Artificial intelligence is reshaping how learners, teachers, and creators engage with education across the continent. A new wave of AI innovation transforming learning across countries on the African continent — from chat-based tutors to hybrid hubs and gamified farms. Credit: UNICEF
 
Through initiatives such as Digital Skills for Africa, Lumo Hubs, and Luma Learn, innovators are breaking barriers of access, cost, and language to build inclusive, localized learning systems.

By Franck Kuwonu
UNITED NATIONS, Nov 19 2025 (IPS)

“Sometimes the best way to grasp a concept,” says Chris Folayan, co-founder and executive officer of Luma Learn, “is to learn it in your native language.”

Seventeen-year-old South African Simphiwe is one of more than 10,000 learners already using Luma Learn, an AI-powered tutor platform. For him, artificial intelligence isn’t an abstract idea: it is a personal tutor that is patient, consistent, and always online.

When on his phone, he’s not always chatting with a classmate or scrolling through social media. Many times, he’s studying physics with Luma Learn, that replies instantly, even in IsiZulu, his mother tongue.

Across several countries on the African continent, innovators like Folayan, Nthanda Manduwi, and Anie Akpe are reimagining what education can look like: localised, practical, and accessible to anyone with a phone or connection.

Together, they’re building a new learning ecosystem: one where AI isn’t replacing teachers but multiplying their reach.”

Nthanda Manduwi: Turning digital skills into interactive ecosystems

“I’ve always believed that technology can democratize opportunity,” says Nthanda Manduwi, founder of Digital Skills for Africa (DSA) and Q2 Corporation. “AI gives us a real chance to leapfrog the barriers that have slowed Africa’s progress, from infrastructure gaps to unequal access to training.”

Her journey began with Digital Skills for Africa, a platform designed to equip young people with practical tech competencies from AI and automation to no-code tools and digital marketing.

“Our courses like ‘Effective Use of AI’ or ‘AI and the Future of Digital Marketing’ were created to help learners not only understand AI but actually apply it,” she explains. “You leave with real, marketable skills you can use to build something or get hired.”

But scaling that vision revealed a challenge many edtech startups face. “We realised enthusiasm alone doesn’t pay the bills,” she says. “There was low willingness to pay for courses, even from institutions. So, we had to rethink how to make digital learning sustainable.”

That rethink led to Q2 Corporation, her new venture linking learning with livelihood. Under Q2’s umbrella sits Kwathu Farms—an innovative gamified agricultural simulator where users learn how to manage farms, predict supply chain issues, and test business models before investing real money.

“AI makes the learning immersive,” Ms. Manduwi explains. “Through simulations, learners can see how weather or market shocks affect yield, and how small decisions impact entire value chains. It turns agriculture into a classroom. And a business lab.”

Behind these simulations run Q2’s proprietary engines, NoxTrax and AgroTrax, which apply AI to real-time logistics and resource management. “It’s about showing that AI isn’t just for coders,” she says. “It’s for farmers, small businesses, anyone who wants to think and plan more intelligently.”

Ms. Manduwi’s mission remains rooted in access. “For Africa to truly benefit from AI, it can’t be an elite tool. It must live where people already are: on their phones, in their communities, in local languages.”

Anie Akpe: Creating spaces where AI meets human creativity

Where Ms. Manduwi builds ecosystems, Anie Akpe builds spaces. Through her work with African Women in Technology (AWIT)and Lumo Hubs, Ms. Akpe has spent over a decade helping innovators, especially women, turn curiosity into competence.

“With AWIT, I started by organising conferences across the continent,” she recalls. “We created safe spaces where women could connect with mentors and learn skills that weren’t taught in schools: digital literacy, entrepreneurship, coding, design.”

Soon, even male students began asking to participate. “That’s when I realized it wasn’t just about women in technology. It was about us (Africans) finding a place in a digital world that was changing fast.”

The next step came naturally. “When AI began to disrupt industries, I saw that we couldn’t just talk about skills. We had to create environments where people could use those skills,” she says. “That’s how Lumo Hubs was born.”

Each hub combines education, creativity, and entrepreneurship. “In one space, you might find a student learning AI-assisted graphic design, a seamstress using AI to plan production, and a young podcaster recording a show in a studio powered by the hub,” Ms. Akpe explains. “The model is hybrid, physical and digital, so even small towns can host a Lumo Hub.”

She is also deliberate about sustainability. “Community members pay; students pay less. It’s important that we don’t depend only on grants,” she says. “That balance keeps the hubs alive and the learning continuous.”

At the heart of Lumo Hubs lies mentorship. “You can’t separate technology from human guidance,” Akpe insists. “AI helps scale learning, but mentorship builds confidence.” Her approach remains rooted in empowerment. “AI can level the playing field if used right. A young person in Lagos or Uyo doesn’t have to wait for opportunity. They can create it.”

Chris Folayan: A tutor that never sleeps

For Chris Folayan, the idea behind Luma Learn came from a simple observation: “The continent doesn’t just have an access problem. It has a teaching gap too.”

According to UNESCO, Sub-Saharan Africa will need 15 million new teachers in the next five years to meet demand. “With classrooms that sometimes have over 100 students per teacher, no one can give every child the help they need,” Mr. Folayan says. “That’s where Luma Learn steps in.”

Luma Learn is an AI tutor that runs on WhatsApp, not a separate app.

“We chose WhatsApp for a reason,” he explains. “It’s already on most phones, it’s free to message, works on low bandwidth, and keeps data safe through encryption. That means a child in a rural area can learn without worrying about internet costs or app installations.”

The platform adapts to the learner’s grade level, curriculum, and preferred language. “Whether you need algebra in English or history in Swahili, Luma Learn can teach, quiz, and explain at your level,” he says. “It learns how you learn.”

Mr. Folayan shares two powerful testimonies. In Durban, a mother named Happyness wrote that her son, after years of illness, seizures, and missed schooling, caught up with the rest of the class with help from Luma Learn.

“Every time Vuyo wants to know something about school, we just ask Luma! What’s great is that Luma explains in our native language, IsiZulu.”

In another case, Simphiwe, a Grade 11 student from KwaZulu-Natal, sent over 1,200 messages to Luma. “Luma Learn wasn’t just another study resource,” he said. “It became the personal teaching assistant I desperately needed.”

Shared goals: One vision, many pathways

Three innovators. Three different models. One shared purpose: to make AI work for Africa’s learners, not the other way around. Across their stories, several threads stand out.

First, access—from WhatsApp tutors to open learning hubs to gamified ecosystems that teach real-world problem-solving.

Second, localisation—learning in local languages, within familiar tools, and around community realities.

Third, empowerment—every model links knowledge directly to opportunity.

From Ms. Manduwi’s gamified farms to Ms. Akpe’s creative hubs, to Mr. Folayan’s WhatsApp tutor, future classrooms are already here — decentralised, digital, and deeply human.

As Ms. Manduwi puts it, “We must stop treating AI as something imported. It’s a tool we can mold to fit our own systems.”

Ms. Akpe echoes that sentiment: “Africa doesn’t lack talent. It lacks platforms that meet learners where they are.”

And Mr. Folayan completes the picture: “No teacher wants their student left behind. With AI, we can make sure no one is.”

At the end of the day, a student in Durban learns physics through Luma. A young designer in Uyo experiments with AI tools at a Lumo Hub. A farmer in Lilongwe tests market scenarios on Kwathu Farms. Each represents a different face of the same revolution — a continent using intelligence, both human and artificial, to learn without limits.

As Ms. Akpe says: “The vision is simple: a generation that doesn’t just survive AI disruption but thrives because of it.” And as Ms. Manduwi concludes: “AI is not a threat to Africa. It’s our greatest chance to catch up. And lead.”

Anie Akpe and Chris Folayan were participants at the Global Africa Business Initiative (GABI): Unstoppable Africa2025, held in New York City on the margins of the UN General Assembly in September. The platform helps foster networking, exposure to potential business partners, and garner support for their initiatives.

Source: Africa Renewal, United Nations

IPS UN Bureau

Follow @IPSNewsUNBureau
  

The Maison des Esclave or Slave House is now a museum and UNESCO heritage site. Credit: UN Photo/Mark Garten. A global symbol of the transatlantic slave trade and a place where history, heritage and the present meet.

By Franck Kuwonu
DAKAR, Senegal, Apr 22 2025 (IPS)

Gorée Island, off the coast of Dakar, is a somber reminder of the transatlantic slave trade. Listed as a UNESCO World Heritage Site, it embodies both the duty to remember and the challenges of passing on a painful past.

But Gorée is not stuck in history; it’s an inhabited island, where heritage preservation, daily life and contemporary issues coexist.

Located about 3 kilometers off Dakar, the capital city of Senegal, Gorée is a small island, only reachable by ferry. Its small size belies its large place in history, its importance in the transatlantic slave trade, and its continuing relevance in preserving memory and heritage for the African diaspora worldwide.

“This is a place of memory, you know?” says Eloi Coly, the Director and curator of the island’s museum. “You can’t talk about the island without mentioning the slave trade and the colonial era, because these two periods left their mark on its history,” he adds.

The Maison des Esclaves (The Slave House) and its museum, which Mr. Coly manages, are the main tourist attractions.

There, the echoes of the past still resonate.

On a typical sunny December morning, hundreds of tourists who are ferried across the Atlantic channel from Dakar, throng the forecourt of the Maison des Esclaves, waiting to be taken through the narrow alleys and rooms of the museum along the last paths once taken by millions of Africans violently seized from their lands and homes and later sold into bondage across the ocean.

Eloi Coly, the Director and curator of the island’s museum. Credit: UN Photo/Mark Garten

Martine is a visitor and along with her colleagues, she was among the tourists waiting to be taken around by the guides that morning.

“Every time I am in Dakar, I make sure to visit,” she tells Africa Renewal. She is one of the 500,000 annual visitors, many of them coming from outside of the continent.

However, in recent times, more and more tourists come from within the African continent. Martine, herself hails from Benin and is part of the growing number of visitors from within the continent.

“This is our history, and I will never tire visiting one of the most iconic places on the West African coastline to remind all of us how tragic that history of ours was,” she says.

Iconic, indeed, opines Eloi Coly. Yet, no matter how iconic the island is, Gorée’s memory cannot be reduced to a static museum: “The entire island must remain a dynamic and constantly evolving place.”

An estimated 2,000 people live on the Island, where cars are not allowed. Its architectural landscape contains building styles representing different colonial occupations and eras from the Portuguese, the French, as well as the Dutch and English.

For Mr. Coly, managing the site –while preserving memory and accommodating its current habitat needs– is a daily challenge.

Most of the lands are public, and as a World Heritage site, Gorée is subject to stringent codes that shape its urban development.

“Any change that does not conform to the criteria that led to its classification as UNESCO World Heritage site risks jeopardizing its status,” he explains.

A stringent approach that sometimes conflicts with the needs of residents. “We’re on a living island. People have aspirations and we must take them into account,” he stresses.

A visitor looks out of the “Door of No Return” from where millions of Africans were forcibly taken from the continent. Credit: UN Photo/Mark Garten

The museum itself still uses traditional live-guided tours for visitors.

So, to reconcile preservation and modernization, a project to make experiencing the Maison des Esclaves better, is currently underway.

It seeks to enhance the museum’s experience using new technologies, “We want to offer tours in several languages and provide access to digital resources, so that history can be accessed anywhere in the world.”

Another major development is the historical narrative itself. Exhibitions will stop focusing on the arrival of the Europeans on the continent but rather emphasize that “life and cultures before the slave trade was vibrant and deserve to be told”, explains Mr. Coly.

UNESCO also recently changed its terminology from “Slave Route” to “Enslaved People’s Route”. A change which reaffirms that “No one is born a slave”, stresses Coly.

Passing on memory: an educational and universal challenge

The memory of Gorée would not endure without being passed on. That’s why education plays a central role in the site’s approach.

“In Senegal, the slave trade and slavery are integrated into the school curricula. Schools must come to the island as part of their extramural courses”, explains Mr. Coly. But with the massive influx of visitors – up to 1,500 pupils a day – there is an urgent need to organize these visits more effectively.

Over the years, visits from prominent figures have also helped reinforce Gorée’s universal message. When Pope John Paul II visited the island in 1992, he apologized on behalf of Europe and denounced the clerics who had blessed the slave ships, Coly remembers.

Twenty-one years later, then US President Barack Obama also visited the island.

Securing the future: Remembrance, Heritage and Survival

Preserving the memory of Gorée, Mr. Coly believes, requires a long-term vision. The island’s inclusion in the International Coalition of Sites of Conscience has helped secure funding, notably from the Ford Foundation, for its revitalization project. But beyond the funds, a greater challenge lies ahead: ensuring the future.

“Memory can only be preserved if it is passed on,” says Mr. Coly. “We need to ensure a continuum because no one is eternal.” The aim is to train new generations of guides and curators capable of perpetuating Gorée’s history with accuracy and commitment.

“Because Gorée is not just about Senegal, he continued, “It’s a heritage that belongs to the whole of humanity. Preserving Gorée means preserving a collective memory, raising awareness among future generations and ensuring that the lessons of the past are never forgotten.”

Source: Africa Renewal, United Nations

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Modou Fall educates young people in his community about the importance of recycling and reducing the use of plastic. Credit: UN Photo/Mark Garten

By Franck Kuwonu
DAKAR, Senegal, Apr 17 2025 (IPS)

In a quiet corner of Medina Gounass, on the outskirts of Dakar, Senegal, one man has taken it upon himself to breathe new life into a place many had abandoned.

Where mountains of plastic waste once sprawled, a green oasis has sprung up, thanks to his relentless determination.

Modou Fall, popularly known as the “Plastic Man,” embodies a struggle that goes beyond recycling. He is an activist, an educator, and a campaigner for a cleaner planet and a more sustainable future.

From dump to sanctuary

In 2020, when the world was grappling with the COVID-19 pandemic, Modou Fall was on a different mission. Medina, his neighbourhood, which was once a vibrant place bustling with all manner of activities, had become neglected and over time seen the exodus of its inhabitants. After several floods, the area slowly became a dumping ground.

“At first, there was nothing but garbage and a few crumpling walls,” he recounts. “But I knew something could be done about it.”

Where others saw an unsalvageable space, Fall saw immense potential. With a team of volunteers, he began to transform the space by planting trees, setting up educational displays and repurposing discarded materials.

“Each piece here tells a story. We salvaged these objects to give them a new life,” he told Africa Renewal in an interview in Dakar.

Cleaning up waste was just the beginning, Fall wanted to change mindsets through raising awareness. He quips: “The problem isn’t just the garbage we throw away, but our relationship with plastic.”

“Plastic pollution can alter habitats and natural processes, reducing ecosystems’ ability to adapt to climate change” —UNEP Credit: UN Photo/Mark Garten

Through educational programmes and workshops, Fall teaches children to recycle and reuse materials they would otherwise have considered garbage. He wants the youth to see waste not as garbage, but as raw material for creativity and sustainability.

For example, old car tyres can be transformed into chairs, while plastic bottles can be turned into decorative pieces.

“We need to show children that waste can have a second life,” he explains. “If we teach them that today, they’ll change their habits tomorrow.”

But education alone is not enough. He stresses the importance of structural change and calls for better regulation of waste management. He remains a vocal advocate for stronger waste management policies and stricter environmental regulations. “If we don’t act now, plastic pollution will spiral out of control,” he warns.

A commitment

Fortunately, “The Plastic Man’s” efforts haven’t gone unnoticed – they have earned him national recognition from authorities who honoured him for his environmental efforts. Yet this recognition did not come without pushback.

Undeterred, he continues his fight, exposing harmful practices with determination. One of the major issues he campaigns against is the discharge of toxic chemicals into the local water system by some industries.

“A few years ago, we still could see frogs here. Today, there are none. They are all gone,” he laments.

He also notes that, despite the ban on single-use plastics, plastic bags remain a common sight—sold, used, and discarded on the streets.

Plans for a greener future

Fall’s goal to create greener spaces stretches beyond his neighbourhood. His next big project? An ecological training centre where young people can learn to design and develop sustainable solutions to pollution.

“We need to go beyond just cleaning up. We need to understand why we are where we are, and find long-term solutions,” he insists.

He also envisions a space where students can come to watch educational documentaries on the environment, saying: “Tomorrow, they’re the ones who will have to protect this planet. They need to know what they’re up against.”

At the same time, Fall is working with local artists to create art pieces from recycled waste. Which, he believes, transforms his awareness-raising into an immersive, interactive experience.

“When you see a recycled object become a work of art, you immediately understand its value,” he explains.

He also plans to introduce regular clean-up drives with community members to foster a culture of collective responsibility. “If we do this every month and make it a habit, we can transform our entire environment.”

The Plastic Man is not your typical activist. He doesn’t just rely on slogans or speeches – he leads with action.

“People often say that what we are doing is a just drop in the ocean. But what is the ocean but a multitude of drops?”

His journey is proof that one person’s determination can spark change. A plastic bottle recycled, a tree planted, a child educated—every action counts.

As we part ways after the interview, he leaves us with a powerful message:

“We are the guardians of this planet. Each of us has a role to play. It doesn’t matter where we come from or what we have. What matters is what we do.”

Source: Africa Renewal, United Nations

IPS UN Bureau

Follow @IPSNewsUNBureau
  

The 2024 UN OSAA flagship report ‘Unpacking Africa's Debt: Towards a Lasting and Durable Solution’ addresses the urgent need to reform Africa’s debt structures and suggests how countries can get out of unsustainable debt.

By Franck Kuwonu
UNITED NATIONS, Jan 21 2025 (IPS)

To achieve the Sustainable Development Goals (SDGs) and Agenda 2063 aspirations, Africa requires an additional $1.3 – 1.6 trillion in financing.

According to a new report ‘Unpacking Africa’s Debt: Towards a Lasting and Durable Solution’ by the UN Special Advisor on Africa launched on 14 November 2024, borrowing remains a necessary tool to navigate the compounding crises of financial distress, climate change, food insecurity, and persistent conflict.

The report emphasizes the need to re-examine Africa’s historical reliance on debt instruments to address structural constraints and unlocking economic opportunities. By fostering economic growth and ensuring debt sustainability, debt can become a tool for progress rather than a hindrance.

Debt is an important mode of financing. While many countries are in debt distress, we must not treat Africa as a completely debt-distressed continent.
–Under-Secretary-General Cristina Duarte, Special Adviser on Africa to the United Nations Secretary-General.

“Debt is an important mode of financing. While many countries are in debt distress, we must not treat Africa as a completely debt-distressed continent,” said Cristina Duarte, Under-Secretary-General and Special Adviser on Africa to the UN Secretary-General, at the launch of the report in New York.

“Debt, when managed effectively, can help us invest in achieving development goals,” added Ms. Duarte. The need to reform the global financing system to ensure predictable and affordable financing, prioritize development outcomes over private finance interests, and create fiscal space to fund SDG investments, is also emphasized in the report.

Existing frameworks, including debt restructuring arrangements like the Common Framework, the Report says, are insufficient to meet Africa’s development needs. The Common Framework for Debt Treatments beyond the DSSI (Debt Service Suspension Initiative) is an initiative launched by the G20 in November 2020 to help low-income countries address unsustainable debt levels.

Developed by the G20 and the Paris Club (a group of major creditor countries), the Common Framework aims to streamline debt restructuring and provide more comprehensive debt relief options for countries struggling with high debt burdens, particularly following the economic impact of COVID-19.

At the national level, African countries can deepen domestic debt markets to incentivize local investment and effectively engage with the private sector.

Strengthening regional financing architecture can support transboundary infrastructure projects, complementing national efforts. Enhancing debt management and reform capacity across the continent will also play a critical role in addressing the development financing gap.

The report envisions debt as a means to support a more sustainable economic model. Moving beyond resource extraction for export, African economies can leverage debt to build value-added industries, fostering resilience and self-reliance.

By rethinking debt, fostering domestic investment, and pushing for global financing reforms, Africa can bridge its development gap and achieve its aspirations sustainably.

Key recommendations
Some of the recommendations proposed by the report aimed at addressing Africa’s financing challenges, include:

Increasing access to affordable finance:
Fulfill Official Development Assistance (ODA) pledges, allocating 10% to capacity building and digitization for domestic resource mobilization (DRM)systems.

Reform Multilateral Development Banks (MDBs) to prioritize long-term (30-50 years) concessional lending, increase capital, and lend in local currencies to reduce currency risks.
Prioritize sustainable development by ensuring predictable, large-scale climate adaptation financing.

Reducing borrowing costs:
Restructure high-interest, short-term debt into long-term, low-cost loans to ease fiscal pressure.
Strengthen the G20 Common Framework by expanded eligibility, clarifying processes, and ensuring debt service suspension during negotiations.

Enhancing debt sustainability:
Introduce debt service suspension linked to SDG progress.
Establish a Sovereign Debt Authority to prioritize development in debt treatment.

Leveraging Financing Innovations:
Use state-contingent clauses to suspend debt payments during crises.
Employ debt-for-development, debt-for-nature, debt-for-climate swaps to free resources for SDG investment.

Strengthening regional cooperation:
Boost regional development banks and accelerate Pan-African institutions like the African Investment Bank.
Promote cross-border financing for infrastructure and deepen regional financial markets.

Source: Africa Renewal, United Nations

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Betty Mtehemu, Deputy Chairperson of Fabric Clothes Sector, and Chairperson of the Women’s Union in Dar es Salaam’s Mchikichini Market.

By Franck Kuwonu
UNITED NATIONS, Jan 19 2024 (IPS)

As African economies look to the new year, countries across the continent are poised to make moderate economic gains but must navigate the maze of domestic and international challenges.

According to the UN World Economic Situation and Prospects (WESP) 2024, the continent’s economic growth is expected to quicken slightly, with average GDP possibly inching up to 3.5 per cent.

Yet, debt sustainability concerns, fiscal pressures, and climate change present uncertainties. The projected 3.5 per cent growth is a slight increase from the 3.3 per cent in 2023.

Major regional economies, such as that of Egypt, are anticipated to slow to 3.4 per cent from 4.2 in the previous year, mainly due to foreign exchange scarcities that may weaken import capacity and domestic demand.

In South Africa, the persistent energy crisis has limited the growth to just 0.5 per cent in 2023, and no significant change is expected in 2024.

In Nigeria, the country’s growth prospect points to a moderate increase, largely due to government reforms in the oil sector. The growth is forecast to be at 3.1 per cent.

 
Debt burden

High levels of debt are one of the main challenges African economies face going forward, the report noted. For instance, Zambia is navigating a debt-to-GDP ratio that soared past 70 per cent in recent years.

Yet, the country is not alone: “18 countries in Africa recorded a debt-to-GDP ratio of over 70 per cent in 2023, with many of them facing debt distress,” the UN Department of Economic and Social Affairs (UN DESA) said in a release accompanying the report.

Ghana’s financial health is also under scrutiny, with a staggering fifth of its tax revenue devoted to servicing debt. These instances are not anomalies but rather stark representations of the debt dilemma many African nations confront.

Fiscal health and inflation

Fiscal stability remains elusive, the report highlighted, with many countries wrestling to increase their tax revenue, a vital lifeline for economic sustainability.

Energy subsidy reforms in nations like Nigeria and Angola reflect attempts to recalibrate fiscal policies amidst pressing economic realities. At the same time, inflationary pressures are widespread, with countries like Nigeria and Egypt experiencing severe surges in food prices.

In response, Central banks across the continent have tightened monetary policies, trying to stabilize currencies and curb inflation. Yet, the effectiveness of these measures in the face of global economic turbulence remains a critical question.

 
Climate change

Climate change continues to be an unpredictable catalyst, significantly impacting agriculture-dependent economies. The Horn of Africa, repeatedly battered by droughts exacerbated by human-induced climate change, faces ongoing threats to food security and economic stability.

Southern Africa’s vulnerability was laid bare by Cyclone Freddy in March 2023, with losses mounting into hundreds of millions. These incidents underscore the urgent need for climate resilience strategies.

Trade

The global slowdown in trade has also slowed down economic growth in Africa. This is due to less demand from the main countries that buy Africa’s exports and the prices for raw materials and goods sold by the continent have stopped increasing.

Although overall intra-African trade remains relatively low continent-wide, hovering below 15 per cent, this general trend masks regional variations.

Notably, East and Southern Africa stand out with their relatively higher levels of intra-regional trade, where intra-African exports correspond to almost 30% of these subregions’ overall exports. These regions contrast with other parts of the continent, where trade is more externally oriented.

The African Continental Free Trade Area (AfCFTA) emerged as a central initiative intended to address these intra-African trade issues. Its goal is to enhance economic integration and increase trade flows within the continent by creating a single market for goods and services.

Yet, despite its potential, the actual impact of AfCFTA has been limited so far, the report said.

The 2024 UN World Economic Situation and Prospects (WESP) is produced by UN DESA in partnership with the five UN Regional Commissions, UNCTAD, UN-OHRLLS and UNWTO. It features the global economic outlook for 2024 and 2025, and regional growth forecasts for developed and developing economies, as well as economies in transition.

The full report is available at: https://desapublications.un.org/

Source: Africa Renewal, United Nations

IPS UN Bureau

Follow @IPSNewsUNBureau
  

In Somalia, water infrastructure projects are building climate resilience and reducing emissions by using solar panels to provide energy. A new report calls for recognizing and establishing a nexus between the water, energy and food sectors in the Horn of Africa. Credit: UNDP/Tobin Jones

By Franck Kuwonu
UNITED NATIONS, Sep 28 2021 (IPS)

Rondrotiana Barimalala is a climate researcher at the University of Cape Town in South Africa and a lead author for the IPCC report to the recently released Intergovernmental Panel on Climate Change (IPCC) report titled Climate Change 2021: The Physical Science Basis.

The report says we can act on climate change but warns that time is running out.

In this interview with Africa Renewal’s Franck Kuwonu, Barimalala talks about what extreme weather events mean for Africa and what could be a new normal if global warming is not tackled urgently.

Excerpts from the interview.

Africa is not a major contributor to carbon emissions, yet human-made global warming is advancing more rapidly on the continent than in the rest of the world, the IPCC report says. How do you explain this?

The warming is global. It happens everywhere. But the situation in African is worse because of our limited capacity to adapt even when most emissions happen elsewhere. More extreme events, for example, happen in different parts of the world, but [again] our capacity to adapt is low compared to other places. And I think that makes us vulnerable and to suffer most from the consequences.

Rondrotiana Barimalala

A: Yes. For the past few decades, the warming rose rapidly. And one of the consequences of global warming is frequent extreme events, frequent extreme temperature—for instance, very hot temperature or very cold temperature. If it continues to increase at this speed, then we should expect more frequent events. And these will become the new normal.

Q: On Africa, the report’s findings include increased hot and cold extremes, rise in sea-level, increased drought and pluvial flooding. Do these events happen equally across the regions? Is North Africa experiencing these at the same rate as West, Central or Southern Africa, for instance?

A: There are differences. In the report, Africa is divided into nine areas. That’s basically based on the understanding of climate systems in the region. So, West Africa wouldn’t be the same as Southern Africa, for instance. All regions in Africa experience extreme heat. But it will be different across the regions.

Let me just take the example of the heatwave magnitude. We are expecting that the number of days that we have more than 35°C across Africa will increase substantially by 2050, but especially in West Africa and East Africa. The substantial increases in these regions may not be the same in Central Africa. So, it’s not evenly distributed; everything will not increase to the same degree everywhere.

Q: Talking about West Africa: the report projects precipitation to increase over Central Sahel and decrease in the western regions?

A: Yes. The report concluded that the western regions of Africa will experience decreased precipitation except in Western Sahel, and there will be an increase in the eastern regions.

Franck Kuwonu

A: Yes. For the western part, there will be an increase in aridity, unfortunately. Because we have a decrease in rainfall, that will impact agriculture, ecology and biosphere. In areas with projected increase in precipitation, it’s not impossible to have a greener land, for example in the eastern part. But again, we need more studies to confirm it.

Q: Another finding and projection of the report is the rise in sea level across the continent. The western side, from the Mediterranean Sea to the Atlantic, appears to be the most affected. How bad is it? How about the eastern parts along the Indian Ocean? To what extent are these affected?

A: Let’s look at what happens [now] before we talk about the future. For the Atlantic Ocean, from 1900 to 2018 the level rose by around 2 millimeters per year. The Indian Ocean was 1.3 millimeters per year. And recently, the levels are almost the same. Now, it’s around 3.40 millimeters in the Atlantic Ocean and 3.60 millimeters in the Indian Ocean. So, it’s serious on both sides. What makes it more serious on the western side, I think, is the the low-elevation land in the area.

Q: So, both are rising, and it looks like the Indian side has outpaced the western side. Is that correct?

A: Yes. But the impact is not felt the same way because coastal areas on the east side are higher than on the west side. If you look at the coast along Tanzania, those areas have high topography—higher elevation.

Q: Traveling along coastal areas in West Africa, from Lagos (Nigeria) to Abidjan (Côte d’Ivoire) for instance, one can see ruins of entire roads and villages, historical sites washed away by the sea. What is the main cause of this—expanding warming waters or sinking lands? Or is it the melting ice, which is far away from the continent?

A: When we talk about sea level rise, we must consider expansion due to the warming of oceans. And that contributes most to the global rise in sea-level. And then, we have the melting ice and glaciers. But I think that from the examples you just gave, these are more classified as coastal erosion than sea level rise, I think houses and roads disappearing are more about coastal erosion. And the continent has experienced shoreline retreats at the rate of one meter per year from 1984 until around 2016/2017, and that’s been very important as well.

Q: Are there other places around the world where, comparatively, the rate of the rise is much higher?

A: Similar to the extreme heats, the rate of rise is not uniformly distributed. For instance, the Atlantic is warming at a faster rate than the Pacific, leading to larger sea level rise than the global mean, along the European and US east coastal areas. There are also different factors such as land settling or rising due to loss of the weight of ice due to melting.

Q: What then are the likely consequences of the sea level continuing to rise?

A: The likely consequences would be on coastal areas because when the sea level rises, you tend to have more erosion from the sea, decline of water quality and destruction of different infrastructures.

Q: What lies ahead? Are the projected trends irreversible for the continent? What should people and policymakers be aware of going forward?

A: That’s a tricky question. Of course, we would benefit from having the greenhouse gases decreasing everywhere. In Africa, that’s what we are looking forward to, as we are very vulnerable. So, if you ask me what lies ahead for Africa, I would say it depends on global efforts. I think we know the facts. We know what is going to happen if we don’t make decisions. Through this report, we are putting facts in front of governments. So, it’s hard for me to say what lies ahead for Africa. But it really depends on global decisions as well as decisions made in every country in Africa regarding what to do based on these facts.

Footnote

Climate Change 2021: The Physical Science Basis: Key facts on Africa:

Mean temperatures and hot extremes have emerged above natural variability, relative to 1850–1900, in all land regions in Africa.

The frequency and intensity of heavy precipitation events are projected to increase almost everywhere in Africa with additional global warming.

Source: Africa Renewal, United Nations

Follow @IPSNewsUNBureau
  

Despite a fragile security situation, Central Africans overwhelmingly exercised their civic duty by going to polling centers and casting their votes. Credit: UN/MINUSCA

By Franck Kuwonu
UNITED NATIONS, Jan 29 2021 (IPS)

Central African Republic and in Niger held their presidential and parliamentary elections on 27 December 2020 to round up a challenging year where despite fears of disruption from the COVID-19 pandemic, most countries in Africa managed to stick to their scheduled elections.

However, in two of the most keenly watched countries, the polls did not proceed as initially planned. In Ethiopia, parliamentary elections slated for 29 August were pushed to mid-2021, while in Somalia the deadline for December 2020 parliamentary elections was missed, although the scheduled February 2021 date for the presidential polls still remains on the calendar.

Franck Kuwonu

In Somalia, the 2020 polls were to be the first in 50 years and voters were to elect the president and their representatives through direct ballots. The last universal suffrage polls in the country were held in 1969. Subsequent presidential elections held in 2009, 2012 and 2017 involved a system of thousands of clan delegates voting for parliamentary representatives, who in turn elected the president.

In Chad, legislative elections, originally scheduled for 13 December, are now slated for the last quarter of 2021.

Despite COVID-19

Last February, the Togolese went to the polls to elect their president, just a few weeks before the COVID-19 lockdowns.

Then in March, Cameroon re-ran parliamentary elections in about a dozen constituencies, while on 22 March, Guineans took part in a hotly-contested constitutional referendum and general elections.

A week later, Malians held their general elections. In May, voters in Benin elected their local representatives, while Burundians elected their president.

In June, Malawians were called again to the polls for a re-run of the presidential election after the courts invalidated the results of an earlier poll in 2019.

Despite a fragile security situation, Central Africans overwhelmingly exercised their civic duty by going to polling centers and casting their votes. Credit: United Nations

Egyptians chose their senators in August, while in October, Côte d’Ivoire, Seychelles, and Tanzania held their presidential elections and Cape Verdeans elected their city council representatives.

The month of November started with a constitutional referendum in Algeria held on 1 November, followed by general elections in Burkina Faso on 22 November.

Then 7 December, Ghanaians held their parliamentary and presidential elections, while Liberians were called for a constitutional referendum and for a mid-term Senatorial election.

On 27 December, the Central African Republic and Niger rounded up the year on elections in Africa in 2020. Central Africans cast their ballots despite attempts by some rebel groups to disrupt the polls. In Niger, the process is reported to have been largely peaceful.

In both countries, run-offs are scheduled in the New Year, starting a new 2021 calendar cycle on the continent.

Elections slated for 2021

Source: Electoral Institute for Sustainable Democracy in Africa (EISA)

Follow @IPSNewsUNBureau
  

Excerpt:

Dignity factory workers producing garments for overseas clients, in Accra, Ghana. Credit: Africa Renewal, United Nations

By Franck Kuwonu
UNITED NATIONS, Jan 13 2021 (IPS)

African countries opened their markets on 1st January under the continental free trade agreement and duty-free trading of goods and services across borders is now underway despite the COVID-19 pandemic and other teething problems.

The new market, created under the African Continental Free Trade Area (AfCFTA) agreement is estimated to be as large as 1.3 billion people across Africa, with a combined gross domestic product (GDP) of $3.4 trillion. This has a potential of lifting up to 30 million Africans out of extreme poverty, according to the World Bank.

Wamkele Mene, Secretary-General of the AfCFTA Secretariat

It is also expected to boost intra-African trade, promote industrialization, create job, and improve competitiveness of African industries on the global stage.

The pact will also empower women by improving their access to trade opportunities. Women make up the largest share of informal traders, representing 70 per cent to 80 per cent in some countries.

“Today is a historic day for Africa. In 1963 the founders of the Organization of African Unity had a vision of creating an Africa common market. The start of trading under the Africa continental free trade area today is an operational start towards the Africa common market. It has been a long journey of focus, determination and resilience,” said Moussa Faki Mahamat, the Chairperson of the African Union Commission, at the launch.

He added that the common market brings real hope for inclusive and sustainable industrialization across Africa.

However, for a smooth rollout, countries have to agree on some of the remaining issues such as the Rules of Origin, which are a key element in international trade as they are the cornerstone of preferential trade arrangement such as AfCFTA.

The World Trade Organisation (WTO) defines Rules of Origin as “the criteria used to define where a product was made” and are important for implementing other trade policy measures, including trade preferences (preferential rules of origin), quotas, anti-dumping measures and countervailing duties (non-preferential rules of origin). Duty and restrictions in several cases depend on the source of imports.

Countries that have ratified the AfCFTA agreement appeared to have agreed on the Rules of Origin on over 81 per cent of tariff lines.

As of today, Africa is in a position to start trading on over 81 per cent of products on preferential terms. These goods form part of the initial trading, while negotiations on the remaining 20 per cent are ongoing and are expected to be concluded by July 2021, according Faki.

But even as trading formally starts, the road to full implementation remains long. “It’s going to take us a very long time,” said Mene

“If you don’t have the roads, if you don’t have the right equipment for customs authorities at the border to facilitate the fast and efficient transit of goods… if you don’t have the infrastructure, both hard and soft, it reduces the meaningfulness of this agreement,” Mene told the Financial Times, before the launch.

Still, the promises of a free trade area are “transformative”.

The formal start of trading was given the official go-ahead at an extraordinary meeting in December 2020 where AU member states called on “women, youth, businesses, trade unions, civil society, cross border traders, the academia, the African Diaspora and other stakeholders to join them as governments in this historic endevour of creating the “Africa We Want” in line with the Agenda 2063.

The summit gave the official go-ahead for formal trade to start on the first day of the new year.

Over the years, regional economic community such as EAC, the ECOWAS and the SADC have tried to achieve these economic goals. The AfCFTA is set to bring these efforts together.

Franck Kuwonu

Two years later in March 2018 in Kigali, Rwanda, the treaty was signed by 44 countries. So far, 36 countries have ratified the treaty as of 4 December 2020 (see table). It entered into force on 30 May 2019 and trading started on 1st January 2021. Was it not for the COVID-19 pandemic, trading would have started six months earlier in July 2020.

It took just under 5 years from negotiations to implementation. Just about the same number of years that was initially envisioned in 2012.

Follow @IPSNewsUNBureau
  

Excerpt:

People living in Lagos State in Nigeria, simulate sneezing into their elbows during a coronavirus prevention campaign. Credit: Africa Renewal

By Franck Kuwonu
UNITED NATIONS, Jul 23 2020 (IPS)

Re-opening economies is a tough balancing act between keeping people safe from the virus while ensuring they can still make a living.

Some four months after the first COVID-19 case in Africa was reported in Egypt, countries on the continent are beginning to ease public health and social measures, such as lockdowns and curfews, imposed to curb the spread of the pandemic.

In Côte d’Ivoire, commercial activities have resumed, and students are back in classrooms, while in South Africa, where the army enforced strict lockdown rules, the government has allowed all essential services to resume operations, and on Monday 8 June some schools reopened.

As of 29 June, the World Health Organization (WHO) in Africa reports over 380,000 confirmed COVID-19 cases – with more than 181,000 recoveries. 9,500 people have lost their lives to the disease.

Across the continent, people are still encouraged to practice social distancing, wear masks and frequently wash their hands. International borders remain closed to regular passenger travel. Nevertheless, most countries are slowly easing restrictive stay-at-home measures in the face of their most severe consequences on the livelihoods of people.

In May, the United Nations Economic Commission for Africa (ECA) estimated that the continent could lose up to $65.7 billion (2.5 percent of annual GDP) for every month of lockdown.

Nigeria, the top African economy, may have lost about $18 billion which represents a 38 per cent drop in GDP in just five weeks of lockdown from March to April, the International Food Policy Research Institute (IFPRI), found.

However, as COVID-19 cases remain on the uptick, including in countries that have re-opened their economies, governments are having to balance containment with preserving people’s means of earning a living.

Franck Kuwonu

Rwanda, one of the first countries to impose a complete lockdown allowed people working in public and private essential services, including market vendors, to return to their workplaces at the beginning of May. A month later, authorities cancelled plans to re-open further as COVID-19 cases rose and the country registered its first coronavirus-related death.

Zimbabwe remains under an indefinite lockdown, with a fortnightly review to determine when to re-open.

At the start of the pandemic, Ghana’s president Nana Akuffo-Addo declared a lockdown in and around the capital Accra and other urban centres such as Kumasi in the south.

“We know how to bring the economy back to life. What we don’t know is how to bring people back to life,” President Akuffo-Addo said at the time.

Ghana ranks among the leading African countries in testing, and has registered a high number of cases, even as the lockdown was lifted. Since April, Ghanaians can move between urban centres that were earlier cordoned off. Internal flights have resumed. They are allowed into houses of prayer, but public gatherings remain highly restricted in size and schools remain closed.

Some countries decided against lockdowns altogether amid concerns of the socio-economic effects. Benin’s president Patrice Talon did not enforce restrictive measures that, he said, will “starve everybody” and “end up being defied and violated,” adding that the government lacked the “means of rich countries.”

“[A] one-size-fits-all approach to COVID-19 could have lethal consequences” for Africa, warned two University of Johannesburg academics in March, in The Conversation magazine, as more than half of the continent rushed to put in place very stringent transmission-curbing measures.

The easing of lockdowns appears to be an acknowledgement of those concerns. However, the accelerated increase in the number of COVID-19 cases being witnessed now suggests that previous stay-at-home orders were effective in curbing the spread of the virus.

According to WHO, the number of days for case numbers to double in a given country – increased during the lockdown period in most of the countries of the region (5 days to 41 in Cote d’Ivoire, 3 days to 14 in South Africa).

In a recent survey across 28 cities in 20 African countries, a majority of people say they supported these public health and social measures, even the most restrictive, aimed at slowing the pandemic. At the same time, some admitted to violating stay-at-home orders to look for food.

The survey was conducted between 29 March and 17 April by PERC (Partnership for Evidence- Based Response to COVID-19), a global private-public partnership on health, including the WHO, the African Centres for Disease Control (Africa CDC), and the World Economic Forum.

As COVID-19 began to spread in Africa, governments took measures early on to cushion people from the socio-economic impact of the pandemic. Namibia is offering emergency income grants to workers who have lost jobs, Cabo Verde is providing cash transfers and food assistance, while Togo is subsidizing access to water and electricity, to name a few.

Yet, the PERC warns that those targeted measures and the gradual re-opening of public spaces may not be enough to meet people’s needs in the long run as domestic and international supply chains remain disrupted.

These are concerns shared by African governments as they contend with when and how to re-open their economies while still managing the health aspects of the ongoing crisis.

*This article, originally published in UN’s Africa Renewal, has been updated to reflect the number of confirmed cases, recoveries and deaths as of 29 June.

Excerpt:

Wizkid performs in London, United Kingdom. Photo: Alamy/Michael Tubi

By Franck Kuwonu
UNITED NATIONS, Aug 16 2018 (IPS)

It is a cold evening in Antwerp, Belgium’s second-largest city, famous for diamonds, beer, art and high-end fashion. Inside a small restaurant, a mix of the latest American pop and rap—clearly enjoyed by diners—is playing on a radio. Nigerians Olalekan Adetiran and Adaobi Okereke, enjoying a kebab dinner, are startled when the radio begins playing the unmistakable “Ma Lo”—a catchy, midtempo and bass-laden song by popular Nigerian artistes Tiwa Savage and Wizkid.

The song, currently a hit in Nigeria and across Africa, awakens thoughts of home; they cannot stop smiling at the pleasant surprise. They are visiting Belgium as part of a tour of European countries and their cultural landmarks.

A week earlier, barely two months after its release, the eye-popping video of the song had been viewed on YouTube more than 10 million times—and counting.

For Mr. Adetiran, hearing “Ma Lo” on a Belgian radio station not known to cater to African communities confirms that music from Naija (as Nigerians fondly refer to their country), is going places. It reflects the greater reach of a new generation of Nigerian artists.

Just like the country’s movie industry, Nollywood, Nigerian music is drawing interest from beyond the borders, showcasing the vitality of a creative industry that the government is now depending on, among other sectors, to diversify the economy and foster development.

Greater recognition

Last November, Wizkid won the Best International Act category at the 2017 MOBO (Music of Black Origin) Awards held in London, the first for an Africa-based artist. He beat back competition from more established global celebrities such as Jay-Z, Drake, DJ Khaled and Kendrick Lamar.

At the same MOBO Awards, Davido, another Nigerian artist, took home the Best African Act award for “If,” one of his hit songs—a love-themed ballad with a blend of Nigerian rhythms and R & B.

Since its release in February 2017, the official “If” video has racked up more than 60 million views on YouTube, the highest number of YouTube views for any Nigerian music video and one of the highest ever recorded for a song by an African artist.

Across the African continent, other musical groups, such as Kenya’s boy band Sauti Sol, Tanzania’s Diamond Platnumz and South Africa’s Mafikizolo, have collaborated with or featured Nigerian top stars in attempts to gain international appeal. Reuters news service calls Nigerian music a “cultural export.”

The Nigerian government is now looking to the creative industries, including performing arts and music, to generate revenues.

A billion-dollar industry?

“When we talk about diversifying the economy it is not just about agriculture or solid minerals alone, it is about the creative industry—about the films, theatre and music,”
Lai Mohammed, Nigeria’s minister of information and culture


In rebasing or recalculating its GDP in 2013, the Nigerian government included formerly neglected sectors, such as the entertainment industries led by Nollywood. As a result, the country’s GDP increased sharply, from $270 billion to $510 billion, overtaking South Africa that year as the continent’s biggest economy, notes the Brookings Institution, a US-based nonprofit public policy think tank.

Brookings reports, however, that the GDP rise didn’t show an increase in wealth and that a recent crash in the price of oil, the country’s main export, is slowing economic growth.

Nigerian music sales revenues were estimated at $56 million in 2014, according to PricewaterhouseCoopers (PwC), an international accounting and auditing firm. The firm projects sales revenues to reach $88 million by 2019.

Globally, the creative industry is among the most dynamic economic sectors. It “provides new opportunities for developing countries to leapfrog into emerging high-growth areas of the world economy,” the United Nations Conference on Trade and Development (UNCTAD), a UN body that deals with trade, investment and development issues, said in a 2016 report.

Over the last decade, Europe has been the largest exporter of creative products, although exports from developing countries are growing fast too, UNCTAD reported.

According to PwC, lumped together, annual revenues from music, movies, art and fashion in Nigeria will grow from $4.8 billion in 2015 to more than $8 billion in 2019,.

Nigeria’s National Bureau of Statistics reports that the local music sector grew “in real terms by 8.4% for the first three months of 2016” and that in the first quarter of 2017, the sector grew by 12% compared with the same period one year prior.

The growth may be attributed to a reversal in music consumption patterns, according to local media reports. Up to the early 2000s, the music in clubs and on the radio in Nigeria was dominated by British and American hit songs.

Not anymore. Reportedly, most Nigerians now prefer songs by their local artists to those by foreigners, even the big ones in the West.

“When I go out, I want to hear songs by Davido or Whizkid or Tekno; like other people, I cannot enjoy myself listening to songs by foreign artistes anymore,” says Benjamin Gabriel, who lives in Abuja. With a population of about 180 million, Nigerian artists have a huge market to tap into. The big ones like Whizkid and Davido are feeling the love—maybe the cash too!

The new oil

“We are ready to explore and exploit the ‘new oil,’” Nigeria’s minister of information and culture, Lai Mohammed, commented ahead of a creative industry financing conference held in Lagos last July.

“When we talk about diversifying the economy it is not just about agriculture or solid minerals alone, it is about the creative industry—about the films, theatre and music,” Mr. Mohammed said.

He was reacting to UNCTAD’s findings that the creative industry contributed £84.1 (about $115.5) billion to the British economy in 2014 and $698 billion to the US economy that same year. “Nigeria cannot afford to be left behind,” Mr. Mohammed declared.

The Nigerian government is already providing incentives to investors in the sector, including a recent $1 million venture capital fund to provide seed money for young and talented Nigerians looking to set up business in creative industries.

The government is also allowing the industry “pioneer status,” meaning that those investing in motion picture, video and television production, music production, publishing, distribution, exhibition and photography can enjoy a three- to five-year tax holiday.

Other incentives, such as government-backed and privately backed investment funds, are also being implemented.

Yet as hopes of a vibrant industry rise, pervasive copyright violations could stunt its growth.

Profits are “scattered”

In December 2017, the Nigerian police charged three people in Lagos with copyright violations. Their arrests had been widely reported in the country months earlier. “Piracy: Three suspects arrested at Alaba with N50 million [US$139,000] worth of materials,” Premium Times, a Lagos-based newspaper, announced in a headline.

Alaba market in Nigeria’s commercial capital, Lagos, is famous for electronics, but it is also notorious for all things fake and cheap, attracting customers from across West Africa to East Africa.

Recent efforts by the authorities to fight piracy led to police raids of Alaba and other markets in the country, resulting in the seizure of pirated items worth $40 million.

Despite such raids, the business of pirated music and movie CDs continues unabated, turning enforcement efforts into a game of Whack-A-Mole. With minimal returns from CD sales, Nigerian artists rely on ringtone sales, corporate sponsorship contracts and paid performances to make ends meet. Most Nigerian artists now prefer online releases of their songs.

Still, online release poses its own challenges. For example, Mr. Adetiran and Mr. Okereke recall visiting in March 2017 a club in Dakar, Senegal, where DJs spun Nigerian beats nonstop. The two realised only much later that those songs had been downloaded from the Internet.

“When you create your content and put it out, it’s scattered,” Harrysong, a Nigerian singer, told the New York Times in June 2017, echoing Mr. Adetiran and Mr. Okereke’s experience. He was expressing performers’ sense of powerlessness as they lose control of sales and distribution of their music.

The Times summed it up like this: “Nigeria’s Afrobeat music scene is booming, but profits go to pirates.”

*Africa Renewal, a magazine published by the United Nations, was launched in 1987. It was formerly published as Africa Recovery/Afrique Relance. 

This article was originally published here

Chef and owner of a restaurant and catering company in Liberia. Credit: UN Photo/C. Herwig

By Franck Kuwonu
UNITED NATIONS, Oct 5 2017 (IPS)

A few years ago, more than half a century after the concept was first proposed, the government of Côte d’Ivoire completed construction of the Henri Konan Bédié Bridge, a span over the Ébrié Lagoon linking the north and south of Abidjan, the country’s main city. The project became a reality after the government received development bank and private capital financing.

Similarly, the Dakar-Diamniado Highway in Senegal, although a public structure, was built and is being operated by private companies. Increasing difficulties in obtaining traditional financing, including bank loans for public infrastructure such as roads, railways and dams are forcing African countries to explore alternative financing approaches.

Having the private sector build and operate infrastructure, recoup its investments and later transfer the infrastructure to governments is one way of compensating for the shortfall in official development assistance and banks’ reluctance to provide loans.

Economic backbone

Aid to the least developed countries (LDCs), most of which are in Africa, fell by 3.9% in 2016, according to the Organisation for Economic Co-operation and Development (OECD), which promotes policies that improve economic and social well-being of rich countries.

At the moment, governments are coming up with innovative financing strategies, while big corporations are relying on investments or bank loans to grow and expand their businesses. However, Africa’s small and medium-size (SMEs) enterprises, still struggle for financing.

Governments that seek financing from private partnerships or international financing institutions such as the African Development Bank (AfDB), the International Finance Corporation (IFC), the World Bank and others often realise that the funding available cannot meet the financial needs of the SMEs.

“In Ghana, SMEs can safely be regarded as the backbone of the economy, employing thousands of people,” Ghana’s minister of finance, Ken Ofori-Atta, said at a gathering of Ghanaian entrepreneurs in June.

SMEs represent 92% of all local businesses in Ghana, providing up to 85% of manufacturing jobs in the country and contributing about 70% to the country’s GDP. In Nigeria, 37 million SMEs employ about 60 million people and account for about 48% of the country’s GDP.

South Africa (the most advanced economy south of the Sahara) is home to more than 2.2 million SMEs, about 1.5 million of them in the informal sector. About 43% of South Africa’s SMEs operate in trade and accommodations, according to South Africa’s Small Enterprise Development Agency (SEDA), which, among other functions, implements the government’s small business strategy.

A 2016 SEDA report says that SMEs face challenges in accessing finance and markets. Yet eight out of 10 jobs and nine out of 10 of all businesses in sub-Saharan Africa are related to small business, according to UN figures.

Potential

SMEs, especially those in the informal sector, have a hard time accessing bank loans. A majority of African SMEs rely on personal savings or start-up capital from friends and family.

“Even when a bank is willing to lend them some money, the collateral and guarantee they require and sometimes the down payment is just too much for a small company like us,” says Alex Treku, the communications and projects manager at the Togo-based LOGOU Concept Togo (LCT).

LCT manufactures a type of electric food mixer (the Foufou Mix) that is used in place of the traditional mortar and pestle and saves women the energy used in pounding yam for fufu, a West African staple dish.

“The Foufou Mix allows for quick and hygienic yam preparation in approximately eight minutes,” the African Innovation Foundation (AIF) said when it named LCT the runner-up for the Innovation Prize for Africa in 2014.

AIF added that “pounding of yam has traditionally been done by women; this innovation provides a solution not currently being contemplated by international manufacturers. It also opens up possibilities for a whole new industry for manufacturing of such appliances on the continent.”

One-third of Nigerians reportedly eat fufu, making the country of 170 million people an attractive market for the gadget. Yet LCT is able to manufacture only about a hundred mixers a month, according to Mr. Treku. The reason? “We don’t have access to bank credit or funds to grow our business,” he says. LTC currently employs 19 people.

Operational capacities and access to markets are other challenges African MSMEs face, but access to financing is the most critical.

Partnership and innovation

On the occasion of the first-ever MSME Day marked globally on 27 June, the AfDB called for an increase in new and affordable financing schemes. Both the AfDB and the IFC would like SMEs to have increased access to financing.

Last year the AfDB reported helping 156,000 SME business owners through financial intermediaries such as commercial banks, development investment and guarantee funds. That’s a good start, but hardly enough, experts say.

By providing coverage for risks associated with lending to SMEs, an intermediary such as the African Guarantee Fund (AGF) can provide credit guarantee facilities to financial institutions that give loans to enterprises they would normally be reluctant to lend to.

Last June, the AGF announced that through a partnership with the African, Caribbean and Pacific Group of States, the European Union and the UN Development Programme, some 5,000 SMEs in “development minerals” in five countries will have more affordable financing because of AGF’s $12 million credit guarantee.

Two years ago, the IFC and Ecobank, a pan-African commercial and investment banking group, launched a $110 million risk-sharing facility that allows Ecobank to lend money to SMEs operating in fragile and conflict-afflicted states in West and Central Africa. In addition to current efforts by traditional banks to lend to SMEs, experts have urged SMEs in Africa to explore innovative financing, such as cooperative financing and diaspora funds.

The World Bank is said to be exploring other ideas like crowdfunding—an innovative way of financing a project by raising funds from a very large number of people—peer-to-peer lending, social impact bonds and development impact bonds.

But the AfDB wants credit providers to increase lending by at least $135 billion to meet demand by African SMEs. As the overall financing gap in developing countries is currently between $2.1 and $2.6 trillion, new strategies are required to finance the 17 Sustainable Development Goals.

According to the World Economic Forum, “blended finance” could plug this hole. Should these funds become available, the majority of SMEs still operating in the informal sector will have to “take giant steps towards formalisation in order to increase their potential for accessing formal credits,” according to a 17 March study, Financing the Growth of SMEs in Africa: What Are the Constraints to SME Financing within ECOWAS? published in the Review of Development Finance.

The authors of the study maintain that policy reforms are as necessary as available financing. They also suggest requiring companies to provide credit information to boost creditors’ confidence and to make sure that government-sponsored credit schemes are managed efficiently and transparently.

*Africa Renewal is published by the UN’s Department of Public Information