Posts

causes of poverty in Côte d'Ivoire
Côte d’Ivoire, or the Ivory Coast, is a former French colony and is located in North Africa. The country’s economy relies heavily on agriculture and processing, with over half of the country’s population working as laborers and farmers. Côte d’Ivoire’s main exports include cocoa, various nuts and palm oil. This low-income country, with 50.9 percent public debt in 2016, has a population estimated at just over 24 million and has a poverty rate of 46.3 percent.

One most recent cause of poverty in Côte d’Ivoire is the production of cocoa which is “highly sensitive to fluctuations in international prices…and to climatic conditions.” Recently, Côte d’Ivoire farmers have been witnessing agricultural diseases among the cocoa plants and trees. Along with decreased crops, around 80 percent of buyers have escaped their contracts with the cocoa farmers, which leaves the farmers with little to no income.

Without payment for the harvested crop, many of these farmers and their families have to survive with nothing. Even if the farmers do receive payment, they earn less than a dollar per day, contributing to the number of people living below the poverty line. Without the proper income, these farmers are facing an inability to buy fertilizers for next year’s production. One farmer states that the soil is old and barren, and without fertilizer, “you can’t grow anything.”

Another cause of poverty in Côte d’Ivoire is the lack of healthcare. Since the civil war in Côte d’Ivoire in 2002, there has been a collapse of resources for people with health issues, including HIV/AIDS. Based on 2016 data, the adult prevalence rate of HIV/AIDS is about 2.7 percent, and about 460,000 people are living with the disease. Côte d’Ivoire is also at high risk of other diseases besides HIV/AIDS.

The absence of sexual education is also to blame for poverty in Côte d’Ivoire. The current rise in population is estimated to continue growing, as about 60 percent of the population is 25 or younger. Furthermore, the fertility rate is approximately 3.5 children per woman, and use of contraception is below 20 percent.

However, there is good news for the country. In June 2012, Côte d’Ivoire received $4.4 billion in debt relief under the Highly Indebted Poor Countries Initiative. Since then, the country’s growth rate has risen to among the highest in the world. To tackle the epidemic of HIV/AIDS and other causes of poverty in the Côte d’Ivoire, several mayors of the nation’s communities joined together with the UNAIDS Executive Director Michel Sidibé to establish the Paris Declaration, which plans to eradicate the disease in Côte d’Ivoire by 2030.

As for the cocoa crisis, sustainability of the fields for production is essential, as well as paying the farmers a livable income. The French Development Agency and Barry-Callebaut, the global leading manufacturer of chocolate, have founded a sustainability strategy called Forever Chocolate in hopes of getting the crisis under control and providing a better future for Côte d’Ivoire farmers.

Furthermore, the Millennium Challenge Corporation (MCC) has selected Côte d’Ivoire “to begin developing a five-year compact,” and the company has committed to helping the country fight its poverty. In conjunction with the MCC, The Borgen Project is advocating the passing of the African Growth and Opportunity Act and Millennium Challenge Act (AGOA and MCA) Modernization Act in Congress. This bill will strengthen and extend programs and aid in Africa if passed. For more information or to contact your Congressperson and show support, visit: https://borgenproject.org/legislation/.

Jennifer Lightle
Photo: Flickr

ticking clockAs the expiration date for the African Growth and Opportunity Act (AGOA) of 2000 approaches in September, members of Congress are calling for a rapid-fire renewal process to protect the work that AGOA has accomplished so far.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Senator Ron Wyden (D-Ore.), and House Ways and Means Committee Chairman Paul Ryan (R-Wisc.) and Sander Levin (D-Mich.) have introduced The AGOA Extension and Enhancement Act of 2015 that will renew the act for ten years.

Originally signed into law in May of 2000, the AGOA was a bipartisan initiative intended to strengthen economic relations between the United States and Africa. By creating trade preferences for African products that allowed for duty-free entry into the United States, the AGOA sought to provide an exclusive economic partnership with budding African industries and American consumers. The Brookings Institution, a Washington, DC-based think tank, estimates that the AGOA has created several hundred thousand direct s in Africa—particularly in textiles.

Under the agreement, eligible African nations would receive “unlimited duty free and quota free access to the U.S. market for apparel made in Africa from U.S. fabric and U.S. thread.” Several African nations saw unprecedented growth in exports to the United States. For example,  Kenya saw a 1,375% increase in exports to the U.S. between 2000 and 2001.

“The legislation [AGOA] has helped transform the economic landscape for Sub-Saharan Africa by stimulating new trade opportunities for African and Americans businesses, creating new jobs, and investments worth hundreds of millions of dollars,” wrote a U.S. Administration 2002 report.

The AGOA was initially set to expire in 2008 until a new round of legislation pushed the expiration date back to September 2015.

In addition to the African jobs created by the AGOA, there are many American jobs dependent on the trade network that this legislation has formed. The United States Trade Representative has estimated that exports to Africa are responsible for more than 120,000 American jobs. The AGOA has provided a level of security that have lead to a four-fold increase in exports to Africa—something that helped to pay thousands of salaries stateside.

“This legislation will promote American trade and strengthen our economic ties with important countries,” said Sen. Paul Ryan in April. “It will encourage our friends in Africa and Haiti to pursue free enterprise and solidify the rule of law. This legislation demonstrates that more trade can create opportunity at home and promote our economic values abroad.”

Brookings has argued that uncertainty over the act’s renewal could halt the progress made so far by the AGOA. Without the stability of the legislation, textile factories are less likely to receive orders in enough time to produce clothing for a new season of shopping. In the void left by the AGOA, competing manufacturers like China will be eager to step in and soak up the businesses that were once protected by the AGOA.

Emma Betuel

Sources: WPI, IB Times, Brookings
Photo: Global Vison

african_economic_growth
The Economist once labeled Africa “The Hopeless Continent.” The magazine determined that the widespread effects of disease, poverty, conflict and corruption rendered the continent economically unfavorable. That was in 2000, the same year that President Clinton signed into law the African Growth and Opportunity Act (“AGOA”). Today, the continent—and particularly sub-Saharan Africa—is home to several of the world’s fastest growing economies. In 2011, The Economist revised its moniker, referring to Africa as the “The Rising Continent.”

Many economists view AGOA as an integral element of growth in sub-Saharan Africa. The primary objective of AGOA is to expand the volume and variety of trade and investment between the United States and sub-Saharan Africa. According to government sources, AGOA’s trade provisions are responsible for 350,000 direct and 1 million indirect jobs in Africa as well as 100,000 jobs in the United States. Since the program’s inception, exports from AGOA nations to the U.S. have risen more than 300 percent.

AGOA is scheduled to expire in 2015, but President Obama has initiated an early campaign to extend the trade agreement. While praising the success of the program the President explained that, “The economies of sub-Saharan Africa are among the world’s fastest-growing, and this economic expansion, partly a result of our long-standing investment in Africa, provides an opportunity to lift millions out of poverty and foster long-term stability.”

Though oil and gas exports comprise more than 90 percent of African exports under the program, leaders hope to expand investment in other industries such as textile and apparel exports. Economists have stressed the importance of diversifying exports in trying to achieve long-term development and sustainable growth.

This month, leaders from the United States and participating African nations will meet in Ethiopia for the AGOA Forum. The theme of the event is Sustainable Transformation Through Trade and Technology. African representatives are hoping for a long-term extension of the trade agreement. Jas Bedi, chairman of the African Cotton and Textile Industries Federation, explained it simply, “You can’t do a $200 million deal if you don’t know what’s going to happen in three year’s time.”

Renewal of AGOA is crucial if the United States hopes to keep pace with China, which has recently overtaken the United States as sub-Saharan Africa’s largest trading partner. A recent report from the Brookings Institute criticizes the American business community for failing to capitalize on the continent’s emerging markets. As the region continues to grow, the United States hopes to accelerate trade and investment with its African partners. The renewal of AGOA will certainly be a good start.

– Daniel Bonasso

Sources: Financial Times, AGOA, Brookings Institute
Photo: It News Africa

Poverty in Madagascar

Madagascar is the fourth largest island in the world and has a population of over 22 million. It has an incredible amount of biodiversity, a great potential for sustainable tourism, and boasts a deep, rich heritage. However, before the mid-1990s Madagascar was in a downward economic spiral. Poverty in Madagascar is rampant. Even though slow improvements have been made, a 2004 CIA Factbook estimate places 50% of the population below the poverty line — the World Bank’s estimate is that 70% of Malagasy live on less than $1 a day. Some of the biggest obstacles to poverty eradication in Madagascar are as follows.

1. Geography. Its placement in the Indian Ocean off the coast of Eastern Africa exposes it to a large amount of intense tropical cyclones. Floods caused by torrential rains are contributing to humanitarian crises the country faces relatively often. Furthermore, the area that Madagascar takes up is slightly less than twice the size of Arizona with a square kilometrage of approximately 587,000 km. Because of the island’s relatively prohibitive size, deforestation and erosion are grave environmental concerns.

2. Political turmoil both past and present. Deep roots of unrest persisted after French colonial rule ended in 1960; in the early 1970s, the military seized the newly independent government and imposed strict socialist economic practices. By 1982 the country needed external aid through the International Monetary Fund. Improvements were made, especially with Madagascar’s inclusion in the Africa Growth and Opportunity Act (AGOA), which allowed Madagascar duty-free access and access to aid funding. However, in 2009 then-president Marc Ravolomanana was deposed in a coup. Andry Rajoelina replaced Ravolomanana; the coup marked Madagascar’s exclusion from the AGOA due to human rights concerns, and donors all but suspended aid to the country. Today the political turmoil and threat of conflict also have driven many tourists from considering Madagascar a destination, halting the already-stunted tourism sector.

3. Disintegrating infrastructure. According to Euromonitor International, the capital city of Antananarivo is the only city on the entire island to provide good road infrastructure. Most railway transport along the island is on the eastern side, where the principal cargo port city of Toamasina is situated to the northeast of the capital city. The country is therefore heavily isolated even between major cities; the lack of ability to move goods and workers is severely detrimental. Furthermore, even transport out of the country by air is tenuous due to air safety and security concerns, according to Euromonitor International.

4. Severe water safety, sanitation and hygiene concerns. According to WaterAid Madagascar, over 18 million people do not have access to adequate sanitation in the country; 89% of Malagasy do not have access to improved toilets. As a result, Index Mundi asserts that the degree of risk is very high for major infectious diseases; waterborne diseases are common, such as bacterial and protozoal diarrhea, hepatitis A, and typhoid fever. Ultimately, the biggest obstacle that Madagascar faces now is its political instability. President Rajoelina’s government — and the way he acquired his power — has caused international aid to come to a halt. Until then, the burden for domestic development, strengthening the economy, and addressing public safety issues falls squarely on the shoulders of the already-financially strained government of Madagascar.

– Naomi Doraisamy

Sources: BBC, CIA World Factbook, Euromonitor International, Index Mundi, Water Aid
Photo: Wild Madagascar