Reduce Poverty in BurundiBurundi is a small country in Central-East Africa with a poverty rate of over 60 percent. It’s difficult for many Burundians to access basic necessities, such as clean water and health care. This is due to so many people in the country living on less than two dollars a day. There are many ways to reduce poverty in a developing country. The following describes four essential areas to improve in order to reduce poverty in Burundi.

Health Care

As of 2016, the degree of contracting an infectious disease in Burundi is very high. Food or waterborne diseases are common. For example, typhoid fever and hepatitis A. Health care spending in 2016, as a percentage of GDP, was 6.19 percent. The U.S., on the other hand, spent 17.07 percent of GDP on health care. Investment in the health care industry would only help reduce poverty in Burundi. Therefore, it would create jobs and improve the livelihood of Burundians.

The functionality of a society relies on good health. So, this is why investing in the health care industry spurs development. A disease, such as malaria, holds back an individual from performing at work. With more than 80 percent of the population working in the agriculture industry, jobs which require manual labor, it’s difficult to work under sickness. About 81.5 percent of patients have to go into debt or sell a portion of their crops, land or livestock to pay for basic health care needs.

Education

Burundi spent 4.3 percent of GDP on education in 2017. The country is ranked 95 out of 175 nations for government expenditure on education. Investing in education can help increase profits in agriculture, which are minuscule. As a result, this can drive farmers to innovate and use efficient means of producing and storing crops for sale. About 15 percent of crops are sold for profit; the rest are consumed for survival. There are no long-term means of storage, so there is little reason to try to produce more crops; they would just spoil.

Education induces innovation and a more educated population. Provided they have the right tools, this leads to business developments. Agriculture accounts for more than 80 percent of all jobs in Burundi. This makes investing in other sectors, such as the power sector, appealing. With affordable and widespread electricity, farmers could afford better equipment, solar power, for example, to store and use energy when needed. As shown above, investment in education has a widespread effect on an economy, especially in a developing economy.

Infrastructure

In terms of GDP, Burundi grew little since 2015. But, investing and improving in the above sectors are a good start to developing the country, creating jobs, improving health and education and reducing poverty. Even simple bus transportation systems would cut the travel time Burundians have while walking over an hour to the market. Electricity, roads and bridges are areas for growth. Subsequently, their development in Burundi would create jobs. For instance, these jobs could be involved with building schools, providing electricity to over 90 percent of Burundians without electricity and supplying farming equipment to help increase productivity and wages.

According to Bertrand Badre, CFO of the World Bank, “Infrastructure is the backbone of any country, generating jobs, improving the quality of life for the poor and boosting economic growth.” Infrastructure creates jobs and therefore helps increase profits of those employed in the industry. Additionally, the infrastructure helps those who would use public transportation and electricity for their occupation. Electricity access is only five percent. Therefore, increasing access would only help grow the struggling economy, thus helping to reduce poverty in Burundi.

Business

Burundi must also improve the business environment so that external investors and internal investors will view the potentially lucrative opportunity of producing products and services in the country. A stable and predictable business environment can be formed as a result of the government providing an incentive to entrepreneurs who are looking to expand to the country. Without government involvement, it’s difficult to improve health care, education and infrastructure. In order to reduce poverty in Burundi, development begins with responsible governments that take initiative in helping its people.

– Sara Olk
Photo: Flickr

Infrastructure Projects in ArmeniaArmenia is a landlocked country in the Caucuses region, bordered by Azerbaijan and Turkey. Azerbaijan and Armenia have been in a state of frozen conflict since 1994 with things heating up briefly in 2016. Turkey and Armenia have been at odds for around 100 years over the Ottoman Turks treatment of ethnic Armenians throughout the history of the Empire, especially during the First World War. Due to these sour relations, the borders are closed. Armenia is forced to trade through the two other nations that it borders, Georgia and Iran. Many infrastructure projects in Armenia are focused on increasing the ease of the flow of goods between Armenia and Georgian Ports.

Armenia’s most important railroads used to be owned by a Russian company. Now they are in a state of disrepair. These three railroads run to Georgian ports where Armenian trade goods are then shipped to globally. However, further improvements to rail transport have been halted due to expenses. This has been attributed to lower than expected Russian investment in Armenia.

The World Bank

The World Bank has been working with both the government and private sector on infrastructure projects in Armenia. Due to a stagnant economy, much of this is not only aimed at improving the basic living conditions for Armenians but also at increasing job creation. By building and improving infrastructure, the government and the World Banks hopes to create jobs in the construction sector through government and private programs.

For example, in December 2015, the World Bank approved a $55 million local economy and infrastructure project. The project was aimed at both improving municipal infrastructure to increase the standard of living as well as to protect and sustain cultural heritage sites in order to boost tourism. The project end date is in 2021.

The European Bank

Infrastructure projects in Armenia are also funded by The European Bank for Reconstruction and Development. The EBRD has funded 171  projects in Armenia to the tune of 1.24 billion Euros since Armenia joined in 1992. Of the current 309 million Euros the EBRD is funding for projects in Armenia, 21 percent is going towards infrastructure projects. This includes improving municipal and urban transportation infrastructure.

This money is not only going to roads, rails and vehicles but it is also being invested in improving how commuters pay for transportation. This includes modernizing the ticket system. By making it easier and cheaper for people to purchase tickets for buses and trains, more tickets will be bought and fewer people will hop on for a free ride. The EBRD is also financing greener infrastructure projects in Armenia. At least 23 percent of the funding is going towards the energy market.

Paying It Forward

Despite the help with infrastructure projects in Armenia that the country is receiving to boost its economy and infrastructure, the nation is also giving. In 2015, the Armenian government donated 1 million Euros to the Eastern European Energy Efficiency and Environmental Partnership. Although Armenia also receives funding and expertise from this organization, so do many of its lost family of ex-soviet states. Armenia’s 2015 donation possibly went on to light homes in another country facing a similar situation.

Nick DeMarco

Photo: Flickr

Infrastructure projects in the Republic of GeorgiaThe Republic of Georgia has been doing fairly well despite a shaky recovery after gaining independence from the former Soviet Union in 1991. The Republic of Georgia and the Russian Federation are still important trade partners despite past conflicts. Trade between Russia and Georgia accounted for 14.5 percent of Georgia’s exports in 2017.  The government has recognized this and, in 2017, it laid out a 3-year plan outlining infrastructure projects in the Republic of Georgia. Its goal is not only to increase the ease of trade but also increase the standard of living for Georgians.

Infrastructure Projects in the Republic of Georgia

Railroads, roadways, seaports, airports, pipelines and electrical transmission lines are all in need of either an upgrade or an overhaul. Infrastructure projects in the Republic of Georgia are being handled organized by the Georgian government, but they are being financed by companies and countries all around the world. For example, Japan signed $38 million agreement to fund investments for improvements on one of Georgia’s main highways.

Much of this investment is organized and promoted by the Georgian International Investment Agency. The agency was developed and established in 2002 outside of direct government control due to the laws at the time. In 2015, the agency was moved under the direct control of the office of Prime Minister as a result of its growing importance and investments. The job of the agency is to ensure that investors and the nation are treated fairly.

Western Trade Partners

As the government of Georgia is seeking closer ties to the west by looking to join both the European Union and NATO, it has formed an important trading partnership with the United States. USAID has been working with Tetra Tech, an international engineering firm, on infrastructure projects in the Republic of Georgia, specifically in the energy sector.

USAID along with Tetra Tech have been working together with the government of Georgia, and other nations in the Caucasus region, on the Georgia Power and Gas Infrastructure Oversight Project (PGIOP). The project includes the construction of 119 kilometers of gas pipelines and the replacement of substations and power lines that were damaged or dismantled during the 1992 Georgian Civil War.

Improved Infrastructure Benefits Trade

Georgia’s other neighbors, Azerbaijan, Turkey, Armenia, Bulgaria and Ukraine, are all important trade partners that share either a land or sea border with the Republic of Georgia. Improving infrastructure in Georgia will facilitate important trade between the county and its neighbors, helping the economies of all countries involved. The World Bank is working with the government of Georgia to help improve the infrastructure needed for this trade.

The World Banks has been investing millions into the Republic of Georgia not only to help stimulate trade within Georgia’s sphere of influence but also though the Caucasus Transit Corridor. The area is an important corridor between Asia and Europe. Modern infrastructure will help facilitate trade across the Black Sea and through all of the nations that border it. Both natural gas and trade goods will need to move faster as consumption increases.

Georgia is a nation tucked in a region with ever-growing tensions. The wars in Iraq and Syria are not far away. Its neighbors Armenia and Azerbaijan are in a constant state of alert. Russia, Turkey and Iran are all beginning to flex their muscles on the world stage more freely. Through improving infrastructure projects in the Republic of Georgia, the country can hope to become too important for any side to lose, allowing it to continue to grow freely and democratically.

Nicholas Anthony DeMarco
Photo: Unsplash

 

transportation impacts poverty
Transportation impacts global poverty in ways that are both obvious and subtle. If the job market is centered in an urban area and potential workers live in a distant, rural area, their immediate survival depends on access to transportation. On a larger scale, the ability for a developing country to transcend poverty and become productive and prosperous depends a great deal on the transportation systems that are implemented with the help of foreign aid. This article analyzes five ways transportation impacts global poverty.

Five Ways Transportation Impacts Global Poverty

  1. Rural isolation arguably deserves its own list of ways transportation impacts global poverty because it has so many consequences that perpetuate continued destitution. For example, farmers in isolated rural environments often fail to reach their economic potential because they cannot easily access marketplaces that offer seeds, fertilizers and other tools for agricultural success.
  2. Other casualties of rural isolation are the elderly or otherwise infirm. Healthcare services are usually in centralized urban locations. Even if the poor and sick or even the old, pregnant or injured can afford the costs associated with health services, they are often unable to get to where the providers are if they live in rural communities. World Bank has helped to address this in developing regions of India, Georgia and Vietnam by subsidizing travel costs and making health professionals available in more remote areas.
  3. Investing in basic infrastructure is often one of the most significant ways in which transportation impacts global poverty. The building of roads, trails and bridges creates greater accessibility even for those who can only travel on foot. Jobs are created to facilitate these developments, and there are often new modes of public transportation implemented to make use of newly created roads or railroad tracks. This helps to minimize the travel time between rural and urban regions. Bill Gates asserts that while domestic resources can and should be utilized for infrastructure investment, global aid is a critical component as well. An investment in a developing country ultimately benefits the entire world, including the wealthiest nations.
  4. It stands to reason that the more easily a population can access educational facilities, the more educated that population is likely to be. People living more than an hour’s walk from the main road in Papua New Guinea were shown to be experiencing twice as much poverty as those living closer to the road. Building new roads and providing greater access to transportation resulted in an increase in education enrollment and literacy as well as an overall decrease in poverty.
  5. A theory known as “spatial mismatch” describes a phenomenon in which those who can easily pay for transportation, whether by automobile or public means, move away from congested urban regions. This creates a problem for the poor because the market often follows the wealthy as do the jobs. In developing countries, this is especially problematic since it feeds a cycle of poverty in which cheap housing options are only available in areas where there are few amenities, poor transportation options and limited jobs.

Writer Wilfred Owen asserts, “Continuing global prosperity is contingent on the very large volume of trade with developing countries and on the foreign investment opportunities they provide.” This will not be feasible without a short-term investment in the infrastructure and transportation systems of those developing countries. While the governments of the developing nations play a vital role in upgrading transportation options in their countries, foreign aid must also play a part. As this article shows, transportation impacts global poverty; therefore, it is not a simple matter of charity but rather a wise investment in our global future.

Raquel Ramos
Photo: Flickr

Failed statesA country is considered a ‘failed state’ when it cannot control its territory and population as well as when fails to secure its borders. A failed state has barely functioning executive, legislative and judicial institutions, which in turn, breeds corruption since the honest economic activity is not rewarded by the state. Here are 10 facts about failed states.

10 Facts About Failed States

  1. Throughout history, civil wars, ethnic cleansing and human rights violations have led to states losing the capacity to regulate and control themselves. When a state loses the capacity to implement policies throughout the country, when it cannot establish public order and equity, and when the government cannot assure the independence of institutions, instability and insecurity reign.

  2. North Korea is often called the ‘hermit kingdom’ due to its isolated nature. The country frequently receives low scores on its legitimacy of state. Aid organizations estimate that around 2 million people have died from food shortages since the mid-1990s. Part of this can be traced back to the economic institutions that prohibit people from owning property as the state collectively owns most land and capital.

  3. Another sign of a faile state is forced labor. In Uzbekistan, students are forced to pick cotton, one of Uzbekistan’s biggest exports. In September, while teachers are relegated to the role of labor recruiters. The children are given quotas of between 20 and 60 kilograms, which varies according to their age. Thus, the children are unable to break out of the cycle of poverty due to their lack of learning.

  4. Syria can be considered a failed state as it is experiencing a civil war that has claimed 100,000 lives and has no end in sight. The country receives an extremely low score for security apparatus, according to Foreign Policy magazine’s annual metric data.

  5. Egypt’s elite is monopolizing the economy to block the entry of new competitors. Under Hosni Mubarak, the military and government own large portions of the economy. According to some estimates, they collectively own up to 40 percent. Even after liberalization, the economy was privatized into the hands of Mubarak’s friends and sons’ companies. Big businesses put a stranglehold on the economy while Mubarak’s family accumulated an estimated $70 billion fortune.

  6. In most failed states, it is typical for the regime and its leaders to prey on its constituents. The regime tends to be motivated by ethnic or intercommunal hostility or even the insecurities of the elite, which lead to the victimization of their citizens or a subset demographic which is deemed ‘hostile.’ This is the case in Mobutu Seke Soso’s Zaire, where the ruling elite oppress and extort the majority of citizens while expressing preferential treatment for a specific sect or clan.

  7. Failed states can often be identified by weak infrastructure. As the rulers or ruling class becomes more and more corrupt, there are often fewer capital resources available for road crews, equipment and raw materials. For example, in the Democratic Republic of Congo, refurbishing navigational aids along aerial waterways was not prioritized.

  8. In order to have a successful economy, a country must have a strong, centralized nation-state. Without this, it becomes exceedingly difficult to provide law and order as mechanisms to solve disputes and provide basic public goods. Somalia exemplifies this failure to exercise control over territories beyond its capital. This can be attributed to the traditional social structure in Somalia where clans made decisions according to the adult males as opposed to adhering to a central authority figure. This persisted in the colonial era and into the modern day with Mohammed Siad Barre’s dictatorship failing to change it.

  9. An economy based on extreme extraction breeds political instability as it incentivizes the non-elites to depose the ruling class and take over. In Sierra Leone, Siaka Stevens and his All People’s Congress (APC) party ran the country from 1967 to 1985 as a dictatorship until he handed control to his protege Joseph Momoh. This invited would-be strongmen such as Foday Sankoh to plunge the country into a vicious civil war in 1991. He was only interested in power in order to steal diamonds. The government revenue went from 15 percent of national income to essentially zero in 1991.

  10. Corruption flourishes on a governmental, nationwide level. Examples include benefitting from anything that can be put to fake tender (medical supplies, bridges, roads, textbooks), wasteful construction projects and licenses for non-existent activities. The corrupt ruling elites mostly invest their ill-gotten money overseas, which worsens the economic situation domestically. Military officers too are guilty of profiting off these corrupt regimes.

In an earlier era where the world was less connected and globalized, it might have been possible to isolate the effects of a failed state from the others. However, in the connected state of today’s global economy and political system, the failures of one state poses grave threats to the security of others. These 10 facts about failed states shed a little more light on sign to look out for when identifying states that have failed or are going in that direction.

Maneesha Khalae

Photo: Flickr

Infrastructure Projects in Romania
Perhaps the most well-known motoring experts and critics, the host of the BBC’s Top Gear, named Romania’s Transfagarasan Highway the best road in the world in season 14, episode 1. In general, infrastructure has not been Romania’s strong suit; however, both Romanian politicians and the European Union alike see large infrastructure projects in Romania as the key to Romania’s social and economic future. There are plans to build roads, railways, ports and a variety of buildings to support the health and safety of Romania.

Unfinished Business

Mismanagement has always been a problem for a post-communist Romania. In 2003, the country began construction on what was supposed to be a nation-changing Autostrada Transilvania highway project that would have stretched from Brasov to Oradea, near the Hungary border, spanning the length of the nation. Construction was canceled in 2013 after high costs and poor management forced the government to abandon the project.

In 2014, the European Union guaranteed 9.5 billion Euros for infrastructure projects in Romania through 2020. Due to shifting government policies and elections in Romania, the EU has had a difficult time effectively following through with the project. Unfortunately, the initial plans went nowhere.

New Commitments to Infrastructure

In 2018, the President of the European Bank of Reconstruction and Development (EBRD) met with the President of Romania, giving the world its vote of confidence when it was announced that the EBRD would increase their commitment in funding infrastructure projects in Romania.

Road projects are important. Only 4.3 percent of roads in Romania are highways. To remedy this Romania is planning two major highway expansions. In 2019, Romania will begin planning a 51-kilometer highway called the Bucharest Belt. The Craiova-Pitesti Expressway is the second highway for which Romania has begun to plan and accept bids. It will be 121 kilometers in length and is projected to cost nearly 820 million Euros.

Railways are another important way to move goods and people through and around the country. The Romanian government has big plans for the rehabilitation and upgrading of its rail system. There are 58 investment projects underway to improve Romania’s railway system at an estimated cost of 2.8 billion Euros.

Other Projects in Place

Infrastructure projects in Romania are not only dedicated to roadworks. The Danube river is one of the most important rivers in European history. In Ancient History, it served as the border of the Roman Empire, from which Romania gets its namesake. The Danube has served as a major artery for trade, bordering 20 countries starting in Germany and ending in Romania and Ukraine at the Black Sea. The Romanian government plans to upgrade the Port of Constanta from 2020 to 2025. Improvements to the piers are estimated to cost $991 million dollars.

Other improvements underway are plans to upgrade and expand Romania’s sewage and water treatment systems. The EBRD and the Romanian government have earmarked 2.2 million Euros for the project. The project will help provide more clean water and better water waste removal to the people of Romania. The EBRD will not only provide money but will also provide expertise in the planning process so that the funds are used most efficiently.

It will not be a quick process. Romania has many years of improvement ahead of it. It will be an expensive and long-term task. Hopefully, the commitment of those involved will not falter like earlier projects but will use future roadblocks as opportunities to grow as they work together.

Nicholas Anthony DeMarco
Photo: Flickr

Communities in Africa, Bridge building
Poverty rates are historically higher in rural, more isolated areas, with an estimated 78 percent of the world’s poor living in the countryside. Africa is no exception. In fact, the majority of Africa’s population is rural, but infrastructural development continues to be slow. This is why building bridges in rural Africa is a much-needed, important step in reducing poverty.

Creating Safer, More Connected Communities

Despite the recent achievement of near-universal mobile phone coverage, Africa’s rural poor are still physically isolated, with many places lacking roads and footbridges, the latter of which is especially critical in servicing marginalized communities. A single pedestrian footbridge empowers a whole community; previously impassable rivers are transformed, providing villagers access to more opportunities.

Bridges in rural Africa prevent drowning, eliminate crocodile and hippo attacks, connect neighboring villages to each other, allow children to reach schools safely and greatly increase access to medical centers. In a walking world, one bridge can provide up to 72,800 secure crossings per year.

Leonard Wantchekon, a professor of politics and an associated member of the economics faculty at Princeton University, emphasizes the value of bridges in rural Africa. His maternal village, Dovi, was formerly one of the most affluent communities in the region, but the loss of the village’s bridge resulted in poverty. Wantchekon wrote, “Today, Dovi is the poorest village in the region despite the fact that the land is still highly fertile. […] the bridge that linked Dovi to neighboring villages across the Oueme River had collapsed in 1992 and the market completely disappeared soon after.” The loss of the bridge led to a loss in commerce, devastating this once thriving village.

Two Organizations Helping Build Bridges

Fortunately, there are organizations whose sole mission is to mobilize rural sectors with bridges. Bridging the Gap Africa (BtGA) is an organization that assists communities in Kenya with bridge-building. BtGA involves community participation with local volunteers, collaborating with them in every phase of the building project. These phases include gathering sand and rock for the bridge footings and raising a portion of the construction costs. BtGA provides technical expertise and financial assistance throughout the process. Once the footbridge is complete, BtGA celebrates the community’s achievement with an opening ceremony wherein the bridge is officially commissioned and owned by the village.

Bridges to Prosperity is a global project that has built more than 250 footbridges worldwide. Although it is based in the United States, the organization has active programs in countries all around the world, including Rwanda and Uganda. Their outreach includes building demonstration bridges, training locals, partnering with local technological institutes and supplying recycled wire rope.

Bridges Are Improving Communities

The work done by organizations like those mentioned above has left palpable ripples. Angelique, a thirteen-year-old resident in the Shagasha community of Rwanda, states that having a safely installed bridge nearby has transformed her commute to school, and thereby her learning performance. “I used to be 30th in my class. I had repeated bad performance because I missed school. Now I’m 6th in my class – my marks have improved.” Being able to attend school regularly, thanks to the bridge built in the community, has allowed many children to improve in their studies since they have been able to safely get to their classes. 

The bridges are also helping with commerce. “Before the bridge, it would take me one hour to get to the market, and when it rained, I would have to turn back because the river was too dangerous to cross. Now it only takes me 3 minutes whether it’s raining or not,” said Dativa, a businesswoman in Gaseke, Rwanda. By alleviating the burden of walking through dangerous flooded water, Dativa has been able to dedicate more time to the success of her shop.

Bridges in rural Africa are directly correlated to a community’s economic and educational gains. They, along with other infrastructural improvements in rural sectors, are essential in alleviating poverty and achieving long-term prosperity in Africa.

Yumi Wilson
Photo: Flick

Private Sector in Poverty Reduction
Poverty and world hunger stand on the docket of extinction, for the first time in human history. Even just one generation ago, this acknowledgment would seem absurd. The United Nations advocates that the world can meet the unimaginable goal of eradicating world hunger by 2030.

To achieve this goal, it would take between $170 and $190 billion a year from the U.S. to take everyone out of extreme poverty in the next two or three decades. Just to put that number in perspective, as the largest bilateral donor, the U.S. allocates roughly $49 billion to foreign funds every year to 96 percent of the globe. This article will look at the role of the private sector in poverty reduction.

Advantages of Private Sector in Poverty Reduction

Directing focus on the magnitude of the nation’s role in poverty reduction must be noted, considering only 1 percent of the federal budget goes to foreign aid, the question arises if there is a cheaper, quicker way to fast-track the eradication of extreme poverty. What about the private sector?

The role of the private sector in poverty reduction is that it naturally brings to the table what governments and nongovernmental organizations do not. Federal funds can only cover so much with a $49 billion a year budget. Some of the most transformative investments in poor regions around the globe come from private lenders.

Most U.S. money goes to direct assistance, like world health programs, providing aid packages and doing the heavy lifting for broad-based long-term economic development. The private sector can help stimulate poor economies. Private business contributes a different model to aid and public resources. They can provide jobs, goods and services sometimes more effectively than agencies can do alone.

Developing Countries Opportunities

Developing countries offer business opportunities unheard of in the developed world. The potential for market growth in underdeveloped regions is monumental. Social entrepreneurs likewise are more flexible in carrying out the demands of poverty because they can develop new cross-sector models out of competition, without being tied to the orthodoxies of foreign aid.

Take for example infrastructure in the developing world. The International Finance Corporation (IFC) estimates that it will take $2 trillion a year to fix the world’s infrastructure needs, especially in the developing world where billions of people lack access to safe water, electricity, roads and other basic services.

While often the domain of governments, poor countries cannot support the immense costs of upgrading infrastructure. Infrastructure is essential to eradicating poverty. To escape low-income agricultural dependency, countries need infrastructure projects to communicate, process and transport quality goods. The private sector can work at a much larger scale enabling investments in energy and transportation infrastructure that administer long-term benefits to the economy for local entrepreneurs to take advantage of.

In theory, by solving insurmountable problems in developing countries economies, the role of the private sector in poverty reduction is improving value chains. The private sector and entrepreneurship play a fundamental role in innovation, improving business standards and job creation without development goals as their primary agenda.

Things to Consider when Investing

Private companies can provide lending to update infrastructure projects as Chinese companies have done in Africa. However, there are negative aspects of foreign funding as well. While the inflow of investments does help locals and spark economic growth, these are debts to be repaid to commercial outsiders. For example, several Chinese infrastructure investments have helped support corrupt and undemocratic regimes and only compounded local problems. Not to mention this activity supports an extractive business model.

Infrastructure and jobs help immensely, but the private sector needs to share its wealth capacity with the developing world. Since 2000, the poorest half of the world has received just 1 percent of the increase in total wealth, while the wealthiest 1 percent of the world received over 50 percent of the total wealth. Wealth tends to stay in the hands of the wealthy people. Businesses need to keep in mind that the most valuable asset for then is their labor force. Better paid skilled jobs are keys to growth anywhere.

Foreign direct investment grew from under $50 billion in 1990 to almost $500 billion in 2011. For the first time in 2013, foreign direct investment in developing countries exceeded investment in developed countries. At the same time, commercial lending and remittances have grown significantly.

GDP growth has been high for the last decade in developing countries. But the growth in jobs has not been enough to transition from an agricultural economy to a high productivity economy. Stimulating these economies to help in that transition is key to transitioning. The role of the private sector is that it must be relevant to the poor. Their intervention can be life-changing in guiding the poor to the path to prosperity, remembering that their labor force may be the main assets they possess.

– Joseph Ventura
Photo: Unsplash

Smart Cities in Africa
Interestingly, the common perception of Africa doesn’t tend to include sprawling urban metropolises; rather, a person typically visualizes a past version that is an incomplete picture of Africa today. While the majority of Africans still live in rural areas, the continent is one of the most quickly urbanizing regions in the world. 

Urbanization

By 2050, 2.5 billion more people will live in cities and almost 90 percent of those people will be from either Africa or Asia. Three African cities have already grown beyond a population of 10 million and are formally considered megacities.

More cities will gain that title in the coming decades. This rapid urbanization provides opportunities for many African nations and their citizens, but it also poses serious long-term problems if not handled properly. With these concerns in mind, several countries have begun developing what has become known as smart cities in Africa.

The Problem with Cities

Many African cities have not been as able to cope as well with the massive increase in urbanization as other cities around the world. Perhaps the most obvious problem is housing. More than 60 percent of the continent’s urban population live in informal settlements where poverty and poor living conditions are rampant.

While the very poor are most affected, African cities’ weak infrastructure affects all of their residents. Some common difficulties that these cities face are:

  • Lack of water and electricity due to limited resources, high costs and poor utility management.
  • Poor access to sanitation facilities affects urban and rural Africans alike. Only a third of the population of sub-Saharan Africa has access to proper sanitation.
  • Heavy traffic congestion that leads to massive daily losses of productivity.
  • Difficulty fighting crime and disease, especially in underdeveloped urban areas with high poverty levels.

Developing smart cities in Africa has the potential to help address these problems.

Smart Cities in Africa

Broadly speaking, smart cities aim to use new data-collecting technology and modernized infrastructure to provide safer and more efficient services for their citizens. This can take a variety of forms, many of which have already begun to be used around the continent.

Cape Town is a good example of such a solution. The South African city has partnered with network providers to acquire data from sensors placed around the city. This data helps the city run more effectively in several ways ranging from traffic monitoring to waste management, crime detection and fire response.

Some countries are taking another route toward smart cities by proposing satellite cities — new urban areas built in areas near pre-existing cities. Kenya, Rwanda, Nigeria and other countries all have such projects in the works. Many of these satellite cities would provide thoroughly modern infrastructure and luxury amenities to attract tech-savvy entrepreneurs.

Smart, Safe and Sustainable

While satellite cities have faced some criticism for being created well out of reach of the millions of poor Africans already living in cities, they are only one facet of a movement toward better urban areas across the continent.

Smart cities in Africa are still in their infancy, but they have an advantage. While many cities in the developed world have to maintain outdated infrastructure, African cities can build updated services and facilities from the ground up.

As African economies continue to grow, these modernized cities will be able to make more sustainable use of resources, respond better to crises and adapt to a world racing forward in the field of technology.

While smart cities will not fix Africa’s urbanization problems overnight, they are certainly a step toward both providing better living conditions and being able to compete with other cities around the world in the global economy.

Joshua Henreckson

Infrastructure in KenyaThe East African Community (The EAC) consists of Burundi, Rwanda, Tanzania, Uganda and Kenya. However, the only country not on the U.N.’s list of Least Developed Countries is Kenya, which is why it is the best qualified to become an intra-regional hub for trade in East Africa. Presently, the Kenyan government is looking for offers to improve and expand infrastructure networks. This will inevitably create significant trade opportunities throughout Eastern and Central Africa. The expansion of infrastructure in Kenya will create a direct, positive impact on all of this country’s immediate neighbors.

Projects Being Implemented for Infrastructure in Kenya

  • Trading: The Lamu Port and South Sudan Ethiopia Transport (LAPSSET) projects will open up a passageway for an increase of trade opportunities with Kenya’s northern neighbors, South Sudan and Ethiopia. The development of this project will lead to opportunities in construction of railroads, roads, airports, houses and utilities. Opportunities are expected in multiple areas of Kenya because of the LAPSSET project.
  • Housing: The National Housing Corporation is using its principal agency status of implementing the government housing policy by putting a program in place to enable interested investors to recognize the current goal of building 150,000 housing units per year. Facilitating this project into action will create more openings for Kenyans and their living situation, allowing people to move up in the housing world, instead of staying in the same place for decades.
  • Economy: The Kenya Airports Authority is in the midst of building a shopping mall, a hotel, a business zone and a commercial passenger terminal at JKIA. This terminal would provide successful bidding companies with equipment and materials for this improvement to Kenya’s Airport. This development would most likely increase the flow of people through Kenya because of the improved infrastructure, pulling Kenya towards its goal of becoming an intra-regional hub for infrastructure.
  • Telecommunications and Transportation: There is a $556 billion investment planned for infrastructure development in Kenya. The majority of this investment will focus on telecommunications and power generation infrastructure. There are also major road projects that are ongoing, one being the Nairobi Southern Bypass, which was appointed in 2012 and is now 40 percent complete. An estimated $5.14 billion has been set aside for road project investment in Kenya. Many industries are expected to benefit from this planned infrastructure, which include oil and gas, mining, agriculture and retail.

Through large investments like these, Kenya will soon become the center for trade in Africa because of its resources, as well as potential investors that are willing to contribute to the growing infrastructure in Kenya. However, delays and an increase in completion cost may take place as a result of legal issues. Limitations on the type of projects international firms can get involved in have been enacted because of legislative changes to the process. Before these restrictions can be addressed, global firms will have to form local partnerships in order for infrastructure projects in Kenya to be accepted. Once these obstacles are overcome, Kenya will hopefully become a center for trade for people throughout the continent of Africa.

Megan Maxwell
Photo: Flickr