In 2017, Sasol had a good run rate on its South African facilities resulting in high output. But that productive year came at the environmental ... cost of an elevated emission footprint. Based on that, the listed integrated chemicals company has now revised its greenhouse gas (GHG) emissions target upwards to 30%, from an initial 10%, by 2030.
What concrete changes will result from the transformation of the New Partnership for Africa’s Development into an AUDA?
The agency has autonomy of execution and freedom to mobilise resources, for example, with advisory services to states and regional organisations. Thus, the African Union Commission is delegated certain tasks of implementing development policy and will be able to focus on political orientation, governance, peace, security [and so on].
Our team will soon grow from 160 to 195 specialised technical employees. We will also create specialised regional centres of excellence, including one in Cairo, before the end of the year, dedicated to climate resilience and renewable energy.
The African Continental Free Trade Agreement (AfCFTA) has entered into force. What is your impression, and what will be the ADUA’s contribution?
Our role is to assist the Commission, based on the data we collect at national and regional levels, to better define a continental strategy and assist the regional economic communities and states in implementing their strategies. We are the only ones to play this transversal role. The main point is that despite the different sensitivities, a consensus has been reached in favour of the AfCFTA. There is already a lot of explaining to African entrepreneurs on the roadmap to follow.
Speaking of the private sector, should African companies be protected from competition, as some suggest?
I think so. We need a strategy of positive discrimination for major African groups. The modalities still need to be defined, but the idea is important, and the more regional these groups are, the better. Nigeria’s Dangote Group could benefit from more facilities when it moves to Ethiopia, for example.
At the regional level, we must have a strategy that facilitates the expansion of these groups, as South Korea has done with its large national companies. We have gone from multilateralism, with its rules, to a regionalism increasingly based on mere power. This phenomenon can be observed in the United States, Europe and Asia. In Africa, regionalism must dominate the construction of the AfCFTA, through the development of competitiveness in our domestic markets before looking outside.
While supporting small to medium-sized enterprises (SMEs)?
Yes, because SMEs will be the job creators. We are seeing the emergence of SME incubation centres. The bosses of the companies I meet do not necessarily ask for funds but to be protected in order to be able to develop in their markets. It is more a support and a removal of obstacles than simple financial flows. But central banks can make their contribution.
When Lamido Sanusi was governor in Nigeria, he used his power to force local banks to finance agribusiness SMEs. It can be done. More generally, the way Africans see themselves today has changed. There is an enthusiasm and optimism among young people that did not exist 20 years ago. They are much luckier than our generation.
What can states do to facilitate the implementation of the AfCFTA?
Decision-makers must adjust, for example, infrastructure projects to facilitate the establishment of the AfCFTA. Non-tariff barriers [logistics, regulatory barriers, incoherent health and safety rules] are the biggest problem today.
All solutions to infrastructure problems are more regional than national, whether in energy or transport. These regional projects are more conducive to economic integration than adding national projects without coherence. This is why the focus is on road corridors (Abidjan-Lagos, Burundi-Tanzania, etc.). They will be one of the key instruments for the AfCFTA.
In addition, through our Move Africa initiative [launched in 2016], we are working with the authorities to promote integrated border crossings and completing all formalities in one place, in an electronic form. In particular, we are working with Japanese cooperation on several projects, including the drafting of a training manual for customs officers.
Another thorny subject is the open skies agreement, which is taking a long time to come into being.
One of the fears is that opening the African sky mainly benefits only a handful of companies, often non-African, by the way. So be it. But for our part, we are mainly working on the development of regional transport hubs and concluded an agreement on this with the International Civil Aviation Organisation (ICAO) in May 2018.
Within five years, more than 50% of African airports will no longer meet modern international standards (runways, etc.), and huge gaps exist in air telecommunications systems. We can’t afford for that to happen.
What about the Eco, the single currency of the Economic Community of West African States (ECOWAS) announced for 2020? Is this feasible?
It is Nigeria that will decide whether or not the single currency will take place. However, at the last ECOWAS summit, Abuja was quite proactive. The question is not a technical one, and it depends on regional political leadership. If the heads of state so wish, this can be done quickly.
Yet East Africa, which is more integrated, does not have a common currency.
But the ease of movement and settlement in the area is a reality. A Kenyan lawyer sets up in Kigali exactly like his local colleague and vice versa for a Rwandan start-up in Nairobi. All the heads of state in the area talk to each other at least once every ten days and solve the problems, sometimes very practical ones, encountered in the integration process!
You do not mention the possible contribution of international aid to accelerating African integration.
Official development assistance is already decreasing, and the target of 0.7% of gross national income allocated to aid is not being met. In my opinion, this aid will disappear within ten years. Some of this aid is already masked as military aid, and on the other hand, a growing proportion is devoted to private sector investments with profitability targets sometimes reaching 20%.
Hence the interest for African countries to mobilise their domestic resources more intelligently, without increasing pressure on companies, but by rationalising customs and tax management systems to avoid leakage.
The question of Chinese financing in Africa is on many people’s minds. What is your opinion on this?
Chinese foreign direct investment in Africa represents less than 1% of this country’s financing in the world! These are the figures of the IMF and the World Bank. Many OECD countries are obsessed with China, and there is a full-scale attack on Chinese investment on the continent. I would like to know how much China has invested in Greece (in terms of GDP per capita) compared to what it is investing in Africa.
In addition, there is an absence of US discourse on Africa. They have written a report, “Prosper Africa” [launched in mid-June], and created a new and larger agency [US International Development Finance Corporation, launched in late 2018] to boost US investment in Africa, but the gap between the institution and the discourse is such that these efforts can hardly bear fruit.
This article first appeared in Jeune Afrique.
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