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Morocco prepares to host global climate change conference

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More than 30,000 people are expected to attend the COP22 gathering in Marrakesh in November.

Morocco has begun preparations for COP22, the 2015 global climate conference, where African nations hope to see further action to help mitigate damage from climate change.

The event, expected to attract 30,000 attendees, will be held November 7 – 18 in Marrakech. Morocco recently appointed a committee, headed by Foreign Minister Salaheddine Mezouar, to guide logistical preparations.

The conference follows COP21 last November in Paris, where 195 participating countries produced a landmark agreement to reduce carbon emissions.

Repairing damage will be key issue

The upcoming conference is expected to focus on an issue of great importance to many African nations: Mitigation of damage already done by climate change and help adapting to a new environment.

Speaking at a recent “From COP21 to COP22” conference in Geneva, Helen Clark, administrator of the United Nations Development Program, said the next conference must drive mitigation efforts.

Following the Paris agreement, Clark said, agencies and governments must “scale up” initiatives to repair or reduce damage and help countries adapt to changing environmental conditions.

Clark said her agency would facilitate access to financial and technical resources along with other major global actors.

From decision to action

She said COP 22 in Morocco marks a transition from the consensus building and decision-making of Paris to a “COP of Action.”

Clark said that in addition to supporting development to reduce emissions, her agency will work with more than 100 countries to finance mitigation measures as well as strengthening disaster management work and linking it to climate change damage.

While Africa is the least polluting continent on the planet, it has suffered some of climate change’s most severe effects.

At the climate conference in Paris, African leaders emphasized the need for financial help to address losses in their countries.

Drought, flooding, erosion hit Africa

Southern Africa, including Mozambique, Botswana, Zimbabwe and South Africa has been hard hit by drought as have Ethiopia, Eritrea and Somalia in the Horn of Africa.

Drought has nearly emptied the Kariba Dam reservoir on the Zimbabwe-Zambia border, forcing power shortages and energy rationing.

At the same time, heavy rains, landslides and flooding have hit Burundi, Nigeria and Malawi.

In tiny Zanzibar, the rise of sea levels is salinizing the soil, making farming impossible. Zanzibaris have also seen rising temperatures, floods and increased sea waves.

Coastal erosion is emerging as a major threat in West Africa, where large shares of gross domestic products are associated with the sea, including fishing and tourism.

Financial help to mitigate damages and help countries adapt to a new and changing environment are expected to take center state at the Marrakech conference.

Morocco has ambitious plans to reduce emissions

Morocco hopes hosting the conference will also shine an international spotlight on its ambitious efforts to reduce its own reliance on greenhouse gas emissions with its pledge to reduce them by one third percent by 2030.

Morocco plans to increase the share of renewable energy to 42 percent by 2020 and to 52 percent by 2030. The country recently opened what is believed to be the world’s largest solar power plant near the city of Ouarzazate, about 120 miles southeast of Marrakech

As preparations get under way, organizers have begun holding workshops to educate tour and hotel operators and discuss logistics in the city of about 1 million population is Morocco’s most popular tourist destination, known for its colorful markets. Marrakech hosted COP7 in 2001.

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Finance minister says South Africa not on the path to austerity

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JOHANNESBURG (Reuters) – South Africa’s recent budget was not aimed at implementing austerity measures and would not go the same path taken by some countries in Europe, the finance minister said on Thursday.

Gordhan’s pledge to narrow the budget deficit to 2.4 percent of GDP by 2018/19 was aimed at placating ratings agencies that had warned of downgrades.

“We are nowhere near austerity. We haven’t cut anybody’s pension, we haven’t raised the retirement age, haven’t cut any jobs in the public sector. Austerity as it was applied in parts of Europe is not what we are trying to do here,” Finance Minister Pravin Gordhan said at a business conference.

On the reported dispute between himself and the South African Revenue Service commissioner Tom Moyane, Gordhan said the dispute would be resolved in due course.

The two men have clashed amid a probe into a unit which allegedly operated unlawfully in the department under Gordhan’s watch during his previous stint as commissioner.

South Africa’s rand currency fell nearly 4 percent on Friday, its biggest daily loss since 2011, after Gordhan said there were attempts to discredit him and the integrity of the Treasury through the investigation.

The investigation also led to media reports of a fallout between Gordhan and Zuma, which both men have dismissed.

“I will stick to my job and do the best I can,” Gordhan said.

Gordhan said Treasury officials would meet investors in London, Boston and New York next week in a non-deal roadshow meant to clarify South Africa’s economic plans.

“(We will) explain the budget to them and the kind of direction that we want to go in,” Gordhan said.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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Data shows decline in governance in 21 African nations

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10 countries see improvement in their political systems and Mauritius, Cabo Verde and Botswana are the top rated.

Africa has seen scant improvement in national governance in recent years and more than a third of its 21 nations saw declines in the quality of their civic systems, according to a comprehensive index established by a Sudanese philanthropist.

The overall average for the continent increased by only 0.2 points to 50.1 out of a total of 100 possible points between 2011 and 2014, according to the Ibrahim Index of African Governance. The index also showed a decline of more than two points in the area of economic opportunity.

Twenty-one countries, including five of the top ten nations, have experienced deterioration of government performance since 2011 while only 10 countries registered improvement.

The index revealed significant gaps. Mauritius was the top-rated nation with a score of 79.9; war-torn Somalia had the lowest with a score of only 8.5. Regionally, Southern Africa had the highest rating for governance at 58.9. Central Africa had the lowest, 40.9.

Index assesses safety, business climate

The annual index is produced by the foundation of Sudanese telecom billionaire Mohamed Ibrahim, who is known for fighting corruption. Launched in 2006, it evaluates governance in each of 54 African countries based on 93 indicators that fall into four broad categories: safety and rule of law, human development, participation and human rights, and sustainable economic opportunity.

The top 10 countries, with their ratings in parentheses, are: Mauritius (79.9), Cabo Verde (74.5) Botswana (74.2), South Africa (73), Namibia (70.4), Seychelles (70.3), Ghana (67.3), Tunisia (66.9), Senegal (62.4), and Lesotho (61.1).

Mauritius, Cabo Verde, Botswana, Seychelles and Ghana, saw ratings declines while the other five countries improved.

Other countries that showed improvement were: Ivory Coast (48.3), Morocco (57.6), Rwanda (60.7), Senegal (62.4), and Zimbabwe (40.4).

Ivory Coast shows most improvement

Ivory Coast was most improved with an increase of 8.4 points. The West African nation is emerging from years of civil war that was triggered by a disputed election in 2010 and left an estimated 3,000 people dead. Ivory Coast held successful democratic elections for president in 2015.

War-torn South Sudan, Mali and the Central African Republic posted the steepest drops in the ratings. South Sudan’s rating declined by 9.6 points to 19.9 out of 100. The Central African Republic’s rating decreased by 8.4 points to 24.9. Mali was down 8 points to a rating of 48.7.

Thousands have been killed or displaced in South Sudan as the government battled rebel forces since 2013. The United Nations has warned that nearly 25 percent of the population of South Sudan is in urgent need of food.

After years of civil unrest, Mali has been plagued by jihadist attacks targeting tourist locations. Islamist militants killed 20 hostages in November at a hotel in the capital of Bamako.

In the Central African Republic, hundreds have been killed and an estimated 35,000 people displaced since 2013, when a mostly Muslim group overthrew the government. Widespread accusations of human rights abuses by that group prompted formation of mostly Christian militias that have retaliated against Muslims.

Tanzania, Uganda among those with declines

These countries had also ratings declines of one point or more: Tanzania (56.7), Uganda (54.6), Mozambique (52.3), Gambia (50.5), Cameroon (45.9), Guinea-Bissau (35.7), and Libya (35.5).

Other countries whose ratings declined slightly (less than one point) were Benin (58.8), Malawi (56.7), Niger (48.4), Guinea (43.7), Equatorial Guinea (35.5), Eritrea (29.9).

Along with the Guinea-Bissau, Equatorial Guinea, Libya, Eritrea, Central African Republic, South Sudan, the bottom 10 included: the Democratic Republic of the Congo (33.9), Chad (32.8), Sudan (28.3), and last-place Somalia (8.5).

The index also revealed striking differences across regions of the continent, from an average low of 40.9 points in Central Africa to a high of 58.9 points in Southern Africa. East Africa scored 44.3, North Africa 51.2 and West Africa 52.4 In addition to being the lowest rated, Central Africa was the only region where governance deteriorated, according to the index.

Business environment declines

In its four categories, the index showed that the sustainable economic opportunity indicators had the lowest average score for the continent, 43.2 points, a decline of 0.7 points from 2011. In particular, the index showed a decline of 2.5 points in “business environment,” which included a drop of 11 points in the sub-category of soundness of banks.

Four countries bucked the trend, showing gains of 5 points or more on economic opportunity ratings: Morocco, Togo, Kenya and Democratic Republic of Congo.

Ibrahim said that while the continent has made significant progress in the past 15 years, the latest results are cause for concern.

The 2015 index “shows that recent progress in other key areas on the continent has either stalled or reversed, and that some key countries seem to be faltering,” he said. “This is a warning sign for all of us. Only shared and sustained improvements across all areas of governance will deliver the future that Africans deserve and demand.”

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African Development Bank approves $1.1 billion in loans to Tanzania

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DAR ES SALAAM (Reuters) – The African Development Bank (AfDB) has approved a loan package worth $1.1 billion to Tanzania to be paid out over five years to fund infrastructure projects and improve public sector governance, it said.

The line of credit will be used primarily to support the transport and energy sectors and improve the business environment in east Africa’s second-biggest economy.

The loans would support “transport and energy to promote domestic and regional transport connectivity and improve access to reliable, affordable and sustainable electricity,” AfDB said in a statement late on Thursday.

“The second pillar prioritises strengthening of financial management and improving the enabling environment for private sector investment and finance for sustainable job creation.”

The government plans to spend $14.2 billion to construct a new standard gauge rail network in the next five years financed with external loans. It also plans to build a new $10 billion port at Bagamoyo, expand existing airports and invest in new roads.

Tanzania, like its neighbour Kenya, wants to profit from its long coastline and upgrade existing rickety railways and roads to serve growing economies in the land-locked heart of Africa.

Tanzania boasts economic growth of 7 percent a year, yet it is largely driven by state investment and poverty remains stubbornly high.

It also has natural gas reserves that are estimated at more than 57 trillion cubic feet (tcf) and the central bank believes 2 percentage points would be added to its annual economic growth simply by starting work on a plant to process that would draw in billions of dollars of investment.

“Board members underscored the need for Tanzanian authorities to ensure that the country’s high GDP growth delivers robust economic transformation, poverty reduction and improved livelihoods,” AfDB said.

 

(Reporting by Fumbuka Ng’wanakilala; Editing by Toby Chopra)

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IMF reviews Zimbabwe economy, eyes first new financing since 1999

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HARARE (Reuters) – The International Monetary Fund (IMF) has started talks with Zimbabwe’s government to review its economic performance, stepping up engagement as Harare seeks a financial aid package after years of isolation.

President Robert Mugabe’s government started defaulting on debts to the IMF, World Bank, African Development Bank and several Western lenders in 1999 – leading to a freeze in IMF assistance – and is struggling to emerge from a catastrophic recession that ran for a decade until 2008.

Without balance of payment support or foreign credit, Zimbabwe is running its budget hand-to-mouth, leaving it with virtually no money for infrastructure.

With formal unemployment above 85 percent, Zimbabwe has since December 2013 softened previously sacrosanct policies in the hope of gaining fresh loans. [nL8N12L1Q0]

At the same time, Western countries have eased sanctions imposed over alleged human rights abuses and vote fraud, looking beyond the rule of the 92-year-old Mugabe, Zimbabwe’s sole leader since independence in 1980.

An IMF team met government representatives on Wednesday under the final phase of a Staff Monitoring Programme, Christian Beddies, the IMF representative in Zimbabwe, told Reuters.

The team will also meet central bank officials and local business leaders before March 10.

“The team is also doing the annual Article IV consultation, which is an important ingredient in the re-engagement process,” Beddies said.

 

TARGETS MET

Zimbabwe started the SMP – an informal agreement with the IMF to monitor implementation of its economic reforms – in December 2013, and has met its targets.

These include softening provisions of its black empowerment law to attract foreign investment, making it easier for firms to lay off workers, and improving government financial accountability.

A senior treasury official said Zimbabwe hoped to begin negotiations this year on new financial aid, which will require it to tackle difficult reforms such as cutting the state wage bill, 82 percent of the national budget.

A parallel programme to clear $1.8 billion in external arrears would also be undertaken. [nL8N129142]

“We are working on the structure of a new financing programme from the IMF and we will soon present to them a country strategy paper on this and the economic reforms that will support the programme,” said the treasury official, who is involved in discussions with the IMF.

The worst drought since 1992 has left 3 million people facing hunger and Zimbabwe has appealed for nearly $1.6 billion to help pay for grain and other food. [nL8N15O44B]

Zimbabwe says it expects growth of 2.7 percent this year after 1.5 percent in 2015, but the World Bank says the economy will stagnate due to drought and weak commodity prices. [nL8N15I3CV]

Beddies has already said the IMF might resume aid to Zimbabwe this year if foreign creditors accept its plans to clear arrears and implement economic reforms. [nL5N11R2YV]

 

(By MacDonald Dzirutwe. Editing by James Macharia and Kevin Liffey)

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South Africa announces austere budget to trim deficit, avoid downgrades

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CAPE TOWN (Reuters) – South Africa announced an austere budget on Wednesday aimed at avoiding cuts in its credit ratings, and vowed to focus spending on priority areas after weak economic growth reduced its revenue.

The measures may appease ratings agencies, which have said they might lower South Africa to sub-investment grade after President Jacob Zuma changed finance ministers twice in less than a week in December, casting doubt over Pretoria’s commitment to prudent fiscal policy.

Still, the package of spending cuts, civil service job freezes and moderate tax hikes on property sales, fuel, alcohol and capital gains may not go down well with voters ahead of municipal elections this year in which the ruling African National Congress faces a stiff challenge from the opposition.

“We cannot spend money we do not have. We cannot borrow beyond our ability to repay. Until we can ignite growth and generate more revenue, we have to be tough on ourselves,” Finance Minister Pravin Gordhan told parliament.

The tax hikes should help raise an additional 18.1 billion rand in revenue in 2016/17, he said.

Asked if the budget was enough to stave off ratings downgrades, Gordhan told ENCA news channel: “That’s what I hope.”

He said the economy may expand just 0.9 percent in 2016, down from a previous forecast of 1.7 percent and compared with estimated growth estimate of 1.3 percent in 2015.

It would be the lowest rate of growth since South Africa emerged from recession in 2009 and would reflect the impact of a severe drought and a sluggish global economy.

Growth has now fallen behind the rate of population increase, resulting in declining per capita incomes, the National Treasury said in a budget statement outlining spending plans for the next three years.

“In other words, the average South African is becoming poorer,” it said.

The rand extended losses over the lower growth forecast, trading 2.5 percent weaker to the dollar on the day.

“I would say the rand weakened so much immediately after the budget was released primarily because of the lack of sufficient reforms to tackle South Africa’s economic problems,” London-based EMEA analyst at 4cast Rajiev Rajkumar said.

“Whilst the lower projections for the budget deficit are a plus, ratings agencies previously said the country’s weak economy could be cause for further ratings downgrades to junk status.”

The cost of insuring exposure to South African debt via credit default swaps rose 17 basis points (bps), indicating investors’ disappointment with Gordhan’s budget.

 

NARROWER DEFICIT

Despite weaker growth, the government would still aim to reduce its budget deficit to 3.2 percent of GDP in the next fiscal year from 3.9 percent in the current 2015/16 period by tightening spending.

Fitch and Standard and Poor’s have South Africa on BBB-, just a step into investment grade. Any further cut would label them as junk status. The third main ratings agency, Moody’s, rates South Africa at Baa2, two notches above junk.

Moody’s said last week the drought risked tipping an already weak economy into recession as rising agricultural imports feed into rising inflation.

The Treasury said a credit downgrade to sub-investment grade, or “junk” status, could trigger a sharp reversal of capital flows and precipitate recession.

“In such an event, aggressive austerity measures would likely be required to restore public finances to a sustainable position,” it said.

The Treasury said it had cut government departments’ budgets for non-essential services, would borrow $4.5 billion from global markets over the next three years, and seek a minority equity partner after merging two of its state-owned airlines.

 

(By Stella Mapenzauswa and Olivia Kumwenda-Mtambo. Additional reporting by Wendell Roelf in Cape Town and Mfuneko Toyana in Johannesburg; Editing by James Macharia and Hugh Lawson)

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As the UNMDGs expire, Togo measures its poverty

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The National Institute of Statistics and Economic and Demographic Studies (INSEED), Togo’s national poverty statistics tracking organization, recently released their findings for poverty levels in the country for 2015.

Between 25 August and 30 September of 2015, INSEED surveyed 2,400 households to measure the living conditions of the Togolese. The conclusion of the 2015 survey is significant for a variety of reasons, but none more important than the expiration of the United Nation’s Millennium Development Goals (UNMDGs). The UNMDGs were the world’s first data-driven goals meant to end global poverty by 2015 or 2020, depending upon the goal. Drawing upon the eight vastly general UNMDGs, INSEED used broad poverty indicators to measure the status of their citizens: access to basic social services; food safety; education and literacy; subjective poverty and monetary poverty. INSEED’s Technical Director Akoly Gentry said that survey results indicated that economic growth had occurred in Togo, although more than half of the Togolese continue to live in poverty and are subjected to the health, education and employment challenges that stem from continued poverty. The overall conclusion was that, between 2011 and 2015, economic development had reached the poorest of the poor in some way.

Conducting the Survey: Why Now?

With the expiration of the majority of the UNMDGs came the birth of the UN’s latest broad development goals, called the Sustainable Development Goals (SDGs). Where there were once 8 MDGs, there are now 17 SDGs, and in order to give a strong baseline for Togo’s SDG targets, the survey was necessary.

59% of the Togolese are 25 years old or under: continued economic development is imperative for a generation that never knew the harsh reign of colonialism and have grown up in a world where they are well aware of the wealth of the outside world. In surveying the levels of poverty of a diverse set of households around the country, INSEED was able to gather a comprehensive set of data with which to inform their development plans.

Access to Basic Social Services

Many households in the developing world do not have access to what are considered basic necessities in the western world, including electricity and improved drinking water. The proportion of households now using electricity as their main mode of lighting is 48.3%, up 9.1 percentage points since 2011. As the use of electricity has increased, the use of other/traditional modes of lighting has decreased. The use of oil lamps, the cause of many house fires and childhood burns, declined from 23.5% in 2011 to 3.1% in 2015. This alone is a massive achievement for Togo.

In countries where tap water is not fit for consumption or available at all, citizens must rely upon bottled or bagged water. In 2011, 55.9% of Togolese were utilizing drinking water, a figure that has improved to 61.8% in 2015. The availability of improved drinking water is a major component of development: clean water promotes good health and hygiene, prevents waterborne illnesses such as cholera and giardia, and prevents unnecessary deaths.

Food Safety

In the developed world, bananas and oranges are available 365 days a year, regardless of the growing season. For the billions of people living in the developed world, access to calories is not guaranteed due to famines. Famines are, of course, not a natural disaster: they occur when food management, transportation and storage systems fail. In 2011, nearly half of the population had difficulty finding food. The survey revealed that now, in 2015, one-third (33.1%) of the population has difficulty accessing adequate nutrition. These are institutional failures endemic in impoverished countries. Whether it is the physical unavailability of food or the inability of an individual to find enough capital to obtain food, one third of Togo’s population is not considered food secure. In an era where obesity threatens to overshadow cardiac disease as a leading cause of death in the western world, this is unacceptable.

Health Indicators

Health is closely linked to food and clean water access. Be it illness from contaminated water, uncooked or unclean meat or pesticide covered vegetables, these two are inextricably linked. 23.9%, or nearly one quarter, of Togolese surveyed reporting being ill within the past four weeks, up from 20.6% at the last survey. Illness was not clearly defined, and thus is an entirely subjective indicator. According to the CIA World Factbook, Togo’s risk of disease is “very high”: malaria, dengue and yellow fever are a threat particularly during rainy seasons when mosquitoes thrive; typhoid and hepatitis A as well as meningococcal meningitis are also listed as high risk diseases. The physician density is 0.05 physicians per 1,000 people–since the average size of a Togolese household is not listed, this statistic cannot be extrapolated to the survey group. It is safe to say that, at best, there may have been one doctor available to the entire group.

Education and Literacy

66.2% of the population over the age of 15 is literate according to INSEED’s survey results–according to the CIA World Factbook, 78.3% of males over 15 and just 55% of women over 15 are literate, showing gross education discrepancies between genders. Overall enrollment rates in primary and secondary schools (which does not measure attendance) improved from 81.8% to 84.8% and 41.0% to 49.2%, respectively.

Employment, Subjective Poverty and Monetary Poverty

The reported unemployment rate declined from 6.5% to 3.4% while the underemployment rate, or the percentage of people who are employed (usually through the selling of their crops at market) but who consider their employment situation insufficient for any number of reasons, rose from 22.8% to 24.9%.

The percentage of households who consider themselves to be poor in comparison to those around them fell from 81.4% to 61.7%. This does not necessarily mean that nearly 20% of the population became less poor, but that they perceive themselves as more equal to their peers.

The incidence of poverty as measured by international organizations such as the World Bank, International Monetary Fund and UN, fell from 58.7% to 55.1% in 2015. The GINI inequality co-efficient, meaning the proportion of people who own wealth in the country, was reported as 38 (although this is not recorded by the World Bank)–a score of 0 means a country has perfect equality, and a score of 100 means the country has perfect inequality (one person would own all of the wealth). By comparison, the United States has a GINI co-efficient of 41.1. Thus, the lower a score, the more equal the society.

The incidence of poverty increased from 28.5% to 34.8% in the Greater Lome region, as well as in some rural areas.

To Go Forward

Poverty is difficult to measure. Standards were created by the very countries that are partially to blame for the stunted development of enormous swaths of the world. The existing modes of development, where a country is given a loan full of conditionality (that often cut social programs), accompanied with crippling loan repayment rates, clearly does not work.

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Ugandan police arrest opposition leader Besigye, fire teargas

Comments (0) Africa, Latest Updates from Reuters, Politics

KAMPALA (Reuters) – Ugandan police on Monday arrested opposition leader Kizza Besigye and fired teargas to disperse hundreds of his supporters in capital Kampala, a witness said, in a move likely to stoke tensions ahead of Thursday’s presidential election.

Besigye was arrested after the police asked him and his supporters to use a different route during their march into central Kampala, according to a witness at the rally.

“They wanted him to use another road which was far away from where he wanted to go. Police then started firing teargas and arrested (Besigye) with two other opposition leaders,” said the witness.

 

(Writing by Drazen Jorgic; Editing by Toby Chopra)

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EU says it is ready to lend Tunisia 500 mil euro

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TUNIS (Reuters) – The European Union said on Friday it was ready to lend Tunisia 500 million euros in 2016-2017 to cope with its economic difficulties, weeks after violent protests erupted in the North Africa country to demand jobs.

Tunisia has been hailed as the success story of the 2011 Arab Spring revolts for its transition to democracy, but economic development and reforms have failed to keep pace with the political changes since the fall of autocrat Zine El-Abidine Ben Ali.

 

(Reporting by Tarek Amara; editing by Patrick Markey and Kevin Liffey)

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South Africa’s rand slides as President’s speech disappoints

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JOHANNESBURG (Reuters) – South Africa’s rand weakened on Friday after President Jacob Zuma’s state-of-the-nation address that analysts and economists said did not deal with concerns raised by rating agencies.

By 0645 GMT the rand had slipped 0.7 percent to 15.9100 per dollar, pushed lower by the president’s failure to address investor worries over fiscal policy as well weak mining and manufacturing data.

Bonds also weakened, with the benchmark paper due in 2026 adding 7 basis points to 9.24 percent.

“There was only limited recognition of the current economic malaise with an overplaying of success of past policy targets,” said Peter Attard Montalto, head economist for emerging markets at Nomura International.

Analysts said ratings agencies were keen to hear the president announce a clear plan detailing how South Africa would improve economic growth, predicted at only 0.9 percent in 2016 by the central bank.

On Thursday, data from the statistics agency showed mining production declined 0.3 percent in December, while manufacturing grew slightly in the same month.

“The impact of the commodity price rout has been disastrous for domestic mining industry,” analysts at NKC African Economics said in a note.

“Unfortunately, new Mineral Resources Minister Mosebenzi Zwane offered little in the way of viable relief strategies when he addressed Mining Indaba earlier this week.”

Stocks opened higher, with the JSE Top-40 blue-chip index adding 0.65 percent to 42,324 points in early trade.

 

(Reporting by Mfuneko Toyana; Editing by Biju Dwarakanath)

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