The Vodacom Group, which is transitioning from a traditional telco to a tech company, views fibre optic internet as the next frontier to be conquered ... in South Africa and the rest of the continent, says Vodacom CEO Shameel Joosub.
From the four and a half years he spent at the head of the ECOWAS Commission, Jean-Claude Brou, who left his post at the end of June, would like to be remembered above all for his economic achievements. “The political crises are more visible and unfortunately tend to overshadow the great work done by all the teams,” he explains. And the 69-year-old Ivorian, a former industry minister, lists the projects he believes he has successfully completed.
Agriculture, infrastructure, energy, education all received Brou’s attention, as he worked to strengthen integration and make the region’s economies more resilient to external shocks.
To facilitate the free movement of people and goods, “matching checkpoints with accelerated border procedures have been set up between Benin and Nigeria, and between Ghana and Togo, and several others are either ready to be delivered or are under development.”
Similarly, in the field of digital technology, Brou says that he and his teams have put in place a framework to accelerate the growth of this sector and thus prevent the region from missing out on the fourth industrial revolution.
According to Organisation for Economic Cooperation and Development’s figures, more than 36 million people are currently in a situation of food insecurity in the Sahel. How can this problem be resolved?
Jean-Claude Brou: We know the main causes of this situation: there are the effects of climate change, which has disrupted the seasonal cycle with an increase in the frequency and intensity of droughts. There is also the price of fertiliser, which has risen sharply. As a result, food production is expected to fall by around 15% in the ECOWAS region this year. This is why the traditional increase in prices observed between two harvest seasons is now much higher.
We have two mechanisms to respond to this. Firstly, our system of stocks of cereals and food products pre-positioned in several countries. This has allowed us, over the past four or five years, to intervene when there have been availability problems in countries like Mali, Niger or Burkina Faso.
But this is not a sustainable solution. We need to increase our agricultural production. With the support of the World Bank, we have set up a resilience programme to help member countries build their adaptive capacity. This means investing in simple, efficient and modern irrigation systems and technologies to increase productivity. We cannot produce today in the same way we did 20 or 30 years ago.
In addition to the security shock that is already shaking ECOWAS, there are the economic and social consequences of the Covid crisis and the war in Ukraine. How have the region’s economies fared in this context?
Before Covid, despite the difficult security situation, we were recording sustained economic growth. We were growing at least 3.5%, which was higher than the sub-Saharan average. And then in 2020, with Covid, growth dropped, but we still held up better than most regions. In 2021, the recovery was strong, with a growth rate of more than 4%, above our pre-pandemic average.
This is to say that the regional economy is quite resilient and the main indicators are still good. One of the challenges we face is the inflation rate, which is still high – at around 12% – and which we need to work on bringing down. Without these kinds of negative factors, we would have had much stronger growth in the area.
The economies of the region are certainly resilient, but they still trade very little with each other. What can be done about this?
Our intra-regional trade currently represents 12-15% of our global trade. Our objective is to increase this rate to 40-45%. To achieve this, we are working to put in place mechanisms that will enable us to strengthen integration. Thus, the common external tariff, adopted in 2015, is now applied by all member countries, except Cabo Verde, which […] needs a little more time to adapt.
We have also worked hard with the African Union (AU) Commission and the other economic communities on the continent to prepare for the implementation of the Africa Continental Free Trade Area [effective since 1 January 2021], to which we are now linked. This included coordinating the positions of ECOWAS member countries and proposing a tariff on goods and services to the AU.
In addition, we have simplified our texts and procedures on the identification of these goods. All of this will contribute to facilitating trade between our countries, but also with the countries of Central and North Africa. These are just a few examples of the things that have been done to facilitate trade and avoid friction between countries, as happened recently between Benin and Nigeria.
In terms of infrastructure to facilitate trade, the region is underdeveloped. Shouldn’t this be the priority?
In this respect, our programmes have made good progress. Take the example of the Abidjan-Lagos corridor highway project, which is 1,000km long and crosses five countries [Nigeria, Benin, Togo, Ghana and Côte d’Ivoire]. All the studies are practically complete.
If it weren’t for Covid, we would have already finished. The technical studies have been completed, thanks to $40m in funding from the African Development Bank (AfDB) and the European Union. The project has been presented to investors and has been very well received. We expect to raise around $15bn for this corridor.
Who will manage it?
A treaty has been signed by the five countries concerned, which provides that this highway will be managed supranationally to avoid it being subject to the vagaries of the states. This is fundamental because this corridor is really strategic for the region. The highway will not only facilitate but above all increase economic activity in our community. Imagine the number of petrol stations, hotels, restaurants and various activities that will develop in the vicinity. This is why the AfDB is very involved and supportive of this project.
When will the highway be completed?
By 2023, the tender phase to select the companies that will build it will have been launched. And I can tell you that there are already many companies that are interested in taking part.
The start of construction will create a good dynamic for the second phase of the project, i.e. the extension of this highway by another 3,000km between Abidjan and Dakar. We have already mobilised the resources to start the studies for this second part. The final objective is to link Lagos to Dakar and then the Senegalese capital to Praia, in Cape Verde, by sea to form a regional backbone to which we will connect the countries of the hinterland, for example by rail as between Dakar and Bamako.
The ECOWAS Commission has communicated a lot about the establishment of a regional energy market. What exactly is the situation?
To fully understand our approach, we must first of all start from the following observations: only half of the population of ECOWAS has access to electricity, and the situation is even more serious in rural areas. Secondly, the cost of energy is high in our region: a Kwh costs $0.24. This is twice as expensive as in Europe and six times as expensive as Japan! We cannot be competitive under these conditions. Access to energy is development. Without energy, there will be no development.
We must recognise that the states are making a lot of efforts, but we must tackle the energy problem at the regional level. We must create a regional energy market like in Europe. A country with a surplus must be able to offer its surplus in this market to a country with a deficit.
And how far have you got with this project?
There were two prerequisites for setting up the market. Firstly, we had to increase production capacity. In this area, we are working on setting up nearly 2,500MW of generation capacity, through projects that are either already finished or underway.
Secondly, it is essential to interconnect the fifteen ECOWAS member countries. Today, nine countries in the region are interconnected and by the end of 2022, we will be at 14 countries.
This means that we are in the process of meeting the conditions for the launch of the single energy market. The control centre will be based in Cotonou […] while the regulator will be in Accra. It is the regulator that will ensure that the provisions governing the operation are properly respected.
What is the share of renewable energy in the production capacity being installed?
Hydropower accounts for two-thirds of the generation capacity currently in place or under development, and the rest comes from fossil fuels. We are promoting non-hydro renewables because many countries have potential in wind and solar. When the regional market is operational, it should facilitate investment in these types of energy.
One of the important aspects was to put in place a mechanism to reassure all the players about payments, and this was finalised with $300m in funding from the World Bank.
Without energy, there will be no industrialisation of ECOWAS economies. What have you done in this area to support the countries of the zone?
With Covid, we have focused on the development of the pharmaceutical industry with the support of the AfDB. Our needs in this area are colossal. There are 400 million people in ECOWAS, and only 15% of our pharmaceutical needs are manufactured locally. But the processes have to be very strict, standardised and of high quality.
More generally, we have been working to put in place a regional investment code that is modern, attractive and relatively uniform. Until then, each country had its own regulations, which sometimes led to competition between members. We explained to them that each country had to maximise its comparative advantage within a framework that avoided giving investors too many advantages.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options