"I DON'T KNOW ENOUGH ABOUT THE GREEN ECONOMY"

After several years of upbeat "Africa Rising" narrative, in the past month the Financial Times has been painting a very different picture. In "Africa's falling commodity prices curb bullishness of recent years" (Jan 20) FT West Africa editor William Wallis has confirmed that a new chapter in Africa's growth story has begun.

In addition to falling commodity prices, Mr Wallis highlights a wider range of additional challenges that will make 2015 a “testing year” for Africa, including the rising cost of debt, dwindling aid donations, Ebola, Islamist extremism and turbulent politics in a “heavily charged election timetable”.

Quoting Charlie Robertson of Renaissance Capital could not have been more appropriate as Mr Robertson was one of the most bullish economists on Africa whose 2012 book "The Fastest Billion" played a big part in generating the Afro-euphoria of 2013. It has been easy, he says, to be bullish about Africa with commodity prices going up. Falling prices, he adds, are now “the biggest challenge to the Africa-rising thesis”.

I had the good fortune to hear Mr Robertson speak at The Economist’s groundbreaking Africa Summit in February 2013. Talking with him afterwards I thanked him for his presentation and congratulated him on his book. I also asked him why he does not mention the green economy, as the consensus among Africa’s leaders is that this is the only viable route to economic, social and environmental sustainability. His honest reply was “I don’t know enough about it”. I got the same sort of honest response from other speakers and delegates at The Economist’s and other Africa meetings I have attended since then - "I don't now enough about the green economy".

In this “testing year” for Africa two critical international negotiations are taking place and knowledge of how the green economy might work there is needed more than ever: the adoption of the Sustainable Development Goals by the UN General Assembly expected in September and the UN’s Climate Change Summit in Paris in November.

2015 also promises to be another record year for Africa summits and conferences (more than one a week by my count), yet hardly any have the green economy in their otherwise excellent programs.

I propose that the easiest and most effective way to raise awareness of the green economy in this "testing" year for Africa in 2015 is to put the subject into this year’s Africa summits. As Mr Wallis points out: “There is a wall of money” out there looking for commercial opportunities. Why wait another year to start exploring opportunities that are green?

US-AFRICA SUMMIT 2014 - GREEN VOICES SILENT AS HISTORIC OPPORTUNITY IS LOST

Afro-optimism reaches the USA

Of all the Africa summits that have taken place so far around the world in 2014 none had the potential to change the game in Africa than the one held in Washington from 4-6 August. After a decade of bilateral Africa summits (China-Africa, India-Africa, Japan-Africa, EU-Africa, Turkey-Africa to name a few) the US-Africa Summit in Washington which hosted nearly 50 African heads of state was the first of its kind and therefore held the promise of delivering something new.

There were many reasons for optimism in the summit. Despite upheavals caused by the financial crisis, the US more than any other nation still possesses a unique combination of power, influence, innovation, dynamism, technological advancement, financial muscle and a youthful population that if correctly harnessed could bring about lasting improvements in Africa. President Obama is also America’s first leader who is half African and a leader who came to the White House promising to “green” the planet. Such an opportunity for both sides may not be repeated for a while.

“I do not see the countries and peoples of Africa as a world apart,” President Obama told the largest gathering of African leaders ever held in Washington. “I see Africa as a fundamental part of our interconnected world – partners with America on behalf of the future we want for all of our children. That partnership must be grounded in mutual responsibility and mutual respect.”

US vice-president JoeBiden called Africa the “continent of limitless promise”. Secretary of state John Kerry spoke of the summit as potentially world changing. “If everybody gets this right, this meeting and this moment and the days ahead of us can literally become a pivotal defining moment for our future history and for the world,” he said.

The Financial Times coverage of this “pivotal” event was probably the most wide-ranging of any newspaper. Between 31 July and 10 August the FT and its on-line publications, Beyond Brics, World Blog and This is Africa gave an in-depth view of the US-Africa relationship including “catching up” with China, “feting strongmen” and a “new American strategy” by Nobel prize-winning economist Joseph Stiglitz.

Yet there was no indication in the summit, and hence in the FT’s reporting, which guarantees the United States will do anything fundamentally different in Africa from those who have gone before, even though the right intentions are there. “We don’t look to Africa simply for its natural resources,” President Obama tried to assure African leaders. “We recognise Africa for its greatest resource which is its people and its talents and its potential. We don’t simply want to extract minerals from the ground for our growth. We want to build partnerships that create jobs and opportunity for all our peoples, that unleash the next era of African growth.”

Surprising omissions

These are fine intentions indeed, but what was missing in President Obama’s speeches, in the contents of the summit and in the FT’s reporting was any suggestion that to “unleash the next era of African growth” the type of growth itself and the way it is measured will need to be significantly reformed to cope with the immense challenges Africa faces in the coming decades. Even though the summit program included "Promoting inclusive, sustainable development" and "Resilience and Food Security in a Changing Climate" nothing was said or written that fundamentally changes the structure of the current flawed system introduced to Africa only 50 years ago that would enable this to happen. There was nothing that suggests that business-as-usual, or the unsustainable and irresponsible “brown” economy with its short-term perspectives, will not continue to dominate the continent.

What was equally surprising was that of the 50 African countries represented at the summit only 25 made official national statements and of those not one mentioned the green economy. Only Djibouti and Namibia used the word green in their statements: “green power” and “green fund” (Djibouti); “green scheme program” and “green scheme projects” (Namibia). Only a handful of African statements called on the US to support sustainable development and only one, Seychelles, mentioned the Sustainable Development Goals that are due to replace the MDGs in 2015. Not one mentioned the need for low carbon growth.

These omissions are particularly striking as sustainable development through a green economy was central to Africa’s Consensus Statement to the Rio+20 “Earth Summit” in 2012 *, and many leading Africans including Donald Kaberuka, president of the African Development Bank who was at the summit, have stressed that green growth is critical to Africa’s future.  

Most surprising of all was the fact that Ethiopia, one of America’s closest and most important allies in Africa, did not even issue a statement let alone call on the US to help Africans build an inclusive and sustainable green economy.  This is despite the fact that Ethiopia’s late prime minister, Meles Zenawi, before his untimely death in 2012 had become the green voice of Africa ** and more than any other African leader had seen the need for green growth. His brainchild, Ethiopia’s Climate Resilient Green Economy strategy, was the first of its kind in the world and is something the US is well qualified to help develop.

For these reasons I wrote the following letter to the Financial Times:

Sir,

This week, both US President Barack Obama and Nobel prize-winning economist Joseph Stiglitz missed a historic opportunity to embark on a new journey in Africa.

At President Obama’s “US-Africa Summit 2014” (In Depth, July 31- August 6) and in Professor Stiglitz’s “A new American strategy for business in Africa” (Comment, August 3) both men demonstrate quite clearly how far the US has progressed in its understanding of the world’s most misunderstood continent and the attitude needed to forge a US-Africa partnership which, in President Obama’s words, is “grounded in mutual responsibility and mutual respect.” But both men fail to mention any sort of fundamental systemic restructuring required to make this happen and to prevent business-as-usual from continuing to dominate the continent.

This omission is particularly striking as just over 5 years ago, in the depths of the financial crisis, both men were cheerleaders for the boldest and most adventurous restructuring yet of our flawed system. Both men repeatedly called for a “Green New Deal” which would lead to a “Green Recovery” and nurture a sustainable “Global Green Economy”. On March 2, 2009 “Obama’s chance to lead the green recovery” by Professor Stiglitz and climate change economist Nicholas Stern was just one of many bold articles and reports on the subject published in the FT. Thanks to the ensuing global green stimulus by the G20, the green economy today is growing at between 2 and 4 times faster than the global “brown” economy.

With the next crisis never far away, with Africa still by far the most vulnerable continent and with the need for sustainable growth more urgent than ever, President Obama and Professor Stiglitz have unfortunately failed to recognise that Africa, as the least developed region on the planet, has the most potential and would be the easiest place for the type of systemic restructuring they called for in 2009.

Africans need some sort of Green New Deal with the US (and the rest of the world), not to rescue them from crisis but to ensure that their long-awaited rise is as smooth as possible and that their countries do not become the last frontier for business-as-usual, or the brown economy, but the first frontier for the green.

Mr Obama has just over two years left of his presidency to leave a historic legacy.  More than any other world leader he is in a position to help Africans on their journey towards a sustainable green economy that would eventually benefit us all.

End of letter. ***

  

The only letter on the US-Africa summit published in the FT was not from one of Africa’s or America’s many “green voices” calling for a new approach to Africa, but from an American CEO of an oil and energy company.

In his optimistic letter “It is not too late to invest in Africa” (Aug 13) Raheem J Brennerman tempts fellow American oil and gas executives with some tasty statistics: “…proven oil reserves are estimated to reach 127bn barrels, with at least another 100bn barrels located offshore. For natural gas, proven reserves are thought to be roughly 606tn cubic feet, with significant upward potential existing for both.”

Disappointed that the only response to the FT’s reports on the US-Africa relationship was from an executive from the king of the brown economy – oil – I wrote another letter to the FT:

Sir,

It is probably safe to say that no international newspaper covered the recent US-Africa Summit more thoroughly than the Financial Times. But despite such comprehensive coverage of what US Secretary of State John Kerry called a “pivotal moment in history” it was surprising and rather disappointing there was not a single letter from an African published in the FT to give us an idea what Africans think about such a moment.

The only letter so far published on the summit (unless I’m mistaken) was by Raheem J Brennerman, Chairman and CEO of an American oil and energy company - “It is not too late to invest in Africa” (August 13). If, as this sole letter implies, America’s investments in Africa will be led by the oil and gas industries, Mr Brennerman and his fellow CEOs had better be careful not to repeat the actions of the past and perpetuate business-as-usual that has dominated and held Africa back for so long.

If, for instance, as you report on August 5, the US tries to “catch up" with China (which is expanding business-as-usual across the continent at an alarming rate), or "links up" with China on building massive infrastructure projects, including mega dams, the world’s most powerful, innovative and dynamic nation will be taking Africa on a huge step back to the 20^th century.

Mr Brennerman says the right things: “by working closely with local partners…and by making investments in local businesses, we are helping to provide education, develop skills and build prosperity in the communities in which we serve.”

However, much more is needed for Africa to continue its rise in the face of mounting challenges, many of which are being reported in the FT. More than anything, Africa needs a systematic overhaul of an outdated development model to address the externalities, or hidden costs, which are increasing almost by the day. Africa needs nothing short of a green revolution, not just in agriculture as is often misleadingly thought, but in every sector, especially in the great “brown” industry of oil which has given the world so much but has also caused and is causing so much harm.

Mr Brennerman and America's new generation of oil and gas executives have a historic challenge and opportunity to help Africans use their greatest non-renewable resources to build a renewable green economy. If they succeed they could prove Mr Kerry correct.

Africa’s green voices were silent at the recent Washington summit as they are in most of this year’s record number of summits on Africa. They urgently need to speak out. Letters to the Editor of the FT would be a good place to start.

End of letter

How the US can change the game in Africa

If President Obama and his team want to make a difference in Africa, for America’s “future history and for the world,” they should encourage their industry captains, beginning with oil and gas, to forge a new path in the world’s most challenging and least known continent. The first thing they must do is sign up for and adhere to the Extractive Industries Transparency Initiative (EITI), “a global coalition of governments, companies and civil society working together to improve openness and accountable management of revenues from natural resources.” Without this business-as-usual, with all its hidden costs, will continue to thrive.

But this is only a start. To deal with the daunting challenges facing Africa in the 21^st century including climate change, water stress, ecological degradation, biodiversity loss, resource depletion, unemployment, inequality, hunger, insecurity and infectious diseases on a continent whose population is expected to double over the next 30 years, Africans and their American partners urgently need to address three specific issues.

Beyond GDP

First, they must look beyond gross domestic product as a measure of economic growth. Although African economies over the past 12 years have enjoyed continued growth in GDP the statistics tell us nothing about sustainability and certainly less about green growth. Of all American economists Professor Stiglitz is perhaps best qualified to begin measuring Africa’s growth in new ways as he was co-author of a 300-page ground-breaking report commissioned in 2008 by then French president Nicholas Sarkozy called “The Commission on the Measurement of Economic Performance and Social Progress.” Summing up this work completed in 2009 Professor Stiglitz urged world leaders to “end the fetish with GDP.”

Greening Education

As President Obama insists that Africa’s people are its greatest resource this is the moment to work out ways to put that resource to best use. Education, everyone says, is the key, but the type of education needed must be designed to prepare Africa’s youth for the challenges of the 21^st century. Not everyone agrees that the current education system is appropriate for Africa’s cultures and conditions, one of the most extreme being the Nigerian Islamist group Boko Harum whose name is loosely, some think inaccurately, defined as “Western, or non-Islamic, education is forbidden or sinful.” Whatever the meaning it is clear that educating young Africans (and adults) in “green schools” to understand the value of their cultures, the importance of the environment and the need to live and work and grow with the lightest of footprints is essential if the continent is to support 2 billion people in 30 years’ time.

Green Growth plans

During Africa’s socialist experiments of the post-colonial era many countries adopted the Soviet/Chinese model of developing 5-year economic growth plans. This is still a valid system but what is needed to ensure sustainability are 5-year plans that promote green growth.  Here, the American system with its short-term perspectives is less qualified to help, but by joining forces with say China and India, Africa’s major Asian partners whose own 5-year plans are becoming increasingly green, a win-win-win could be achieved. It would be a win for the three economic giants to cooperate on green growth plans in Africa instead of competing over the continent’s dwindling resources. It would be a win for Africa to have three major powers using their technologies, know-how and finance to accelerate green growth across the continent. And it would be a win for the rest of the world as we would all learn how to live on this planet with finite resources.   

President Obama has called 2014 the “Year of Action.” With only 3 months left can we expect some “Green Action” in Africa or will the “pivotal defining moment” be lost?

* Item 24 of Africa’s Consensus Statement to Rio+20, calls on the international community “to put an international investment strategy into place to facilitate the transition towards a green economy.”

** See blog post Africa’s green voice falls silent: 2013 London Memorial to Meles Zenawi

*** For published letters to the FT on Africa and the green economy including “Obama’s chance to foster green Africa” click here and follow the link. This letter can also be found in a blog post - click here.

RISING AFRICA, RISING RISKS

HOW SELF-SUFFICIENCY THROUGH A GREEN ECONOMY IS AFRICA’S ONLY HOPE FOR LONG-TERM GROWTH

NOTE: Any article from the Financial Times or The Economist referred to here to can be accessed for free by following the links.

Africa Rising
This time last year the Financial Times' and The Economist’s joint “Africa Rising” campaign was in full swing. Over the first quarter of 2013 two of the world’s most influential newspapers, using every medium at their disposal*, confirmed that Africa is now the “Hopeful Continent” and that its “Moment” has truly arrived.

By February, enthusiasm had reached fever pitch, Afro-optimism was turning into Afro-euphoria and The Economist reported global investors were “salivating” at the prospects. By the end of the year the euphoria was given the ultimate justification when the FT published nine articles in December on international bankers getting “excited” about Africa as the last frontier for finance.

However, the combination of Afro-euphoria, salivating investors and excited bankers (with their tendency for “irrational exuberance”) should ring alarm bells for anyone interested in Africa’s long-term sustainable growth and development. It was no surprise therefore to read on 6 February 2014 an article by Gavin Jackson in the FT’s on-line publication beyondbrics: “Africa: getting riskier.”

Africa Risky
“Africa is looking increasingly risky for investors and global supply chains,” Jackson writes, referring to information in the latest Global Risks and Resilience Atlas (GRRA), published by UK-based global analysts Maplecroft on 6 February. Maplecroft’s highly respected annual GRRA evaluates 179 countries across 36 risk issues. It identifies 5 broadly interconnected risks in Africa: macroeconomic, security, climate change, resource scarcity and pandemics and infectious diseases. Risk resilience is identified by two indices: governance and societal.

Of the 21 countries worldwide that saw an increase in their exposure to risk during 2013, 15 are in Africa. Nearly a third of sub-Saharan countries saw rises in their levels of risk and deteriorating resilience. More than 75 per cent are now in the “high risk” category with South Sudan in the “extreme”, second only to Syria. Last October the UN warned of a “conveyor belt of instability” running across Africa from Mauritania to the Horn. The conveyor seems to be getting longer and is speeding up.

Factor in the effects of climate change, deforestation, soil erosion, resource depletion and biodiversity loss (most of these are twice the global average) plus the doubling of populations over the coming decades and today's risks, without a radical change of approach to economic growth, will seem insignificant. 

In addition to risks from insecurity, climate change and resource scarcity, Africa’s latest boom has thrown up macroeconomic risks and increased vulnerability to the global economy. African countries last year borrowed a record $8 billion on the capital markets, imports are surging and export earnings are extremely volatile. As a result the International Monetary Fund says there is increasing risk of current account deficits and fiscal imbalances throughout Africa. Ghana, West Africa’s 'rising star', in August 2013 became the first African country since the historic debt-relief in 2005 to pay back debt with more debt. Across Africa there is a growing sense of déjà vu.

The IMF has also warned of Africa’s over-reliance on foreign investors and its particular exposure to China, to US “tapering” and to international financial flows. Add to this Africa’s estimated losses of over US$50 billion a year in illicit financial flows (and rising), far more than the amount of official development assistance the continent receives, and Afro-euphoria is looking increasingly hard to justify. 

What is more worrying is that countries with high growth rates, like Nigeria and Mozambique, seem to be just as vulnerable to increased risk as the lesser economic performers like Central African Republic or Somalia. According to Maplecroft, Nigeria, Africa’s second largest economy and darling of international investors, has seen a big change in its rankings moving from the 22^nd most at risk to 14^th in the past year and is now in the high risk category.

Veteran Africa reporter Patrick Smith, in the March issue of The Africa Report, asks the critical question: “Why is it, when more investment is pouring into the continent than ever and the IMF has just upgraded its forecasts for African growth to an average of 6.2 per cent in 2014, that political violence is on the rise again in both outright civil wars and armed insurgencies?”

This gives an African dimension to a rising concern captured by Gideon Rachman in the FT on 27 January. In “Growth and globalisation cannot cure all the world’s ills,” Mr Rachman argues that the old prescriptions for solving problems – "more trade, more investment with a good dose of structural reform" - are no longer guaranteed to work. This has huge implications for Africa as it is now the fastest growing, the fastest globalising and yet still by far the world’s most vulnerable region.

So if growth and globalisation, as we know them, are not the answers to Africa’s ills and rising risks, what are? African leaders have two interconnected answers to this and have been trying to get the message across to the international community for years: self-sufficiency and a green economy.

The Dependency Model
African leaders first called for self-sufficiency, or self-reliance, at independence in the 1960s, not to reclaim it, as they are today, but to avoid losing what they already had. Their fears were justified. By the end of the 1980s, the planning, technologies and economics of the post-colonial development model (and the assumptions that underlie them) left Africa with billions of dollars’ worth of failed or failing projects, millions of destitute people and billions of dollars of debt. In single generation Africa’s self-sufficiency had been destroyed.

Standing in the wreckage of this dependency model in the early 1990s a new generation of African leaders called once more for self-sufficiency. Africa’s participation in the UN’s first Rio ‘Earth Summit’ in Brazil was the turning point in thinking about how this might be achieved. Sustainability was now the goal. New models for development, new concepts and new systems were being explored. Green technologies, green accounting and green thinking based on local knowledge and a multidisciplinary approach would enable Africans to reclaim self-sufficiency and economic independence.

But this was also the post-cold war era when globalisation was taking off. Over the following 20 years, while Africans were laying the foundations for self-sufficiency through a 21^st century green economy, the old system, or business-as-usual, remained the most dominant force on the continent and it was expanding fast. China’s ‘big push’ into Africa from around 2003 followed by other emerging economies, while bringing much needed investment, perpetuated the late 20^th century model of dependency. China has been called ‘the game changer’ in Africa but the game is just the same, only bigger, faster and more risky. For all the talk of “this time is different” in Africa, there is a lot that is not so different after all.

This was thrown into focus during the 2007-2008 global food crisis when Africans found themselves in a dependency situation more precarious than ever with mass hunger staring them in the face. A year later the Great Crash of 2008 emphasised Africa’s dangerous vulnerability to outside shocks. At an African Union crisis summit in January 2009 Meles Zenawi, late prime minister of Ethiopia, warned fellow Africans that “unless we act, and act now and decisively, the majority of African states could become failed or failing states over the coming decade.”

Africa and its international partners did act decisively and now five years later the continent is rising fast and is in a position to play a critical role in global affairs and become the new engine for global growth. However, as the latest Global Risk and Resilience Atlas suggests, there is no guarantee the engine will deliver the type and amount of growth that Africa and the global economy needs.

The Quest Continues
The good news is that despite the dominant role of the old dependency system, Africans haven’t given up their quest for self-sufficiency through a green economy. Since the dark days of the crisis Africans have been building on their green foundations and now have the knowledge and credentials to convince potential partners where sustainable investments lie. African countries need rapid and sustained investment in their green economies to counteract the expansion of the dependency system, which also happens to be high carbon, resource intensive, ecologically degrading and socially divisive. This old “brown” economy will not work in the world’s most challenging continent.

Africa leaders such as Meles Zenawi, Donald Kaberuka, President of the African Development Bank, and Kofi Annan, former UN secretary-general, have been calling for green growth as Africa’s only viable route towards economic transformation and self-sufficiency. Green Economy Initiatives - from the pan-African to local level - are proliferating across the continent. Green success stories are accumulating fast.

Last October the African Development Bank issued an inaugural $500 billion Green Bond which sold out within 24 hours and was 10 per cent oversubscribed. The AfDB, NEPAD, the UN, the World Bank, OECD and other global institutions plus innumerable NGOs, large and small, are taking first steps towards measuring Africa’s green economies so that they can be understood and expanded.

Since the 2008 crash both the FT and The Economist have shown how far green thinking about Africa has travelled. In August 2011, one month after South Sudan’s historic independence, The Economist published an article called “South Sudan: the new green”. This 21^st century view of Africa proposed that the country's unique pristine wilderness areas with little human footprint could act as "buffers between cattle-raiding groups - and brand the country as the green heart of Africa." On 20 June 2012, the opening day of the UN's Rio+20 Earth Summit, the FT explained in more detail how the new ideas might work with a Special Report: “Africa and the Green Economy”.

The African leaders' Consensus Statement to Rio+20 makes it clear that green growth is critical to Africa’s future. This overlooked document demonstrates that Africa’s self-sufficiency, resilience and sustainable growth is only possible through a 21^st century green economy. It also shows that Africans have been preparing the way ahead. 

With urgency mounting, Item 24 of the Consensus Statement calls on the international community “to put an international investment strategy in place to facilitate [Africa’s] transition towards a green economy." As world leaders, preoccupied as they are with multiple crises of their own, are unlikely to deliver a green investment strategy in time, this is a historic moment for Africans to propose their own. 

Globalisation on Trial
In the 1960s, departing Europeans said "the white man's civilisation is on trial in Africa." Well aware of the consequences of success or failure they could see that "the future of us all is bound up in Africa." Fifty years later it is globalisation that is on trial and an economic growth system that is wrecking the planet. As Africa is the last frontier for investment the future of us all is bound up there more than ever. In our interconnected world Africa's risks are now everybody's risks. 

The days when Africa’s dependency was to everyone else's advantage are over. The continent's return to self-sufficiency through a low carbon, resource efficient, ecologically responsible and socially inclusive green economy would benefit us all. Africa's advantage is that the brown economy is still underdeveloped. African leaders can and must do more to put the green economy into the Africa Rising narrative. More exposure from influential publications like the Economist and the Financial Times would help.   

* FT/Economist media include the article, analysis, editorial, comment, special report, summit, conference, meeting, interview, video and on-line debate.

Related posts: Davos, derisking Africa and the green economy

BRITISH AID CAN BOOST AFRICA'S GREEN GROWTH

The Financial Times articles mentioned below can be accessed for free by following the links.

On 28 January 2014 the FT published an article by chief foreign affairs correspondent Gideon Rachman entitled “Growth and globalisation cannot cure all the world’s ills”. With this article Mr Rachman questions the accepted trouble-shooting prescriptions that have been used by policy makers for the past twenty years.

YaleGlobal online, a publication of the MacMillan Center, gives a good summary of the article:

“Global leaders and elites, such as those who gathered for the World Economic Forum in Davos, regard economic growth via globalization as the prescription for difficulty or political conflict, suggests Gideon Rachman for the Financial Times. But economic growth, globalization and capitalism do not necessarily curtail inequality, instability, environmental degradation, nationalist rivalries, jihad and the other stubborn quests for power that ignore democratic decision-making. Rachman identifies three areas of the concern: Syria and other places in the Middle East are beyond the fixes of economic rationality. The Chinese-Japanese rivalry intensifies despite the fact that China is “Japan’s largest trading partner and the biggest recipient of Japanese foreign investment” and Rachman points out that “in some respects, China’s growing prosperity is actually driving the increase in international tensions in Asia.” And in Europe and the United States, globalization has enriched many but contributes to wage stagnation and a widening inequality that could lead to more political extremism.” 

            What a coincidence that Gideon Rachman should write on the same day as the FT’s Africa Editor, Javier Blas, reports “UK shifts African aid focus to economic development” with its emphasis on growth.

Mr Rachman’s insights are particularly relevant for African aid because, despite being the world’s fastest growing region (by some accounts) and globalising at a dizzying pace, the benefits are by no means curing the continent of its many political, social and environmental ills, and in many respects are making them worse.

Mr Rachman’s well-argued Comment should therefore act as a signal to Justine Greening, head of the UK’s Department for International Development (DFID) , to make sure that investments that boost growth are sustainable and inclusive. In the current system this is easier said than done. Economic growth, measured by gross domestic product, has the tendency to have the opposite effect. The only known solution to this conundrum is through investments designed to boost green growth measured by green GDP, a 21st century accounting system not yet recognised in Africa or elsewhere.  

If, as Ms Greening says, DFID’s departure in the way the UK spends its aid budget is “radical”, “revolutionary” and yet “pragmatic”, this is a unique opportunity for her department to live up to those words and direct aid towards Africa’s emerging green economies instead of towards business-as-usual.

Britain has many advantages for supporting green growth in Africa including historical connections, unrivalled knowledge of the continent, leadership in green technologies and a deputy prime minister, Nick Clegg, who championed the green economy at the UN’s Rio+20 Earth Summit in 2012.

2013 was the year of “Africa Rising”. With Britain's, and more specifically DFID’s, influence 2014 can be the year of Africa’s Rising Green Economy.

Related posts:

Africa's Green Voice Falls Silent: 2013 London Memorial to Meles Zenawi (30/06/13)

Britain's Role in Unlocking Africa's Green Economy (16/05/13)

A Letter to the FT: Europe's Role in Unlocking Africa's Green Economy (09/03/12)

BOB DIAMOND IN CASINO AFRICA?

AFRICAN REGULATORS BEWARE

Between 7 and 18 December 2013 the Financial Times published no less than nine news pieces on Bob Diamond's return to banking, this time in Africa. The infamous Mr Diamond resigned as chief executive of Barclays Bank on July 3, 2012, following controversy over manipulation of Libor interest rates by traders employed by the bank. He is now planning his comeback among the 'unbanked' and very vulnerable people of Africa.

This alarming piece of news that a discredited 'master of the universe' might begin gambling with Africa's new-found wealth prompted me to write a letter to the FT on 18 December. This letter was not published. (For a list of published letters click here)

Note: Although the FT site is open to subscribers only the paper allows 8 free articles a month per e-mail address. Just click on the relevant link and follow the procedure.  

Sir,

The news that bankers are becoming “excited” about Africa, particularly Bob Diamond who was at the heart of the Libor scandal and resigned from Barclays as a result, should ring alarm bells for anyone interested in long-term, sustainable development on the world’s last frontier for investment - "Africa offers growth potential on a vast scale" (Dec 15).

From the arrival of the Arab and European slavers 600 years ago right up to the “land grabbers” of today, Africa has been held back by unscrupulous opportunists only interested in the single bottom line where social and environmental costs are not included in the business model. If Mr Diamond’s comeback centres on buying a Nigerian bank, “Bob Diamond’s Africa fund Atlas Mara raises $325m” (Dec 17), that country’s regulators had better have their wits about them.

If Mr Diamond, once dubbed “the unacceptable face of banking”, has had a conversion and can see beyond short-term (and dubious) profits for himself and his investors, his involvement in Africa is great news. If not, and he gets up to his old tricks, his arrival spells disaster.

Africa is set to add trillions of dollars to the global economy over the next decade. The key to sustainable growth lies with honest and open bankers. So come on, Bob, surprise us. You could go down in history as "the acceptable face of banking in Africa".

END OF LETTER

MEASURING AFRICA'S GREEN ECONOMIES IS ESSENTIAL FOR LONG-TERM GROWTH

GREEN STATISTICS FOR AFRICA

In February 2013 Morten Jerven, Associate Professor at Simon Fraser University, Vancouver, published a book "Poor Numbers: How We Are Misled by African Development Statistics and What To Do About It". On February 25 the Financial Times reviewed the book "Consequences of a continent’s miscalculations". Essentially, the book and the review highlight the errors in African development statistics and call for more accuracy so that policy makers, investors and the general public have a better idea of what is going on.

The most famous and most extreme example of this occurred in 2010 when Ghana recalculated its gross domestic product and added 60 per cent ($13 billion) literally overnight.

In response to the FT review I wrote a letter to the paper saying that content is just as important as accuracy and that statistical methods currently in use in Africa, largely inherited at independence, are inadequate for understanding the world’s most challenging continent. This letter was published on March 3 as "Investors need fresh models of African growth". On 4 April I used this letter as the basis of a blog post under the title Salivating Investors Beware.

On October 23 the FT’s new Africa Editor, Javier Blas, revived the issue with an article, “Africa economic data: investors fear numbers fail to add up”. This was followed on October 28 by an FT Editorial “Africa at Dawn”. The main message of the Editorial was that "showering" African government statistics agencies with resources would pay off in the long run by "putting investors in the picture". While these two pieces reinforce the need for statistical accuracy, neither mention the need for new statistics designed for the 21^st century. For this reason I wrote another letter to the paper entitled “Green statistics for Africa”. This letter was not published. 

NOTE: For an overview of letters published click here. Although the FT website is open to subscribers only the paper allows 8 free articles per month per e-mail address. Just click follow the link and sign up.

LETTER 

Sir,

As the Africa Rising narrative unfolds, your report "Africa economic data: investors fear numbers fail to add up" (Oct 23)  and Editorial “Africa at dawn” (Oct 28) are timely reminders that accurate statistics that “put investors in the picture” are crucial if the continent is to maintain its attraction as an investment destination and continue its rise.

If, as you imply, “showering” African government statistics agencies with resources would produce reliable economic data, create confidence and “could deliver a surprisingly large return, lowering capital costs and attracting foreign investment”, there is no time to lose in accelerating the process. Getting a clearer and more accurate picture of the world’s most promising but most challenging continent would help smooth the road ahead.

However, in addition to showering resources on the conventional statistics introduced into Africa over the past 50 years, such as balance of payments (as you suggest), they should also be showered on a new set of statistics developed for the 21^st century, a set of 'green' statistics that will help measure levels of sustainability. If Africa is to cope with the challenges of the coming decades, seize the opportunities and, as many hope, pioneer green growth, accurate green statistics are crucial. Fortunately, Africans are now well qualified to produce them.

In the past 20 years, since the failure of the post-colonial development model, Africans have been laying the foundations for a green economy through their long-term sustainable development programs. Across Africa there is now a vast network of little-known green initiatives and success stories - public, private and combined. In the 5 years since the financial crash African leaders, championed by the African Development Bank, have been calling for green investors to support the transition to the green economy. A welcome boost to Africa's green economy took place on 10 October when AfDB launched a triple-A-rated $500 million Inaugural Green Bond that was 10 per cent over-subscribed.

From Morocco to Mozambique, Ethiopia to Senegal, Africa is turning green, yet despite these advances the green economy has not yet entered mainstream reports and discussions on Africa’s growth story. In this year’s record number of Africa summits and conferences the green economy hardly gets a mention and Africa’s green statistics are nowhere to be seen. As Afro-optimism turns to Afro-euphoria, without information on sustainability investors in a hurry who are not "in the picture" might find their returns short-lived.

As the sponsors of next year’s Africa meetings plan their agendas and invite their speakers, the time is ripe for introducing the green economy as an essential topic, starting with accurate and meaningful green statistics. Although they may uncover some "inconvenient truths" they will also reveal many that are very convenient. Africa's green economies, when measured, may be larger than we can imagine.

END OF LETTER