Archive for category: Economy

Information and stories about economy.

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Inflation in Egypt 

Inflation in EgyptIn 2022, inflation has been sweeping across the world like wildfire, and it has impacted the world’s impoverished the most severely. Here is some information about inflation in Egypt.

Inflation on the Rise

Inflation in Egypt rose to 13% in June 2022 from 11% in April 2022, after only seeing an inflation rate of 4.8% at the end of 2021. The Ukrainian war caused an increase in costs of goods which also caused the interest rates in the country to rise. These interest rates were already some of the highest in the world before the increase. These increases in the costs of imported and exported goods have made it much more challenging for the working class of the country to make a living.

There has been an increase in the prices of simple goods like bread, rice and sugar, making it hard for families to sustain themselves, and even things like nuts have moved into the category of luxury for most families. Inflation has affected individual families and Egypt’s economy as a whole as Egypt’s purchasing index contracted for the 18th consecutive month in May which is what caused the country to raise the interest rates for the first time since 2017. This has put a strain on small business owners who sell goods to survive because they no longer can afford to buy the product that they sell.

Humanitarian Impact

The U.S. has donated $30 billion in economic aid to Egypt since 1978 in order to provide stability to the region. USAID’s current plan to help the economy is to reduce the rising cost of food in Egypt. U.S. aid to Egypt reduced by 85% from 1998-2020 from $833 million to $125 million in 2020, however, the Biden Administration has requested $1.43 billion in aid for Egypt in 2022 amid the pandemic and the Ukrainian war.

The world cannot control what goes on in terms of the Russian and Ukrainian war, so the Goal of USAID is to impact the country in as many ways as possible from within. As of April 2022, the Biden Administrations’ funds are to go toward creating more and better jobs and enhancing the role of government officials to help the institutions of Egypt meet the economic needs of their people. Inflation in Egypt has been the cause of many people losing their jobs and so plans created to foster the economy are very relevant and should prove useful. Hundreds of thousands of jobs have emerged since 1978 in Egypt due to U.S. involvement, and that growth could be beneficial to combating inflation in Egypt.

Looking Ahead

The inflation crisis in Egypt is far from over, but the world is taking the proper steps in order to attempt to turn the tides. It may take months or years for one to be able to see the impact of the funds that Egypt received, however, the people of Egypt know that their struggle is not going unnoticed and that can be the spark someone needs to keep pushing for a little bit longer.

– Alex Peterson
Photo: Flickr

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Curbing Inflation in Venezuela

Curbing Inflation in VenezuelaInflation is one of the most significant problems in the world right now, as the global inflation rate rises to 6.7% in 2022, almost double the average of the last decade. This is a consequence of the Russian-Ukrainian war and the effects of the ongoing COVID-19 pandemic. Venezuela, which is one of the most in-need countries in South America has finally come out of one of the longest bouts of hyperinflation in the world after 12 consecutive months of the inflation rate rising below 50%, however, three in four people in the country still lived below the poverty line in 2021. The United States and other major players can still do a lot to help the country and curbing inflation in Venezuela is one of the many solutions necessary to improve poverty and economic stability in the country.

Mounting Challenges in Venezuela

In 2016, Venezuela entered a streak of hyperinflation which is when the rate of inflation increases by more than 50% for 12 consecutive months. In 2022, Venezuela has been able to pull itself out of this downward slide pretty simply. The country ramped up printing money in 2016, which became a real issue at the end of 2017 and caused the recent inflation. This has even been a problem in the United States because innately the more currency circulating, the less each piece of currency will be worth. That, along with deficit spending created one of the worst inflation crises in the world.

The solution to this problem appeared to be just as simple as the cause because as soon as the central government of Venezuela decided to stop printing so much money, the inflation rate eased. Although inflation has been on the decline, poverty has still been on the uptick rising to 76% in 2020. Even though these two statistics would seem to be contradictory there are reasons why simply curbing the inflation in Venezuela is not the end all be all.

Solutions

Curbing inflation in Venezuela is only the first step in a long line in order to help the situation in the country. In June 2022, the U.S. announced more than $314 million in aid to help stabilize Venezuela and the rest of that South American region.

These funds will go to multiple countries and aim to improve education and provide COVID-19 relief along with aid for other basic human needs. These funds will also go toward an effort to help potential migrants leaving the country, fleeing in an attempt to find better financial stability. They will also improve access to health care, which has been a challenge for people to access in Venezuela. As many as 5.4 million people have left the country in 2022 because of the unstable economy.

These funds ensure these people can have safe and productive new lives after leaving the country. Venezuelans will receive access to life-saving humanitarian programs like emergency shelters and obtain health care which has been difficult to access because of Venezuela’s own health care system. The International Rescue Committee (IRC) provided health care to more than 100,000 Venezuelans between 2020 and 2022, and since 2017, the U.S. has donated nearly $2 billion in total to Venezuela and the surrounding region. The humanitarian aid provided to the country has already done a lot to improve the lives of those living there and those attempting to leave. Curbing inflation in Venezuela is a step in the right direction.

Looking Ahead

The inflation crisis is severely affecting the entire world including Venezuela. People are having to leave the countries they call home in search of refuge and the possibility of a better life. A person’s displacement is a life-altering event that can change how they live forever. As more and more countries join in the fight to help Venezuela, hope exists that it will have a bright future.

– Alexander Peterson
Photo: Flickr

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Green Initiatives Reduce Poverty in Ghana

Poverty in GhanaPoverty in Ghana has been reduced, thanks to the tremendous growth of the Ghanaian economy over the past years, but at a hidden cost: the natural resources that undergird this success are being increasingly and perhaps unsustainably, depleted. The increase in the price and production of raw materials such as cocoa, gold and oil have quadrupled the real GDP growth, and cut extreme poverty in Ghana to a Lower Middle-Income Country status, from its previous status as a Low Income Country. Nonetheless, such impressive growth must be balanced with environmental protection in order to prove enduring.

Ghana’s Precarious Dependency on Natural Resources

Residents of the Bia Biosphere Reserve in Ghana are extremely dependent on the forest for their livelihoods. As cocoa farmers, harvesters of wild honey, mushrooms and other non-timber forest products, the people living in the region cannot economically sustain themselves without such natural resources. And yet, environmental depletion has become a serious concern, seeing as local populations rely almost exclusively on the forest’s resources for income. Large corporations also contribute to this degradation: unmanaged solid waste and gold mines result in air, plastic and water pollution, contaminated sites diffuse hazardous chemicals, and general deforestation and overfishing severely strain the biosphere.

Beyond the sheer environmental toll, the economic costs of such overexploitation are immense. The World Bank Ghana Country Environmental Analysis (CEA) estimates that environmental degradation incurs an annual cost of $6.3 billion, equivalent to nearly 11% of Ghana’s 2017 GDP. Air pollution costs nearly $2 billion and causes approximately 16,000 deaths each year. The damage caused by water pollution equates to 3% of the GDP. Land degradation costs over $500 million while deforestation costs $400 million per year. In addition to the immediate economic tolls, the depletion of natural resources inhibits the potential for future growth.

Green Economy Initiatives

In response to the increasingly salient threat of the Ghanian economy’s overdependence on natural resources, local communities have begun working with UNESCO and the Korea International Cooperation Agency (KOICA) to put in place green economy initiatives. The project builds on the Green Economy Scoping Study, performed by the United Nations Environment Programme (UNEP) and the Ministry of Environment, Science, Technology and Innovation (MESTI) between 2012 and 2013. The goal of such initiatives is to uncover income alternatives, as to reduce local populations’ reliance on natural resources for economic survival.

The project, launched in 2013, has thus far identified multiple viable alternatives to depleting natural resources, a few of which include mushroom farming, bee-keeping, snail rearing and palm oil production. According to UNESCO, there have been 235 direct beneficiaries, of which 91 are women, who received training and support as part of the green initiatives to transition to alternative livelihood options. In addition to the direct crafts, the residents also received education in marketing and investing, as to ensure the sustainability of their new businesses.

The green economy initiatives have had tremendous positive impacts on the socio-economic status of local communities, who have since been able to vary their sources of income and avoid environmental depletion. The project attests to the importance and viability of reconciling nature and economy for sustainable growth.

– Emily Xin
Photo: Unsplash

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A Tumultuous Turn for France-Africa Relations

France-Africa RelationsIn 2019, Italy’s deputy prime minister Luigi Di Maio declared that France is “impoverishing African countries” through its commercial and security ties, prompting an inquiry into how current French-Africa relations impact poverty in Africa. As France’s role in Africa dwindles and French President Emmanuel Macron reassesses French-Africa relations, it is essential to explore the impact of French policies on the African people.

History of France-Africa Relations

After the invasion of Algiers in 1830, France initiated more than a century of colonialism in Africa, subjugating millions of Africans to French rule. French colonization changed the shape of African militaries, economies and politics. Most colonies achieved independence during the 1960s. However, France still “detained a sphere of influence in these regions.”

In the post-independence period, French relations with its former colonies became known by the term “Françafrique,” a portmanteau of France and Afrique (the French word for Africa). This term encompasses the economic, political and military relations between Paris and its former African colonies. However, during the 1990s, the idea of Françafrique faced challenges in France. Activists revealed “African emissaries traveling to France with suitcases full of cash seeking, regardless of who won the election, to cement French politicians’ loyalty and support for certain African heads of state,” according to Global Voices.

Nowadays, French attitude and policy shifts may signify an end of Françafrique, as France transitions from neocolonialism to a desire to build mutually beneficial relationships with African nations.

Emmanuel Macron’s New Direction on Africa

President Macron aimed to start a new chapter of France-Africa relations after his speech in Ouagadougou, the capital of Burkina Faso in November 2017. Macron expressed his desire to establish more equal partnerships with African nations in his speech.

In October 2021, the President held firm to this policy shift at the New Africa-France Summit, where he worked with African leaders to redefine France-Africa relations.

In his attempt to revolutionize French influence in Africa, the French President has made unprecedented advances by recognizing France’s negative role in Africa, declaring that colonialism was a “grave mistake,” according to Economist Intelligence.

Economic Dependency

Despite Macron’s hopes, forging an equal partnership between France and Africa is challenging, as France created and controls a relevant African currency: the Communauté Financière Africaine (CFA) franc.

The CFA franc is a regional currency used by nations in the West African Economic and Monetary Union and the Economic and Monetary Community of Central African States. Created in the colonial era, France ensured its use in its sub-Saharan colonies, guaranteeing the fixed rate of CFA franc with the French franc and now with the Euro, according to Carnegie Endowment for International Peace.

Togolese economist Kako Nubukpo criticized the CFA franc because the Central European Bank, instead of a centralized African bank, determines the financial policies that impact this currency, according to Global Voices. France requires African nations to hold 50% to 65% of its foreign reserves in France’s central bank to “guarantee the convertibility of the CFA at a fixed exchange rate,” Global Voices stated.

Additionally, Senegalese economist Ndong Samba Sylla noted that former French colonies that did not have the CFA franc—specifically, Algeria, Morocco and Tunisia—are now “stronger economically than any user of CFA franc,” Global Voices reports.

Military-Driven Security in Africa

Africa also depends on the French military and aid to defend national security, promote political stability and curb threats of terrorism and extremism.

In 2014, France began a military operation in the Sahel, Operation Barkhane, sending 3,000 troops to combat terrorism and maintain regional stability, according to Brookings. France’s military-driven efforts to combat terrorism and instability in Africa are not the most effective, especially since military involvement failed to prevent coups d’état in Chad and Mali, according to Carnegie Endowment.

French Foreign International Development Aid to Africa

Unlike military engagement, French foreign aid is generally well received in Africa, as France remains a top contributor of support for the continent. France has expanded its foreign assistance recently, increasing its international development budget to 0.55% of its GDP. Paris plans to continue this course of increased aid with a 0.7% aid target by 2025.

French foreign aid contributes to humanitarian assistance and economic, social and political development programs. These projects could improve the lives of Africans by cultivating new job opportunities and spurring further economic and technological advancement. One example is the development of a commuter rail line in Nairobi, Kenya, funded by the French government’s contribution of €3 billion.

Targeted foreign aid offers the chance for France to advance meaningful development in Africa while also advancing its diplomatic goals of strengthening French-Africa relations.

Poverty in Africa

According to the World Bank, extreme poverty in Africa fell from 54% in 1990 to 41% in 2015. Despite this seemingly sharp drop in poverty rates, “the number of poor people in Africa has actually increased from 278 million in 1990 to 413 million in 2015.”

Targeted foreign assistance from France may promote job growth, counteracting poverty. For instance, France initiated a project called Choose Africa, giving €2.5 billion to invest in new African businesses, according to France Diplomacy. This project and other French international development projects in Africa could successfully challenge poverty.

Outside of the French government, many nongovernmental organizations fight poverty on the ground, including Médecins Sans Frontières (MSF). Commonly known as Doctors Without Borders in English, MSF is an NGO of French origin focusing on providing medical assistance to those in need. Working in more than 70 countries in 2021, MSF brings health care programs across the globe, with much of their work centered on impoverished Africans.

Even though France-Africa relations remain complex, French foreign aid, coupled with the work of NGOs like MSF and other foreign powers, contributes to the enduring battle to tackle poverty in Africa.

– Michael Cardamone
Photo: Flickr

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The Efforts of USAID Programs in Vietnam

USAID Programs in Vietnam
The U.S. Agency for International Development (USAID) began its relationship with Vietnam in 1989 with programs assisting disabled persons and has expanded its influence on Vietnamese society and its markets. The foreign aid agency primarily focuses on Vietnam’s economic productivity, education systems, health and environment, amongst other pressing issues.

Fostering Economic Growth

USAID programs offer support by improving the business ventures of Vietnamese enterprises and governance capacity. USAID programs are aiming to increase Vietnam’s economy to an upper-middle-income status by 2035 through efforts to increase productivity and competition amongst small businesses, address economic policies and emphasize sustainability.

Existing programs promote global trade and international commerce by stimulating competition in private sectors and developing leadership and management skills for provincial leaders. USAID programs in Vietnam create a further expanding market with small and medium businesses that cooperate with global supply chains. Boosting Vietnam’s trade reach beyond localities creates a more inclusive, productive and accessible market for vulnerable populations.

Efforts to increase sustainability go hand-in-hand with USAID’s environmental protection programs. Shifting reliance on renewable energy sources has been a goal of USAID in partnership with Vietnam Urban Energy Security (VUES) to stimulate investments and commercialization. The focus on sustainability and economic growth aims to provide opportunities for vulnerable populations in poverty to gain access to business ventures that can bring social mobility and stability.

Health and COVID-19 Recovery

USAID invested more than $1 billion in Vietnamese health assistance programs to prevent and treat infectious diseases such as HIV/AIDS, tuberculosis and zoonotic diseases in the past 20 years. Global health security projects aim to train health workers, monitor possible health threats from animals and/or contagions and prepare appropriate responses to public health emergencies that may arise in the future. For example, the One Health Workforce project will provide training at universities for almost 1,700 students in various health care disciplines – not only enhancing the job force with academic opportunities and skills for the next generation but also improving the health security of the country.

Vietnam has also received $23.4 million in COVID-19 assistance including vaccine doses, ventilators, emergency response systems and health facilities. USAID’s MOMENTUM project addressed low immunization rates and a lack of accessibility to COVID-19 vaccine doses in provinces without properly trained medical health professionals and resources due to geographic and socio-economic barriers.

In the first six months of its implementation, the program trained almost 4,000 staff members and placed 716 mobile vaccination sites in mountainous provinces that otherwise experienced neglect in terms of health security amid the pandemic.

Higher Education System Modernization

One step USAID programs in Vietnam are taking to provide access to knowledge and skills required for socio-economic prosperity is focusing on improving academic opportunities. USAID recognizes that in order to improve Vietnam’s status from its current standing as a lower-middle income country, the labor force would benefit from modernization and advancement in skills to keep up with an ever-changing job market.

The government is appropriating funds and creating partnerships between Vietnamese universities and American higher education institutions like Indiana University to improve academic quality, research and innovation in the Southeast Asian country. American universities will give nearly 150,000 Vietnamese students the opportunity to pursue academic endeavors that reflect the future of the job market through academic partnerships and socio-economic growth within the country.

USAID programs in Vietnam have reflected the strengthening relationship between the United States and Vietnamese governments with financial investments and support that could benefit the economy on local and international levels. Economic support, educational advancements and emergency relief that the U.S. provided could allow Vietnam to eventually become an independent and thriving country.

– Nethya Samarakkodige
Photo: Pixabay

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The Impact of COVID-19 on Poverty in Albania

The Impact of COVID-19 on Poverty in Albania
The 2020 pandemic lockdowns hit Albania, a nation still struggling to cope with the effects of a once-in-a-century earthquake from just the year before, extremely hard. The impact of COVID-19 on poverty in Albania resulted in acute economic and social challenges but targeted fiscal policies and international aid suggest a hopeful future for the Balkan state.

Impact on the Most Vulnerable Sectors

Albania’s economy relies heavily on micro, small and medium enterprises (MSMEs), which comprise more than 85% of the private sector’s formal employment. Its reduced size increased its fragility in the face of the earthquake and the pandemic made it difficult for MSMEs to access loans and use insurance policies. MSMEs’ hardships meant a significant drop in tax returns for the government and increased unemployment in the lower socio-economic sectors.

In 2019, one-third of the Albanian population lived on less than $5.50 a day, making it the nation with the highest rate of poverty out of all the Western Balkan states. COVID-19 ended up increasing the poverty rate by 4%, which is equivalent to additional 112,000 people living in poverty.

The impact of COVID-19 on poverty in Albania is especially hard for women. Not only did more women face an increase in unpaid domestic labor compared to men, but 97.5% of women-led firms are in the MSME category, Financial Protection Forum reports. In addition, a 2020 U.N. Women report found that women between 25-44 years old living in urban areas were at the highest risk of unemployment.

International Response

This dual economic and social blow to women’s livelihoods required urgent action to prevent this vulnerable group from falling into long-term unemployment. The United Nations Development Program (UNDP) addressed the issue of the impact of COVID-19 on poverty in Albania through a series of small projects for women in Tirana and other municipalities. The projects also targeted the promotion of equal family gender roles along with measures to combat domestic violence and offer psychological support to victims.

The UNDP aided other at-risk groups as well. From teletherapy services for disabled persons to employment promotion for ethnic minorities, the UNDP provided localized efforts to address problems raised by the pandemic.

The French Agency for Development (AFD) also continued its projects to increase Albanian women’s access to economic opportunities and further the fight for gender equality. The AFD’s foreign aid is part of an initiative to lead Albania towards fulfilling the social criteria needed for entry into the EU.

Albania’s cultural sector also needs help to recover from the impact of COVID-19. Lockdowns and travel restrictions gravely damaged the industry as it relies heavily on events and tourism. Along with MSMEs, the cultural sector plays a significant role in the economy, generating 2.95% of Albania’s GDP.

Wide-Reaching Solutions

These severe impacts on two of Albania’s most lucrative sectors, MSMEs and culture, needed to be curbed as soon as possible while addressing the state’s high pre-pandemic poverty rate. The Albanian government thus implemented a fiscal stimulus of about 3.5% of its gross domestic product (GDP). Through welfare support, tax relief and credit schemes the government alleviated the burden on the private sector and policies on credit installments curtailed impacts on new businesses.

Only 18% of Albanian firms reported using digital platforms to adapt to the pandemic, suggesting that the government efforts were the primary aid to alleviate the pandemic’s impact. The cultural sector, however, stands out. The Ministry of Culture founded the National Digitalization Center. Apart from that, 87.5% of institutions and enterprises in the cultural sector reported moving part of their business to virtual platforms, UNESCO reported.

The government also alleviated the impacts of the fall of the euro. The Bank of Albania promoted the lek’s stability and increased transparency in transactions involving foreign currencies. The European Commission and European Central Bank contributed financial aid to stabilize the banking system and provide euro support, LSE reported.

These sweeping measures were effective in helping the nation bounce back in the post-pandemic period. Despite rising inflation levels and supply chain disruptions, both the real wage and the minimum wage increased in 2021. Most significantly, the poverty rate dropped to 22% in 2021.

Looking Ahead

In 2021, the Council of Europe Development Bank (CEB) agreed to loan Albania €60 million to “mitigate the effects of COVID-19.” The loan aims to aid individuals especially vulnerable to the pandemic and help close the €570 million gap created in 2020. The loan and government measures may thus offset the impacts of COVID-19 on poverty in Albania through sustainable growth.

The impacts of COVID-19 on poverty in Albania were challenging, touching the most vulnerable sectors of the economy and exacerbating social challenges for women. However, the government’s wide-reaching economic reforms successfully curbed the pandemic’s economic impact on the industries and continued decreasing the nation’s poverty rate. International aid from the UNDP, EU and CEP was crucial in helping complement the government efforts by addressing the pandemic’s social impacts. This continued aid can continue to help Albania lower its poverty rate.

– Elena Sofia Massacesi
Photo: Unsplash

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Updates on SDG 8 in Cuba

Updates on SDG 8 in Cuba
The United Nations (U.N.) Division for Sustainable Development Goals grades member countries on 17 Sustainable Development Goals (SDGs). One can discover the most direct links to potential poverty in a country by analyzing the economy and labor market. The Sustainable Development Report from May 2022 provides updates on SDG 8 in Cuba.

What is SDG 8?

SDG 8 focuses on economic growth and decent work. The factors that influence updates on SDG 8 in Cuba include the country’s gross domestic product (GDP) growth, the unemployment rate, potential victims of modern slavery and “fatal work-related accidents embodied in imports.” Previous updates on SDG 8 in Cuba also showed progress. Both the 2020 and 2021 Sustainable Development Reports showed that Cuba had met SDG 8 and maintained it.

How Did Cuba Do?

The most recent updates on SDG 8 in Cuba come from the 2022 report, which once again, shows Cuba achieving the goal despite economic setbacks in recent years.

In the last decade, Cuba’s gross domestic product (GDP) averaged a growth of about 2% a year, according to the World Bank. The Caribbean island nation’s GDP had not seen negative growth in the 21st century until a slight dip in 2019. Like most countries, the COVID-19 pandemic caused a steep drop in GDP in 2020. After recording a -10.9% GDP in 2020, Cuba rebounded slightly in 2021 with a 2% growth in its economy.

The unemployment rate in Cuba is also relatively low, only hitting 3.87% in 2020.  The 2022 Sustainable Development Report places Cuba’s unemployment rate at 2.5% in 2022. Trading Economics predicts that, by 2023, the unemployment rate will drop to 2.2%.

According to the Sustainable Development Report of 2022, 3.8 out of every 1,000 Cubans fell victim to modern slavery. This number likely links to accusations of modern slavery against Cuba in relation to the nation’s international medical outreach program. The most recent allegations pertain to doctors, with the U.N. Human Rights Council’s rapporteur making an official inquiry in November 2019.

Based on reports from Cuban doctors themselves, the United States alleges that Cuban doctors working in other countries are overworked and endure underpayment in the international medical assistance program that brings billions to Cuba each year. The U.S. also alleges that Cuban doctors have to leave their families behind in Cuba to discourage defection while abroad.

As for the factor of fatal work accidents embodied in imports, the 2022 Sustainable Development Report notes 0.2 per 100,000 Cubans. This data is consistent with the 2020 and 2021 reports, indicating stagnation in work-related fatal accident rates.

Potential Progress on SDG 8 in Cuba

One beacon of hope that Cuba is leaning toward to further its economic growth and recovery is the tourism industry. Despite the United States embargo from the Kennedy administration, Cuba used to welcome about 4 million visitors each year from across the globe before the pandemic.

As pandemic restrictions ease, the tourism industry is seeking to capitalize on increased travel. The Cuban government has dedicated 24% of its 2022 budget to tourism, focusing on building new hotel rooms as well as relying on entrepreneurs in the country to bolster the uptick in tourism to the island.

The United States easing travel restrictions to Cuba will help increase the number of visitors to the country. According to an announcement in May 2022, while U.S. citizens cannot travel to the island for tourism purposes, those traveling to Cuba for research or meetings can enter the country.

The State Department announced on May 17, 2022, that it will allow flights from the U.S. to land at other airports in Cuba going forward, lifting a restriction that only permitted flights to land at the José Martí International Airport in Havana.

Barring any unforeseen setback, Cuba expects to increase its GDP by 4% in 2022, according to Prime Minister Manuel Marrero in a report from December 2021. Cuba could maintain SDG 8 for next year by increasing GDP, keeping unemployment low and maintaining the improvements presented in the 2022 Sustainable Development Report. This would mark a small victory for a nation battered by economic stagnation and sanctions from its neighbor to the north.

– Emma Rushworth
Photo: Flickr

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Constructing the Thwake Dam in Kenya 

Thwake Dam in Kenya Severe, extended droughts and contamination due to runoff waste has impacted Kenya’s ongoing water crisis. UNICEF estimates that only 59% of Kenyans have access to clean water in 2022. While access to basic drinking water has increased in the last decade, Kenyans’ access to basic sanitation has decreased from about 34% to 29%. The Kenyan government and private sectors are working together on a multiphase project called the Thwake Multipurpose Water Development Program (TMWDP) in a reformative attempt to build rural water connections and deliver new economic opportunities to the country. Here is some information about the Thwake Dam in Kenya and how it will promote water security in the country.

The Thwake Multipurpose Water Development Program

The TMWDP efforts occur between Kenya’s Makueni and Kitui counties, which are among the areas that drought affects the most. The low annual average rainfall in the project zone is confirmed to be about 500 mm per year, which is a major factor driving unreliable water access. For the Kenyans in these areas, it is not uncommon to travel more than 10 km each day just to receive water for livestock and domestic use.

After receiving approval from the Kenyan government in 2013 under financing from the African Development Fund, the TMWDP offered a timeline consisting of four phases. The first and most crucial phase currently under process is the construction of the Thwake Dam, spanning 1.5 km along the merging point of the Thwake and Athi rivers that intersect Makueni and Kitui counties. In November 2017, the county governments of Makueni and Kitui contracted the Chinese Gezhouba Group Company (CGGC) to construct the dam.

The Thwake Dam, which the Kenyan government estimates will be constructed by the summer of 2022, will supply 150,000 cubic meters of water daily for more than 1 million Kenyans in Makueni, Kitui and Machakos counties. The dam will be a major contributor to completing phase 1 of the project, providing 681 million cubic meters (MCM) of water storage. Following phase 1, the project aims to increase water supply for human consumption by 34 MCM, for power and downstream irrigation by 625 MCM, and 22 MCM for upstream irrigation. African Development Bank Group President Dr. Akinwumi Adesina stated his support for the project while attending a celebration of Madaraka Day in Nairobi, Kenya, highlighting its ability to transform lives by providing electricity, water supply and irrigation to 40,000 hectares of land.

Benefits of the Thwake Dam and Kenya Vision 2030

The Thwake Dam is already proving to be beneficial for Kenya’s labor force where the majority of workers operate in the informal economy without secure contracts or benefits. The project has hired more than 1,100 local Kenyans for dam construction and sources materials like cement and steel from nearby industries. CGGC managing director Frank Keeh stated his support for socio-economic growth in Kenya, referring to the project as an “economic game-changer” for the people.

The TMWDP targets more than 1 million people who will benefit from the Thwake Dam once it is operational. In specific, the African Development Bank Group mentions the 674,700 Kenyans who live in rural Makueni and Kitui, as well as the additional 640,000 projected to live in Konza, described as a world-class city with a thriving information, communications and technology (ITC) sector. Similar to the Thwake Dam, Konza Technopolis is a flagship project of Kenya’s Vision 2030, a long-term development plan to create “a globally competitive and prosperous country with a high quality of life by 2030.” Both projects will help Kenya Vision achieve its goal of an average economic growth rate of 10% per year until 2030.

Looking Ahead

The Thwake Dam serves to benefit Kenya’s water-insecure regions to bolster sustainable and inclusive economic growth within the country. By supplying and storing over 681 MCM of treated water, the Thwake Dam will contribute to improving health care and sanitation across three counties. The dam will also promote the agricultural sectors by assisting in irrigation and combatting lengthy dry spells. The work done by the TMWDP acts as a pillar for Kenya Vision 2030’s goal to transform Kenya into an economically prosperous middle-income country by the end of the decade.

– Evan Lemole
Photo: Wikipedia Commons

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Handling Inflation in Uganda

Inflation In Uganda
Uganda is in a state of having to combat inflation and rising prices for its citizens as global events, such as the COVID-19 pandemic and the Russia-Ukraine war, continue to interrupt normal streams of trade and supply. As a result, Uganda’s government has already begun implementing actions and constructing a broad policy that seeks to help keep the negative effects of inflation from causing more economic instability in the future.

The Current Impact of Inflation

Uganda is a country that is heavily reliant on crude and other imported material in order to make necessities such as cooking oil and soap. The cost of gasoline went up by 32% by February 2022 and soap went up to 57% at the same time.

As a result of this influx of prices, the Ugandan monetary policy committee increased the interest rate benchmark from 6.5% to 7.5%. This is the first time the committee has increased the interest rate benchmark since 2018. This has come at a time when Ugandan citizens already face higher prices and taxes which will remain at the same rate.

Uganda’s leaders are taking these steps in hopes of counteracting the risks of further global complications. Whether it be recurring waves of COVID-19, the impact of the Russian invasion of Ukraine or rising prices, Uganda will continue to look to other methods of revitalizing its economy and keeping up the fight against poverty.

During the first wave of COVID-19 in 2020, poverty rates in Uganda went from 27.5% to 32.7%, with the employment rate going down during the second lockdown in 2021. These complications along with the increased oil and consumer prices could result in slow growth, below 6%, through 2023 and 2024 for the Ugandan economy. All of this highlights the need for more structural economic transformation and how inflation in Uganda will be tackled.

Ongoing Strategies

Though there are many obstacles to the ongoing development of Uganda, there is a myriad of programs, partners and policies that are also working towards a brighter future. According to the World Bank, the primary financial investment that is going into fighting poverty and inflation in Uganda is the International Development Association. It is offering a low service rate of 0.75% on disbursed credit with loan repayments stretched over 38 years. Major projects funded by the IDA in Uganda include The Electric Access Scale-Up Project ($568 million) which improves energy accessibility, Investment for Industrial Transformation and Employment ($200 million) and Additional Financing to Uganda COVID-19 Response and Emergency Preparedness Project ($164.3 million).

The aforementioned projects will seek to improve economic recovery for Uganda amid the COVID-19 pandemic by fortifying its public health and response institutions.

With funding continuing throughout the rest of the fiscal year 2022 through the IDA and government awareness of the issues at hand, there is hope that inflation in Uganda can subside eventually and allow citizens to enjoy the growth of the Ugandan economy. Despite complications due to global conflicts of war, supply interruptions, the COVID-19 pandemic and future uncertainty, there is hope for Uganda to become a prosperous economy by 2040, according to the World Bank.

– Albert Vargas
Photo: Flickr

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Planting Fruit Trees in Morocco Reaps Economic Benefits

Planting Fruit Trees in Morocco
Due to its geographical location, Morocco is susceptible to long periods of droughts and water shortages. The Moroccan government partnered with civil society to plant 800,000 trees by 2024 to improve climate issues and agriculture. As a country that experienced the unemployment rate rising to 12.3% in 2021, planting fruit trees in Morocco is one of the solutions to boost its economy by creating an oasis in the desert.

Reforestation in Morocco and its Benefits

Fruit tree planting in Morocco can reduce poverty by providing income for local farmers. There is a wide variety of fruit trees in the country ranging from olives, argan and dates to carob, cashew nuts and more. Its shallow, rocky soils and Mediterranean climate are perfect for these fruits to grow.

For example, the planting of argan trees has played an important role in improving the Moroccan economy. Argan extracted from the trees goes toward producing argan oil, which is rich in fatty acids and antioxidants and is designed for culinary, cosmetic and medicinal purposes. The demand for Moroccan argan oil is growing; the market for argan oil is expected to reach $262.4 million by 2025.

According to The National Agency for the Development of Oasis and Argan Zones, “The Gross Domestic Product (GDP) of oases and argan trees in Morocco increased from MAD 84 billion to MAD 129 billion (€7.88 billion to €12.1 billion) between 2009 and 2018.”

In addition, locals are able to receive jobs from the reforestation. It was uncommon for women in Morocco to work outside. However, to keep up with the growing business of argan from the planting argan trees, local women joined and changed the social perception about women’s roles within the society, improving the livelihoods of women in the region.

Charrouf, who established a movement of women cooperatives, told CNN how local women’s lives improved after the business. “Before they didn’t get any money, but now they have at least €100 ($108) per month,” she said. And they were very grateful because their children were finally able to receive an education by earning a decent wage.

Tree Planting Programs in Morocco

Two major organizations are providing programs related to planting fruit trees in Morocco. This ensures sustainable development and helps expedite the growth of its economy.

  • Reforest’Action — In 2017, it started running several projects with the Ibn Al Baytar Association across Morocco with the objective of promoting economic development through harvesting organic fruits. The organization made significant progress during the planting season from 2020 to 2021. It also helps raise awareness of planting fruit trees among local communities through participatory planting sessions.
  • High Atlas Foundation (HAF) — HAF assists local families by planting fruit trees through collaboration with communities. According to the HAF report published in 2021, “HAF-community collaboration has planted 700,000 trees of nine fruit varieties, with 6,000 farming families in 39 provinces.” The collaboration also planted 1.6 million seeds in 13 nurseries located in eight provinces.

Planting fruit trees in Morocco has brought economic benefits in a sustainable way. Local farmers and communities are able to generate income and enjoy self-sustainability through the programs assisted by the organizations. In the middle of the desert, an oasis is growing and benefiting the nation.

– Jiaying Guo
Photo: Flickr