Ethiopia’s Industrial Hopes Dwindle as Conflict, Sanctions Take Toll

Ethiopia once said it wanted to become the “China of Africa” — that is, a manufacturing hub — with the help of its industrial parks. But the global economic downturn and the country’s ongoing conflict have prompted companies to leave the parks and lay off thousands of workers.

The Ethiopian government hoped that one the country’s industrial parks — Hawassa, which was opened in 2016 with the potential to create 60,000 jobs — would help the country move from an agricultural to a manufacturing economy, and that the companies operating there would bring high-tech work.

Kalkidan Asrat, a logistics manager Nasa Garment at the Hawassa Industrila Park, shared those dreams.

Her birthplace, she said, is a small town and her family worked in agriculture for a living as subsistence farmers. When she completed her education, she joined the industrial park, where she said she was able to improve her prospects.

There are 10 other industrial parks like Hawassa spread across Ethiopia.

The government has said it hoped to make Ethiopia a lower middle-income country by 2025, with manufacturing playing a big part.

That is now looking less likely because of the COVID-19 pandemic, inflation, a lack of foreign currency in the country, and conflict and human rights abuses.

“Two of the industrial parks have been directly impacted. They’ve been in the combat zone, effectively,” said emerging markets economist Patrick Heinisch. “The most severe hit to the industrial parks is from the loss of access to AGOA. One week after the announcement, the first company announced they would retreat from the Ethiopian market; they sold their factories in Ethiopia. This has been followed by other companies.”

The African Growth and Opportunity Act, or AGOA, passed in the U.S. in 2000 to aid development in sub-Saharan Africa, gave Ethiopia duty-free access to the U.S. market for several products.

With Ethiopian wages much lower than those in China, a country synonymous with manufacturing, and AGOA making it cheaper to import goods to the U.S., many international manufacturing companies set up in Hawassa’s industrial sheds.

On January 1, however, the U.S. withdrew Ethiopia’s access to AGOA due to “gross violations of human rights.”

Rights groups have accused the Ethiopian government and its aligned military forces of large-scale human abuses, including ethnic cleansing, against Tigrayans during the country’s nearly two-year conflict.

Tigrayan forces have also been accused of abuses.

Thirty-five thousand people worked at Hawassa, but in June, one firm laid off 3,000 workers and others laid off hundreds.

One factory owner in Hawassa, Raghavendra Pattar, said the country is struggling to adapt.

“We are forging towards a new market, but it will take more time to roll up the market again, so that’s why we are suffering a lot,” he said. “The country is suffering because of foreign currency availability in the country today. They also need support from other countries, big countries, like America.”

The deputy general manager of the park, Belante Tebikew, said the withdrawal of AGOA was causing more problems than the pandemic or inflation.

“There are some, as I told you, reductions on orders, because they are being injured by the customs, duty-free privileges in the American markets, since most of the commodities are being exported to the U.S.,” he said.

In another bad sign for the country’s economy, fighting between government and Tigrayan rebel forces broke out again in late August after a five-month cease-fire.

Source: Voice of America

West Africa food insecurity demands climate-smart response amid multiple crises

In the face of the crisis, the World Bank is deploying short- and long-term responses to boost food and nutrition security, reduce risks, and strengthen food systems.

These actions form part of the institution’s global response to the ongoing food security crisis, with up to $30 billion in existing and new projects in areas spanning agriculture, nutrition, social protection, water, and irrigation. This financing will include efforts to encourage food and fertilizer production, enhance food systems, facilitate greater trade, and support vulnerable households and producers.

Soaring prices

The shockwaves of the conflict are expected to have complex, long-lasting impacts for the world. Global prices are forecast to remain at historically high levels through the end of 2024, and the war is altering patterns of trade and production in ways that will aggravate food insecurity and inflation. These jolts come after two years of COVID-19 pandemic disruption, creating a blow to an already fragile global food system grappling with climate extremes.

Markets in the Sahel and across West and Central Africa are experiencing stark price rises of oil, rice, wheat and other commodities on the international market, and poorer households spend disproportionately more on food than those better off. The price of wheat, a food staple for many households, stood 60% higher at the start of June 2022 compared to January 2021, according to World Bank data.

The price of fertilisers too, essential for productive agriculture, has surged since the war and now stands almost three times higher than a year ago. The knock-on effect is expected to reduce food production over the coming years as soaring prices force many farmers to use less fertiliser.

Tackling root causes

The World Bank is mobilising support for emergency responses in the Sahel and West Africa to help countries at risk of food insecurity respond faster. It is also working with its humanitarian partners to monitor regional food insecurity and draw up Food Security Preparedness Plans.

The challenge of boosting the region’s food and nutrition security is also demanding long-term responses. And, as many root causes—and consequences—of food insecurity defy national borders, regional approaches are being adopted to build food systems resilience across Western and Central African countries.

The $716 million Food System Resilience Program (FSRP) is one such approach. It aims to benefit more than four million people in West Africa by increasing agricultural productivity through climate-smart agriculture, promoting intraregional value chains, and building regional capacity to manage agricultural risks.

The Great Green Wall

As food systems in the Sahel and West Africa face exceptional stress, there is also a growing demand for more climate-smart investments to support countries where communities face the compounded effects of climate change, conflict, and unprecedented environmental degradation.

The African-led Great Green Wall is a major regional initiative that promises such climate-smart solutions to transform both the region’s economies and ecosystems. By 2030, it seeks to restore some 100 million hectares of degraded land and generate 10 million jobs in rural areas, supporting people’s ability to respond and adapt to climate risks. The World Bank has committed to invest $5.6 billion between 2020 and 2025 in 11 countries taking part. Over 60 projects are focused on transforming livelihoods in the Great Green Wall through landscape restoration, improved food systems, and access to climate-resilient infrastructure.

Tangible results

“Before, I used chemical fertiliser every year and I could go through 20 or 30 bags of it,” says farmer Nama Boureima in Sapouy, Burkina Faso, one of hundreds benefiting from biodigesters installed in the country.

By adding a mix of cow manure and water to biodigesters, farmers can generate renewable biogas for cooking and organic fertiliser for their fields. This reduces CO2 emissions by capturing methane emitted by the manure, while lowering pressure on forest resources previously used for household fuel.

“Now I don’t worry anymore about the fertiliser problem,” Boureima says.

His farm illustrates some of the sweeping changes in progress under the Great Green Wall. Some 270,000 hectares of land have been brought under sustainable management in Burkina Faso; more than 2,500 micro-projects have been financed; 1.5 million people have seen their monetary benefits from forest products increase; and 10 million tons of CO2 have been reduced or avoided.

About 12.5 million people benefited from the US$900 million Nigeria Erosion and Watershed Project (NEWMAP) that reinforced the country’s ability to fight erosion, natural hazards and disasters, while creating 20,000 direct and 32,000 indirect jobs through Sovereign Green Bonds — a first for Africa.

In Niger, additional yields of as much as 58% have been achieved by agro-sylvo-pastoral communities thanks to training on climate-smart strategies.

Green future

As global food security challenges mount, tapping the potential of these ambitious climate-smart investments is seen as essential for making the region’s economy more resilient, achieving inclusive growth, and combating food insecurity.

“When these elements are put together, not only does it transform the economy, but jobs are created too. That allows young Africans to stay in Africa and make a living from their work by being in Africa,” says the World Bank’s Diagana.

Source: World Bank

Swiatek Defeats Jabeur to Clinch US Open Crown

World No. 1 Iga Swiatek defeated Tunisia’s Ons Jabeur to win her second Grand Slam title of the year with a straight sets victory in the U.S. Open final on Saturday.

Polish star Swiatek overcame a spirited second set from fifth seed Jabeur to win 6-2, 7-6 (7/5) in 1 hour, 52 minutes at Arthur Ashe Stadium.

The victory followed Swiatek’s win at the French Open in June, making the 21-year-old the first woman since 2016 to win two Grand Slams in a single season.

Swiatek’s 10th career title also extended her remarkable record in tournament finals.

She has now won her last 10 finals, without dropping a set.

Swiatek collapsed on the court in relief after a win that saw her earn $2.6 million in prize money.

“I’m really glad it’s not in cash,” she quipped as she was presented with her winner’s cheque for a tournament she entered with low expectations.

“For sure this tournament was really challenging because it’s New York — it’s so loud, it’s so crazy,” said Swiatek who was also French Open champion in 2020.

“So many temptations in the city, so many people I’ve met who are so inspiring — it’s really mind-blowing for me and I’m so proud I could handle it mentally.”

But the loss was another agonizing near-miss for Jabeur, who had been bidding to become the first woman from Africa to win a Grand Slam.

The 28-year-old from Tunis also lost in the final of Wimbledon in July.

“I really tried but Iga didn’t make it easy for me,” Jabeur said. “She deserved to win today. I don’t like her very much today but it’s OK.”

The 28-year-old said she is already drawing up a battle plan for 2023.

At the Australian Open, she will have no points to defend having missed the 2022 tournament before she suffered a shock first round exit at the French Open.

Despite being the Wimbledon runner-up, ranking points were stripped from the event by the WTA after the All England Club banned Russian and Belarusian players.

“Points-wise, I don’t have defending points in Australia, in French Open, in Wimbledon, which is good. It’s a good thing. I’m definitely going for the No. 1 spot,” she said.

“I still have the Masters (WTA Finals in Fort Worth). I will maybe show myself there and build more confidence to really get ready for the next season because I feel like I have a lot to show.”

Jabeur, a late bloomer on the tour having still been outside the top 30 at the end of 2020, believes history shows that time remains on her side when it comes to her Grand Slam future.

“But I’m not someone that’s going to give up. I am sure I’m going to be in the final again and I will try my best to win it,” she said.

Source: Voice of America

Nigerian Economy Showed Upward Trajectory Despite Strong Headwinds: President

Nigeria’s economy continued to be resilient, and maintains an upward trajectory, despite disruptions in the global economy, Nigerian President, Muhammadu Buhari said, yesterday.

Buhari, while inaugurating an 11-man Presidential Committee, on the National Economy in Abuja, the Nigerian capital, said, the loss of substantial volumes of oil, the mainstay of the economy, as well as, the COVID-19 pandemic and the conflict between Russia and Ukraine, had brought negative impacts on the economy of Africa’s most populous country.

“Starting with COVID-19, and now the conflict in Ukraine, the past three years have been turbulent ones for the global economy. Global interdependence has become more apparent as we had to deal with volatility, uncertainty, complexity, and ambiguity,” the Nigerian leader said.

He said, while the global economy was largely affected by challenges, which include lockdowns as COVID-19 raged – with disruptions to supply chains around the world and sharp fluctuations in prices, the Nigerian economy continued to show resilience and growth, despite the adverse effects of rising interest rates, a stronger U.S. dollar and higher inflation across the world.

Buhari charged the national economic committee to look inward in addressing the issues peculiar to Nigeria.

Last month, Nigeria, one of Africa’s largest oil producers, recorded a decline in the production of crude oil, with an estimation that the country produced less than one million barrels per day, Buhari said. This is a figure far less than the target of 1.88 million barrels per day, in the president’s 2022 national budget speech, in Oct, 2021.

He attributed the fall in oil production to be “essentially due to economic sabotage.”

The newly inaugurated economic committee, headed by Buhari, will, according to the president, bring together all policymakers responsible for the economy, to share a common understanding and approach towards solving the economic challenges in a swift and efficient manner.