By Motoki Aoki
On June 3, German software giant Systems Applications Products (SAP) announced “Digital Africa,” a partnership with the German Ministry for Economic Cooperation and Development (BMZ) that seeks to support the development of Africa’s digital potential. This program—one of SAP’s $500 million investment initiatives—will train 20,000 children in 11 African countries, underscoring growing recognition of the role of Information, Communications Technology (ICT) in driving broader development in Africa. The new partnership comes in recognition of the significant opportunity ICT driven initiatives present in Africa, both in terms of development impact and profit potential. Here’s a review of that opportunity, and the trends that are driving it.
Access to mobile ICT technology has the potential to transform African economies.
Diversified economy for Africa‘s high demographic dividend
Surprisingly, by 2035, the number of Africans joining the working age population (ages 15-64) will exceed that from the rest of the world combined. With the right conditions for sustainable job creation, Africa will enjoy a rapid-growing demographic dividend. Indeed, many Africans are migrating from rural to urban areas to search for better opportunities. This massive urban migration can be transformed into a positive, but in the short term it will stretch already limited public resources. Continue reading
By Ariel Gandolfo
On May 29, the International Finance Corporation (IFC) and the state-owned China International Trust and Investment Corporation’s subsidiary CITIC Construction launched CITICC (Africa) Holding Limited, a $300 million investment platform to develop 30,000 African homes over the next five years. Projects would begin in Nigeria, Rwanda, and Kenya and expand throughout the continent.
The deal addresses a crucial regional gap in housing finance. Kenya is short 2 million housing units, Nigeria a whopping 17 million units, and these numbers are set to grow. According to the World Bank Group, three billion people, or 40 percent of the world’s population, will need new homes in the next 15 years, most of them in Africa. The United Nations Human Settlements Program (UN Habitat) states that the African continent is experiencing the highest rate of urbanization in the world, with approximately 40,000 people migrating to cities every day.
The graphic illustrates the scope of population growth in major cities across Africa. Source: Niti Bhan
A number of African cities already face housing shortages, with notorious informal settlements such as the massive Kibera slum outside Nairobi, Kenya, home to almost 1 million people. UN Habitat reports that in some countries, including Nigeria, Sudan, and the DRC, over half of urban populations live in slums. Continue reading
By Michael Jacobs
In order to provide some perspective on the shifting composition of development related financial flows over the last few decades, we assembled graphs using data from the UN Conference on Trade and Development to illustrate trends in Official Development Assistance (ODA), Foreign Direct Investment (FDI), and remittances. The numbers are compared for developing countries in three discrete regions: Asia, the Caribbean/Americas, and Africa. After a quick analysis of the results, a few common themes are apparent: FDI now exceeds ODA flows for developing countries in all three regions, and ODA flows, long flat relative to FDI in Asia and the Americas, are now leveling off in Africa as well.
This new reality reflects a paradigm shift in how we should view development in Africa, and globally– ODA will continue to play a critical development role, but as a force to mobilize, direct, and augment the substantial financial flows sourced from elsewhere. These snapshots illustrate clearly that the ODA “bull market” is a thing of the past, and development strategy must adjust accordingly.
- In Asia today, FDI far exceeds ODA flows, and while remittances are substantial, remittance flows are also dwarfed by FDI. We have to look all the way back to 1985 to see a point at which ODA flows were greater than FDI– while ODA remained flat and even declined slightly in the 1990’s, FDI exploded.
Donald Kaberuka, President, African Development Bank Group. Photo taken from the OECD Development Centre’s flickr photostream used under a creative commons license.
By Daniel Runde
Last week I was in Abidjan, Ivory Coast (currently and thankfully “Ebola free”) and had the opportunity to spend time with the board and the senior management of the African Development Bank. The bank was founded by 23 African countries in 1964, and today has authorized capital in excess of $43.5 billion. The United States joined in 1983, and is the bank’s largest non-regional shareholder. Over the next ten years the AfDB will face unique opportunities as well as unprecedented challenges to relevance. The new President slated for selection in 2015 should be chosen with these challenges and opportunities in mind.
Donald Kaberuka, a former Rwandan finance minister, has led the ADB since 2005. Mr. Kaberuka oversaw Rwanda’s post-conflict economic recovery, and is well-regarded in both Washington and Africa. At the time of his selection, he was seen as the choice of the African “francophone” countries (French is one of AfDB’s two official languages) despite the fact that Rwanda’s official language is now English. His tenure is limited to two five-year terms, the second of which will conclude in May 2015.
As President of the AfDB, Mr. Kaberuka pushed the bank to approve a ten-year strategy focused encouraging private sector activity to absorb the 15 million young people that join the work force every year in Africa and programs that address the nexus of food, water and energy. To achieve these goals, his board approved an operational orientation that targeted:
- Infrastructure Development
- Regional Integration
- Policy to Support and Enable Private Enterprise
- Improved Governance
- Skills and Technology Acquisition
By Jing Jin and Caitlin Allmaier
According to a recent World Health Organization (WHO) report, Ebola has claimed nearly 2300 lives across West Africa, marking the worst outbreak on record. While providing emergency food and health aid is necessary for managing the ongoing crisis, it is important to look forward and consider strategies for rebuilding affected communities. One key point of breakdown in understanding occurs at the juncture of cultural tradition and health education. Traditional burial practices, gender roles, and food consumption have all contributed to the severity of the current Ebola outbreak. As health professionals work on education and target behavioral change to reduce the risk of future Ebola outbreaks, there must be an understanding of existing social and cultural norms.
One cultural norm that has been pegged as a potential line of transmission for the current Ebola outbreak is the consumption of wild game, colloquially known as “bushmeat.” Bushmeat is a term that covers everything from caterpillars to elephant meat, and is a traditional and relatively abundant source of low-cost protein in many parts of Central and West Africa. Ebola is thought to originate with fruit bats, and can be spread to other animals via direct contact, including humans. The hunting, butchering, or eating of infected animals can result in infection.
Bushmeat can transmit Ebola, but is a crucial source of protein across much of Africa