By Jee-A Van Der Linde – Economist



Finance ministers of East Africa are expected to table their respective budgets in coming days for the new financial year that begins on July 1. The reading of East African budgets is normally a joint exercise.



The new budgets come at a pivotal time, as the unexpected Covid-19 pandemic has placed pressure on government finances in 2020.



Authorities have little choice but to provide fiscal support where they can. However, there will be challenges and the governments will need to closely monitor developments to avoid the budget deficits from spiralling out of control.



Government finances will take a hit across the region. We believe that this will for the most part be driven by the collapse in fiscal revenue due to the marked deterioration in the economic outlook.



The region’s largest economy, Kenya, has provided fiscal support through tax relief, which will further weigh on the revenue side.



In general, on the expenditure side we expect to see a lot of reprioritisation away from sectors that have seen activity halted due to the Covid-19 pandemic. This could include a reduction in direct spending in the tourism sector and construction.



These resources will likely be redirected towards containment efforts – particularly health care – and social support.



Regardless, East African fiscal finances will look a lot worse during the next fiscal year than what was expected a few months ago. Fiscal deficits will be wider than previously anticipated and public debt will increase at a faster rate.



We have seen multilaterals stepping up support, which could reduce the longer-term fiscal impact of the Covid-19 crisis, but commitments to date will undoubtedly have to be supplemented to ensure that the Covid-19 pandemic does not have a long-term fiscal legacy.



Furthermore, most East African nations have been able to assess the impact of the virus and incorporate this new reality into their budgets.



This is a lot more efficient than having to adjust a budget midway through a fiscal year.



Rwanda, the region’s fastest-growing economy in 2019, is to delay publishing its budget for the new financial year. The break from tradition comes down to the Rwandan Cabinet not yet having approved the finance minister’s budget proposal.



The government expects to spend RWfr3.245trn during the fiscal year 2020/21 – RWfr228.7bn more than the revised budget estimates.



Although we do not expect government to curb non-essential expenditure during this time, stimulus measures to fight against the fallout of the virus are unavoidable.



Rwanda’s fiscal deficit is expected to widen this year, in step with its regional peers. Moreover, public debt levels have risen over the years and 2020 will be no exception.



Given the extraordinary circumstances, forecast adjustments are likely.



Room to deploy fiscal policy to combat Covid-19 is limited.



It seems investors globally have made peace with the fact that many countries will have to increase borrowing to combat the pandemic, and if containment efforts show positive results, these countries should not struggle to find capital to fund the recovery.



The East African region is fighting an economic battle on two fronts.



Covid-19 is disrupting supply chains, curtailing economic activity at large and devastating regional tourism.



Meanwhile, the unprecedented locust infestation is wreaking havoc in the region’s agricultural sector – an industry generally spared from the Covid-19-induced economic slump.



The World Bank announced the commencement of an emergency programme to help countries in Africa fight the ongoing locust infestation.



The Bank noted that the first East African countries to be financed under the initial phase of the programme are Djibouti, Ethiopia, Kenya, and Uganda, with a total financing package of $160m.



Despite this support, the unprecedent nature of both the Covid-19 pandemic and the locust infestation will derail the region’s economic growth trajectory.



We expect Africa’s fastest-growing region to record a 1.8% GDP contraction this year.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Op Ed: East African finance ministers to present budgets for new fiscal year

JOHANNESBURG, 11 June 2020:- South Africa’s largest annual study of social media trends has revealed that Facebook remains the social platform of choice for marketing – but TikTok is rising fast among both brands and consumers. According to the 2020 edition of the SA Social Media Landscape, released this week by World Wide Worx and Ornico, almost a third of major brands intend to become active on TikTok, which is also the fastest growing social media platform among consumers. Fewer than 20% of brands have used it in the past year, but none believe they are doing so very effectively. These numbers are likely to change significantly during 2020. It is estimated that around 6-million South Africans are already using the platform. Nine out of ten major brands – just more than 89% – indicated they were active on Facebook, versus 77% on Twitter, 75% on LinkedIn and 68% on Instagram. “There was a common factor across all these platforms, however: a substantial drop in engagement from the previous year,” says Arthur Goldstuck, CEO of World Wide Worx and lead analyst on the project. “The one exception was LinkedIn, which saw a small increase in activity by major brands. LinkedIn also led the way in the proportion of older platforms that were intending to use it for the first time in the coming year: a large 21%. One could argue that LinkedIn is a social platform whose time has come.” Not surprisingly, lack of budget has emerged as the single most significant barrier to implementing social media strategies. A massive 18% are not allocating budget to social media, compared to only 1% last year. While Facebook remains the dominant platform among both brands and consumers, it has lost some appeal in terms of marketing budgets. “Facebook spend has plateaued,” says Oresti Patricios, CEO of Ornico. “This signals how brands are looking at prioritising their budgets across platforms, which can also talk to where brands look to increase their communication.” Patricios believes TikTok is set for explosive growth. “Launched in China in 2016, TikTok is seen as the new kid on the block in South Africa which marketers and communicators are scrambling to understand.” Goldstuck agrees: “The popularity of social media environments for brands has in the past been shown to be directly related to the level of usage of those platforms by marketers. Hence, TikTok is almost non-existent among big brands, as the marketers behind those brands are not active on TikTok.” Twitter and Instagram both showed strong growth in the past year, each reaching a user base of about 9-million. Data analysed for the SA Social Media Landscape 2020 report from the Target Group Index (TGI), a research survey among 30,000 South Africans coducted by Ask Afrika, shows that just over half of Instagram and Twitter users – 4,7-million on each – are highly active on these platforms. Contrary to the view that Twitter is primarily a vehicle for negative sentiment, data on all South African tweets over a 12 month period, provided for the project by audience intelligence company Brandwatch, shows a different picture. Of the tweets reflecting sentiment, 61% comprise positive sentiments, against 39% negative.  However, it is clear that even 39% remains a high proportion, and generates significant shade over the Twitter landscape in general.

Facebook holds on as TikTok invades Social Media in SA

<h3 class="wp-block-heading">KEY POINTS</h3>



<ul class="wp-block-list"><li>Economic activity collapsed in Sub-Saharan Africa in the first half of the year.</li><li>Nigeria&#8217;s economy expected to shrink by 3.2% this year.</li><li>South Africa’s output is forecast to contract 7.1% this year, the deepest contraction in a century.</li><li><a>Angola, DRC &amp; Ghana are having to cope with weaker external demand &amp; lower prices for oil &nbsp;&amp; metals</a>.</li><li>Agricultural commodity exporters, Côte d’Ivoire, Ethiopia &amp; Kenya, have suffered from a collapse in demand.</li><li><a>Economic activity in Sub-Saharan Africa on course to contract by 2.8% in 2020, the deepest on record</a>. Growth could resume to 3.1% in 2021</li><li>COVID-19 pandemic likely to push millions in the region back into extreme poverty.</li></ul>







<h2 class="wp-block-heading">Recent developments: </h2>



Sub-Saharan Africa has been ravaged by the COVID-19 pandemic, and economic activity collapsed in the first half of this year. The pandemic has taken a heavy human and economic toll, causing the most serious disruption to region-wide economic activity on record. Sub-Saharan Africa has suffered as a result of the impact of the pandemic on its key trading partners, the disruption to global travel and supply chains, and the collapse in global commodity prices, particularly for oil and industrial metals. These shocks have heightened risk aversion among investors and prompted unprecedented capital outflows.



In Nigeria and South Africa, activity has fallen precipitously in the first half of the year. <a>Several industrial commodity exporters, such as Angola, the Democratic Republic of Congo, and Ghana, have had to cope with weaker external demand and lower prices for oil and metals</a>, in addition to domestic disruptions. Agricultural commodity exporters, including Côte d’Ivoire, Ethiopia and Kenya, have suffered from a collapse in demand as well as disruptions to supply chains. The fall in global travel as a result of the pandemic has hit hard on countries with substantial exposure to travel and tourism, such as Cabo Verde, Ethiopia, Mauritius, Seychelles.



Inflation has crept up in the region, reflecting currency depreciations and supply chain upheaval. While many countries have announced fiscal support measures, in many instances these involve reprioritizing existing budgets given fiscal constraints. International institutions have called on bilateral creditors to suspend some debt payments.



<h2 class="wp-block-heading">Outlook: </h2>



<a>Economic activity in the region is on course to contract by 2.8% in 2020, the deepest on record. Per capita GDP is anticipated to fall even more sharply, likely pushing millions in the region back into extreme poverty. </a>Growth could resume to 3.1% in 2021 assuming the pandemic fades in the second half of the year, that domestic outbreaks of the virus follow a similar path, and that growth in major trading partners rebounds. Sub-Saharan Africa faces daunting hurdles to contain COVID-19 given weak health care capacity, lack of access to basic sanitation, and the prevalence of informal economic activity across much of the region.



<a>The economy of Nigeria is expected to shrink by 3.2% this year, given the collapse in oil prices, which represent 80% of the country’s exports, about a third of banking sector credit, and half of government revenues. South Africa’s output is forecast to contract 7.1% this year, the deepest contraction in a century, as stringent but necessary containment measures curtail economic activity.</a>



<a>Economic activity among commodity importing economies is anticipated to shrink this year despite lower oil prices, as international travel restrictions weigh on tourist visits. Industrial commodity exporters’ GDP is similarly anticipated to contract in 2020 as domestic disruptions are compounded by low prices for oil and metals. Agricultural commodity exporters are also expected to experience a collapse in economic activity this year despite being somewhat insulated from commodity price declines, as foreign direct investment and tighter financial conditions delay investment.</a>



<h2 class="wp-block-heading">Risks: </h2>



Risks are tilted firmly to the downside. A longer lasting and more severe pandemic would trigger an even deeper recession in the region and have devastating effects on the health and well-being of the region’s population. The effects of the pandemic are expected to markedly increase the region’s vulnerability to debt distress, and these strains will be compounded by the increased borrowing necessary to fund larger deficits. Severely constrained government resources could lead to a curtailment of critical public services during the pandemic and further weigh on activity.



There are also growing concerns that the pandemic may cause a food security crisis in the region as border closures and trade restrictions disrupt trading in food and agricultural products. The region’s large numbers of displaced people could complicate efforts to prevent the spread of COVID-19. In addition, there is the risk of social unrest as governments prioritize efforts to thwart the virus and peacekeeping efforts lose momentum. Rising unemployment, falling incomes, and potential shortages of essential items could lead to instability and weigh on activity well after the pandemic has faded.



<a href="https://openknowledge.worldbank.org/bitstream/handle/10986/33748/9781464815539.pdf">Download Global Economic Prospects</a>



<h2 class="wp-block-heading">World Bank Group COVID-19 Response</h2>



“The&nbsp;<a href="https://www.worldbank.org/">World Bank Group</a>, one of the largest sources of funding and knowledge for developing countries, is taking&nbsp;<a href="https://www.worldbank.org/en/who-we-are/news/coronavirus-covid19">broad, fast action</a>&nbsp;to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery.&nbsp; This includes $50 billion of new IDA resources through grants and highly concessional loans.”



<figure class="wp-block-table"><table><tbody><tr><td></td></tr><tr><td></td><td><img loading="lazy" decoding="async" width="424" height="812" src=""></td></tr></tbody></table></figure>



<a href="http://www.worldbank.org/en/publication/global-economic-prospects">Download this data</a>

International travel for South Africans is now allowed, this is how it will work

This is how badly COVID-19 has ravaged Sub-Saharan Africa

By His Excellency Dr. Eyob Tekalgn Tolina and Dr. Ruth Goodwin-Groen



As the <a href="https://www.cnbcafrica.com/covid-19/">COVID-19 crisis widens</a>, and the economic outlook darkens, <a>governments across Africa will face what seems like conflicting choices between relief today and investing for tomorrow. The one exception? Digital payments. </a>They can <a>save lives and livelihoods on a massive scale</a>. Yet, once the infrastructure is there and adoption expands, the vast benefits that drive inclusive growth last well past a crisis. Now is the time to seize them.



Put simply, this is because how government support is delivered matters every bit as much as what it consists of. This is equally so whether delivering economic life-support, fiscal shock-treatment, or rehabilitation measures for a sustained recovery.



Investing in digitization will deliver huge dividends on three fronts.



First, better digital infrastructure will enable future rounds of support to people and businesses to flow with much greater speed, accuracy, efficiency, transparency and safety in the age of COVID-19.&nbsp; Governments that invest in digital infrastructure will have a powerful weapon in their arsenal: the ability to deliver financial support directly to businesses and individuals who need it most &#8211; in a matter of days, not weeks or months. For countless millions, this is literally a matter of survival.



It’s equally vital that people can also spend funds digitally, and thus minimize in-person cash transactions. As governments take extraordinary steps to limit proximity between people, this must be high on the list.&nbsp;



Second, there is now a vast body of evidence showing that digitizing payments drives economic inclusion, tax revenues and productivity.&nbsp; All three are vital for returning to sustained economic growth, and the wider <a href="https://www.betterthancash.org/tools-research/reports/igniting-sdg-progress-through-digital-financial-inclusion">Sustainable Development agenda</a>.



New data soon to be released by the United Nations-based <a href="http://www.betterthancash.org/">Better Than Cash Alliance</a> shows that digitizing tax payments can deliver an additional US $300 billion every year for emerging economies.&nbsp; This equals almost one third of the US $1 trillion funding gap that is pushing the <a href="https://www.betterthancash.org/tools-research/reports/igniting-sdg-progress-through-digital-financial-inclusion">Sustainable Development Goals</a> (SDGs) off track.



Third, digital infrastructure is a powerful springboard that can help emerging economies take a giant leap forward towards the modern economies that people deserve as much as those in the developed world.&nbsp; Notably, in the recovery as in brighter economic times, bringing more women into the formal economy is a crucial driver of living standards, opportunity and growth. As with all of the SDGs, <a href="https://btca-prod.s3.amazonaws.com/documents/351/english_attachments/BTC_SDG_5.pdf?1537627393">gender equality</a> is more than a moral imperative; it is economically essential. Here, digitizing payments have a track record as impressive as any other driver of women’s economic empowerment.&nbsp;



There are some guiding principles that enjoy near-unanimous support among experts in this field.



Measures to digitize payments – including vital infrastructure – must be <a href="https://www.betterthancash.org/tools-research/case-studies/responsible-digital-payments-guidelines">responsible</a>.&nbsp; Payment recipients need their data, privacy and security protected and trusted systems to address grievances and ensure that the payments help them become more resilient. This applies even more in times of crisis.



Investments should also take into account the needs of different users, so that they are practical in times of crisis, and drive more flow-on economic activity in better times. For example, in many markets, digital infrastructure will serve women better when accompanied by measures to improve their access to ID and digital technology, and to prevent financial discrimination.&nbsp;



Emerging countries may be extremely vulnerable in this pandemic, but also extremely well positioned to shift digitization efforts into top gear. Before the pandemic, Ethiopia had already made great progress on its digitization roadmap. The early efforts to put in place the foundations for a digital economy are already paying off, encouraging startups to lead in launching digital payments and markets to promote social distancing. These are promising initiatives that will not only help to cope with the pandemic but also prepare us for the post-COVID-19 global economy. But – like many emerging economies – it can’t be done alone.



As the UN Secretary-General has urged: COVID-19 is a body-blow to our common humanity; humanity must unite to fend it off and recover.  Success will depend on three factors: urgency, cooperation and taking collaboration between policymakers, the private sector and the development community to a new level. But this is all more likely when government and civil servants lead the way.



His Excellency Dr. Eyob Tekalgn Tolina is State Minister of Ethiopia&#8217;s Ministry of Finance and Dr. Ruth Goodwin-Groen is the Managing Director of the United Nations-based <a href="http://www.betterthancash.org/">Better Than Cash Alliance</a>, a global partnership of governments, including Ethiopia, companies and international organizations committed to digitizing payments to advance the <a href="https://www.betterthancash.org/tools-research/reports/igniting-sdg-progress-through-digital-financial-inclusion">Sustainable Development Goals</a>.

Op-Ed: Supporting the ICT sector in Africa as a cure for the economic crisis

Op-Ed: As COVID-19 presents Africa with conflicting choices between relief for today and investing for tomorrow, here’s why it needs to consider digitization

Given the severity of the Covid-19 pandemic, Africa could be facing an economic crisis of unprecedented magnitude. Although the peak of the epidemic has not yet hit the continent, all economic indicators are currently flashing red as a result of preventive measures such as lockdowns and national border closures across most of the continent.



Why should we be so concerned with what is happening across the Mediterranean? Because if the growth dynamic recorded in Africa over the past several decades stalls, it is Europe that will suffer the consequences in a later stage. Everything that has been undertaken with the help of development aid and the setting up of structuring partnerships at the economic level as well as at the health and education levels is at risk of being reduced to nothing. For example, more than 8 million children have been enrolled in primary and more than 160,000 in secondary education in Africa as a result of EU-funded interventions in 2013-2014. This ambitious partnership needs to continue on an ever-stronger footing. Needless to also say that a new wave of migration would also have an impact on our societies: the looming economic crisis would be coupled with a real political crisis that would undoubtedly give populist parties the upper hand in the next elections.



As European politicians, Africa is one of our priorities. Sceptics need only remember the first trip made by the President of the European Commission, Ursula von der Leyen; her first official trip, just a week after taking office, was to Addis Ababa, to the African Union&#8217;s headquarters. Two months later she went back, along with 20 of the 27 European Commissioners, a sign that Africa and the EU have a real “common destiny” and an ambitious partnership to rebuild.



We need to think, and fast, about how we can help our African partner in the race against time as it faces the predicted economic disaster in the wake of the global covid-19 pandemic. Let&#8217;s ask ourselves the right questions: what works in Africa, what are the factors for development and growth? One is undoubtedly Information and Communication Technologies (ICTs), since Africa had more than 400 million Internet users in 2018 – that’s 20% more than in 2017. Mobile phones are the preferred means of accessing the Internet (used three times more than computers) and the United Nations estimates that mobile phone operators are major job creators today. Before the crisis, it was predicted that the mobile phone industry would generate 7.9% of GDP and create 3.45 million jobs in sub-Saharan Africa by 2022.



As Co-Chair and Vice-Chair of the soon to be established RUMRA &amp; Smart Villages Intergroup in the European Parliament, we know how important access to a good Internet connection is as a factor for growth. The intergroup aims to “promote the integrated development of European territories in all their diversity”. And what is true for Europe is all the more true for Africa! ICTs facilitate access to education, they contribute to increasing business productivity, and they represent real added value in the agricultural sector, for example by giving family farmers access to targeted information on techniques to improve their yields.



In light of these facts, there is an urgent need to support the companies operating in the ICT sector that are working on providing Internet access and deploying fibre optics on the African continent, such as Vodafone, Orange, or Huawei Northern Africa. Huawei for instance provides 200,000 kilometers of optical fibre network coverage on the African continent, and owns 50% of the 3G and 4G networks. Orange invests 1 billion euros every year in network development in Africa and Vodafone now has more than 170 million mobile customers across eight African countries, with 4G networks launched in many African markets. These groups are engines of growth and potential solutions to the impending crisis. In this process we need to make sure not to single out any of these companies for geo-strategic considerations that should have no place in our economic considerations. As free marketeers our decisions need to be based solely on merit and the ability of any given company to provide the ICT solutions needed.&nbsp;



Without complicity, without naivety, we have to think about what will impact us positively in the short, medium and long term. Our fear is that our reluctance to move towards greater connectivity will impact our economies, and those of our neighbors, and Africa first and foremost. So let&#8217;s be responsible, let&#8217;s be political, and let&#8217;s take responsibility for our choices. ICTs are one of the ways out of the crisis caused by Covid-19, so let&#8217;s not deprive anyone, and especially not Africa!



Franc Bogovic, Member of the European Parliament from Slovenia in the centre right group of the European People&#8217;s Party &amp;



Engin Eroglu, Member of the European Parliament from Germany in the liberal Renew Europe Group



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Why business has a greater role to play in mitigating conflict with COVID-19



By <a href="https://twitter.com/chidomunyati?lang=en">Chido Munyati</a>, Lead, Africa regional team, World Economic Forum.



A <a href="https://au.int/sites/default/files/documents/38326-doc-covid-19_impact_on_african_economy.pdf">report</a> by the Africa Union estimates that due to the COVID-19 pandemic, “nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction”. The resulting potential for social unrest is largely due to the disproportionately-affected youth demographic (15-24 years), whose level of unemployment is <a href="https://media.africaportal.org/documents/Occasional_Paper_30_En.pdf">twice that of older adults</a>.



Africa is demographically the world’s youngest continent. By 2030, one fifth of the global labour force – and nearly <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---relconf/documents/meetingdocument/wcms_728052.pdf">one third of the global youth labour force</a> – will be from this region. While 10 to 12 million youth enter the workforce each year, <a href="https://www.afdb.org/fileadmin/uploads/afdb/Images/high_5s/Job_youth_Africa_Job_youth_Africa.pdf">only 3 million formal jobs are created</a>. Indeed, the impact of the ongoing COVID-19 pandemic will likely exacerbate this trend. Notably, in the first month of the crisis, it has been <a href="https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_743036/lang--en/index.htm">estimated</a> that the income of informal workers in the region dropped by 81%. In Africa, 85.8% of employment, and <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_norm/---relconf/documents/meetingdocument/wcms_728052.pdf">95% of youth employment</a>, is informal. The ILO defines informal employment as “employment without legal or social protection”. This work is often characterized by low pay, erratic hours, uncertain employment status, and hazardous working conditions.



For more stories on the impact of COVID-19 on Africa visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>



Worryingly, the combination of the region’s demographic dividend and the <a href="https://www.worldbank.org/en/news/press-release/2020/04/09/covid-19-coronavirus-drives-sub-saharan-africa-toward-first-recession-in-25-years">first recession in 25 years</a> will probably increase the risk of social unrest. There is a <a href="https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Working_Paper_171_-_Youth_Unemployment_and_Political_Instability_in_Selected_Developing_Countries.pdf">considerable body of literature that argues</a>, both from theoretical and empirical perspectives, that large youth unemployment – associated with socioeconomic inequalities and corruption – is a driver for instability and national insecurity. For example, access to quality jobs was a <a href="https://atlantic-community.org/youth-unemployment-north-africas-ticking-time-bomb/">central demand and a key driver</a> of the Arab Spring protests. Moreover, in the Regional Risks for Doing Business 2020 <a href="https://www.weforum.org/reports/regional-risks-for-doing-business-2019">report</a>, for the second year running, business identified “unemployment or underemployment” as the top risk in the region.



While the primary responsibility for peace, security and development must rest with governments, we are witnessing a <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2891391">growing acceptance and enquiry</a> into multitrack approaches to conflict prevention, whereby private-sector efforts complement those of the public and civil society sectors. An <a href="https://www.usb.ac.za/wp-content/uploads/2018/02/Brian-Ganson-A-Seat-at-the-Table_FINAL-010819-Web.pdf">analysis of patterns across case studies</a> suggests that companies can help establish or sustain peace, or mitigate conflict. Attempts have been made to develop a <a href="https://link.springer.com/chapter/10.1057/9780230277052_1">theoretical framework</a> for measuring the effects of private-sector activities on the development of peace and security.



Effectiveness in conflict prevention and peacebuilding flows from intervention into the key driving factors of conflict – factors without which the conflict would not exist or would be significantly different.



To the extent that private-sector actors aspire to change the driving factors of conflict and violence sufficient to achieve positive outcomes, there needs to be a clear theory of change, which analyses the key drivers of conflict and resilience and conceptualizes strategies for transforming conflict dynamics. <a href="https://www.weforum.org/agenda/2017/11/what-is-a-transformation-map/">Transformation Maps</a> are a knowledge tool that can help stakeholders move from anecdotal evidence to a more rigorous and systematic understanding of the drivers of conflict and resilience.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="872" height="774" src="https://www.cnbcafrica.com/wp-content/uploads/2020/06/Africa_Transformation_Map.jpg" alt="" class="wp-image-373223" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/06/Africa_Transformation_Map.jpg 872w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/Africa_Transformation_Map-300x266.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/Africa_Transformation_Map-768x682.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/Africa_Transformation_Map-696x618.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/06/Africa_Transformation_Map-600x533.jpg 600w" sizes="auto, (max-width: 872px) 100vw, 872px" /></figure>



Importantly, any role for business can only complement other elements of conflict prevention and should not be seen as distinct. One implication of a systems perspective to conflict prevention and peacebuilding is that the effect of any intervention derives from the impacts that the activities have on drivers of conflict within a larger conflict system, and not from any intrinsic good that comes from a particular standalone activity.



For example, an <a href="https://www.iisd.org/sites/default/files/publications/igf-asm-global-trends.pdf">estimated 9 million people</a> (mostly youth) in Africa are directly involved in artisanal and small-scale mining (ASM) – and an additional 54 million indirectly depend on ASM for their livelihoods. (In most African countries, 5-20% of the population directly depends on ASM.) However, almost all ASM activities are informal and occur outside of legal frameworks. Consequently, the illegal trade of minerals <a href="http://pratclif.com/2015/mines-ressources/polinares/chapter7.pdf">contributes to violent conflicts</a>.



Global mining companies are attempting to <a href="http://www.aga-reports.com/18/sdr/material-issues/asm">address</a> these discrete drivers of conflict – vulnerable employment, inequality and exclusion – by providing artisanal miners with geological, value-addition and administrative support. But these local-level interventions must be integrated into regional and international regional mechanisms that legalize and formalize ASM activities.



By weakening or transforming the drivers of conflict, companies can help reduce the risk of conflict, and better ensure the <a href="https://www.ft.com/content/234d8fd6-6e29-11ea-89df-41bea055720b">long-term preservation and resilience</a> of their businesses. In all cases, these interventions should be undertaken in ways that acknowledge the primacy of local actors, are sensitive to the complex context, and help build trust and confidence.



In the aftermath of the COVID-19 pandemic, there will be an even greater demand for job security in Africa; and there will be a need to further develop inclusive business models that facilitate young people’s transition to the formal economy, which in turn will reduce the risk of instability.

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Op-Ed: COVID-19 is likely to lead to a vast increase in youth unemployment in Africa, this is how business can mitigate the damage…

By Shani Smit &#8211; Economist



Travel bans and containment measures around the world are having a devastating effect on the tourism sector in Mauritius, which was already experiencing sluggish growth in 2019. According to Statistics Mauritius, the total number of tourists visiting the island’s shores declined by 1.1% in 2019, while gross tourism earnings fell by 1.5% to Rs63.1bn.



The tourism industry as a whole is an essential component of the Mauritian economy and is estimated to have accounted for 18.8% of GDP and 19.1% of total employment in 2019.



In the first four months of 2020, tourism arrivals dropped by 33.9% y-o-y. Meanwhile, tourism earnings, which are not updated as regularly as tourist arrivals, are estimated to have fallen by 3.8% y-o-y in the first two months of 2020.



The United Nation’s World Tourism Organisation (UNWTO) estimates that global travel could fall by 60% &#8211; 80% in 2020, which would suggest a drop of between 850 million and 1.1 billion in international tourists, the loss of $910bn &#8211; $1.2trn in export receipts from tourism, and as many as 120 million direct jobs in the tourism sector being at risk.



Prior to the pandemic, the government’s vision was to attain 1.6 million tourists by the end of 2020, to increase tourism earnings to the tune of Rs71bn and create 12,208 (compared to 41,792 jobs in 2017) additional direct jobs in the tourism sector.



Tourists visiting Mauritius are primarily European, accounting for about 60% of all tourists. European tourists are mainly French, British, and German, but the government has undertaken numerous initiatives to diversify its tourism market, with a particular focus on Asia, Oceania, and America.



While many countries have started to ease their lockdown measures, potential tourists will be anchored down by travel restrictions, tighter budgets, and health-related fears.



While the tourism sector has been the hardest hit, other economic sectors such as the textile, transportation, and manufacturing sectors are also facing the brunt of the economic slowdown.



As a result, unemployment figures have started to soar. According to the minister of finance, Mauritius could see unemployment increase by 150% to a total of 100,000 active non-employed workers; that is, 17.5% of the active population.



This would represent an increase of around 60,000 of unemployed persons across Mauritius, he said.



As part of the government’s fiscal support measures amid Covid-19, a wage support scheme and self-employed assistance scheme have been implemented.



The purpose of the two schemes is to cushion the socio-economic impact of Covid-19 by providing financial support to employees who have become unemployed on a temporary basis, as well as those who are employed in informal sectors or self-employed.



On April 17, the government extended the schemes until the end of April, allocating an additional Rs4.5bn in spending. Meanwhile, temporary amendments have been made to the Workers’ Rights Act and the Employment Relations Act under the Covid-19 Bill to protect the rights of workers and support businesses.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Op-Ed: Tourism sector in Mauritius devastated by COVID-19

By Nic Wolpe



The pandemic has thrown the spotlight on the gross inequalities that plague our world; the bitter harvest of unfettered capitalism and consumption. COVID-19 has thrown millions of people out of work and onto the lines at soup kitchens and food banks to exist on the slender generosity of others. Amidst this we read how the wealth of the wealthiest of society continues to grow exponentially.



In the United States, in the thick of it all, came the sickening death at the hands of police of an innocent African American. It sparked outrage on the streets around the world and brought into stark focus our world of racial inequality and prejudice. A staggering reality for the land that gave us the sweet words of independence: “We hold these truths to be self-evident, that all men are created equal that they are endowed by their Creator with certain unalienable rights, &nbsp;that among these are life liberty and the pursuit of happiness.&#8221;



The brutal and senseless murder of George Floydripped down those lofty ideals and cast them into the gutter.



Aside from this, as the world struggles to contain COVID-19, concern is growing that governments, under the guise of addressing the pandemic, are slowly whittling away at hard won freedoms. It is unfortunate and sad that South Africa is not above these accusations. There has been a rising tide of voices expressing concern that the freedoms and civils rights secured by our struggle against apartheid are being undermined; that the declaration of a “National State of Disaster” is being used to emasculate our Freedom Charter, Bill of Rights and Constitution,&nbsp; on the way to a draconian state. The fear is there are elements within Government who are abusing the powers given to them through the declaration of the “National State of Disaster”, to strengthen not only their political positions but to circumnavigate the democratic laws of the land, in search of greater power and control.



It is interesting to note that President Lincoln, following his decision shortly after the start of the Civil War, to suspend the writ of Habeas Corpus, came in for similar criticism. There are indeed similar parallels in the justification to rein in democratic principles for the sake and wellbeing of the country and its people. However, can the argument used by President Lincoln that his actions were dictated by serving the national interest be used now to propagate and justify certain measures being implemented under the “ National State of Disaster” as being in the National Interest and wellbeing of our people. Therefore, the fundamental question is can one draw a justifiable comparison between war and the battle against a virus, to justify some of the draconian measures being imposed in the name of national Interest, which has curtailed and put restrictions on our freedoms and civil liberties. Venturing down this path has potential dangers and opens a Pandora’s Box for abuse, particular if our political leaders are susceptible to the concentration and accumulation of unfettered political power, particularly when they begin to use such power to undermine and discredit the necessary checks, balances and overseeing mechanisms, to not only hold our political leaders to account and the potential possibility of political misuse and abuse of such power. As Plato remarked “the measure of a man is what he does with power” and as President Lincoln stated: “nearly all men can stand adversity, but if you want to test a man’s character, give him power”.



Unfortunately history is strewn with incidents of political leaders accumulating immense political power and abusing and riding roughshod over the very mechanisms to check and limit such political abuses and in the process undermining the populous civil rights and liberties. A problem we face as Plato suggests in many cases is those who rise to power do so because most good men are indifferent to public affairs. As he says “ one of the penalties of refusing to participate in politics is that you end up being governed by your inferiors



 America, unfortunately is currently living proof of Plato’s concern. We have all being watching with utter dismay – on CNN &#8211; how a group of Police Officers, who swore to protect and serve, to uphold the law, abused this oath in such a blatant, brutal and cavalier way.  The look on the officer’s face, as he kept his kneed of the neck of George Floyd, was one of arrogance, the invincibility of being untouchable. This is not surprising when there is a President in the White House, who at a time like this should be showing statesmanship and leadership, but instead belittles the pandemic by making a wild and ludicrous statement that drinking disinfectant will cure you of COVID-19 and following the barbaric killing of George Floyd by police offices, actions reminiscent of apartheid security forces, tweets: &#8220;when the looting starts, the shooting starts.&#8221; The President then has the audacity to play naïve and the affront to claim he has no idea that the saying came from in the violent days of South Africa.



One is left stunned and bewildered that the leader, supposedly of the free world, only interest and concern is for the police to turn on its people, when what is needed and required, is leadership, compassion, understanding, empathy and solidarity at a time of multiple distress, pain and anguish. His actions and behaviour show he has no respect for human life, common decency and the fundamental principles upon which the United States was founded on. At times like this, just like during the very dark days of apartheid, we all hope for a brighter and better tomorrow;, a tomorrow built on and enshrined in the principles of universal human rights, equality and justice for all. This is now needed more than ever before, as it was hope that pushed and propelled our people forward in our struggle against apartheid. The endurance and spirit of hope combined with solidarity, unity of a shared common purpose can bring about what we all crave and desire a better life and world for all.

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COMMENT:  Nic Wolpe on George Floyd – Why can’t we banish bigotry like we banished apartheid?

By Dr Adrian Saville, CE, Cannon Asset Managers



In September 2006, economics professor Nouriel Roubini warned an incredulous audience of fellow economists at the International Monetary Fund (IMF) that the US housing market was at risk of collapsing – an event that could ruin the global financial system. This was at a time when the global economy had recorded its fastest patch of growth in 30 years and, in the space of a decade, US house prices had doubled, making for the sturdiest gain in house prices in the post-war era.



Unfortunately, Roubini was right. Soon after his address, the global financial crisis (GFC) struck, and the little-known scholar of emerging markets quickly became the Wall Street celebrity “Dr Doom”.



The lessons learned from the GFC encouraged policymakers worldwide to work furiously to get economies back into shape through a series of fierce and co-ordinated policy responses to the impacts of Covid-19. In turn, this has encouraged a consensus view amongst economists that the recovery from the crisis will be V-shaped. Wall Street&nbsp; agrees, with the S&amp;P500 and NASDAQ having rebounded sharply since March’s meltdown. In fact, it seems that markets anticipate that the bold responses from the world’s leading policymakers will produce an equally fierce rebound in economies and earnings.



Groundhog Day



Yet, as if trapped in the tragicomedy of Groundhog Day, Dr Doom again disagrees with this consensus, and suggests the economic trajectory is likely to be L-shaped. Admittedly, Roubini expects an economic rebound in the pandemic’s immediate aftermath, but insists that this recovery will quickly collapse beneath the weight of the global economy’s accumulated debts, giving rise to the prospect of an economic depression.



It’s tempting to dismiss Roubini as having been “spectacularly right” the first time because he was banging on the disaster drum for many years before the GFC struck. But there is more than enough evidence in the post-pandemic makeup to suggest that we should be paying close attention to a depression scenario.



Markers for concern include a collapse in vehicle sales; the imposition of trade barriers to protect domestic markets; falling commodity prices; a wave of consumer debt thanks to easy money; a dive in the federal funds rate; a surge in unemployment; sharp market swings; deepening fiscal deficits; and the risk of a deflationary price spiral.



The risk is that Roubini is right



This list bears eerie similarity to the features that characterised the Great Depression of the 1930s. So, in deliberating on Roubini’s diagnosis and the implications for policymakers and investors, the risk is not that he is wrong, but that he is right.



We ignore this risk at our peril. In depression scenarios, conventional economic policy stops working, and markets behave differently. For example, in terms of policy, economists Lawrence Summers and J. Bradford DeLong have shown the importance of fiscal expansion – rather than fiscal prudence – in depressions.



Depressions also offer a good reason to seek and maintain some price inflation. Nominal interest rates of zero can’t be lowered much further. But the real rate of interest – the nominal interest rate minus expected inflation – can be taken far below zero by policies that push inflation rates higher.



Positioning portfolios for a depression scenario, then, means preparing for a world of higher rates of price inflation, government spending stimuli, nominal interest rates of zero, and negative real interest rates.



Diversify, diversify, diversify …



In this world, the first three rules of investing must be enforced with the strictest discipline: diversify, diversify, diversify. Portfolio diversification is a free lunch available to every investor, and the surest form of risk management.



We don’t know how or when the pandemic period will end – and we can’t be sure that Roubini is right. But diversifying your portfolio across asset classes, geographies, currencies and industries has a surer prospect of getting you to your investment destination than investment decisions that, in the absence of diversification, could be perfectly right or exactly wrong. This means gold and growth assets, not gold or growth assets; it means China and the US, not China or the US; and it means healthcare and resource stocks, not healthcare or resource stocks.



… and look for transformative assets



Additionally, investors should consider investing in transformative assets. If Roubini is right, it’s likely that even in an environment of hardship and misery, investments that are inclusive, co-operative, and collaborative will thrive. Covid-19 bonds could be one such asset, where issuers include the African Development Bank, or even the Bank of America, which has come to market with a $1 billion four-year Covid-19 bond to fund lending to hospitals, nursing facilities and healthcare manufacturers.



Then there are transformative businesses that will do better in hard times by doing good business, taking the place of current portfolios winners. In March, Kenyan telecom operator Safaricom made all person-to-person transactions under 1,000 Kenyan shillings free on the mobile money service M-Pesa. Near term, this put one-quarter of Safaricom’s revenue at risk, but long term is likely to entrench the business’s position in the payments market. Likewise, British restaurant chain Leon has reinvented itself by converting 57 sites into shops selling groceries and takeaway meals, saving 1,500 jobs and looking after 70 suppliers.



In other words, depression times do not spell the end for businesses or investors. Rather, as Joseph Schumpeter implores, our task is to create out of the destruction, by redesigning, reinforcing and reinventing.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

COVID-19: Investing for Roubini’s Greater Depression

The South African manufacturing negative supply shocks will cause demand shortages, while South Africa will be expected to be dependent on imports for the next half a decade.



South Africa&#8217;s manufacturing production fell 2.1% from a year ago in February of 2020, following a downwardly revised 1.8% decrease and almost in line with market expectations of a 2.2% slump. Covid19 has made it worse. Demand and supply is disrupted and raw materials are expected to be too expensive in the future, while backlogs caused by the lockdown are starting to hurt manufacturers.



&nbsp;Manufacturing is very prone to COVID-19, with many small businesses closing without &nbsp;credit to sustain them. Many had problems as far back as 2015 as they faced changing in markets and also disruptions from electricity and less investment confidence in the South African economy.



A rapid response survey, conducted by Stats SA has the following key findings for the manufacturing industry: About 4% of business turnover was above the normal range, about 88% of business turnover below the normal range and 8% of business turnover was within the normal range; The manufacturing trading status of businesses are, about 10% continuing to trade with full capacity, 26% continues to trade partially, 6% has permanently ceased to trading and about 58% has temporarily closed or paused trading; The majority of responding businesses (85,4%) reported turnover below the normal range.;46,4% indicated temporary closure or paused trading activity; 50,4% expected their workforce size to stay the same in the two weeks after the survey, while 36,8% reported that their workforce size is expected to decrease; 28,3% indicated that their workforce has decreased working hours and 19,6% reported laying off of staff in the short term; 19,1% indicated that prices of materials, goods or services purchased increased more than normal.



There is no doubt large manufacturing companies are in trouble and about &nbsp;50 percent of companies in financial distress, which can lead to South Africa experiencing the highest number of manufacturing business rescue and acquisitions by new shareholders as a result of Covid19 and South African recession..



New technologies are an enabler, not merely a goal in themselves, and more than the reported 10 percent should have continued to operate when adoption to manufacturing technologies was higher than it is currently. We believe that the senior leaders of many manufacturing organizations need to start asking different questions as they think about the investments and changes they will make in the coming years.



It is likely that advanced technologies will be part of the answer to that question, but ensuring that people have the skills, stunning mind-set, and behaviours to use those technologies effectively will be equally important. The South African manufacturing industry needs to improve on the skills development for it to be competitive to the global economy.



The implementation of African Continental Free Trade Area (AfCFTA)&nbsp;&nbsp;are to create a continental market for goods and services that &nbsp;can boost continental trade and inspire growth post Covid19.



&nbsp;What we think is very exciting is not only can you think about utilizing existing assets in a new way—but that goes for the workforce as well. How can we utilize an existing workforce and&nbsp;upskill or reskill&nbsp;them to be successful in the new technologies? What we’re seeing around the world is that some of the most advanced Industry 4.0 plants not only are using brownfield assets but they’re also using their same workforce. The people are learning new skills and working in a new way. The implementation of the South African special economic zones must be aligned with the evolution of the global manufacturing technologies and the human centred approach for its sustainability.



Most businesses (65,0%) anticipate that the COVID-19 pandemic will impact their business substantially worse than the 2008/09 global financial crisis. Revised strategic planning in manufacturing operations management will add value for new affordable solutions to turnaround businesses and deliver the expected needs of the customer’s.



Miyelani Mkhabela is an Executive Director of Antswisa Transaction Advisory Services.

miyelani mkhabela

COVID-19: Economic meltdown the price – skills and trade the answer

By Louw Nel – Political Analyst



On Tuesday, May 26, authorities in Zimbabwe charged three activists from the opposition Movement for Democratic Change-Alliance (MDC-A) with breaching the country’s lockdown regulations, nearly two weeks after they were allegedly abducted and brutalised after being taken into police custody.



The female activists, including Member of Parliament Joana Mamombe, were arrested at a roadblock in Harare on May 13 as they were returning from a protest in the Warren Park area.



They say that they were then taken to a remote area where state agents beat and sexually assaulted them before leaving them on the side of the road near Bindura, some 90km north of the capital, two days later.



The Zimbabwe Republic Police (ZRP) has confirmed that the activists were taken into custody but denies any knowledge of the alleged abduction.



All three remain hospitalised.



Minister of Justice Ziyambi Ziyambi has accused the activists of inventing the story to deflect from their violation of lockdown regulations.



Prosecutors say that the activists were attending a protest gathering of more than 50 people – in contravention of lockdown regulations – and have accused them of trying to “promote public violence or breaches of peace”.



Two journalists who tried to visit the women in hospital were also arrested and charged with breaking lockdown regulations – among them the MDC-A’s youth leader in Harare, Stanley Manyenga.



The decision to charge the women with breaching lockdown regulations has been condemned, with Zimbabwe Lawyers for Human Rights (ZLHR) and Amnesty International both describing the decision as an effort to intimidate the women, calling instead for an investigation into their abduction.



The accused’s onerous bail conditions have also been questioned, including the requirement that they report to their local police station three times daily.



Diplomatic envoys in Zimbabwe, including the heads of mission from the EU, Norway, Switzerland, UK, and US, co-signed a statement saying they expect “a swift, thorough and credible investigation into the abduction and torture of opposition Member of Parliament Joana Mamombe, along with Cecilia Chimbiri and Netsai Marova… [and that] the perpetrators of heinous acts of this kind and other human rights violations need to be identified and prosecuted”.



Opposition forces in Zimbabwe have questioned the government’s response to Covid-19, suggesting that the widespread deployment of police and military personnel and strict lockdown measures have been used to crack down on and stifle dissent.



The 21-day countrywide lockdown, introduced on March 30, was extended indefinitely on May 16. Heavy-handed enforcement of lockdown restrictions has been widely reported, with the Zimbabwe Human Rights NGO Forum saying on May 22 that 245 violations had been recorded since the start of lockdown.



The coalition of 20 rights groups has petitioned the minister of home affairs and the police commissioner to investigate what they describe as “escalating human rights violations”.



The abduction of the MDC-A activists has raised alarm in a country where the targeted harassment – or worse – of opposition forces was commonplace during the regime of former President Robert Mugabe.



The trend seems to be continuing under his successor, Emmerson Mnangagwa, with state agents still being accused of extrajudicial actions, presumably with the knowledge of their superiors.



The decision to charge the activists suggests that authorities are intent on continuing their harassment of opposition forces.



More protests against food shortages, such as the event attended by the activists, are likely in the coming weeks and we expect these to be met with a heavy-handed security force response.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Zimbabwe tightens coronavirus lockdown in capital Harare as cases hit 203

Op-Ed: Zimbabwean opposition activists charged following their own abduction

By Uzoma Dozie, Chief Sparkler



Nigerians are some of the world’s most creative, energetic, and entrepreneurial people. We are rich with talent, enthusiasm, and passion.



Nigerians are a global force bursting with potential and an enviable track record of success. But in a more complex and fast-paced world than ever before, many of us struggle to find the time or have the ability to fulfil their potential.



Ultimately, this comes down to the lack of effective solutions in the market to support the lifestyle and finances of Nigerians and our businesses. For too long, we have been underserved by the traditional physical retail environment, which is limited by bricks and mortar infrastructure and legacy technology – the weaknesses of which have been laid bare by the Covid-19 global pandemic.



<h2 class="wp-block-heading">Unlocking Nigeria’s digital economy</h2>



While Nigerians are being underserved by current circumstances, there is also an exciting opportunity to start filling a gap in the market.



Nigeria’s digital economy is thriving, but it remains informal. Nigeria has a population of 198 million people – 172 million have a mobile phone and 112 million have internet access.



Many of us access social media platforms such as Facebook and Instagram through our phones and use them as valuable sales tools, especially female entrepreneurs. Data and digital applications have the potential to revolutionize the daily lives of millions of Nigerians.



Therefore, new digital-only solutions are required. These should not just focus on finances though – they have to be intrinsically linked with everyday lifestyles, rather than thinking about linear processes and transactional outcomes.



Let us take one example. Chatbots powered by artificial intelligence have long been used to provide financial advice. But these chatbots could do so much more and evolve to provide support for more sophisticated usage, such as a personal adviser or lifestyle concierge.



Furthermore, these solutions should not just support Nigerians at home, but the ever-growing diaspora across the world.



<h2 class="wp-block-heading">Introducing Sparkle</h2>



The opportunity to play an integral role in transforming Nigeria’s digital economy and lead the charge in growing the digital economy across Africa inspired the creation of Sparkle.



Sparkle was founded with five core values – freedom, trust, simplicity, inclusivity, and personalisation. We are adopting these values and embedding them in everything we do.



We will be leveraging technology and data to create and apply new digital-only solutions which bring more Nigerians into the formal economy thereby benefitting government, businesses, and individuals.



Starting with the launch of a current account, we will co-create with our customers and collaborate with our partners to improve our services and increase our user base. We embrace collaboration and we are working with some of the world’s biggest companies, including Google, Microsoft, Visa, and PwC Nigeria, to achieve our vision.



In addition, we want to create a more inclusive economy and break down barriers by accelerating the role and influence of female entrepreneurs, many of whom already operate in the informal economy with the help of Instagram and other social media apps.



At present, we are facing a global crisis in the shape of the COVID-19 pandemic. COVID-19 has shown us that we need a strong digital infrastructure to ensure the economy continues to function. It will likely completely change the way we operate and conduct business in the future.



COVID-19 has only reinforced our belief that new digital solutions like Sparkle are required now more than ever before to serve Nigerians, boost the formal economy, and unlock potential in the digital age.

Op-Ed – Uzoma Dozie: How Nigerians can unlock their potential in the digital age

By Louw Nel – Political Analyst



Divisions within the ruling Jubilee Party have seemingly given way to an all-out battle for control with the realignment of the party and the purging of senior officials.



A coalition deal has been formalised between Jubilee and the once-powerful Kenya African National Union (Kanu) – they notified the Registrar of Political Parties, Anne Nderitu, on May 4.



An agreement was entered into prior to the 2017 elections but was never formalised.



However, several senior Jubilee members have lodged a dispute with the registrar, saying that Secretary General Raphael Tuju and acting Chairperson Nelson Dzuya do not have the authority to engage Jubilee, as the party’s National Executive Committee (NEC) never passed a resolution on the matter. The Political Parties Dispute Tribunal (PPDT) is expected to consider the matter on Thursday, May 21.



Meanwhile, President Uhuru Kenyatta has seemingly set about purging Jubilee of members aligned to his deputy, William Ruto: both Senate Majority Leader Kipchumba Murkomen and Majority Whip Susan Kihika were removed on May 11. Mr Murkomen and Ms Kihika have both been outspoken public critics of the president.



In addition, five nominated senators aligned to Mr Ruto’s so-called Tangatanga faction appeared before a party disciplinary committee on Wednesday, May 20, over their failure to attend the parliamentary group meeting at State House on May 11.



According to reports, several chairs of senate committees are also expected to be replaced imminently and a Cabinet reshuffle is under discussion as Mr Kenyatta’s Kieleweke faction seizes the initiative.



More background to the development is Mr Kenyatta’s rapprochement with Raila Odinga, leader of the main opposition, the Orange Democratic Movement (ODM). Messrs Kenyatta and Odinga have joined forces in promoting the Building Bridges Initiative (BBI), with Mr Odinga championing calls for a referendum on the BBI’s final recommendations.



Mr Ruto’s attitude to the BBI has oscillated between ambivalence and hostility, notably to its recommended creation of a prime minister position.



It is increasingly clear that the relationship between Messrs Kenyatta and Ruto has broken down irretrievably, and that the battle over Jubilee is set to grow acrimonious as opposition to the latter’s 2022 succession bid grows.



Many shots have been fired in recent months, including calls by Jubilee and opposition MPs for Mr Ruto to resign on March 11 and Mr Ruto’s social media tirade against the “fraudulent changes” to Jubilee’s NEC by “political rejects, conmen &amp; fraudsters” in early April.



The coalition agreement between Jubilee and Kanu is certain to antagonise Mr Ruto, as his adversarial relationship with Kanu leader and fellow Kalenjin, Gideon Moi, is well documented.



The possibility of the ODM or the Wiper Democratic Movement – Kenya (WDM – K) entering into coalition talks with Jubilee-Kanu cannot be dismissed, especially as Wiper leader, Kalonzo Musyoka, stated on May 11 that his party was exploring the possibility despite being a member of the National Super Alliance (Nasa) alongside the ODM.



The dissolution/reconstitution of Jubilee does not necessarily portend political instability in Kenya, as parties are generally viewed as election vehicles rather than institutions in their own right.



Indeed, political development and democratic consolidation in the country are held back by the absence of durable political parties that are based on principles rather than ethnic ‘big men’ or election strategies.



Recent developments seem to suggest that this isn’t about to change.

Op-Ed: Jubilee, Kanu formalise coalition as internal battles rage in Kenya

By Maram Ahmed, Senior Fellow at the School of Oriental and African Studies, University of London



The blue economy has immense value and lots of opportunity for Africa.



During the Coronavirus pandemic, it has been at the heart of global supply chains and will no doubt be vital in recovery efforts.



An increasingly popular concept in policy circles, the <a href="https://www.worldbank.org/en/news/infographic/2017/06/06/blue-economy">blue economy</a> is the “sustainable use of ocean resources for economic growth, improved livelihoods and jobs and ocean ecosystem health” according to the World Bank.



READ: <a href="https://www.cnbcafrica.com/west-africa/2019/06/22/op-ed-why-africas-blue-economy-is-one-of-its-biggest-opportunities/">Op-Ed: Why Africa’s blue economy is one of its biggest opportunities</a>



Traditional blue economy industries such as tourism, fisheries and maritime transport as well as non-traditional industries, such as renewable energy, aquaculture, marine biotechnology, have vast potential to meet growing economic demands.



The importance of the blue economy is further highlighted in the United Nations (UN) Sustainable Development Goal <a href="https://sustainabledevelopment.un.org/sdg14">number 14</a> “to conserve and sustainably use the oceans, seas and marine resources for sustainable development”.



Given oceans do not exist in a vacuum and have no borders, south-south cooperation and partnerships within both the public and private sectors can help boost the blue economy.



<a href="https://www.un.org/development/desa/en/news/intergovernmental-coordination/south-south-cooperation-2019.html">South-South cooperation</a> refers to developing countries in the “Global South” working together to find solutions to common development challenges according to the UN’s Office for South-South Cooperation. Cooperation includes the sharing of knowledge, resources and technology in areas such as climate change, agriculture, urbanisation and so on.&nbsp;



There are common concerns shared by countries in the Global South with regards to the blue economy, such as the adverse impacts of climate change, rising sea levels, increase in natural disasters like droughts, coastal erosion and the depletion of ocean resources.



Going forward, prioritising policies and practices that ensure sustainable management and conservation of the ocean is vital. For example, enhancing sustainable practices in the fisheries industry to prevent overfishing and illegal fishing would go a long way.



Over the past few decades, fish stocks have considerably decreased disrupting marine ecosystems. In Africa alone the UN’s Economic Commission for Africa estimates the continent loses around <a href="https://www.uneca.org/sites/default/files/PublicationFiles/blueeco-policy-handbook_en.pdf">US$ 42 billion per year</a> through illegal fishing activities &#8211; putting added strain on the oceans.



This is not a problem Africa alone is facing as the issue persists in the Global South, ie, developing countries, which are located primarily in the Southern Hemisphere, therefore it should be addressed in cooperation with these countries through South-South cooperation. Knowledge sharing and formulating strategic frameworks in a concerted manner is an ideal approach. Ultimately, it may help safeguard Africa’s fisheries sector and offer new pathways for sustainable development.  



Another way South-South cooperation can boost the blue economy is by collectively combatting the impact climate change is having on the oceans.



The oceans are being unprecedentedly impacted by climate change on multiple fronts &#8211; changes in water temperature, acidification and loss of biodiversity are disrupting and degrading coastal and marine ecosystems.



Greater collaboration to integrate cross-border policies to preserve the health of the oceans and the underlying marine ecosystems shared, can harness the blue economy efficiently.



As seventy percent of African countries are coastal, the Blue Economy is a low hanging fruit for many countries. It offers the opportunity for countries on the continent to not only diversify their economies and preserve marine ecosystems but it could help transition some countries to middle-income status.



A key to unlocking the potential of the blue economy is through promoting South-South cooperation. It no way displaces north-south cooperation but rather complements it.



Sharing of knowledge, technology, expertise through South-South cooperation would be a catalyst to the growth of the blue economy.

Op-Ed: How Africa can boost its blue economy

By Danesh Ranchhod, vice-president and executive director at Franklin Templeton Emerging Markets Equity



As with most parts of the world, what started out as a health crisis has also turned into a humanitarian and economic crisis. While Covid-19 infections rates have been relatively low on the African continent compared to the rest of the world, much of the region’s economies are being impacted due to the various forms of restrictions being imposed on citizens. The International Monetary Fund (IMF) has forecast Sub-Saharan Africa Gross Domestic Product (GDP) to contract by 2% in 2020 vs growth of 3% in 2019. Some of the oil-exporting countries such as Nigeria are likely to face a sharper contraction due to the lower oil price. Many current forecasts and outlooks could be rendered irrelevant given the highly uncertain nature of the Covid-19 infection and the variability of outcomes given different government policy responses. At the same time, there is a growing risk that the spread of the virus could still escalate to unmanageable levels. This is due to some additional challenges facing many African countries.



FOR MORE COVID-19 COVERAGE VISIT: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>



1] While the level of urbanisation is still low compared to many other frontier and emerging markets, urbanisation has actually been growing fast off a low base to result in high density informal communities in larger cities. The nature of these living environments makes social distancing measures almost impossible to follow through in a government ordered lockdown.



2] Healthcare resources are constrained, with facilities lacking the necessary equipment such as ventilators and high care beds to deal with mass volumes of patients that could get sick. &nbsp;A report from McKinsey &amp; Company showed Africa has 1.4 beds per 1000 people compared to China which has 4 beds per 1000 people. Additionally, laboratory capacity is low implying that not enough testing is being done to collate a true gauge of active cases. Genomic sequencing of the virus in Africa is also the lowest globally. There is a risk that Africa may not be well represented in a potential vaccine; vaccines are typically developed on large and varied pools of sequencing data so that there is good representation of strains that may have mutated.



3] Much of the continent’s economic activity is driven by informal businesses that are small in nature. A hard lockdown would result in many businesses having to close down and subsequently leaving staff and business owners without income. There is also not much to rely on in terms of savings pools, while insurance or fiscal support for loss of income is negligible.



4] In the developed world and many parts of Asia, governments have announced Covid-19 related fiscal support for citizens and businesses amounting to 7%-10% of their respective GDPs. These far exceed support programmes at the time of the Global Financial Crisis. This quantum (relative to the GDP) of support is not possible in Africa due to fiscal pressures already faced. While the IMF and World Bank have been disbursing crisis funding to help with healthcare and related costs, it is likely that a lack of more broad fiscal support together with a hard lockdown could see African economies struggle to recover.



These challenges preclude many African governments from adopting some of the measures that are being employed elsewhere in the developed world and more formalised emerging Asian economies. <a>Extended hard lockdowns in Africa are likely to have a more dire result due to a devastating economic environment that could see increased deaths from starvation.</a>



To find a balance between containing the virus and maintaining a semblance of economic activity will require a different approach. While African governments may not have the fiscal capacity to rapidly increase hospital and equipment capacity, they can more easily at a lower cost increase widespread testing to get a true sense of active cases.  The testing can be multi-level with initial screening doing a lot to filter patients that require immediate testing and care. This together with mobile operators can introduce a form of smart contact tracing and awareness using mobile phones. As the level of cases will initially be low, infected patients can be housed in basic isolation centres that do not require high care in key areas to help alleviate pressure on hospitals and reduce the reproduction rate given it is hard to isolate in high-density informal areas. Other soft lockdown measures such as border control and social distancing measures where possible can still take place to help flatten the curve. Most importantly having confidence around widespread testing and tracking will help to create more timely data on active cases and recoveries and assist in identifying hot spot areas that could then be considered for targeted lockdowns rather than national hard lockdowns. It can also allow economic activity to remain in some form allowing many informal businesses to continue to operate and giving much-needed income to large parts of the populace that have no social safety net in any form.

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Op-Ed: Why Africa cannot afford an extended hard lockdown in the COVID-19 crisis

By Zandre Campos, CEO of ABO Capital.



As the coronavirus outbreak continues to spread, no country is immune. Global cases are well into the millions and Africa is continuing to see a rise. There are several African countries <a href="https://coronavirus.jhu.edu/map.html">whose numbers are rapidly increasing</a> including Algeria, Egypt, Morocco, and South Africa. However, their numbers are still relatively low compared to some of the hardest-hit countries, such as the United States, Russia, the United Kingdom and Italy. In my homeland of Angola, we have been very fortunate to have less than 50 reported cases to date. However, despite the swift actions taken by the country to keep the rate of infection relatively low, its role in the global economy means it is still at risk. Angola must prepare for when travel and trade resume at full speed, as it will be critical to remain vigilant and prepared. 



The cost of the coronavirus, if it becomes more widespread, will not only be to the health of Angolans, but to its economy, as seen in the latest Ebola epidemic. During the Ebola epidemic of 2014 to 2016, there were approximately 28,600 cases and 11,300 deaths<a href="#_ftn1">[1]</a>. In addition to the devastatingly large loss of life, Ebola contributed significantly to economic hardships in the countries that were most impacted, ie, Guinea, Sierra Leone, and Liberia.



For more COVID-19 coverage visit <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>



In 2014, the World Bank projected that the three nations would in 2015 lose approximately $2.2 billion in their gross domestic product. The primary donors in the international response, the United States, the United Kingdom, and Germany, donated a combined total of over $3.6 billion in relief efforts. The sectors most greatly affected were the private sector, agricultural production, and cross-border trade as restrictions on movement, goods, and services were put in place<a href="#_ftn2">[2]</a>. Not only did this hurt the GDP and the economy, but it had a direct impact on the lives of those in affected regions. While a slowdown in these sectors leads to a loss of jobs and job security, it often impacts the most vulnerable in society first. Decreased agriculture and trade can cause food shortages, which have a direct impact on low income individuals and their ability to have access to food.



if Angola fails to remain diligent and keep the rate of infection relatively low, it could come at a severe economic cost as shown by countries that had Ebola, therefore different industries need to step up to help the relief efforts. While some industries are being negatively impacted by the coronavirus, they can also do a number of things to help. For example, Angola’s oil and gas industry has been hard hit by the coronavirus. As people across the world shelter in their homes, the price of oil has been consistently dropping and the industry is facing a significant downturn. However, there are a number of ways that those in the industry can assist Angola and the challenges it is facing caused by coronavirus.



For one, many companies have and can donate to the World Health Organization’s COVID-19 Solidarity Response Fund, which purchases and ships protective equipment for medical workers. The fund also puts money towards research to develop a vaccine for the virus. In addition to donating to relief funds, many companies have and can turn their focus to producing products that can be useful in the fight against the coronavirus. Some of the materials that are used in fuel production, such as ethanol from sugarcane, can be made into disinfectant instead. Oil and gas companies can shift their production in other ways as well. For those with major factories, if the resources are available, they can produce not only disinfectants, but face masks and protective gear too.



Despite the downturn that the oil and gas industry is currently facing, there are other ways that companies can provide relief in multiple ways. For example they can follow the example of those offering free fuel to service vehicles, while others are giving fuel cards or fuel vouchers to service workers. Angola’s oil and gas industry is a crucial component of the economy. While it is in a vulnerable position right now, this doesn’t mean that companies aren’t able to shift their focus, and their resources, in a way that combats the coronavirus.



While most businesses and industries in Angola will weather the coronavirus pandemic, and even come out stronger on the other side, it highlights the need for an improved education system to be put in place. The coronavirus pandemic draws attention to the fact that the country does not have enough doctors or medical professionals. Angola will have a shortage of doctors if the youth of Angola aren’t getting the best possible education. The need for a highly trained medical community may be brought to light due to current issues, but it will not go away after this virus does. Angola must utilise the scope and knowledge of its ancestors to help in developing other sources of knowledge or solutions.



What is clear is that while the coronavirus might not be going away any time soon, it is presenting an opportunity for companies to mobilise in inspiring ways to help the best that they can. With the ability to come together to provide much-needed materials such as disinfectants and face masks, and the more traditional output of fuel, there is hope in our fight against the global health pandemic. In addition, there are many lessons that we can learn from the past including how to stabilise the economy, keep each other safe, and ultimately make Angola a stronger country.



[1] <a href="https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/index.html" target="_blank" rel="noreferrer noopener">https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/index.html</a>



2 <a href="https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/cost-of-ebola.html#N3" target="_blank" rel="noreferrer noopener">https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/cost-of-ebola.html#N3</a>



<hr class="wp-block-separator"/>



<a href="#_ftnref1">[1]</a> <a href="https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/index.html" target="_blank" rel="noreferrer noopener">https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/index.html</a>



<a href="#_ftnref2">[2]</a> <a href="https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/cost-of-ebola.html#N3" target="_blank" rel="noreferrer noopener">https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/cost-of-ebola.html#N3</a>

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Op-Ed: How Angola can use its industries to fight COVID-19

By George Ott – Economist



The dual shocks of the Covid-19 pandemic and the international oil price slump are expected to cause severe damage to economies across the African continent.



Oil-dependent African sovereigns are particularly vulnerable to the associated drop in export revenues and resultant rise in currency pressures.



In this regard, there has been considerable uncertainty and speculation about the capacity of both the West African Economic and Monetary Union (Waemu) and the Economic and Monetary Community of Central Africa’s (Cemac) to absorb these shocks and to protect the value of their respective regional currency pegs to the euro.



The CFA franc (comprising the Central African XAF and the West African XOF) is pegged to the euro at CFAfr655.96/€.



Despite relative economic resilience across the Waemu region, oil-exporting members of the Cemac are coming under severe strain as international oil prices fell to decades-low levels.



Moreover, with the Cemac region still in the process of rebuilding external buffers drawn down during the 2014-16 oil price crash, the region’s capacity to absorb the massive shocks of the current global crises is expected to be limited.



With many indicators pointing towards severe strain on the CFA franc, concerns have been raised about a potential devaluation of the currency peg.



With speculation circulating in the local media across the Cemac region, both the Bank of Central African States (Beac) and the French Treasury have released statements to dispel rumours that a devaluation was on the cards.



On Tuesday, May 12, Bloomberg reported that Odile Renaud-Basso, the head of the French Treasury, affirmed the institution’s commitment to ensure the convertibility of the CFA franc, stating in a telephonic interview that they “do not see a need for adjusting the exchange rate. So that is not on the agenda”.



On the same day, Reuters quoted a statement by the Beac in which it denied that it was considering a devaluation of the CFA franc and that foreign exchange reserve levels remained “comfortable”.



With economic and financial pressures mounting on the CFA franc, there has been a measure of uncertainty pertaining to the French Treasury’s willingness to support the regional peg by ensuring the unit’s convertibility to euros at the current rate.



This commitment has not yet been tested and with economic conditions in Europe also hard hit, concern in this regard was arguably warranted.



Therefore, the French Treasury’s public backing of the peg is significant and reduces uncertainty at a time when severe pressures on the CFA franc are unavoidable.



These developments also add weight to our current baseline expectation for the CFA franc to remain pegged to the euro at the current rate of CFAfr655.96/€.



Although economic risks are set to rise across the region in the coming months, we nevertheless expect that financial assistance from multilateral organisations should have an added stabilising impact across both the Waemu and Cemac regions, with a host of member states already having received such assistance.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

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