsp;



As Peter Lockwood has argued,&nbsp;<a href="https://academic.oup.com/afraf/article/122/487/205/7133587" target="_blank" rel="noreferrer noopener">Kenyan politics</a>&nbsp;is already moving away from ethnically-based voting, where people trust only someone from their own region and ethnic group to represent them, towards interest-based voting. Ruto’s success among Kikuyu voters was based partly on his appeal to the ‘hustlers’: the poor, the street vendors, the disadvantaged who wanted to believe he would help them. But it was also based on their disenchantment with Uhuru Kenyatta’s ‘elite capitalism’ and Kenya’s patron-client politics (neo-patrimonialism for political scientists), in which political support for the President buys access to lucrative business opportunities. As in 18th century England, corruption (‘Old Corruption’ as it was called then) is integral to the political system: it is how political loyalty is bought and political patrons secure money to satisfy their clients. But it only works where constituencies can be bought off in this way. Where a political system is sewn up through such patronage, the only way for those outside the system to make their voices heard is in the street.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1060" height="699" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2.png" alt="" class="wp-image-513382" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2.png 1060w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2-300x198.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2-820x541.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2-136x90.png 136w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/IMF-Graph-2-768x506.png 768w" sizes="auto, (max-width: 1060px) 100vw, 1060px" /></figure>



What underpinned the protests of the crowds in Nairobi and throughout the country was that Ruto had not changed this political process but simply shifted the benefit to his friends and political allies. Not just the hustlers but Kenya’s growing middle classes are suffering from the inflation that debt-fuelled spending and the falling shilling have brought. They saw no reason to suffer higher taxes to pay off the debts that were accumulated without their agreement or benefit. Ruto had done little to prepare the political ground for his debt strategy – either through the tax-and-pay-back approach approved by the IMF or the cut-and-pay policy he is now proposing.&nbsp;



In Britain’s recent election, neither party was willing to admit that Brexit was substantially responsible for the country’s economic woes: the subject was too toxic to raise, seen as a vote loser by both sides. The problem therefore remains unaddressed. So too in Kenya, no one seems willing to admit that it is the imprudent borrowing and incompetent investment by the previous government (in which Ruto was Vice-President) which fuelled the debt crisis that now dominates budget policy. Far easier to blame the international financial system – which has its share of blame, but where the inequality is less immediately visible to Kenyans than is the unfair affluence of their own elite.



Being forced first to withdraw the budget and now to re-structure his whole cabinet shows that Ruto has registered the need to re-establish his legitimacy by bringing in a wider range of political forces to the government. But until the policy issue is debated honestly in public, Ruto’s government will remain vulnerable to popular protest, whoever is co-opted into the cabinet. The moral authority of the crowd has been asserted: it will not disappear, even if it is no longer on the street.&nbsp;



Kenya is not alone in facing this kind of economic crunch over debt, but others have handled it differently.&nbsp;<a href="https://www.reuters.com/markets/ghanas-debt-restructuring-takes-another-step-forward-2024-06-24/#:~:text=*%20January%202024%20%2D%20Ghana%20reaches%20a,loan%20payout%20a%20week%20later." target="_blank" rel="noreferrer noopener">Ghana</a>&nbsp;and&nbsp;<a href="https://www.reuters.com/world/africa/zambias-three-year-debt-restructuring-takes-step-forward-2024-03-25/#:~:text=July%202022%3A%20Zambia&amp;apos;s%20OCC%2C%20co,worth%20of%20loans%20to%20Zambia." target="_blank" rel="noreferrer noopener">Zambia</a>&nbsp;both chose to default and restructure their debt obligations rather than try to meet the unaffordable repayments by drastically raising taxes or cutting spending. The cost for these countries has been excluded from global capital markets and weakened currencies, but they have so far avoided riots. The issue is already a critical one in the Ghanaian elections due in December, so the debate there cannot be avoided.&nbsp;



<a href="https://africacenter.org/spotlight/key-takeaways-from-senegals-presidential-election/" target="_blank" rel="noreferrer noopener">Senegal’s elections</a>&nbsp;earlier this year posed a political rather than economic challenge, but it was as much the people on the street as the phone calls from global leaders that finally persuaded Macky Sall to allow the elections to go ahead and hand over the Presidency peacefully to opposition leader Diomaye Faye who stood on a strong anti-corruption platform. In Senegal too, the elite had to listen to the crowd, which now has a leader it trusts.



In&nbsp;<a href="https://www.bbc.co.uk/news/articles/ceqde3dqd05o" target="_blank" rel="noreferrer noopener">Uganda</a>&nbsp;also the crowd has taken up the anti-corruption message and taken to the streets. As in Kenya, the authorities have responded with repression, but their legitimacy is put at risk. Just as coups spread across the Sahelian countries reflecting people’s unhappiness with their ruling elites, in African countries with more robust civil societies, popular protest is spreading demanding more democratic change.



Nigeria is the African country currently most vulnerable to such popular protests. The&nbsp;<a href="https://journals.sagepub.com/doi/10.1177/17506352241239550?icid=int.sj-abstract.citing-articles.1" target="_blank" rel="noreferrer noopener">#EndSARS protests</a>&nbsp;in October 2020 already demonstrated the ability of young Nigerians to mobilise public protest against what was seen as a recurrent injustice of arbitrary arrest by the police. Though it came to an abrupt end after the&nbsp;<a href="https://www.theguardian.com/global-development/2021/nov/01/nigeria-end-sars-protesters-find-no-justice-one-year-on" target="_blank" rel="noreferrer noopener">‘Lekki Gate massacre’</a>&nbsp;and the state has taken extensive&nbsp;<a href="https://www.hrw.org/news/2021/10/19/nigeria-year-no-justice-endsars-crackdown" target="_blank" rel="noreferrer noopener">steps</a>&nbsp;to discourage such protests since, the mobilisation of middle-class opinion fed through into&nbsp;<a href="https://www.cfr.org/blog/peter-obi-and-dream-deferred" target="_blank" rel="noreferrer noopener">Peter Obi’s</a>&nbsp;strong showing in the 2022 Nigerian elections.



The Nigerian state, even more than the Kenyan, revolves around&nbsp;<a href="https://www.cfr.org/article/nigerias-all-too-familiar-corruption-ranking-begs-broader-questions-around-normative" target="_blank" rel="noreferrer noopener">patronage networks</a>&nbsp;lubricated by access to state funds. The dependence on oil revenue has meant that personal and trade taxation in Kenya is negligible. The tax take is reported to have risen from 6.7% of GDP in 2021 (<a href="http://chrome-extension//efaidnbmnnnibpcajpcglclefindmkaj/https:/www.oecd.org/tax/tax-policy/revenue-statistics-africa-nigeria.pdf" target="_blank" rel="noreferrer noopener">OECD</a>) to 10.8% in 2023 (<a href="https://www.aljazeera.com/news/2023/7/7/nigeria-on-quest-to-almost-double-tax-to-gdp-ratio-in-three-years#:~:text=Nigeria%20has%20one%20of%20the%20lowest%20tax%20collection%20rates%20in,and%20the%20rest%20from%20borrowing." target="_blank" rel="noreferrer noopener">government adviser</a>), but this is as likely to reflect that Nigeria’s measured GDP has fallen sharply since the last election, and is still amongst the lowest in the world. But people do care about the cost of living, the removal of fuel subsidies, and the falling value of the Naira – all of which underpinned the&nbsp;<a href="https://www.reuters.com/world/africa/nigerian-unions-shut-down-power-grid-start-strike-over-minimum-wage-2024-06-03/" target="_blank" rel="noreferrer noopener">general strikes</a>&nbsp;called by Nigerian unions in May and June this year, demanding a raise in the minimum wage. If nothing is done about it sooner rather than later, the Nigerian crowd could take to the streets once more to demand action from a government that has so far failed to deliver.&nbsp;



For now, Tinubu’s government seem to believe that maintaining the patronage networks is more important for their political survival than fending off public protest and that the corruption underpinning those networks can be left in place. Given the size, diversity and devolution of Nigeria’s political system, that may be right – for now. But the risk is that if things do not improve very soon, protests will break out and the authorities may lose political control completely in some areas which they will find very hard to restore without more drastic political and economic reform. Only time will tell.&nbsp;

MoralEconomybanner

The Moral Economy of the African Crowd

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1365" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Dr-Sania-Nishtar-CEO-of-Gavi-the-Vaccine-Alliance.jpg" alt="" class="wp-image-509912" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Dr-Sania-Nishtar-CEO-of-Gavi-the-Vaccine-Alliance.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Dr-Sania-Nishtar-CEO-of-Gavi-the-Vaccine-Alliance-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Dr-Sania-Nishtar-CEO-of-Gavi-the-Vaccine-Alliance-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Dr-Sania-Nishtar-CEO-of-Gavi-the-Vaccine-Alliance-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Dr-Sania-Nishtar-CEO-of-Gavi-the-Vaccine-Alliance-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Dr-Sania-Nishtar-CEO-of-Gavi-the-Vaccine-Alliance-1536x1024.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Dr. Sania Nishtar, CEO of Gavi</figcaption></figure>



A seminal moment in the future of immunisation in Africa occurred in Abidjan, Cote D’Ivoire, this week. In a meeting of the health ministers of nine African nations, a declaration was signed that will see these nations commit to a future where the costs of immunisation will be borne entirely out of their own budgets, helping fulfill the long-term mission of the organisation I lead, Gavi, which is to ultimately put itself out of business.



Why is this so important? Since 2000 Gavi has facilitated the immunisation of over one billion children – over half of the global birth cohort. Providing a shield against deadly yet easily preventable diseases has generated over US$200 billion in economic benefits as young people grow into healthy, wage-earning adults, parents are spared debilitating healthcare costs and health systems’ resources are freed up to provide other essential services. But Gavi’s model is designed so that countries pay a greater share of their national immunisation programmes as their income increases, placing them in the driving seat for determining the healthy futures of their populations.



Political will is one thing, however securing the resources and technical ability to realise that ambition is another entirely. Only 19 countries have transitioned away from Gavi support since 2000. A new era of immunisation began this week with the agreement of the Abidjan declaration &#8211; a commitment to self-sufficiency and vaccine sovereignty that sits at the heart of the Gavi model. Thank you to all those who have welcomed me in Abidjan and participated in a hugely productive visit for the Vaccine Alliance. Achieving sustainability requires huge amounts of collaboration, capacity-building and, at times, course-correction. Having nine countries signal their intention to joining the club in one week therefore represents a huge moment.



This is what makes this week’s Abidjan Declaration unprecedented. The nine signatory countries &#8211; Benin, Congo, Côte d’Ivoire, Djibouti, Ghana, Mauritania, Nigeria, Sao Tome and Principe and Senegal &#8211; all at separate stages on the Gavi transition pathway, have effectively formed a club to support and guide each other through the transition pathway. This means collaboration on establishing strategies that strengthen not only immunisation programmes but the institutions that underpin them and the budgetary mechanisms to support them. And it means building systems capable of supporting new vaccine introductions whenever they come online.



The collaboration will inevitably take many forms; for me, one of the most innovative new approaches is a plan to create a peer monitoring mechanism to allow the sharing of best practices across the group. The group’s commitment to working closely with civil society and the private sector, and to strengthen more broadly primary healthcare infrastructure are equally laudable.



That these commitments are being undertaken is admirable; that they are being undertaken at a time of considerable fiscal constraint caused by high costs of debt servicing, the ravages of climate change and other factors is even more impressive. In the spirit of the Lusaka Agenda, global health initiatives like Gavi are in turn committed to help countries achieve their long-term vision of nationally-funded healthcare systems in Africa.



In practice, Gavi will use its expertise to help countries plan and monitor vaccine programmes as they transition. It will also provide support to help structure innovative finance mechanisms in support of domestic resource mobilisation. We will also continue to support these countries even after they graduate &#8211; as we do for other former-Gavi countries and indeed other middle-income countries that have never been fully supported by our Alliance, through technical assistance.



The World Health Organisation also has an important role to play to support countries in transition in helping build capacity and sharing best practices that will assist the transition. Lastly, all international organisations have an obligation to coordinate support and assistance to countries to optimise the benefits they bring and minimise the transaction costs.



As I look back on my many meetings in Abidjan this week, I cannot help but think reflect on events that took place here as representing a milestone not just for the countries of Africa but for Gavi also. The government of Cote D’Ivoire deserves enormous credit, not just for committing to a sustainable immunisation future for itself but also for showing leadership, and showing the world what a Global South-led transition will look like. For Gavi, too, as we enter a replenishment year where donor funding will be crucial to helping us protect more children, against more diseases, than ever before over the coming five years, the Abidjan Declaration presents a powerful endorsement of our model; that money invested in Gavi today will help countries stand on their own tomorrow.

Dr Sania Nishtar, CEO of Gavi, the Vaccine Alliance

The Abidjan Declaration: an unprecedented moment in charting the future of sustainable immunisation in Africa

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1544" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/CAMB3048-1-scaled.jpg" alt="" class="wp-image-508589" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/CAMB3048-1-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/CAMB3048-1-300x226.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/CAMB3048-1-820x618.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/CAMB3048-1-119x90.jpg 119w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/CAMB3048-1-768x579.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/CAMB3048-1-1536x1158.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Zen Dlamini &#8211; Executive Head: Infrastructure and Sovereign &amp; Public Sector, at Standard Bank CIB</figcaption></figure>



South African public-private partnerships (PPPs) are the key to unlocking the massive infrastructure investment opportunities available to investors. The funding capacity of local investors is, however, not sufficient to meet the country’s infrastructure funding needs. The total value of the country’s Strategic Integrated Projects project pipeline has grown from R340 billion in July 2020 to R540 billion today, and the South African Government estimates that it will require R3.2 trillion (US$168 billion) from the private sector in order to meet its infrastructure needs by 2030.



South Africa’s ambitious infrastructure objectives cover four mission-critical infrastructure areas: energy, transport, water and digital communications. These areas, were they to receive sufficient investment, would support economic growth and job creation, and act as an enabler of future development. President Ramaphosa said in March this year: “Infrastructure is an enormous economic multiplier, providing dividends for an economy long after the infrastructure has been delivered.”



To unlock this potential, and to meet South Africa’s crucially important developmental needs, the country’s state-owned companies (SOCs) are increasingly looking at International Investors for PPP opportunities aligned with their interests and capacity.&nbsp; Over the past decade, the GCC has emerged as a major investor with interest across Africa, with a growing number of trade deals that significantly benefit both regions. Foreign Direct Investments from the GCC into Africa from 2012-2022 saw $101.9 billion invested in 628 projects.&nbsp;



South Africa’s infrastructural investment opportunities span various economic sectors, offering portfolio diversification potential for investors seeking global opportunities. The opportunities include social and utility infrastructure projects to improve access to much-needed water and power resources, and vital transport networks, including roads, rail, and ports. There are also ample investment opportunities in digital infrastructure and developing agriculture and agro-processing infrastructure.



The South African government is highly incentivised to create conditions conducive to attracting international investments, and that includes establishing a predictable and sustainable regulatory environment. Faced with a notable decline in PPP activity in recent years, the National Treasury has instituted reforms that simplify and speed up the regulatory process of establishing PPPs.



It has created two pathways for PPPs: one for high-value projects and a simplified version for low-value projects (less than R2 billion). The reforms mean that low-value projects no longer have to go through the lengthy process of obtaining Treasury approvals. Thus, investors who want to partner with the government on a smaller project won’t need to go through the time-consuming processes previously required.



As a bank committed to fostering cross-border relationships and collaboration between all the local and international stakeholders that will make these partnerships a success, Standard Bank fully supports the amended PPP regulatory framework. We believe this will make it easier for South Africa to benefit from the more than $50 trillion international investment pool held by the world’s top 300 investors.



It is important that international investors work with institutions that can capably navigate the country’s broader regulatory framework. For instance, international investors entering into PPPs must prioritise community building, job creation, localisation, and skills transfer. They would also be expected to source local suppliers from the surrounding communities instead of importing necessary supplies. Unless given a special dispensation as a priority project, international investors must meet the local requirements.



For investors looking to explore South African PPP infrastructure investment opportunities, Standard Bank is ideally positioned to help. We have the local know-how, experience, and expertise and have been a committed role player in the government’s private sector capital-raising initiatives. In terms of assets, we are the largest of the big four commercial and investment banks in sub-Saharan Africa and are equipped to put together large, impactful, and high-profile PPPs.



Already a meaningful partner to many international investors, Standard Bank has a global presence in 20 countries on the African continent, as well as in the UAE, Dubai, Beijing, London, New York, New Jersey, and the Isle of Man. We are a preferred partner for many global multinationals coming to the continent and South Africa. We operate across multiple sectors and have been involved in many large infrastructure projects in the renewable energy sector in particular, including a sizeable hydro-electric project in the Northern Cape.



Standard Bank has long nurtured its relationships with investors in the GCC and the surrounding region, where investors have access to substantial capital and the appetite to invest in the opportunities South Africa has to offer. These opportunities offer investors sustainable, long-term returns and exposure to a fast-growing population with tremendous economic potential.



Standard Bank’s State-Owned Company Investment Summit, held recently in Dubai, provided a platform for investors in the Gulf region to connect with representatives of South Africa’s state-owned companies to explore infrastructure opportunities and possible collaborations. We expect the summit to lead to a round of significant infrastructural investment agreements, as has occurred at each previous iteration of this annual event.



PPPs in South Africa have played a crucial role in attracting much-needed private investment. But more is needed. By sharing risks and rewards with the private sector, and international investors in particular, the government can unlock additional funding sources and accelerate the development of critical infrastructure projects.



The overhaul of the PPP regulatory framework has been instrumental in sending the right message to international investors about South Africa’s infrastructure opportunities. The country cannot meet its massive infrastructure development goals – and reach its full economic potential – without international investors and successful PPPs. The latest regulatory changes shift the dial in the right direction for all stakeholders.

CAMB3048-1

South Africa’s PPP reforms provide an investor-friendly platform for global infrastructure capital

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1152" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Charlie-Robertson-View-From-MEA-colour-watercolor-scaled.jpg" alt="" class="wp-image-505633" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Charlie-Robertson-View-From-MEA-colour-watercolor-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Charlie-Robertson-View-From-MEA-colour-watercolor-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Charlie-Robertson-View-From-MEA-colour-watercolor-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Charlie-Robertson-View-From-MEA-colour-watercolor-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Charlie-Robertson-View-From-MEA-colour-watercolor-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Charlie-Robertson-View-From-MEA-colour-watercolor-1536x864.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Charlie Robertson &#8211; Head of Macro-Strategy at FIM Partners and author of The Time-Travelling Economist</figcaption></figure>



The author is Head of Macro-Strategy at FIM Partners and author of The Time-Travelling Economist. The article first appeared on <a href="http://fdiintelligence.com/">fDiIntelligence.com</a>, a service from the Financial Times. 



For first-term US presidents, domestic affairs are the top priority. In the case of Joe Biden’s government, any bandwidth in the international arena is now fully taken up by tension with China, Vladimir Putin’s war, and now Israel and Gaza. Policy on Africa barely gets a look-in.&nbsp;



It’s a big shift from 10 to 20 years ago, when George W Bush (with initiatives tackling HIV relief and promoting debt forgiveness) and Barack Obama (who led the ‘Power Africa’ initiative) did focus some attention on the continent.&nbsp;&nbsp;



President Trump’s focus on limiting immigration, including from Africa, which he reportedly described as “<a href="https://www.nbcnews.com/politics/white-house/trump-referred-haiti-african-countries-shithole-nations-n836946" target="_blank" rel="noreferrer noopener">shithole countries</a>” (a quote he&nbsp;<a href="https://x.com/realDonaldTrump/status/951793123985973248" target="_blank" rel="noreferrer noopener">denied on X</a>), marked a change of tone. His administration’s interest in Africa seemed mainly about countering China.&nbsp;&nbsp;



President Biden has sparked different headlines. He invited a minority of African leaders to his democracy summit in 2021, and&nbsp;<a href="https://agoa.info/profiles.html" target="_blank" rel="noreferrer noopener">suspended</a>&nbsp;countries including Ethiopia and Uganda from the Africa Growth and Opportunity Act which provides duty-free access to the US. Civil wars in Libya and Sudan, and a spate of coups in west Africa, have triggered minimal US response.&nbsp;



Where the US has stood up is via greater support for IMF and World Bank involvement on the continent, including the $500bn Special Drawing Rights expansion of the IMF’s balance sheet in 2021 which has helped limit Africa’s sovereign defaults to Ethiopia, Ghana and Zambia. The US has backed hefty IMF/World Bank support to Kenya, putting multilaterals on course to represent 60% of its debt until 2035, IMF reports show.&nbsp;



Geopolitics is still a factor. Like his predecessor, President Biden wants to counter China, which surpassed the US as Africa’s largest trade partner in 2009, and Russia whose arms sales and interest in exploiting Africa’s natural resources has seen it support a number of the continent’s undemocratic leaders.&nbsp;<a href="https://ao.usembassy.gov/fact-sheet-the-u-s-angola-partnership/" target="_blank" rel="noreferrer noopener">US financing</a>&nbsp;for a railroad across Angola is a recent example of US efforts to peel one big player away from China’s influence.&nbsp;&nbsp;



With the upcoming US election, it’s unlikely the country will become more proactive in Africa. The continent’s gross domestic product of $2.9tn in 2023 was less than California’s, limiting the economic imperative. Unless there’s peace in Gaza and Ukraine, US officials just won’t have the bandwidth.&nbsp;

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Africa neglected by limited US bandwidth

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="800" height="800" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Helen-Lubamba-image-800x800.jpg" alt="" class="wp-image-505630" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Helen-Lubamba-image-800x800.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Helen-Lubamba-image-300x300.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Helen-Lubamba-image-90x90.jpg 90w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Helen-Lubamba-image-768x768.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/Helen-Lubamba-image.jpg 1024w" sizes="auto, (max-width: 800px) 100vw, 800px" /><figcaption class="wp-element-caption">Helen Lubamba, Stanbic Bank Zambia, Head of Corporate and Investment Banking</figcaption></figure>



Copper-rich Zambia has a rare opportunity to harness its critical minerals resources, kick-start the national economy and drive the global just energy transition.



Zambia has an abundant endowment of mineral wealth. Our world-class Copperbelt region is rich in copper and cobalt, and we also have lithium, nickel and bauxite. Zambia is the second-largest producer of copper on the continent and the sixth largest globally. Africa produces 77% of the world’s cobalt, of which Zambia is the second-largest producer on the continent, after the Democratic Republic of Congo (DRC). Copper and cobalt are both key ingredients in the electronic mechanisation that the world is going through.



These critical minerals will drive Africa’s just energy transition. Copper has always been a resilient mineral in terms of demand, which is why copper prices have generally held up well on global commodities markets over the years. Due to the heightened focus on energy transition and the urgent shift to electric vehicles, prices have been increasing to around $10 000 per metric ton. Some market analysts estimate that it could go as high as $40 000 per metric ton in the next 4 to 5 years because of the significant global demand combined with supply-side disruptions. Zambia is well placed to take advantage of this, being a producer of copper and cobalt, which is generally seen as a byproduct of copper.



From an extractive point of view, DRC is Zambia’s primary cross-border partner. About a year and a half ago, the governments of DRC and Zambia signed an MoU to build facilities in the Copperbelt area, with a view to extending the critical minerals value chain beyond extraction and into local processing and beneficiation.



The copper strip between the two countries creates a great opportunity to build the value addition industry around that area. We may not be manufacturing electric vehicles ourselves in the immediate future, but we can certainly start building the components. Private investors, including original equipment manufacturers (OEMs), are now coming closer to the mineral production areas and investing in growing the value chain closer to the source. The Zambian government is incentivising value addition on the ground, so more and more of these value addition requirements are becoming conditions for allowing investment in the local mining sector.



The government has a vital role to play here. Mining needs a stable investment environment to thrive. The sector needs a stable tax regime, for example, as mining remains a long-term business.



In the past, the national economy’s heavy reliance on mining – and particularly copper mining – meant that the government tended to push its tax demands onto the mining sector in order to raise more revenue. However, there is greater optimism now that Zambia’s current government has pledged more investment in mining and is moving towards a more stable environment by revising some of the tax practices of the past.



Amid this optimism, we are also seeing more exploration going into Zambia’s western border with Angola. In terms of logistics, we see Mozambique, Namibia, Zimbabwe, and even South Africa as crucial partners, even though we don’t necessarily share a common border with the latter.&nbsp;



Mining and minerals are a core part of the Standard Bank Group’s heritage. In fact, the Group itself is a product of the gold mining sector, having been established in the goldfields of South Africa’s old Transvaal. So, it’s part of our origin and it continues to be a big part of our sustainability plans.



In Zambia, Standard Bank financed the brownfields of what is now known as Barrick Gold Lumwana Mine. With the drive for more demand for critical minerals, we’re now funding a lot of existing operations, with clients including the likes of First Quantum, Vedanta Resources, Mopani (recent majority acquisition by IRH), and so on. But even when we work with multinationals or through our global offices, the focus is always on activities that impact Africa.



Mining is not just about the mines and the mining activity, it’s about the communities they impact. If you visit Zambia’s ‘old’ Copperbelt today, you’ll see how the region has regressed over the last 5 years. Several auxiliary and mining related companies no longer operate there because the two biggest mines in the region have not been operating at their optimum. As a result, Zambia’s copper production levels started receding. In 2015 the DRC surpassed us by producing 1 million metric tons of copper, while we were sitting at around 800 000 metric tons. We need to get those numbers up, and that can only be done through investment. Our current government has a target of 3 million tons of production by 2031.



To reach these ambitious production targets, you need power. So there’s a huge focus on energy right now – especially renewable energy. The energy sector is very exciting. It’s bringing various stakeholders together, from government to independent power producers to regional and cross-border partners, to provide that much-needed energy that will grow our continent.



When you look at energy supporting the extractive industry, there is talk of an interconnector coming in from East Africa. East Africa has a surplus of energy, whereas southern Africa has a deficit. Once that interconnector is completed, hopefully within the next two years, we’ll have energy from East Africa supplementing our energy supplies in the south.&nbsp;



But one thing we also to need be cognisant of is that as the demand for critical minerals grows, we’re going to see other suppliers stepping in. Therefore, Zambia must act NOW to take advantage of this windfall, and to get production out to generate economic and social impact for the country. As a country and bank that supports her growth, we are poised for it. We just need to make sure that we’re courageous enough to follow through on the opportunities.&nbsp;

Helen-Lubamba-image

Critical Moment

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="234" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-spr-sovereign-debt-restructuring-process-c-andrew-caballero-reynolds-imf-photo-820x234.jpg" alt="" class="wp-image-500803" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-spr-sovereign-debt-restructuring-process-c-andrew-caballero-reynolds-imf-photo-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-spr-sovereign-debt-restructuring-process-c-andrew-caballero-reynolds-imf-photo-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-spr-sovereign-debt-restructuring-process-c-andrew-caballero-reynolds-imf-photo-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-spr-sovereign-debt-restructuring-process-c-andrew-caballero-reynolds-imf-photo-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-spr-sovereign-debt-restructuring-process-c-andrew-caballero-reynolds-imf-photo-1536x439.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-spr-sovereign-debt-restructuring-process-c-andrew-caballero-reynolds-imf-photo-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Credit: Andrew Caballero-Reynolds/IMF Photo</figcaption></figure>



The global economy avoided what could have been a systemic debt crisis during the turbulence of recent years, but vulnerabilities remain amid high debt servicing costs that pose&nbsp;<a href="https://www.imf.org/en/Blogs/Articles/2024/01/24/how-to-ease-rising-external-debt-service-pressures-in-low-income-countries?utm_medium=email&amp;utm_source=govdelivery">an important challenge</a>&nbsp;for low and middle-income countries. Some may yet confront major tests.



When countries do falter on debt, restructuring is critical to containing the damage. Restructuring should be as quick as possible because delays deepen distress by making adjustment harder and adding to the costs for both debtors and creditors. Longer waits leave people suffering when they lose jobs and face increasing poverty, while creditors watch their losses mount as they wait for recovery. It’s a lose-lose situation.



While some sovereign restructurings have faced significant delays, we are working with our counterparts to accelerate the process. The progress achieved so far shows how the world can work together to reduce risks.



<h2 class="wp-block-heading" id="h-common-framework-has-started-to-deliver-nbsp">Common Framework has started to deliver&nbsp;</h2>



The Common Framework, which brings creditor countries together to help restructure debt where needed, has started to deliver. How? By reducing the time from IMF staff level agreement – a key step toward an IMF program – to delivering the financing assurances from official creditors required for program approval. This means that the Fund can move in more quickly to provide much needed financial assistance to the country. For example, Ghana’s agreement this year took five months to cover those steps, roughly half the time it took for Chad in 2021 and Zambia in 2022. Ethiopia’s talks are likely to be faster, closer to the customary two or three months.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="950" height="950" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/spr-blog-newsletter-size_original.png" alt="" class="wp-image-500802" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/spr-blog-newsletter-size_original.png 950w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/spr-blog-newsletter-size_original-300x300.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/spr-blog-newsletter-size_original-800x800.png 800w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/spr-blog-newsletter-size_original-90x90.png 90w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/spr-blog-newsletter-size_original-768x768.png 768w" sizes="auto, (max-width: 950px) 100vw, 950px" /></figure>



These improvements are possible in part because stakeholders have developed more experience working together, including with non-traditional official creditors like China, India, and Saudi Arabia. Earlier cases presented creditor coordination challenges. But becoming more familiar with the process helped parties better know what to expect, building trust, and allowing creditors to overcome more easily what had previously been stumbling blocks.



We are also seeing progress in accelerating debt restructuring for emerging market countries outside of the Common Framework. Sri Lanka’s case was faster than the process for Suriname that preceded it in 2021, reflecting improvements in creditor coordination and improved understanding of safeguards and assurances.



<h2 class="wp-block-heading" id="h-global-sovereign-debt-roundtable-has-been-effective-nbsp">Global Sovereign Debt Roundtable has been effective&nbsp;</h2>



The IMF, World Bank and the Presidency of the Group of Twenty introduced the Global Sovereign Debt Roundtable (GSDR) early last year to help overcome various disagreements on technical issues. Discussions among creditors and debtors have made progress on several key aspects, including&nbsp;<a href="https://clubdeparis.org/en/communications/page/comparability-of-treatment?utm_medium=email&amp;utm_source=govdelivery">comparability of treatment</a>&nbsp;among creditors, defining what debts are included in the restructuring, information sharing, and processes and timelines. This has helped accelerate ongoing restructuring cases and build good foundations for the future. That progress, summarized in a&nbsp;<a href="https://www.imf.org/-/media/Files/About/FAQ/gsdr/gsdr-compendium-of-common-understanding-on-technical-issues.ashx?utm_medium=email&amp;utm_source=govdelivery">recent report</a>, is a big step forward.



<h2 class="wp-block-heading" id="h-imf-is-reforming-its-debt-policies">IMF is reforming its debt policies</h2>



The IMF is building on our sovereign debt restructuring experience to make the process even faster. The Executive Board in April adopted significant&nbsp;<a href="https://www.imf.org/en/Publications/Policy-Papers/Issues/2024/04/16/Policy-Reform-Proposals-To-Promote-The-Funds-Capacity-To-Support-Countries-Undertaking-Debt-547821?utm_medium=email&amp;utm_source=govdelivery">reforms to our debt policies</a>:



<ul class="wp-block-list">
<li>They provide tools that generally would allow IMF program approval within two or three months of a staff-level agreement, including through safeguards that help us proceed in cases where there are coordination problems among creditors. Approval in principle for programs, which enables disbursement as soon as financing assurances materialize, will increase transparency and help complicated cases move along on such a schedule.</li>



<li>They create a new procedure for establishing financing assurances, which should provide greater flexibility over time. Accordingly, the Fund would assess that a “credible official creditor process” is underway, based on actions by the creditors and accounting for the creditor’s track record in delivering. This will eventually be considerably faster than the present practice of waiting for formal letters.</li>
</ul>



These reforms will facilitate faster engagement with the debtor country—a key step since delays can intensify a crisis. The reforms will also provide more information to creditors to help them reach restructuring decisions faster (either because the program can be approved more quickly, or through approval in principle). This would include information about our economic projections, policy commitments, and our debt sustainability analysis. This complements other Fund efforts to improve transparency and&nbsp;<a href="https://www.imf.org/en/Publications/Policy-Papers/Issues/2023/06/23/Staff-Guidance-Note-on-Information-Sharing-in-The-Context-of-Sovereign-Debt-Restructurings-535203?utm_medium=email&amp;utm_source=govdelivery">share information</a>&nbsp;in a timely manner with all stakeholders involved in the restructuring process.&nbsp;



High geopolitical tensions have made global economic cooperation more difficult. Yet we can take heart from the fact that creditors and Fund shareholders more broadly are coming together unanimously to assist countries that need debt restructuring. This is critical to further improve the international debt architecture which is a key priority, especially given the high debt levels and prohibitive debt servicing costs in some countries.



<h2 class="wp-block-heading" id="h-what-s-next">What’s next</h2>



As we strive to reduce delays, it is important to note that sovereign defaults and requests for comprehensive debt relief have tapered off since 2021 and 2022. The last notable request was Ghana’s more than a year ago. Markets have reopened earlier this year for low-income countries, with Benin, Cote d’Ivoire, Kenya, and Senegal having raised money from foreign investors. Emerging market bond spreads are back to pre-pandemic levels, signaling investor confidence that those countries can repay debt.



However, spreads for about 15 percent of emerging markets are at distressed levels, underscoring vulnerability. Likewise, low-income countries still need to refinance about $60 billion of external debt each year over the next two years—about triple the average in the decade through 2020. Around 15 percent of low-income countries are in debt distress and another 40 percent are at high risk of distress.



So, progress on debt must continue. The GSDR will continue to address remaining key restructuring challenges such as how official and private creditor processes can move in parallel, and ways to address liquidity challenges. This could involve a potential menu of options for countries including the use of the Common Framework for coordinated liquidity relief; liquidity management operations such as debt swaps or buy backs; and ways to support new inflows including through risk-sharing instruments.



The IMF will distill our policies in a sovereign debt handbook that we plan to publish later this year. This clarity should further underpin more efficient processes. We are also reviewing the debt sustainability framework for low-income countries, jointly with the World Bank, to ensure it remains fit for purpose.&nbsp;



<h2 class="wp-block-heading" id="h-easing-the-liquidity-squeeze">Easing the liquidity squeeze</h2>



More will be needed to address debt challenges and avoid distress amid elevated interest rates and financing needs, against a backdrop of enormous long-term financing needs for economic development and to cope with climate change.



Borrowing countries, creditors, and the international community have roles to play. Borrowers must foster economic growth and boost government revenues so that they can create space to finance development and climate-related spending while maintaining debt on a sustainable path. Given that policy reforms in borrowing countries will take time to deliver results, official creditors should consider mobilizing more funding at reduced cost, particularly grants. The Fund will continue to help support these efforts and provide adequate financing, including through the review of our concessional facilities.



A forthcoming blog will elaborate on how the international community must keep working together to help ease the burden of borrowing and alleviate the liquidity squeeze facing many emerging and low-income countries.

blog-2099×600-spr-sovereign-debt-restructuring-process-c-andrew-caballero-reynolds-imf-photo

Sovereign Debt Restructuring Process Is Improving Amid Cooperation and Reform

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Chido-Munyati-Panel-1-820x547.jpg" alt="" class="wp-image-500322" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Chido-Munyati-Panel-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Chido-Munyati-Panel-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Chido-Munyati-Panel-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Chido-Munyati-Panel-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Chido-Munyati-Panel-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Chido-Munyati-Panel-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chido Munyati</figcaption></figure>



Over the last 20 years, China has become sub-Saharan Africa’s <a href="https://www.imf.org/-/media/Files/Publications/REO/AFR/2023/October/English/china-note1.ashx">largest bilateral trading partner</a>. Around 20% of the region’s exports now go to China and about 16% of Africa’s imports come from China, according to the International Monetary Fund (IMF). This amounted to a record <a href="https://www.scmp.com/news/china/diplomacy/article/3250552/china-africa-trade-hit-282-billion-2023-africas-trade-deficit-widens-commodity-prices-key-factor">$282 billion</a> in total trade volume in 2023. Primary commodities — metals, mineral products and fuel — represent about three fifths of Africa’s exports to China, while it typically imports Chinese manufactured goods, electronics and machinery.



At the same time, China has also emerged as the largest bilateral creditor to Africa, providing African countries with a new source of infrastructure, mining and energy financing. China’s <a href="https://openknowledge.worldbank.org/entities/publication/02225002-395f-464a-8e13-2acfca05e8f0">share</a> of total sub-Saharan African external public debt was <a href="https://www.imf.org/-/media/Files/Publications/REO/AFR/2023/October/English/china-note1.ashx">less than 2%</a> before 2005 but grew to about 17%, or $134 billion, by 2021.



Moreover, Chinese foreign direct investment (FDI) has increased significantly over the last two decades. In 2003, <a href="https://www.sais-cari.org/chinese-investment-in-africa#:~:text=Chinese%20FDI%20in%20Africa%20Data%20Overview&amp;text=Flows%20surged%20from%20US%2475,Bank%20of%20China%20(ICBC)">the annual FDI flow from China to Africa</a> was approximately $75 million. It peaked at $5 billion in 2022, representing about 4.4% of the region’s total FDI. The Belt and Road Initiative (BRI), a global development strategy launched in 2013, is the framework for China&#8217;s FDI directed primarily towards transportation, energy and mining infrastructure.



While the relationship between China and the African continent has been ripening over the years, a recent deceleration of economic growth means both will now need to take a more prudent approach if they want to maintain future trade relations and investment flows.



<h2 class="wp-block-heading" id="h-china-africa-economic-relations-are-evolving">China-Africa economic relations are evolving</h2>



In 2020 and 2021, China and Africa continued to <a href="https://www.fmprc.gov.cn/eng/wjb_663304/zwjg_665342/zwbd_665378/202112/t20211217_10471245.html">strengthen their economic cooperation</a> through various strategic plans and initiatives within the frameworks of the BRI and the Forum on China-Africa Cooperation (FOCAC), a partnership platform established in 2000. This cooperation plan is focused on aligning the BRI with the African Union’s Agenda 2063 — a strategic framework for the socio-economic transformation of the continent over the next 50 years.



The cooperation plan prioritizes improving infrastructure connectivity across Africa to facilitate trade and economic integration. It also aims to enhance trade facilitation, financial integration and policy coordination between China and African countries. The latter will ensure development strategies are harmonized and mutually reinforcing.



However, China&#8217;s investments and loans in Africa have declined in recent years. This shift <a href="https://www.cnbc.com/2024/04/12/chinas-policy-to-boost-demand-by-700-billion-will-have-a-bigger-and-bigger-impact-official-says.html">has been attributed</a> to various factors including a slowdown in China’s economic growth and its desire for a more sustainable development model. Consequently, <a href="https://www.bu.edu/gdp/2023/09/18/a-new-state-of-lending-chinese-loans-to-africa/">total new loan commitments in 2022</a> were only $995.5 million <a href="https://www.bu.edu/gdp/chinese-loans-to-africa-database/">compared</a> to a high of $28.5 billion in 2016. And at the last FOCAC held in November 2021, China announced <a href="https://idsa.in/africatrends/FOCAC-2021-Key-Takeaways-10-1-2">a $40 billion financial commitment to Africa</a>, a significant decrease from the $60 billion pledged in 2018. About half of this decrease was due to a fall in infrastructure lending.



The <a href="https://www.mfa.gov.cn/eng/wjdt_665385/2649_665393/202208/t20220819_10745593.html#:~:text=Both%20the%20Chinese%20and%20African,a%20shared%20future%20in%20the">new commitments</a> signify a shift away from direct infrastructure financing towards trade credit for regional exports, while promoting an increase in private investments. China is also <a href="https://carnegieendowment.org/research/2024/05/how-is-chinas-economic-transition-affecting-its-relations-with-africa?lang=en">buying less crude oil</a> from Africa, leaving major African oil producers earning significantly less than they did before the pandemic.



African economies have certainly benefited from China’s unprecedented growth, but they must now adapt to a deceleration of export volumes, investments and loans. According to the IMF, every 1 percentage point decline in China’s real GDP growth rate leads to <a href="https://www.imf.org/en/Publications/WP/Issues/2024/02/23/Navigating-the-Evolving-Landscape-between-China-and-Africas-Economic-Engagements-545104">about a 0.25 percentage point</a> decline in sub-Saharan Africa’s total GDP growth within a year.



<h2 class="wp-block-heading" id="h-the-next-chapter-in-china-africa-economic-relations">The next chapter in China-Africa economic relations</h2>



In the decade ahead, China’s private sector, rather than its state-run enterprises, will likely lead trade and investment in Africa. Of the 3,000 Chinese enterprises that are invested in Africa, more than <a href="https://insightplus.bakermckenzie.com/bm/international-commercial-trade/south-africa-trade-relations-with-china-grow-stronger">70% are private sector</a> businesses. The African Continental Free Trade Area (AfCFTA) is likely to accelerate this trend by promoting the growth of regional value chains, offering Chinese businesses access to a larger unified African market. A similar outcome was realized with the EU’s single market – China is now <a href="https://www.statista.com/statistics/1364662/international-trade-eu/#:~:text=The%20European%20Union%20has%20experienced,EU's%20largest%20external%20import%20partner.">the EU’s largest external import partner</a>.



Officially launched in 2021, the AfCFTA creates a single market <a href="https://www.sanews.gov.za/south-africa/afcfta-agreement-presents-economic-opportunities-investors">projected to grow</a> to 1.7 billion people and $6.7 trillion in consumer and business spending by 2030. The preferential trade agreement will increase international exports and intra-African trade, particularly in agriculture and green technology minerals. This will unlock opportunities for local and global businesses to enter and expand throughout new markets across the continent. The first <a href="https://www.weforum.org/publications/an-action-plan-to-accelerate-global-business-and-investment-in-africa/">private sector action plan</a> for the AfCFTA was launched at the World Economic Forum’s annual meeting in January 2024.



To realize this immense potential, both regions must prioritize greater coordination between the AfCFTA and the BRI. Investments should be targeted to catalyze the region’s industrialisation and manufacturing plans, and to enhance trade connectivity. At a BRI Forum in October 2023, <a href="https://english.www.gov.cn/news/202310/18/content_WS652f7ef9c6d0868f4e8e060b.html">the Chinese government said</a> the next phase of the BRI will be “small yet smart”, with an increased focus on green development and the digital economy.



Better coordination and synergy will ensure mutual benefits and sustainable growth for Africa and China. Ministers and business leaders from Africa are convening in China for the Annual Meeting of the New Champions in June to advance progress in regional cooperation and coordination. These discussions will focus on building on the momentum created to date, while also finding growth amid increasing geopolitical and economic risk.

Centre for the Fourth Industrial Revolution, Rwanda Launch

Why strong regional value chains will be vital to the next chapter of China and Africa’s economic relationship

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1365" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Parvoleta-Shtereva-Gemcorp-scaled.jpg" alt="" class="wp-image-497835" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Parvoleta-Shtereva-Gemcorp-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Parvoleta-Shtereva-Gemcorp-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Parvoleta-Shtereva-Gemcorp-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Parvoleta-Shtereva-Gemcorp-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Parvoleta-Shtereva-Gemcorp-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Parvoleta-Shtereva-Gemcorp-1536x1024.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Parvoleta Shtereva, CIO of Gemcorp</figcaption></figure>



Even as we celebrate the progress made in gender equality and women&#8217;s empowerment in emerging markets (EMs) and beyond, we must recognise the significant work that remains.



<h2 class="wp-block-heading" id="h-labour-force-participation">Labour force participation</h2>



Labour force participation rates are a critical metric of gender equality and economic development. World Bank data on female-to-male labour force participation highlights significant disparities across the EM universe. In regions such as the Middle East and India, these ratios remain notably lower while Africa’s ratio is one of the highest in the world and on par with that of China and North America, according to McKinsey research. Notably, Africa has also made strides in increasing female representation on executive committees and boards, with the highest board-level representation globally. However, most African women still work in low-paid, often subsistence-level jobs in the informal economy and, as evidenced by Chart 2, do not have matching access to financial services.



Governments are taking action on female labour participation. For example, Saudi Arabia has prioritised increasing women&#8217;s participation in the workforce as a core component of its Vision 2030 initiative, recognising that economic growth and gender equality are deeply intertwined. However, it takes more than government policy to destroy the structural barriers that prevent women from fully participating in the workforce. Cultural norms and expectations, impaired access to education and childcare facilities are just a few of the obstacles that need to be addressed. We have been a proud supporter of EMpower – The Emerging Markets Foundation – a philanthropic organisation that supports a multitude of women- and adolescent girl-focused programmes, dedicated to life skills, leadership, livelihoods and sexual and reproductive health. Meaningful progress is only possible through community-wide engagement with parents, elders, male peers, educators and the authorities and it takes time.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1196" height="712" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED.png" alt="" class="wp-image-497833" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED.png 1196w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-300x179.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-820x488.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-151x90.png 151w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-768x457.png 768w" sizes="auto, (max-width: 1196px) 100vw, 1196px" /></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1196" height="688" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-1.png" alt="" class="wp-image-497834" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-1.png 1196w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-1-300x173.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-1-820x472.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-1-156x90.png 156w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Graph-OPED-1-768x442.png 768w" sizes="auto, (max-width: 1196px) 100vw, 1196px" /></figure>



<h2 class="wp-block-heading" id="h-access-to-water-and-sanitation">Access to water and sanitation</h2>



In many emerging markets women dedicate their daily time to a number of vital activities, ranging from generating an income, looking after children and elders to securing water supply for their homes by fetching water from sources that could be miles away.



Access to water from close and reliable sources has a positive impact on women&#8217;s lives, with benefits that go beyond well-being and health: dignity, ability to protect their families from disease, access to income opportunities by not having to spend time searching for water. Girls, who are usually assigned to this activity, can devote time to attending school and receiving a formal education and enjoying their childhood.



In Angola, Gemcorp Capital is financing a number of important infrastructure projects, including universal access to water with the Águas de Benguela, EPAL&#8217;s Sistema III, Quilonga Grande projects, as well as projects to combat drought in southern Angola in the provinces of Cunene and Huíla, which will guarantee access to water throughout the year, thus preventing families from constant need to migrate and enabling food security for the communities. These projects underway will benefit around 24 million people.



<h2 class="wp-block-heading" id="h-technology-driving-progress">Technology driving progress</h2>



Mobile telephony has revolutionised access to financial services, particularly for women and rural populations. Since 2000, mobile phone usage has surged in EM countries, often surpassing that of developed markets. One company driving data access across a number of African countries is Africell, part of Gemcorp’s investment portfolio. Africell is a fast-growing mobile network operator that provides affordable and reliable mobile network coverage to over 12 million subscribers across Africa. Their services include voice, data and mobile money, significantly contributing to economic growth. The rapid spread of mobile communications has had a profound impact on rural areas, where traditional infrastructure – both telephony and banking &#8211; is often lacking. This technological leap has empowered many women by providing financial inclusion through mobile payment services, enabling them to start businesses and achieve financial independence. The World Bank emphasises that no technology has spread faster globally than mobile communications, underscoring its critical role in development​.



Jumo, a financial technology platform provider and another one of our investee companies, is a major force in driving financial inclusion and development in Africa. One-third of Jumo’s 24 million unique customers are women and Jumo’s AI-powered scoring models are gender-, age- and ethnicity-blind. By leveraging technology, women can overcome prejudice and gain equal access financial services to improve their economic standing and gain greater autonomy. Financial inclusion is a cornerstone of women&#8217;s empowerment, allowing women to save money, invest in education and health, and build businesses. Supporting these innovative businesses through investment and policy measures is crucial for fostering sustainable development.



<h2 class="wp-block-heading" id="h-the-road-ahead">The road ahead</h2>



This is just a glimpse of the multitude of interventions that are crucial to supporting the women of emerging markets in their quest for equity and equality. Securing global financing for Africa and other rapidly growing emerging markets regions is essential. Policymakers, businesses, investors and civil society must work together to create inclusive policies, invest in women-focused initiatives, and ensure that technological and economic advancements benefit all.

Parvoleta-Shtereva-Gemcorp

Women in Emerging Markets: Progress and the path forward

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="585" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-dollar-dominance-blue-planet-studio-by-getty-images-scaled.jpg" alt="" class="wp-image-496208" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-dollar-dominance-blue-planet-studio-by-getty-images-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-dollar-dominance-blue-planet-studio-by-getty-images-300x86.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-dollar-dominance-blue-planet-studio-by-getty-images-820x234.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-dollar-dominance-blue-planet-studio-by-getty-images-160x46.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-dollar-dominance-blue-planet-studio-by-getty-images-768x220.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/blog-2099x600-dollar-dominance-blue-planet-studio-by-getty-images-1536x439.jpg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Credit: Blue Planet Studio/iStock by Getty Images</figcaption></figure>



Dollar dominance—the outsized role of the US dollar in the world economy—has been brought into focus recently as the robustness of the US economy, tighter monetary policy and heightened geopolitical risk have contributed to a higher greenback valuation. At the same time,&nbsp;<a href="https://www.imf.org/en/News/Articles/2024/05/07/sp-geopolitics-impact-global-trade-and-dollar-gita-gopinath?utm_medium=email&amp;utm_source=govdelivery">economic fragmentation</a>&nbsp;and the potential reorganization of global economic and financial activity into separate, nonoverlapping blocs could encourage some countries to use and hold other international and reserve currencies.



Recent data from the IMF’s&nbsp;<a href="https://data.imf.org/?sk=e6a5f467-c14b-4aa8-9f6d-5a09ec4e62a4&amp;utm_medium=email&amp;utm_source=govdelivery">Currency Composition of Official Foreign Exchange Reserves (COFER)</a>&nbsp;point to an ongoing gradual decline in the dollar’s share of allocated foreign reserves of central banks and governments. Strikingly, the reduced role of the US dollar over the last two decades has not been matched by increases in the shares of the other “big four” currencies—the euro, yen, and pound. Rather, it has been accompanied by a rise in the share of what we have called nontraditional reserve currencies, including the Australian dollar, Canadian dollar, Chinese renminbi, South Korean won, Singaporean dollar, and the Nordic currencies. The most recent data extend this trend, which we had pointed out in an earlier IMF&nbsp;<a href="https://www.imf.org/en/Publications/WP/Issues/2022/03/24/The-Stealth-Erosion-of-Dollar-Dominance-Active-Diversifiers-and-the-Rise-of-Nontraditional-515150?utm_medium=email&amp;utm_source=govdelivery">paper</a>&nbsp;and&nbsp;<a href="https://www.imf.org/en/Blogs/Articles/2022/06/01/blog-dollar-dominance-and-the-rise-of-nontraditional-reserve-currencies?utm_medium=email&amp;utm_source=govdelivery">blog</a>.



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="950" height="821" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-1-dollar-dominance-for-newsletter_original.jpg" alt="" class="wp-image-496207" style="width:512px;height:auto" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-1-dollar-dominance-for-newsletter_original.jpg 950w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-1-dollar-dominance-for-newsletter_original-300x259.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-1-dollar-dominance-for-newsletter_original-820x709.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-1-dollar-dominance-for-newsletter_original-104x90.jpg 104w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-1-dollar-dominance-for-newsletter_original-768x664.jpg 768w" sizes="auto, (max-width: 950px) 100vw, 950px" /></figure>



These nontraditional reserve currencies are attractive to reserve managers because they provide diversification and relatively attractive yields, and because they have become increasingly easy to buy, sell and hold with the development of new digital financial technologies (such as automatic market-making and automated liquidity management systems).



This recent trend is all the more striking given the dollar’s strength, which indicates that private investors have moved into dollar-denominated assets. Or so it would appear from the change in relative prices. At the same time, this observation is a reminder that exchange rate fluctuations can have an independent impact on the currency composition of central bank reserve portfolios. Changes in the relative values of different government securities, reflecting movements in interest rates, can similarly have an impact, although this effect will tend to be smaller, insofar as major currency bond yields generally move together. In any event, these valuation effects only reinforce the overall trend. Taking a longer view, over the last two decades, the fact that the value of the US dollar has been broadly unchanged, while the US dollar’s share of global reserves has declined, indicates that central banks have indeed been shifting gradually away from the dollar.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="538" height="465" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-2-dollar-dominance-for-newsletter_crop.jpg" alt="" class="wp-image-496206" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-2-dollar-dominance-for-newsletter_crop.jpg 538w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-2-dollar-dominance-for-newsletter_crop-300x259.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/chart-2-dollar-dominance-for-newsletter_crop-104x90.jpg 104w" sizes="auto, (max-width: 538px) 100vw, 538px" /></figure>



At the same time, statistical tests do not indicate an accelerating decline in the dollar’s reserve share, contrary to claims that US financial sanctions have accelerated movement away from the greenback. To be sure, it is possible, as some have argued, that the same countries that are seeking to move away from holding dollars for geopolitical reasons do not report information on the composition of their reserve portfolios to COFER. Note, however, that the 149 reporting economies make up as much as 93 percent of global FX reserves. In other words, non-reporters are only a very small share of global reserves.



One nontraditional reserve currency gaining market share is the Chinese renminbi, whose gains match a quarter of the decline in the dollar’s share. The Chinese government has been advancing policies on multiple fronts to promote renminbi internationalization, including the development of a cross-border payment system, the extension of swap lines, and piloting a central bank digital currency. It is thus interesting to note that renminbi internationalization, at least as measured by the currency’s reserve share, shows signs of stalling out. The most recent data do not show a further increase in the renminbi’s currency share: some observers may suspect that depreciation of the renminbi exchange rate in recent quarters has disguised increases in renminbi reserve holdings. However, even adjusting for exchange rate changes confirms that the renminbi share of reserves has declined since 2022.



Some have suggested that what we have characterized as an ongoing decline in dollar holdings and rise in the reserve share of nontraditional currencies in fact reflects the behavior of a handful of large reserve holders. Russia has geopolitical reasons to be cautious about holding dollars, while Switzerland, which accumulated reserves over the last decade, has reason to hold a large fraction of its reserves in euros, the Euro Area being its geographical neighbor and most important trading partner. But when we exclude Russia and Switzerland from the COFER aggregate, using data published by their central banks from 2007 to 2021, we find little change in the overall trend.



In fact, this movement is quite broad. In our 2022&nbsp;<a href="https://www.imf.org/en/Publications/WP/Issues/2022/03/24/The-Stealth-Erosion-of-Dollar-Dominance-Active-Diversifiers-and-the-Rise-of-Nontraditional-515150?utm_medium=email&amp;utm_source=govdelivery">paper</a>, we identified 46 “active diversifiers,” defined as countries with a share of foreign exchange reserves in nontraditional currencies of at least 5 percent at the end of 2020. These include major advanced economies and emerging markets, including most of the Group of Twenty (G20) economies. By 2023, at least three more countries (Israel, Netherlands, Seychelles) have joined this list.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2024/06/11/dollar-dominance-in-the-international-reserve-system-an-update?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2024/06/9634024/5505914/chart-3-dollar-dominance-for-newsletter_crop.jpg" alt="chart showing the declining percentage of global FX reserves held in US dollars"/></a></figure>



<a href="https://www.sciencedirect.com/science/article/pii/S0022199623001083?utm_medium=email&amp;utm_source=govdelivery">We also found</a>&nbsp;that financial sanctions, when imposed in the past, induced central banks to shift their reserve portfolios modestly away from currencies, which are at risk of being frozen and redeployed, in favor of gold, which can be warehoused in the country and thus is free of sanctions risk. That work also showed that the demand for gold by central banks responded positively to global economic policy uncertainty and global geopolitical risk. These factors may lie behind the further accumulation of gold by a number of emerging market central banks. Before making too much of this trend, however, it is important to recall that gold as a share of reserves still remains historically low.



<figure class="wp-block-image"><a href="https://www.imf.org/en/Blogs/Articles/2024/06/11/dollar-dominance-in-the-international-reserve-system-an-update?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener"><img decoding="async" src="https://content.govdelivery.com/attachments/fancy_images/USIMF/2024/06/9634027/5505915/chart-4-dollar-dominance-for-newsletter_crop.jpg" alt="chart showing gold holdings in official reserve assets"/></a></figure>



In sum, the international monetary and reserve system continues to evolve. The patterns we highlighted earlier—very gradual movement away from dollar dominance, and a rising role for the nontraditional currencies of small, open, well-managed economies, enabled by new digital trading technologies—remain intact.

blog-2099×600-dollar-dominance-blue-planet-studio-by-getty-images

Dollar Dominance in the International Reserve System: An Update

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="761" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Richard-1-820x761.jpg" alt="" class="wp-image-494420" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Richard-1-820x761.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Richard-1-300x278.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Richard-1-97x90.jpg 97w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Richard-1-768x713.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Richard-1-1536x1426.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/06/Richard-1.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Richard Firth, CEO, MIP Holdings</figcaption></figure>



Since government announced the passing of the National Health Insurance (NHI) Bill, industry experts, business leaders, legal experts, and numerous other commentators have voiced opinions as to why implementing NHI is either going to be a nightmare, or frankly impossible. Reasons have ranged from the difficulty of integrating two very different existing systems to challenges with funding, but all criticisms of the bill essentially boil down to a belief that the execution of the NHI will be, at best, piecemeal and ineffective. At worst, the implementation of the NHI could remove access to private medical coverage entirely, according to some experts, leaving everyone in the country reliant on the already overstretched and underfunded public health system.



These criticisms are not unfounded. History has proved that state-run kitties like the one proposed for the funding of the NHI are open to looting and mismanagement. In addition, governments are incapable of building entrepreneurial businesses, focusing on policy rather than profits. One just has to look at the Road Accident Fund and Workman’s Compensation Fund to get a glimpse of the complexities involved in managing such large pools of money. The NHI financial process will make both these units look tiny in comparison to the number of transactions and volume of money that will flow daily through the system.&nbsp; There are however, centers of excellence, The Government Employees Medical Scheme commonly known as GEMS have built a quality business unit focused on the healthcare for government employees.&nbsp; Both their member management and claims processes are held up as being one of the best and largest individual schemes in the country.&nbsp; We can take learnings from here!&nbsp;



However, there is a way to ensure that the NHI delivers on the government’s dream of universal healthcare for all, while enabling South Africans from all walks of life to access the world-class medical resources that currently define private healthcare in the country.



<h2 class="wp-block-heading" id="h-technology-can-make-nhi-a-viable-reality">Technology can make NHI a viable reality</h2>



What is currently missing from the proposed implementation of the NHI is a scientific, unified and integrated pricing approach for all medical procedures agreed by both medical practitioners and payors. &nbsp;We have the technology and the capabilities to price every single procedure and diagnosis, and can use that to create the framework on which the basis for the NHI can be built.



In 2009 the competition commission found the single exit price across all fees was anti-competitive and cancelled this form of pricing.&nbsp; In any successful healthcare model, a single price is the only way forward.



A standardised, structured pricing approach, integrated into the processes of the healthcare system, will guarantee that all spend is allocated correctly. This will not only eliminate the risk of mismanaged funds, but also make sure that patient bills are fair and that the entire healthcare value chain – from doctors, to hospitals, to pharmaceutical providers – is reimbursed fairly.



Take an appendectomy, for example. Using historical data to determine everything from the length of a hospital stay to the exact doses of all medications needed, we can arrive at a standard figure for the procedure. Using this figure, the correct amount will always be allocated to the surgeon, the anesthetist, the hospital, and so on, leaving no room for overpricing or fraud.



This approach would also create an easy way to integrate public and private healthcare. Knowing exactly what each procedure costs, government could start “auctioning” patients to “private” hospitals who generally manage overall utilization by bed availability, allowing them to take on patients and procedures based on their capabilities, the availability of beds, and so on. The end result would therefore be focused on patient outcomes rather than costs, revolutionising how medical care is delivered in South Africa.



<h2 class="wp-block-heading" id="h-public-and-private-sectors-working-hand-in-hand">Public and private sectors working hand-in-hand</h2>



There’s no doubt that the current health system is not working, but without a structured, systematic approach to the implementation of NHI, we run the risk of creating even more problems. It will take years to get the right architecture in place, and once that is done, we will also have to ensure that the right oversight is in place.



Shifting the government funding model from allocating a state hospital a budget to moving all hospitals to a “claim for services” rendered model minimises the risk of fraud and other financial improprieties.&nbsp; This costing model will also help drive quality and patient outcomes will play a big part of the payment and control processes. The proposed central NHI fund will be dealing with billions every year, and will require stringent controls. A trustee system needs to be set up, preferably with representatives from both the public and private healthcare sectors providing guidance and oversight.



I really believe that this model can be implemented in the government funded SASSA grantees for a pilot project and then grow the scheme into the private sector. This will allow government time to prove its plan and show how the system can work. With the right systems in place, and all stakeholders working together, South Africa can build a national health system that not only works for everyone in the country, but that can set a new international standard.

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Contributor

An Equipped Foundation for African Children: The Key to Unlocking Africa’s Sustainable Future

Women Lead Record Number of Central Banks, but More Progress is Needed

Africa’s food processing sector holds the key to a food-secure and prosperous continent

The advancement of women in technology: Overcoming under-representation and igniting gender diversity

Employment Equity Progress Report highlights the collaborative efforts of government, businesses, and civil society in fostering a fairer, more inclusive, and diversified workplace

How to finance Africa’s future economic development

What business wants from the DTIC

The Moral Economy of the African Crowd

The Abidjan Declaration: an unprecedented moment in charting the future of sustainable immunisation in Africa

South Africa’s PPP reforms provide an investor-friendly platform for global infrastructure capital

Africa neglected by limited US bandwidth

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Sovereign Debt Restructuring Process Is Improving Amid Cooperation and Reform

Why strong regional value chains will be vital to the next chapter of China and Africa’s economic relationship

Women in Emerging Markets: Progress and the path forward

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Paving the way for an effective NHI

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