Credit: UNDP

By Ayodele Odusola
HARARE, Zimbabwe, Mar 21 2024 (IPS)

This year’s UNDP Global Human Development Report (HDR) marks a dramatic shift away from the cautious optimism espoused in the HDR just four years ago: despite reaching a new high, the Global Human Development Index now evolves meaningfully below the 2019 trend – threatening to make global development losses permanent.

Perhaps for citizens of many countries, it is easy to see why this would be the case. In our relentlessly interconnected world, citizens bear witness to dangerous geopolitical quagmires; unpredictable climate shocks threaten everyday livelihoods; and the world still struggles with the human consequences of insecurity and inequality in nearly every form.

It is because of these inequalities – at least – that every Organization for Economic Co-operation and Development (OECD) country has rebounded to recover to its pre-2019 Human Development Index trend – yet only about half of the world’s Least Developed Countries have done so.

That is, while wealthier countries recover, much of rest of the world has lost – and remains below – the encouraging trajectory countries had once experienced before 2019.

Can I surprise the reader by saying not all is doom and gloom?

Twenty five (25) of the African countries recovered to their pre-COVID-19 trend.[1]

Further, for the first time since the COVID-19 pandemic, the Human Development Index for Zimbabwe rose from 0.549 in 2021 to 0.550 in 2022 (the closer this number stands to 1.0, the higher the level of human capability and individual choice). This result puts Zimbabwe in Medium Human Development category.

Still, although Zimbabwe increased in HDI value – and was ranked 159 out of 193 countries – its ranking dropped by 13 points between 2021 and 2022, implying that 13 countries (including Angola, Cameroon, Comoros, Kenya, Solomon Islands, and Zambia) outperformed Zimbabwe in improving their levels of human capability in 2022.

This notwithstanding, Zimbabwe is ranked 22nd in Africa, along with Uganda. It is also one of the best 10 countries in Africa on mean years of schooling – and one of the best 15 in Gender Development Index with a value of 0.936 out of 1.0.

To build on successes and even further advance Zimbabwe’s development, there remains quite a lot we can do.

The United Nations Development Programme, (UNDP) in partnership with the Government of Zimbabwe, is making significant strides towards achieving the Sustainable Development Goals (SDGs) for Zimbabwe, with real successes in areas of food security (SDG2), health and wellbeing (SDG3), access to energy (SDG7), and building resilience (a cross-cutting issue) across the SDGs.

Towards eliminating hunger, UNDP and the Government of Zimbabwe have supported over 40,000 farmers in southern Zimbabwe with climate-smart crop varieties, producing nutritious produce resistant to climate stress.

These efforts have produced yields as high as 74% beyond traditional harvest levels, supported by new climate-change informed infrastructure, such as automatic weather stations, rain gauges, hydro stations, and irrigation facilities – with over 1.1 million beneficiaries.

This partnership has also established 230 Farmer Field Schools to establish peer-to-peer learning between smallholder farmers.

Further, an ongoing partnership has ensured that 98% of Zimbabwe’s 1.3 million people living with HIV are currently on Anti-Retroviral Therapy, while 1,044 health facilities have now installed solar power, including 447 solarized boreholes to supply safe water. In terms of staffing, 25,000 critical health workers are now on paid retention to provide support, along with 6,606 village health workers.

Additional government partnerships led to the installation of a 152 kilowatt solar minigrid system with lithium battery storage in Binge and Chipinge, as well as 150 biogas digesters to facilitate safer, environmentally-friendly cooking. Existing boreholes are now equipped with solar pumps and improved water storage, while 100 vulnerable households now have solar household lighting.

Programmes to build resilience in Zimbabwean communities trained thousands of people on new vocational skills, provided affordable financial services to smallholders, and supported livestock management to over 85,000 farmers – investing dramatically to improve the quality of life with the support of our development partners.

These achievements are all thanks to the partnership and collaboration among the Ministry of Health and Child Care, the Global Fund, and UNDP Zimbabwe, as well as strategic collaboration with the European Union, the UK Foreign, Commonwealth and Development Office (FCDO), and the governments of Sweden and Denmark.

While these efforts constitute solid progress, of course more must be done.

One major challenge that development partners must confront is the “chilling effect” the debt arrears – and other economic conditions – have had on Foreign Direct Investments. I want to commend the 2024 Budget of the Government of Zimbabwe that committed $55 million to deal with issues relating to the Global Compensation Deed and Bilateral Investment Protection and Promotion Agreements.

Committed implementation of the budgetary provision and improved governance across all levels of government are all key to accelerating progress on clearing debt arrears.

While UNDP and its Government partners have cooperated in a Structured Dialogue Platform to decrease debt and increase Zimbabwe’s fiscal health, more must be done by creditors to clear Zimbabwe of these external debt arrears. Rolling back the arrears, placing the country towards a financially healthy condition, would signify the kind of risk reduction that appeals to private investment.

To this end, the Government alone cannot achieve the SDGs. Instead, a whole-of-society approach is central to their achievement. The private sector must be aggressively engaged to profitably invest in Zimbabwe’s development, offering sustainable opportunities to build upon the above achievements, scaling up the kinds of successes that dramatically advance achievement of the Sustainable Development Goals.

Towards providing all stakeholders – including the general public – with valuable services and constructive information, Zimbabwe’s CSOs and media houses have a valuable role to play, as well.

Too many opportunities for progress exist to be disheartened. As always, we have solutions as well as problems – and our own dedication, hard work, and ingenuity remain key to achieving the Sustainable Development Goals.

Dr. Ayodele Odusola is UNDP Zimbabwe Resident Representative.

[1] These are Algeria, Botswana, Comoros, Cote d’Ivoire, Djibouti, Congo (Democratic Republic), Egypt, Eritrea, Ethiopia, Gambia, Ghana, Guinea, Liberia, Libya, Madagascar, Morocco, Nigeria, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Tanzania, Togo, and Uganda

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By Ayodele Odusola
UNITED NATIONS, Aug 23 2018 (IPS)

The best time to invest in Africa is now. However, foreign investors have not moved into the continent as quickly as expected because foreign investment decisions are often methodically over-structured. One of the major factors cited is too much risk. But risks and profits are inseparable twins: high-risk ventures are frequently associated with higher profits.

Africa is the most profitable region in the world. A report by the UN Conference on Trade and Development states that between 2006 and 2011, Africa had the highest rate of return on inflows of Foreign Direct Investment: 11.4%.  This is compared to 9.1% in Asia, 8.9% in Latin America and the Caribbean. The global figure is 7.1%.

Six of the world’s 12 fastest-growing countries are in Africa (Ethiopia, Democratic Republic of the Congo, Côte d’Ivoire, Mozambique, Tanzania, and Rwanda). Further, between 2018 and 2023, Africa’s growth prospects will be among the highest in the world, according to the IMF.

Examples of companies benefiting from bountiful profits in Africa abound: Sonatrach’s turnover from oil and gas alone was $33.2 billion; MTN Group’s turnover was about $10 billion; and Dangote Group’s turnover was $4.1 billion—all in 2017.

A variety of factors drive up Africa’s profit prospects, making it imperative for European, North American, Asian, and Latin American businesses to invest, helping to foster the continent’s economic progress.

Africa’s economic growth prospects are among the world’s brightest. Six of the world’s 12 fastest-growing countries are in Africa (Ethiopia, Democratic Republic of the Congo, Côte d’Ivoire, Mozambique, Tanzania, and Rwanda). Further, between 2018 and 2023, Africa’s growth prospects will be among the highest in the world, according to the IMF.

Good news: sectors where foreign companies could have a comparative advantage, such as banking, telecommunications and infrastructure, are among the drivers of current economic growth in Africa—creating clear investment opportunities for foreign businesses.

Africa’s growing, youthful population, amidst an aging population in most other regions, constitutes a formidable market. The continent’s population is predicted to quadruple from 1.19 billion in 2015 to 4.39 billion by 2100.  In 2015 alone, 200 million Africans entered the consumer goods market. Maximizing this bourgeoning market size calls for actively engaging Africa’s structural economic transformation.

Africa’s youthful population contributes to an abundancy of labour, which is one of the region’s highest potentials for labor-intensive industrialization, and lowers production costs, leading to benefits that far outweigh the cost of doing business on the continent. 

The hourly wage in Africa is less than 50 cents (for example, it’s $0.27 in Mozambique, $0.34 in Nigeria and $1.62 in Morocco) compared to $10.49 in UK, $7.25 in the USA and $6.57 in Japan. Engaging more foreign companies may help raise wage rates in Africa, improve labour market efficiency and generate additional resources for those left behind on the age ladder.

Africa’s large deposits of natural resources promise a bright future for developing value chains. Agriculture and the extractive sectors are linchpins of national, regional and global value chains. Africa hosts 60% of the world’s uncultivated arable land. In 2015, the continent produced 13% of global oil, up from 9% in 1998.

The growth trend of oil and natural gas production between 1980 and 2012 was amazing: from 53.4 billion barrels to 130.3 billion barrels for oil; for natural gas, from six trillion cubic meters in 1980 to 14.5 trillion cubic meters in 2012.  As of 2012, Africa also controlled 53.9% of the world’s diamond resources.

In 2017, the Democratic Republic of the Congo alone accounted for 58% of the world’s cobalt (used in electronics production) while South Africa accounted for 69.6 % of the world’s platinum production in 2016 (used for catalytic converters and in other goods). Actively investing in adding value to these commodities, among other extractive activities, will shape global economic activities over the next five decades.

Finally, emerging domestic developments lend credence to actively engaging Africa’s economic transformation agenda. Some of these developments include improvements in macroeconomic prudence and overall governance. For instance, evidence from the 2017 Ibrahim Index of African Governance shows that Africa’s overall governance index improved at an annual rate of 1.4% since 2007, an improvement of more than 5% in at least 12 countries, including Côte d’Ivoire, Tunisia, Rwanda and Ethiopia. This improvement helps to mitigate perceived risks for many investors on the continent.

African governments should build on this positive trend to maximize foreign investments. This includes eliminating corruption; improving safety and security; strengthening macroeconomic environment, investing in quality education and skill development in science, technology and innovation; and avoiding a ‘race to the bottom’ syndrome, that gives unnecessary tax holidays and waivers to foreign companies.

Investing in Africa is good business and a sustainable corporate strategy for foreign investors. Advanced and emerging countries’ governments and the private sector should leverage these profitable, emerging investment opportunities.

Using official development assistance to leverage and de-risk the investment climate in Africa is a key component in attracting FDI. Japan’s Nippon Export and Investment Insurance (NEXI) initiative, to insure a facility in Ghana, is a laudable effort that should be scaled-up and supported by other actors.

Implementing the Sustainable Development Goals (SDGs) in Africa offers investment opportunities to foreign companies. Good examples abound: the Sumitomo Chemical’s insect-proofing mosquito nets technology is helping to fight malaria; the Sonatrach, JGC, and Hitachi’s desalinating seawater technology is accelerating access to clean water; and the Commodity Risk Management Group and the Sompo Japan Niponkoa’s weather index insurance is helping to mitigate climate change.  In Africa, each SDG offers business solutions and investment opportunities to foreign companies.

The UN Development Programme (UNDP) is working with African governments and private sector actors to de-risk and improve the continent’s investment climate. Developing industrial strategies and clusters, promoting special economic zones, improving energy access, facilitating innovative funding, advocating for value chain development across countries and supporting investment promotion through the International Conference on the Emergence of Africa are some of UNDP’s efforts.

The best time to invest in Africa is now.

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