Thursday, January 30, 2014

Africa: Why Addis still matters more than Davos

Source: ISS

Why Addis still matters more than Davos

Last week, the world’s rich and influential once again gathered in Davos, Switzerland, for the annual meeting of the World Economic Forum (WEF) – an event ‘committed to improving the state of the world,’ as the WEF slogan goes.

Discussions covered everything from youth unemployment, new technology and banking to the environment and politics. Among the high-profile speeches that hit the headlines were those by President Hassan Rouhani from Iran and Israeli Prime Minister Benjamin Netanyahu. But it is essentially a business-driven event; quite rightly so, one could argue, since the CEOs of the huge global corporations who met in Davos more or less rule the world.

On the eve of the summit, a report by Oxfam stating that the planet’s 85 richest people have as much wealth as a staggering 3,5 billion of its poorest, cast something of a shadow over the event at the Swiss ski resort. Inequality is often talked about but easily forgotten in such a setting, reported Christopher Dicky, one of the moderators at Davos in a blog that was published on the US-based news site, The Daily Beast.

Africa wasn’t absent from the summit. The WEF organisers are increasingly conscious of not portraying the gathering as a ‘talk-shop’ event for the rich – especially after violent protests from anti-globalisation groups pretty much ruined its image these last few years. Though representing only a fraction of world GDP, Africa was certainly invited; and not only because Liberian President Ellen Johnson-Sirleaf’s and Nigerian Finance Minister Ngozi Okonjo-Iweala’s colourful outfits provided a respite in a gathering dominated by suits and ties.

During his speech, Nigerian businessman Aliko Dangote urged investors not to shy away from the continent and ‘not to wait until the next election’ because many of Africa’s perceived risks are not ‘real’. South African billionaire Patrice Motsepe was also at the forum, where he announced a $10 million donation to fighting HIV/Aids on the continent.

Unfortunately for Africa, however, inasmuch as business is booming and its growth rates are of the highest in the world, politics and conflict still pose a major obstacle to ensuring everyone on the continent prospers. Business people are not (yet) running the show.

In 2013, after a year of high drama in Mali, with French troops driving Al-Qaeda militants out of the northern desert-region of the country, the simmering conflict in the Central African Republic (CAR) exploded into a full-scale civil war with devastating consequences. In South Sudan, the friction between the country’s president, Salva Kiir, and his erstwhile deputy, Riek Machar, has now plunged the country into a conflict that has reversed almost all of the development gains that the fledgling state has made since independence in July 2011. Even though these can be seen as isolated crises, they cause huge damage to Africa’s image amongst investors.

In his speech at the opening session of the Executive Council of the 22nd African Union (AU) summit, which is being held in Addis Ababa this week, Ethiopian Foreign Minister Tedros Adhanom said the situation in South Sudan is ‘a reflection of the challenges that face a post-conflict state,’ and called on the South Sudanese political actors to ‘rise above their individual interest to save the country from falling into the precipice.’

Not only has the situation in South Sudan cost the lives of thousands of people and destroyed valuable infrastructure, it has also been bringing the economy to its knees. Researcher Luke Patey says the oil output has dropped from a potential 350 000 barrels per day (bpd) to only 50 000 bpd – exports that were meant to be ‘the lifeblood of the new nation.’ This affects not only South Sudan, but also Sudan and the region.

Adhanom, addressing the AU foreign ministers, also spoke about the situation in the CAR. ‘The international community should remain fully committed to support this fragile state in its herculean task of stabilising itself and organising elections to ensure a successful political transition,’ he said. AU Commission Chairperson Nkosazana Dlamini-Zuma also spoke of the conflicts on the continent, saying in her speech on 27 January: ‘If we want to silence all the guns by 2020, we must build inclusive and tolerant societies, manage our diversity, ensure forgiveness and reconciliation and respect for human rights.’

Many, of course, ask whether the AU is able to do anything about these crises. The continental organisation has failed so often in the past to prevent conflicts from escalating and to ensure effective peacekeeping. Many are disappointed that the much-talked-about African Standby Force is still not operational, while the United Nations (UN) and France have to intervene to save the lives of ordinary Africans who get caught up in the fighting.

However, increasingly, the AU is improving its institutions and upping its game. Following the Executive Council meeting, which is made up of foreign ministers, African heads of state are to meet tomorrow and on Friday for the bi-annual Assembly meeting.

This will be one of the few occasions where leaders have to meet face to face to discuss issues such as agriculture and food security – the theme of this year’s summit. But, more importantly, one-on-one meetings between leaders and mediators are usually held over burning issues that are plaguing the continent. The UN, an important player in peace efforts, foreign dignitaries and civil society is also present in Addis.

The AU summit is ultimately also a ‘talk-shop’ event, like Davos, but pressure is on the organisation to deliver on the peace and security that are so badly needed on the continent. It is also tasked with overseeing democracy and ensuring that free and fair elections take place – a major stumbling block towards stability in many places. Business cannot thrive if there is war, and continued instability will drive away investors.

Madagascar – where four years of political strife, following a coup in 2009, has brought the country’s economy to a standstill – has been welcomed back into the AU family after elections in December last year. Some would argue that this was an example of how the AU and its Regional Economic Communities like SADC can make a difference; though mediation efforts probably took far too long.

Africa does have its billionaires. It too makes ‘tech breakthroughs’ and has its own share of CEOs who fly around in private jets. They also gather at times during meetings like the annual Mining Indaba coming up in Cape Town next month. But for mining to really take off, they will tell you, peace in the eastern Democratic Republic of the Congo has to be consolidated. That’s where the AU and its politicians come in.

Liesl Louw-Vaudran, ISS Consultant