Tag Archives: Africa development

Mini-Green Grids

image from http://www.nigeriaelectricityhub.com/2017/12/11/legal-framework-for-mini-grids-power-generation-and-distribution-in-nigeria/

A forested village in Jharkhand state, eastern India, Narotoli is home mainly to adherents of Sarna, a nature-worshipping tribal religion. In more ways than one, it has long been off-grid… In 2018, it became one of the last in India to benefit from a push by Narendra Modi, the prime minister, to supply electricity to all the country’s villages. But the national power lines are so “reliably unreliable”, says an Indian executive, that they might as well be washing lines.

In 2016, before the national grid arrived, however, Mlinda, a social enterprise, had set up a “mini-grid”, a bank of batteries charged by solar panels and hooked up to homes, to guarantee round-the-clock power independent of the national network.  The power generated by the plant is expensive (though it costs less than villagers often pay for alternatives such as kerosene for lighting and diesel for irrigation pumps). The worry is that demand for electricity may not be enough to justify the installation cost. …But Mlinda and other mini-grid installers see them as more than a way to satisfy existing demand for electricity: they are a way to catalyse development. The installers advise villagers on irrigation, farming and marketing to help them develop businesses that require reliable electricity, which in turn justifies the expense of installation.

Vijay Bhaskar of Mlinda says a big mistake in development has been to assume that, once people are hooked up to electricity, businesses will automatically flourish. People have to be taught how to make the most of power, he says. “Bringing energy is the easy part. The hard part is finding productive ways to make use of it.”  According to one British expert, “mini-grid operators are not sellers of kilowatt-hours; they are stimulators of rural development.” Jaideep Mukherjee, the boss of Smart Power India, an NGO supported by the Rockefeller Foundation, says their job is to “demonstrate the benefits, train and then propagate”.

An independent study for Mlinda found that GDP per person in eight villages with mini-grids rose by 10.6% on average over the first 13 months, compared with 4.6% in a group of similar villages without them.  Mini-grids are being set up at the rate of just 100 or so a year, from Myanmar to Mozambique. But the International Energy Agency (IEA), a forecaster, says hundreds of thousands of them could connect 440m people by 2030, with the right policies and about $300bn of investment.

African countries used to focus almost exclusively on expanding national electricity networks. Now some, including Nigeria and Togo, have started to prioritise mini-grids. ..

Most mini-grids are green, unlike diesel, kerosene and coal- and gas-fired electricity. That is a welcome feature, though not the main aim, since the contribution of places like Narotoli to global warming is minuscule.

Excerpts from Mini-girds and development: Empowering Villages, Economist, July 14, 2018, at 61

World’s Toy: the African Country

Ouagadougou City Burkna Faso. image from wikipedia

Investors are yanking their cash from African assets, until recently a popular play for the adventurous, as a toxic confluence of factors overhangs the continent.Crashing commodity prices, a Chinese slowdown and a string of policy failures are forcing investors to reassess the risk of investing in Africa after years of optimism about its growth prospects.Stock markets and currencies have been selling off across the continent, especially in commodity-dependent economies. Nigeria, the continent’s largest economy and longtime investor darling, has one of the world’s worst-performing stock indexes this year, down by 14% since the start of 2016. The S&P Zambia Index has fared even worse over the past year, plunging 45% as the country’s copper exports tumbled on softening Chinese demand. President Edgar Lungu last September called for a day of national prayer to petition God to shore up Zambia’s currency, the kwacha. At the time, the kwacha had lost 45% of its value against the dollar in 2015.  The declines mean African equities are performing worse than any other frontier markets. The MSCI Africa index tumbled 19% last year, significantly more than the overall MSCI Frontier Markets index….The upshot is that frontier investors are moving their money from Africa to Asian countries like Pakistan, Bangladesh and Vietnam; net energy and commodity importers which have shown more commitment to industrialization….

The shift has also pushed up the costs of sovereign borrowing, even as African countries slow down their issuance of bonds in international capital markets. In 2014, African sovereigns issued $12 billion worth of bonds in international capital markets; last year it was half that, according to Deutsche Bank.Ghana, mired in an economic crisis, issued the most expensive African Eurobond in history late last year, paying a whopping 10.75% for $1 billion; far higher than the single-digit interest rates the government had become accustomed to paying for international bonds in recent years….

[T]here are important exceptions to the rule: Kenya, which has a more diversified economy, and Ivory Coast, the world’s top producer of cocoa, are still attracting frontier investors…..

“One of the biggest flaws when investors look at Africa is that they think of it as a country and not a continent composed of very unique countries and companies,” says Laura Geritz, who runs U.S.-based Wasatch Frontier Emerging Small Countries with $1.1 billion under management.

Excerpts from  Africa Bruised by Investor Exodus, Wall Street Journal, Feb. 26, 2016

This Land is their Land: money, minerals and the dead elephants

satellite image of Afirca 1994. image from wikipedia

GOVERNMENT DEFENCE ANTI-CORRUPTION INDEX, by Transparency International [Excerpts below]

• In Ethiopia, a sizable conglomerate, the Federal Metal and Engineering Corporation (METEC), grew out of the defence industry complex. METEC is now the biggest, richest, and most influential enterprise in the country and has started to acquire private property and hotels. METEC is overseen by a board headed by Defence Minister Siraj Fergessa, but METEC’s financial and budgetary links with the military aren’t clear, and there is no evidence that annual reports have ever been made available to the public.
• In Sudan 160 registered companies are linked, owned, or controlled by the military, security, and police services …
• The Eritrean military state puts the entire population to work. Military conscripts are a source of cheap labour and even the Eritrean diaspora is coerced into contributing 2% of their income to the Eritrean Defence Forces. Eritrean defence and security institutions have beneficial ownership of many key businesses in Eritrea – in agriculture, forestry, fishing, animal husbandry, mining and minerals, industry and manufacturing, energy, services, tourism, banking and finance, and there is no transparency regarding the details of their operations and finances… • In Ghana, the armed forces started operating their own bank in 2013. No audits or
nannual reports appear to be publicly available…
In 29 of the countries surveyed, defence institutions have controlling or financial interest in businesses associated with the country’s natural resource exploitation that face little to
no scrutiny.
• In Rwanda,…  Tin and tantalum smuggled into Rwanda are allegedly aundered through the country’s domestic tagging system and exported as ‘clean’ Rwandan material. The government has denied its involvement, but evidence suggests it is complicit.
In Equatorial Guinea, there are reports that government officials, including defence and security officials, have diverted revenues obtained from the country’s natural resources, including land and hydrocarbon, into private accounts through offshore shell corporations. Teodorin Nguema Obiang, the president’s son and Vice-President for Defence and National Security, has been accused of stealing $300 million (US) of the country’s oil and gas wealth through corruption and money laundering.
• In Cameroon, there is also evidence of military involvement in the illegal exploitation of the water and forest sectors including the sale of small titles to companies on an industrial scale, and through allowing the Chinese to engage in illegal commercial fishing….
• In Algeria, there are significant links between the military and oil and gas industry; with billions of oil dollars at the heart of the permanent clashes between the different clans in the “pouvoir” – the opaque military and political collective which controls the country….
In many cases, military personnel engage in illicit commercial operations for their private
gain….• In Cameroon, military personnel have been involved in money laundering through the operation of casinos and illegal gaming houses, and there is evidence that the Cameroonian armed forces have been used to provide security for private oil companies.
• There are reports of Tanzania People’s Defence Force (TPDF) and other security officials being involved in the highly lucrative trade of elephant tusks. Reports have also emerged of entire military convoys escorting illegal poachers. If caught, rather than face prosecution, military officers are transferred to new positions.

The Virgin Digital Land and the Google Monopoly

Online Africa is developing even faster than the new highways of offline Africa. Undersea cables reaching Africa on the Atlantic and Indian Ocean coasts, plus innovative mobile-phone providers, have raised internet speeds and slashed prices. In some African markets you can buy a daily dose of internet on a mobile phone for about the cost of a banana (ie, less than ten American cents). This burgeoning connectivity is making Africa faster, cleverer and more transparent in almost everything that it does.

Google can take a lot of the credit. The American search-and-advertising colossus may even be the single biggest private-sector influence on Africa. It is not just that its internet-search and e-mail are transforming Africa. Take maps. Before Google, ordinary Africans struggled to find maps. Military and civilian mapping offices hoarded rolls of colonial-era relics and sold them at inflated prices. By contrast, Google encourages African developers to layer maps with ever more data. In Kenya 31,000 primary schools and 6,900 secondary schools are marked on Google maps. Satellite views even let users see if the schools have built promised new classrooms or water points. Similar initiatives let voters verify local voting figures at election time. Satellite views of traffic jams have also shamed some African cabinets into spending more on city infrastructure.

Google has also pepped up Africa’s media, enabling Africans to read each other’s newspapers. Google is improving translation software to bring more Africans who speak only local languages online. As well as English, French, Portuguese and Arabic, it offers Zulu, Afrikaans, Amharic and Swahili. Languages like Wolof, Hausa, Tswana and Somali are set to follow.

Faster downloading speeds have helped make Google’s YouTube video-viewing more popular. Young urban Africans organise YouTube parties. The company is also trying to help African governments digitise information and make it freely available to their citizens. Many rulings in the higher courts of Ghana, for instance, are going online.

Yet critics complain that Google is buying up enormous amounts of virgin digital land in Africa at virtually no cost. Within a couple of decades, without the regulatory oversight of the African Union or African governments, they say, Africa’s internet life will be almost entirely in hock to the Google giant. Even the company’s decision to go slow on seeking profits from Africa by offering cheap deals has been attacked by African would-be rivals, which say that such tactics are only extending Google’s unfair advantage.

Google says its recent effort to best a rival South African firm, Mocality, was an embarrassing aberration. Google’s top man in Africa, Joe Mucheru, brushes aside fears of a monopoly. The company’s advertising model, he says, helps African business. “The more Google grows, the more the entire ecosystem grows.” He is especially keen on Google+, a service that seeks to provide an even more useful online community than Facebook

Google in Africa: It’s a hit, Economist, May 12,2012, at 57