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In this week’s Pulse:
Tunisia political crisis threatens democracy, Kenya to export medics to UK despite domestic shortage, US President’s initiative to revive trade relations with Africa, genetically engineering mosquitoes to eliminate malaria, Central Bank crypto for monetary policy in Nigeria, Simone Biles could inspire Black athletes to prioritise mental health over sport, and can Obama’s investment in NBA Africa inspire the diaspora to do more?
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Despite being in place for the last two decades, the AGOA trade Act - that aims to enhance market access to the US for SSA countries - has failed to halt the decline in African exports to America since 2005. Remaining trade barriers on common exports from Africa such as agricultural products and textiles have hindered exports to the US for many African countries. Instead, many African countries are increasing trade with China and the EU. Read below for US President Biden’s plans to revive trade with Africa via a $80mn initiative focused on investing in women entrepreneurs and SMBs.
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Numbers in the Spotlight
$2,000,0000,000
(USD2bn) hydropower dam commissioned in Zambia
$80,000,000
(USD80mn) sought by US President Biden to revive trade with Africa, with a focus on support for women entrepreneurs and SMBs
Up to $59,000,0000
(USD59mn) is the amount BioNTech intends to invest in early-stage development of Malaria and TB vaccines in Africa
59,000GW
is the potential of Africa’s wind power - enough to meet the Continent’s energy need 250x over
894
Kenyan health professionals already work in NHS England, with more set to join them in UK in coming months
32% of Nigerians
are using cryptos in 2021 - more than any other country - as Nigeria’s Central Bank plans to launch its own digital currency
25 world championship medals
won by Black American Simone Biles, who withdrew from Tokyo Olympics competitions
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On The Continent This Week
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Effective internal and regional security, and foreign policy
Tunisia’s democracy threatened. In what has been labelled by critics as a coup, Tunisia’s President Kais Saeid has removed the Prime Minister and several senior government officials, suspended parliament, and imposed emergency law. Whilst many Tunisians are celebrating Saeid’s intervention following months of economic unease, his unilateral move threatens to reverse the democratic gains of the 2010 Arab Spring in its birthplace. Tunisia was the only Arab Spring country that embraced full democracy characterised by ‘free and fair elections featuring Islamists and secularists, free-marketeers and communists’. But with little economic and political progress under more than 10 governments in 10 years, time may be ripe for a new discourse to repair a system that doesn't seem to be working for all.
Access to financial services and products
Biden’s US-Africa trade relations. US President Joe Biden is requesting $80mn from Congress for a new trade initiative with the Continent, with a focus on investing in women entrepreneurs and SMBs. Whereas America’s latest move to revive trade with Africa could improve access to finance for African businesses, some analysts argue that it’s a distraction from the ineffectiveness of AGOA - the 20-year old flagship US trade deal with SSA. Despite AGOA granting African countries duty-free access to the US market for 6,500 products, the Continent accounts for only ~1.5% of US imports. Existing protectionist tariff barriers on a range of agricultural products and textiles particularly hinder African countries from making the most of AGOA, and getting a bigger slice of the $2.5trn US import market (2019).
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High value skills development and talent repatriation
The UK to hire medics from Kenya. The UK has granted a request by Kenya’s President Uhuru Kenyatta for unemployed Kenyan medics and non-graduate skilled workers to be recruited into the British labour force. Although details of the deal remain scanty at this point, the move could turn out to be a perverse incentive, as employed medics might equally quit their Kenyan jobs in favour of moving to the UK. With Kenya having a shortage of 42,800 health workers in 2018 (according to the then Cabinet Secretary for Health Cecily Kariuki), and a health system that is significantly stretched by some of the highest Covid-19 infection rates in Africa, is now the time for Kenya to be exporting medics? Before the deal, NHS in England had 894 Kenyans.
Home-grown digital infrastructure & platforms
Nigeria to launch own digital currency, 'E-Naira'. Nigeria’s Central Bank (CBN) plans to launch its own crypto in October to become the first country in Africa and the fourth in the world to do so after China, the Bahamas and Cambodia. Having banned its financial institutions from facilitating crypto transactions over money laundering and security concerns, CBN’s E-Naira can reposition it for better stewardship over monetary policies - instruments to control inflation and financial stability - that have become less effective in recent years. With 32% of Nigerians found to be using cryptos in 2021 - more than any other country - the CBN is increasingly losing some control to private digital networks seeking more from the $2.2trn global crypto market. But the E-Naira equally raises privacy concerns that the government could use it to monitor private-party transactions.
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Exporting culture and identity
Can Obama’s NBA Africa stake draw the African diaspora? Former US President Barack Obama has obtained a minority equity stake in NBA Africa, which aims to develop local basketball talent on the Continent and give global exposure to African players. The involvement of Obama, who remains one of the most respected figures in the world, offers a case study for the African diaspora to give back to the Continent through financing and expertise for skills development. E.g. The African diaspora in the US in 2019 was estimated at ~44mn with a purchasing power of ~1.3trn and African immigrants are more highly educated than America’s native-born population. There are about 175mn Africans in the diaspora, according to the World Bank. Tapping into the diaspora’s resources could have a transformational effect on development in Africa.
Baseline healthcare & disease protection
Potential ‘game changer’ in eliminating malaria. For the first time, scientists have displayed that genetic engineering can render mosquitoes infertile – raising hopes of one day eliminating malaria. If this technology, which has the potential to wipe out populations of certain mosquito species that carry the malaria parasite, passes additional trials and eventually becomes mainstream, it could complement current interventions like sleeping nets, insecticides and vaccines, and become a ‘game changer’ in eliminating the disease. While malaria remains a public health challenge in most tropical countries, the impact of the disease is disproportionately higher in SSA, which accounts for 94% of global cases and deaths. Malaria costs Africa $12bn annually in economic value, according to the WHO.
End-to-end value chain capture
BioNTech to make Malaria and TB vaccines in Africa. BioNTech wants to manufacture vaccines for Malaria and Tuberculosis in Africa, with clinical trials for the vaccine candidates planned for next year. With BioNTech planning to co-locate its African plants with the vaccine technology transfer hubs being developed by the WHO, the company will support the Continent to build local capabilities in manufacturing, technical know-how, market linkages, and supply chain linkages for vaccine production. This will help elevate African vaccine companies from largely packaging to end-to-end manufacturing, enabling the Continent to scale up production, reduce its 99% reliance on pharmaceutical imports, and tap into the global vaccines market - expected to reach ~$74bn in 2028.
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Proportional representation in politics, business and community leadership
Simone Biles sends strong message for Black athletes to prioritise self. Simone Biles, the most decorated gymnast of all time, recently pulled out of some competitions at the Tokyo Olympics over concern for her mental health – sparking a discussion about sports, mental health, gender and race. Some people criticised Biles for her decision, but she has predominantly received overwhelming support for her bravery in the face of adversity. She follows the example set by fellow Black athlete Naomi Osaka in refusing to sacrifice her wellbeing for sport in a society that objectifies Black athletes. As a role model to millions of Black children, Biles has shown that it's fine to prioritise wellbeing in the face of immense pressure to excel.
Essential infrastructure, personal living-space & utilities
Zambia commissions $2bn hydropower dam. Zambia has commissioned a $2bn hydroelectricity dam with an installed capacity of 750MW, which increases the country’s power supply by 38%. The operationalisation of the Kafue Gorge Lower Hydropower Station cuts Zambia’s power deficit from 810MW to just 60MW, enabling the landlocked country to raise access to electricity in rural areas from the current 4%. More electricity will also power Zambia’s drive to diversify from copper (60% of the country's total exports), which hit a 3-year price low last year triggering a fiscal deficit of 11.7% of GDP. Inadequate infrastructure has hindered Africa’s leading copper producer from transforming its water resource advantage to an energy advantage e.g. only 23% of River Zambezi’s 20,000MW potential is being harnessed.
Scaleable energy access
Africa’s wind power potential is 250 times more than the Continent’s energy demand. A new study published by the International Finance Corporation (IFC) has revealed that Africa's wind power potential stands at 59,000GW, enough to meet the Continent’s need 250x over. With Africa’s installed wind power capacity just 0.01% of this potential, the Continent possesses endless opportunities to harness its wind resources to generate electricity, reduce carbon emissions, increase adoption of clean energies and create jobs. Political will, partnerships between the private and public sectors, reducing entry barriers, expanding transmission infrastructure and increasing cross-border energy trading can help quicken the pace of tapping Africa’s wind power potential.
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Intra-continental connectivity, collaboration & trade
Tanzania joins initiative to make East Africa a single tourist destination. Tanzania has agreed to join the East African Community’s Single Tourist Visa scheme that allows visitors to acquire one visa in order to visit all member countries. The scheme launched in 2015 with the membership of Kenya, Uganda and Rwanda – enabling a tourist to pay $100 for a 90-day visa to visit the three countries. Tanzania’s entry will add significant value to the EAC tourist visa by bringing on board six more World Heritage Sites, including Mount Kilimanjaro (Africa’s tallest mountain). Tourism accounts for ~17% of export earnings, ~10% of GDP and ~7% of employment in the region. With Africa the second fastest growing tourism market in the world (pre-Covid), enabling ease of intra-continental travel can only aid growth.
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Finally...
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