In a world of imperfect information, institutions should reflect African realities

Covid-19 has plunged the African continent into a full-blown recession. According to the World Bank, the pandemic has pushed up to 40 million people into extreme poverty across the continent. Every month of delay to the vaccine roll-out programme is estimated to cost some $13.8 billion in lost GDP, a cost counted in lives as well as dollars – writes Lord St John, the crossbench peer and member of the All Party Parliamentary Group for Africa.

Foreign direct investment (FDI) into Africa has also dropped as a result, with investor confidence dented by weak economic forecasts. The rise of ESG investing, which sees investments assessed on a range of ethical, sustainable and governance metrics, should in theory be channelling funds into worthy projects across the continent to bridge this gap.

Ethical investment principles applied in practice, however, can in fact create additional barriers, where the evidence needed to meet ESG requirements is unavailable. Operating in emerging and frontier markets often means working with imperfect information, and accepting a degree of risk. This lack of information has led to African countries obtaining among the weakest ESG scores across international rankings. The Global Sustainability Competitiveness Index for 2020 counted 27 African states amongst its bottom 40 ranked countries for sustainable competitiveness.

As someone who has seen first-hand the social and economic benefits of entrepreneurial projects in African nations, it makes no sense to me that a supposedly more ‘ethical’ approach to investing would discourage investment where it would do the greatest social good. The financial community has further work to do to generate metrics that take account of uncertain environments and imperfect information.

The countries in greatest need of foreign investment often come with unacceptable levels of legal, even moral risk for investors. It is surely to be welcomed that the international legal systems is increasingly holding companies to account for corporate behaviour in Africa.

The UK Supreme Court’s ruling that oil-polluted Nigerian communities could sue Shell in the English courts is sure to create a precedent for further cases.  This month, LSE listed Petra Diamonds reached a £4.3 million settlement with a group of claimants who accused it of human rights abuses at its Williamson operation in Tanzania. A report by Rights and Accountability in Development (RAID) alleged cases of at least seven deaths and 41 assaults by security personnel at the Williamson Mine since it was acquired by Petra Diamonds.

Finance and commerce must not be blind to ethical concerns, and any involvement in the sorts of abuses alleged in these cases should be roundly condemned. Where there is conflict and where there are human rights abuses, western capital must stay well away. When conflict gives way to peace, however, western capital can be deployed to rebuild society. To do so, investors need to have confidence that they can operate in post-conflict zones without exposure to spurious legal claims.

Leading international lawyer Steven Kay QC recently published an extensive defence of his client, Lundin Energy, which has faced an extended ordeal in the court of public opinion, regarding its operations in southern Sudan between 1997 and 2003. The case against Lundin is based on allegations made by NGOs some twenty years ago. The same allegations formed the basis of a US lawsuit against Canadian company Talisman Energy in 2001, which failed due to a lack of evidence.

Kay is withering about the quality of evidence in the report, specifically its ‘independence and reliability’, saying it would not be ‘admissible in an international criminal investigation or prosecution’. The key point here is the international consensus that such allegations are dealt with by the appropriate institutions, in this case, the International Criminal Court. In this case, the company has faced trial by NGO and the media, while, it is claimed, activists have ‘shopped around’ for a jurisdiction which will accept the case. The public prosecutor in Sweden, having considered the case for an extraordinary eleven years, will decide shortly whether the wholly improbable case that the Lundin Chairman and former CEO were complicit in alleged war crimes in 1997 - 2003 will be pursued as a charge for trial or will be closed down.

I am by no means an expert on international or indeed Swedish law, but in Kay’s description, this is a case where the public narrative has far outrun the limited and imperfect information we have regarding the facts on the ground. Western companies operating in post-conflict zones are rightly held to high standards and are expected to be partners in countries’ economic development. This simply will not happen if part of the cost of doing business in these countries is to be pursued for decades by spurious legal claims.

Africa has a grim history of heinous crimes committed in the name of Western capitalism, there can be no doubt of that. Wherever they operate, Western companies should form social and economic partnerships with their host countries and communities, maintaining a duty of care to the populations and the surrounding environment. We cannot, however, assume that conditions for these companies will be identical to conditions in established markets. International institutions, standard setters and civil society should be mindful of African realities when fulfilling their right and proper role of holding companies to account for operations in Africa.

Africa

Agriculture: Commission approves a new protected geographical indication from South Africa

Published

2 days ago

on

June 1, 2021

The European Commission has approved the registration of 'Rooibos'/'Red Bush' from South Africa in the register of protected designation of origin (PDO). 'Rooibos'/'Red Bush' refer to the dried leaves and stems cultivated in the Western Cape Province and in the Northern Cape Province, a region which is known for its hot dry summers and cold wet winters. ‘Rooibos'/'Red Bush' has developed some unique characteristics to adapt in this harsh climate and presents fruity, woody and spicy flavours. It is harvested each year during the hot summers and is sun dried just after harvesting. The tea court process is often described as an art form and is one of the most critical parts of the ‘Rooibos'/'Red Bush' production process with specific know-how and expertise required.  The use of the dried leaves and stems of ‘Rooibos'/'Red Bush' as a tea was first documented almost 250 years ago. Since then its fruity, sweet taste has resulted in it being a cultural icon of South Africa. There are currently 262 geographical indications from non-EU countries registered. More information in the eAmbrosia database and in the quality schemes pages.

EU

Can the EU come up with a common Libya policy?

Published

3 days ago

on

May 31, 2021

When European Union Ambassador to Libya José Sabadell announced the reopening of the bloc’s mission to Libya on 20 May, two years after it was shut, the news received distinctly muted fanfare. With new geopolitical crises hitting headlines every week, it is hardly surprising that the European political commentariat has gone quiet on its neighbour across the Mediterranean. But the radio silence on recent developments in the North African country reflects a worrying lack of reflection at EU level about the upcoming election which will decide the course of the nation in December, after a decade of bloodshed, writes Colin Stevens.

But despite the ten years that have elapsed since Nicolas Sarkozy’s fateful decision to throw France’s weight behind the anti-Gaddafi forces, member states’ actions in Libya remain both inconsistent and contradictory–a problem which has only served to exacerbate the country’s political divisions. However, precisely because Libya’s future hinges on the December vote, the EU should seek to bridge the divisions between its bigger members and unite European leaders behind a common foreign policy.

The haunting legacy of the Arab Spring

The questions marks surrounding the upcoming elections reflect the jockeying for power in Libya of the past decade. After an eight-month civil war in 2011, during which at least 25,000 civilians lost their lives, protestors succeeded in toppling the 42-year-long regime of Colonel Gaddafi. But high spirits were quickly shattered as discord and distrust set in between the winning militias. In the aftermath, three different governments stepped into the power vacuum, thus triggering a second civil war and thousands more deaths.

So when Tripoli’s transitional unity government (GNU) was established in March, domestic and international optimism for an end to this destructive stalemate was widespread. But as the country’s polarised political factions continue to clash in the run up to the vote, the apparent gains made towards stable leadership in Libya are proving fragile–with the EU’s lack of a joint strategic vision further complicating things. The time is ripe for the EU to take a common stance on the political future of this strategically critical nation.

A two-horse race

That a stable future for Libya hangs on these elections fails to have hit home in Brussels. Indeed, while the Union is quick to mobilize on Libyan migrant policy and the withdrawal of non-Western foreign troops from the country, there is no bloc-wide consensus on the best candidate for the leadership. European powerhouses France and Italy, in particular, have been at loggerheads as to which feuding faction to back ever since the 2011 insurrection, when one diplomat quipped that the EU’s dream of a Common Foreign and Security Policy (CFSP) “died in Libya – we just have to pick a sand dune under which we can bury it”. The intransigence of member states has complicated a unified EU response.

On the one hand, Italy has vocalized their support for the Government of National Accord (GNA), a UN-implemented party that also enjoys the support of Qatar and Turkey, which has held sway in Tripoli since 2014. But despite its UN backing, critics have looked increasingly askance at the party’s questionablefinancial agreements with Turkey, and its close connections Islamist extremists, including Libya’s branch of the Muslim Brotherhood. At a time when Libya’s increasing numbers of armed Salafi and Jihadi groups threatens both domestic, regional and European security, Italy’s support for the Islamist GNA is raising eyebrows.

The other force in the country is Marshal Khalifa Haftar, who is backed by France, seeks to reverse the worrying proliferation of extremism in Libya. As head of the Libyan National Army (LNA) and de facto leader of three quarters of the country’s territory (including its biggest oil fields), Haftar has a track record of fighting terrorism after suppressing the Islamic extremists in the country’s eastern Benghazi region in 2019. This dual Libyan-US citizen is considered well placed to stabilise the country enjoying the support of neighbouring Egypt, as well as the UAE and Russia. Despite drawing the ire of some, Haftar is popular within the battle-fatigued nation, with over 60% of the population declaring confidence in the LNA in 2017 opinion poll, compared to just 15% for the GNA.

A proxy election?

The longer the EU fails to speak up with one voice, and guide the country out of its twin civil wars, the more flak it will draw for intervening in the first place. Brussels has a wealth of experience in conflict resolution and has achieved some notable successes in conflicts where it has intervened with the full force of its member states behind it. But instead of deploying its expertise in Libya, the EU seems to have taken a rather hands off approach so as not to rattle feathers internally.

The muted response to the EU’s reopening of its mission in Libya reflects Brussels’ worrying disengagement from the political constellation of the nation. With the elections nearing, Berlaymont will have to be sure that this lack of talk does not lead to lack of thought in coming months. Without a coherent EU Libya policy, the power divide in the country between the two principal powers will only deepen, exacerbating the Islamist threat in Europe. In order to ensure that the country’s cautious optimism is not betrayed once again, the EU should orchestrate diplomatic discussions between its members sooner rather than later.

Europe puts €1 billion towards health technologies in Africa

Published

2 weeks ago

on

May 21, 2021

European Commission President Ursula von der Leyen announced today (20 May) at the G20 Global Health Summit in Rome a Team Europe initiative on manufacturing and access to vaccines, medicines and health technologies in Africa. The initiative will help create an enabling environment for local vaccines manufacturing in Africa and tackle barriers on both supply and demand sides, backed by €1 billion from the EU budget and the European development finance institutions such as the European Investment Bank (EIB). This amount will be further enhanced by contributions from EU member states. 

Von der Leyen said: “Local health capacities and institutions are the foundation of global health, but today Africa imports 99% of its vaccines and 94% of its medicines. This has to change. Team Europe will support Africa with over €1 billion and expertise to help develop its own pharmaceutical, biotech and medtech industries, and ease equitable access to quality and safe products and technologies. The Initiative will also help develop a number of regional manufacturing hubs across the continent, so that the whole of Africa can benefit.”

International Partnerships Commissioner Jutta Urpilainen said: “The Team Europe initiative will contribute to our African partners' efforts to improve access to affordable, life-saving health products, advance universal health coverage, and strengthen health systems. It will also boost skills and help create jobs and opportunities for Africa's younger generations. Born from a key lesson learnt from this pandemic, this initiative incarnates the spirit of solidarity and mutually beneficial partnerships that the EU promotes.”

Tackling COVID-19 and preparing for the next pandemic

The world now has safe and effective vaccines against COVID-19. Team Europe's immediate priority therefore remains to support and accelerate vaccination campaigns in partner countries, primarily through support to COVAX, vaccine-sharing, and addressing logistical gaps and developing the capacity of health authorities and workers.

COVID-19 has highlighted an underlying structural problem: the wide discrepancy in manufacturing capacities worldwide. Europe for example has been able to manufacture 400 million doses of COVID-19 vaccines so far, and to export half of them. At the same time, the crisis has shown the importance of diversifying global value chains, and opens a window of opportunity for Africa and Europe. African leaders have called for boosting pharmaceutical production in Africa, and Team Europe is responding to this call to support the continent in building its own strong manufacturing and production capacities. The new initiative will complement existing efforts within the Access to COVID-19 Tools (ACT) Accelerator, notably the COVAX Manufacturing Task Force.

A 360˚initiative, with support in the short, medium, and long term

The Team Europe initiative is an integrated and comprehensive support package that will tackle barriers to manufacturing and access to health products and technologies in Africa from all angles, and will place the continent's own actors and institutions at its heart.

On the supply side, together with the EIB and development banks, the initiative will incentivise and de-risk investment into local pharmaceutical and biotech companies. For example, the European Commission and the EIB are announcing today a coordination platform for European development banks to facilitate investment in the health sector in Africa.

The Team Europe initiative will support technology transfer and develop a number of regional manufacturing hubs in alignment with the African Union and the Africa Centres for Disease Control and Prevention (Africa CDC) which recently launched the Partnerships for African Vaccine Manufacturing. Together with several African and international counterparts, the Commission is already actively engaging in promising projects in South Africa, Senegal, Egypt, Morocco and Rwanda.

On the demand side, the initiative will work with African leaders and communities to tackle the fragmentation of local markets and help consolidate demand, facilitate market integration and the use of locally produced goods.

The initiative will greatly strengthen pharmaceutical and health systems, thus creating an enabling environment for sustainability. It will contribute to developing human resources by investing in skills and education, by increasing African research capacities, and by enhancing scientific cooperation between the two continents. The initiative will also address the problem of falsified products and boost confidence in local goods by strengthening regulatory frameworks. In this context, the future African Medicines Agency (AMA) can count on the European Medicines Agency. The European Commission is also willing to support digital solutions, for example to trace vaccines and medicines across the supply chain.

This specific Team Europe initiative will be further backed up by other national, regional and global health initiatives supported by Global Europe. The Commission is keen to underpin health systems and promote health security and pandemic preparedness.

Next steps

Work has already begun to make these commitments a reality. The Commission has been engaged for a number of months with African partners, EU Member States, the EIB, European development finance institutions, and the private sector. A number of EU Member States have indicated their interest to join this Team Europe initiative. The comprehensive strategy and operational steps will be prepared in close collaboration with African partners. Team Europe will work intensively during this year to prepare first announcements at the next EU-Africa summit. 

Source: https://www.eureporter.co/world/africa/2021/06/03/in-a-world-of-imperfect-information-institutions-should-reflect-african-realities/

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