Foreign Investment Through the Prosper Africa CampaignForeign assistance helps people living in poverty while also benefiting the donor nations. Foreign aid helps domestic business interests because investment abroad in emerging markets opens the doors for more consumers. Furthermore, it stimulates demand for those domestic goods and services.

A new U.S. government initiative, called the Prosper Africa Build Together Campaign, is aiming to do just that by encouraging investment in Africa. The campaign promises development for recipients and new opportunities in key emerging markets for donors.

Africa’s Emerging Markets

Across the continent, income levels are rising. Some predict that by 2030 global household consumption will reach well over $2 trillion. Opportunities abound with urbanization in countries such as Nigeria, which holds seven cities with populations of more than a million people. By 2030, a fifth of the world’s consumers will live in Africa — with an increasing number of people breaking into the middle class. As GDP per capita continues to rise, so will the buying power for consumers across the continent. Additionally, Africa’s citizens will look to purchase more goods, including luxury goods. Already, Africa is the fastest-growing market for telecommunications and the second biggest market for mobile phones.

Prosper Africa Build Together Campaign

The Biden Administration promises to “elevate and energize” trade and investment across Africa. The Prosper Africa Build Together Campaign is the vehicle to accomplish that task. The goal is to get U.S. government agencies, African governments and the private sector to coordinate together in order to invest in development projects.

USAID states priorities for projects include “clean energy and climate smart solutions, health, and digital technology.” The private sector is key in this campaign as U.S. relationships with African countries start to shift while these nations continue to develop. More and more, relationships will evolve from being focused on aid to relationships focused on trade and investment.

The Prosper Africa Build Together Campaign is one mechanism of the Build Back Better World Initiative. The campaign encourages private sector investment which can help “on a scale that could never be matched on foreign aid alone.”

Prosper Africa Early Results

So far, the two-pronged approach of facilitating transactions and shaping future opportunities seems to be working. Prosper Africa fostered 800 deals, spurring more than $50 billion in exports and investments in over 40 countries across Africa.

For example, one success story comes from Ghana. An investment saved Global Mamas, a small firm that sells unique handcrafted products. Because of the economic hardship associated with COVID-19, Global Mamas saw its domestic revenue decline by 90% and lost almost 50% of its global revenue. USAID’s West Africa Trade and Investment Hub helped to secure $2 million of private funding to save the company. Furthermore, it set Global Mamas up for a sustainable future post-pandemic with projections of over $1 million in exports. The investment will save more than 250 jobs and establish 85 new jobs within one year. Additionally, the jobs go primarily to women who will be the primary earners of their household.

Looking Forward

Fighting global poverty is not only the right thing to do, it has benefits for domestic interests. Investing in key emerging markets helps to grow new consumer bases and in the end, everyone can prosper together. The Prosper Africa Build Together Campaign imagines such a world where we can fight global poverty by encouraging sustainable growth. But, it also supports the investor’s economy at home and improves the domestic industry.

– Alex Muckenfuss
Photo: Flickr

Strategies for Economic Growth and Sustainability in Ghana
In a monumental accomplishment, Ghana has triumphed in its Millenium Development Goal of cutting poverty within the nation in half. In the 1990s, half the population was subject to living standards below the poverty line, but by 2013 this figure was down to less than a quarter.

The country now gears up for the U.N.’s first Sustainable Development Goal of completely ending poverty in Ghana. With this new goal in mind, Ghana is challenged to address the lagging segment of the population and stimulate growth and greater equality.

Agriculture in Ghana

From 2007 to 2016, Ghana managed to stimulate economic growth at a rate above 7 percent. However, the agricultural industry only grew by 3.5 percent, lagging much behind the economy. In fact, the African Development Bank reported that Ghana’s agricultural sector would need to achieve a 7 percent growth in order to initiate poverty reduction.

The reason agriculture is a crucial area of improvement to end poverty in Ghana is that more than half of its population works in this industry. Over 90 percent of employment in rural areas is based in agriculture, and these areas also comprise the poorest of the poor in the entire country.

Opportunities For Development

Fortunately, the means for development stems from the agricultural sector and would significantly contribute to Ghana’s growth and overall poverty reduction. The following is a condensed list with strategies and areas of improvement that would help achieve economic growth in the agricultural sector and ultimately push ahead ending poverty in Ghana:

  1. Incorporate mechanization and other technology
  2. Advance beyond rainfed agriculture
  3. Promote security in the land tenure system
  4. Stimulate interest and investment in agriculture
  5. Improve storage and management of post-harvest yields
  6. Make policy that focuses on progressing agriculture beyond subsistence farming

Sustainable Growth and Energy

Ghana faces other challenges in infrastructure that hinder economic growth and poverty alleviation; however, the U.N. Development Program supported Ghana in its transition to greater infrastructure in a sustainable way. Energy, for instance, appears to be one of the key focus areas for infrastructure improvement.

The U.N. provided adaptation and mitigation strategies in Ghana’s development policies and programs. Moreover, this cooperation between the U.N. and Ghana also contributed to Ghana’s mission to diversify energy sources, greatly incorporate renewable energy and develop more efficient energy.

Secretary General’s Sustainable Energy for All Initiative

One such collaborative effort between Ghana and an international organization to secure poverty reduction and economic growth is the Secretary General’s Sustainable Energy for All Initiative (SEforALL). SEforALL works to advance energy systems, end energy poverty and promote prosperity. In fact, the three main objectives are as follows:

  1. Provide universal access to up-to-date energy services
  2. Double the global rate of energy efficiency
  3. Double the renewable energy inclusion in the global energy mix

Efforts to End Poverty in Ghana

Ghana has advanced and grown significantly over the past two decades; poverty is cut by more than a half of what it was before the turn of the century. Ghana stands as one of the few countries that achieved the Millennium Development Goal.

Fortunately, there are numerous strategies, focus areas and initiatives occurring today to end poverty in Ghana once and for all.

Roberto Carlos Ventura
Photo: Flickr

The Vietnam Green Growth Strategy Promises Sustainable Growth
In the face of increasing pressure on natural resources, Vietnam has demonstrated great commitment to sustainable growth and development. Launched in September 2012, the Vietnam Green Growth Strategy aims to restructure economic efficiency, cope with climate change and reduce poverty within the country.

Vietnam has experienced rapid growth in recent years, but this progress has also put pressure on the country’s natural resources. Poverty in Vietnam declined from 49.2 percent in 1993 to 3.2 percent in 2012.

As unfortunate side effects of this achievement, air pollution levels rose in major cities, rivers became more polluted, greenhouse gas emissions almost tripled between 2000 and 2010, and climate-related disasters began to devastate rural and coastal regions.

In response to increasing strains on the environment, the government adopted the Vietnam Green Growth Strategy in 2012, with the ultimate goal of creating a more sustainable footing for the national economy while further reducing poverty.

The Green Growth Strategy seeks to accomplish its goals largely by encouraging businesses to move towards greener practices and help new businesses develop along green lines. Focusing on business practice reform paves a strong foundation for lasting growth, as “green investment is good investment,” according to Pratibha Mehta, UNDP resident representative.

If successful, the strategy would reduce the intensity of greenhouse gas emissions by 8-10 percent as compared to the 2010 levels, reduce energy consumption per unit of GDP by 1.5 percent per year, reduce greenhouse gas emissions from energy activities by 10-20 percent as compared to standard current rates, and promote green lifestyles and sustainable consumption among Vietnamese citizens.

The World Bank is supporting Vietnam’s progress through investments that steer the energy sector towards lower carbon options. By focusing on restructuring the economy and business practices, Vietnam is showing a strong effort to create large-scale and lasting green growth.

The Vietnam Green Growth Strategy is further supported by a partnership between Vietnam’s Ministry of Planning and Investment, the United States Agency for International Development and the United Nations Development Program. This partnership assembled a supplemental framework that accelerates Vietnam’s ability to implement green growth policies. The Strengthening Capacity and Institutional Reform for Green Growth and Sustainable Development in Vietnam project supports capacity building and encourages policy reform along Green Growth lines.

Thus far, five ministries and almost 30 localities in Vietnam have implemented green growth strategies. The steps taken include resource mobilization, institutional and policy improvement, capacity enhancement, and technology improvement.

The Vietnam Green Growth Strategy is guiding both rural and urban development toward substantial and sustainable growth. By integrating green growth with national policies, the initiative is positioning Vietnam to achieve the sustainable development goals.

McKenna Lux

Photo: Flickr

According to Sri Mulyani Indrawati, Managing Director of the World Bank, energy poverty implies that “poor people are the least likely to have access to power, and they are more likely to remain poor if they stay unconnected.” The key to solving energy poverty likely lies in the choice of power, with renewable resources being both the cheaper and environmentally cleaner option.

Misconceptions of Renewable Energy

The term renewable energy often conjures up images of developed, wealthy nations experimenting with different resources while using the most modern, up-to-date technology. However, renewable energy is now spreading to the farthest corners of the earth, achieving goals of environmental and economic sustainability. Renewable energy is often thought of as a luxury, but in some parts of the world, it has become a necessary way of life.

According to World Bank data, a large number of poor countries rank as some of the top users for renewable energy. Joining the ranks of eco-friendly Albania, Paraguay and Iceland are Kenya, Zambia, Mozambique and many other African countries. Falling at number 16, three-quarters of Kenya’s electricity production is derived from renewable resources, especially hydropower. In fact, developed countries, in general, lagged behind poorer countries in their use of renewable resources.

Renewable Resources: Budget and Environmentally Friendly

Utilizing renewable resources to create energy is not only environmentally friendly but also budget-friendly for many communities. The U.S. based nonprofit EarthSpark recently set up a solar microgrid in Haiti, which is an affordable energy solution for homes and businesses. Microgrid users pay for the service in advance, ensuring that customers only use the energy that they are able to afford.

Another benefit of renewable energy is that new technology often brings along new employment opportunities. In Haiti, 109 entrepreneurs were trained to work with and market microgrid technologies.

Countries still bypassing the usage of renewable resources for coal need to realize that solving energy poverty requires, as Huffington Post writer Edward Cavanough notes, the “pragmatic use of local and sustainable energy sources to meet immediate and long-term demand while fostering sustainable growth.” Renewable resources are the energy of the future, and it’s in the world’s best fiscal and environmental interest to utilize them.

Carrie Robinson

Photo: Flickr

2030 Agenda
In a February 2016 meeting that marked the United Nations Development Program’s (UNDP) 50th anniversary, representatives of more than 120 countries, including Ministers and Heads of Government from over 80 U.N. Member States, gathered in New York’s General Assembly to decide the trajectory of the 2030 Sustainable Development Goals (SDGs).

According to the UNDP, the meeting had a clear agenda: to transform ideas into “actions and results.”

The Ministerial Meeting itinerary included several thematic subgroup debates that focused on implementation questions, derived from topics that included eradicating poverty; sustainable development; preventing violent conflict and building peaceful societies; managing risk and building resistance and financing the SDGs.

Opening the meeting with a speech, Helen Clark, Administrator of the United Nations Development Program, said that the UNDP’s fundamental purpose remains the same and is “more relevant than ever- that is, to support countries to eradicate poverty in a way which simultaneously reduces inequality and exclusion, while protecting the planet on which we all depend.”

She added that the 2030 Agenda will require increased preemption, receptiveness,and improvement on the part of the UNDP and that global cooperation is crucial to facilitating lasting development.

Emphasizing the need for global consensus, Clark said that meeting discussions “strongly suggest that there is a shared understanding of the road ahead for development and for UNDP as a trusted and strategic partner.”

Ministers and U.N. partners unveiled strategies to assist the UNDP in its pursuit of the 2030 Agenda. Clark suggested that analyses and proposals originating in discussions at the meeting will be used as a benchmark for the framework of future UNDP work as a global partner.

The UNDP, according to News Ghana, has programs in more than 170 countries and is one of the most influential anti-poverty organizations in the world.

The organization is known worldwide for its efforts to fight poverty and inequality through government partnerships. Established as the U.N.’s development center in 1966, the UNDP works with the word’s most vulnerable people to boost gender equality, enhance sustainable farming, improve the quality of health and education and combat climate change.

Heidi Grossman

Sources: UNDP 1, UNDP 2, UNDP 3, News Ghana

Development Across AfricaThis year could be a major turning point for development across Africa according to a new report by the Brookings Institution.

Building on data from the World Bank, analysts from the organization’s Africa Growth Initiative lay out key human development interventions needed in 2016 to keep the continent on course to achieve the Sustainable Development Goals by 2030.

First, the report argues, there is a critical need to address the lack of reliable data on poverty coming out of the region. The World Bank recently committed to helping the poorest countries conduct surveys every three years, and hopes this investment will spread.

“Better data will tell us whether we’re delivering effective programs that will help end extreme poverty by 2030 and boost shared prosperity among the poorest,” said World Bank Group President Jim Yong Kim.

Based on data that is available, it is clear that many low-income countries on the continent have realized significant progress over the past 20 years. The number of people living on less than $1.90 per day is now 43 percent, down from 56 percent in 1990. School enrollment has increased from 55 percent to 74 percent. Life expectancy at birth has increased by six years. And, HIV prevalence has been reduced by five percent.

But while development across Africa is on the rise, progress may be leveling off. The number of people living in poverty has actually increased by 50 million since 1990, bringing the total number to 330 million.

Brookings and World Bank Analysts say this comes down to a growing African population, but also to conflict, persistent gender inequality and an over-reliance on exporting natural resources.

In 2016, they recommend African leaders and development partners renew focus on gender-inclusion beginning with primary school enrollment. Financial support will be needed to promote cost-free education, since families often keep girls out of school if it means saving money. Pay equity and employment non-discrimination legislation at the national level should also be fostered.

Resource-rich countries in Africa face a perplexing development gap, including a 10 percent shorter life expectancy and higher levels of economic and social inequality. Brookings Senior Fellow, Haroon Bhorat, explains that when countries rely on exporting natural resources, they may generate a lot of revenue, but they do not create many jobs — meaning there is no real effect on poverty.

A renewed focus on manufacturing jobs will be needed in 2016 to create long-term employment and sustainable growth in these countries, he suggests.

“An expansion in manufacturing will provide the building blocks for a more diversified local economy — in the pursuit of structural transformation and an improvement in living standards in Africa,” Bhorat said.

Analysts are confident that development across Africa, in terms of economic progress, over the last 20 years can continue if leaders make 2016 a turning point to re-energize and refocus their development efforts. Leaders will need to look beyond the short-term benefits of exporting resources, and make serious investments in inclusive, sustainable growth.

Ron Minard

Sources: Brookings Institution, Global Research, World Bank
Photo: International Trade Centre

Grow Africa: Accelerating Investments for Sustainable Growth
Grow Africa is a partnership platform that seeks to accelerate investments and transformative change in African agriculture based on national agricultural priorities and in support of the Comprehensive African Agricultural Development Programme, also known as CAADP. CAADP is a program of the New Partnership for Africa’s Development, which was established by the African Union in 2003. The end goal of the program is to create sustainable growth in each country.

Grow Africa has several concrete goals they are striving to achieve. The first is to increase private sector investments in African agriculture through investment blueprints,  strengthening cross-sector collaboration, and building a pipeline of investments. The second is to enable stakeholder partnerships by developing partnerships to attract investment in initiatives that complement national agriculture sector strategies. And the third is to expand knowledge and awareness of the best practices and existing initiatives. They are working to strengthen investor interest in agriculture by building increased trust and shared commitment.

Six core elements guide Grow Africa’s initiatives. The first is leadership and alignment by public leaders and policy shapers as well as a platform for active co-creation by the private and public sector and civil society members. Second is strategy and priorities defined by what is best for each country and what coincides with the country’s national strategy. The third is investment and entrepreneurship pipeline through bankable investment opportunities, and engagement of groups and organizations to participate in opportunities. Fourth is finance and risk management including risk reduction mechanisms to catalyze investment. Fifth are improvements to hard and soft infrastructure, policy and regulations and human institutional capacity. And finally, there is an additional focus on designing, managing and monitoring the hard and soft infrastructure projects in place.

An example of one of Grow Africa’s initiatives is the Rwanda food basket initiative. Rwanda is working to become a destination for agri-business investment. Rwanda is creating opportunities in the form of a food basket approach that is based on priority commodity value-chains located in highly specific geographic areas. This initiative is directly correlated with Rwanda’s agricultural development strategy, which is aimed at tackling poverty and improving food security. This project enables the environment and infrastructure developed by the government. It is designed to directly access key growth markets for Rwandan produce.

The second example of a Grow Africa initiative is Ethiopia’s agricultural growth project. Ethiopia is working towards transforming its agriculture into a sustainable market-led sector, which would lead to improved food security, environmental conservation, gender inclusion and equity, and contribute to improved middle-income status by 2020. The program is coordinated and implemented by the Agricultural Transformation Agency. They are charged with creating an enabling environment, improving industry structure, and engaging the private sector, as well as increasing productivity of smallholder farms, improving frontline extension quality and scaling irrigation and better land management.

Grow Africa works as a part of the African Union. The program currently has initiatives in Burkina Faso, Ethiopia, Rwanda, Ghana, Kenya, Mozambique, and Tanzania.

– Caitlin Zusy
Source: Grow Africa
Photo: UN