The likely impact of COVID-19 on the extractive industries and its governance implications

COVID-19: A GGA RESPONSE

MAY 2020

The likely impact of COVID-19 on the extractive industries and it’s governance implications

COVID-19, the disease caused by the SARS-CoV-2 virus, has been declared a pandemic by the World Health Organization (WHO). Global policy responses have shut down economic activity in attempts to flatten the curve – to prevent a stiletto-type impact on the capacity of healthcare systems to provide care for COVID-affected patients. Recent projections from the Asian Development Bank suggest that resultant global economic losses could amount to between $5.8tn and $8.8tn (Asian Development Bank 2020). African countries appeared, initially, to be particularly susceptible to the negative social and economic consequences unleashed by COVID-19 (The Economist 2020).

However, the demographic profile of many developing countries, not only in Africa, entails a ‘youth bulge’, and the elderly – most susceptible to contracting severe forms of the virus – tend to live at home rather than in concentrated spatial locations (Cash and Patel 2020). Though a lack of data and testing capacity is a governance concern throughout the continent, African countries thus far have relatively low numbers of recorded infections. Nonetheless, the global figures make for gloomy reading. Total cases at the time of writing stand at 5,462,447; recorded deaths amount to 344,503 (Johns Hopkins University 2020).

A looming governance question is how countries will respond to the economic contraction and address looming fiscal deficits in the wake of vastly reduced tax bases (Roubini 2020). For many African countries, dependent on natural resources for exports and foreign exchange revenue, economic recession will have a devastating effect on livelihoods. The World Bank estimates that, globally, 49 million more people will be pushed into ‘extreme poverty’, with sub-Saharan Africa likely to suffer disproportionately (Gerzon Mahler et al. 2020). Extractive industries are particularly susceptible to the worst impacts of the economic downturn as they are capital-intensive businesses deeply connected to global supply chains. Find out more here: Extractive Industries and Governance Implications Document

 

Ross is a natural resource economist and policy analyst, and he has been dealing with governance issues in various forms across this sector since 2007. He has a PhD in economics from the University of Cape Town, and his thesis research focused on the political economy of oil and institutional development in Angola and Nigeria. While completing his PhD, Ross worked as a senior researcher on extractive industries and wildlife governance at the South African Institute of International Affairs (SAIIA), and in May 2019 became an independent conservation consultant. Ross’s task at GGA is to establish a non-renewable natural resources project (extractive industries) to ensure that the industry becomes genuinely sustainable and contributes to Africa achieving the Sustainable Development Goals (SDGs).
Sixolile holds a Masters of Commerce (M.com) in Economics from the University of Fort Hare, where he worked on the National Income Dynamics study (NIDS), based at the University of Cape Town, for Econometric research (econometric modelling, data coding, data mining, data analysis and interpretation). Sixolile has two B.com undergraduate degrees (in economics and in business financial management and industrial psychology). For his B.com Honours he majored in econometrics and economics. He has multidisciplinary skills, including an intersection of machine learning and data science (PYTHON and R-programming). Sixolile has background experience in natural resources, working with AngloGold Ashanti in the finance department. Later, he joined CNH-Industrial as a junior strategic developer and government relations. In 2019 he joined Good Governance Africa as a lead researcher, where he is responsible for quantitative and qualitative data management and statistical analysis on research projects relating to natural resources, land reform, and policy analysis, among others. At university he was in involved in starting an academic society, New Economic Horizon, that fostered a working relationship between the Auditor-General’s office in the Eastern Cape and the University of Fort Hare’s accounting department.

Africa Day 2020: A unique opportunity for reflection

Covid-19 has taken the world by storm. It has exposed deep fragilities in our global systems. Our economic systems, first and foremost, clearly require deep reform. Failing to properly account for ecological degradation has unleashed climate change and viral dark matter, both of which have exacerbated vulnerabilities among the worst off. Ecological economists have been raising the red flag on this front since the late 1960s at least. If Covid-19 is not a catalyst for designing and implementing new economic models that help us to arrive at a more safe and just space in our delicate web of planetary boundaries, it is hard to imagine what could be. Our next edition of Africa in Fact deals with this very issue.

The edition thereafter addresses health. Health systems, even in rich countries, were already creaking under the strain of lifestyle diseases. In poor countries, the health burden of infectious diseases such as TB and HIV, along with malaria, hardly disappeared when Covid-19 arrived. Every bed set aside for Covid-19 patients is a bed that cannot be used to treat other urgent health needs. The Economist was quick to point out (26 March, 2020) that any given American ICU unit had more ventilators than entire African countries. While the article contained interesting analysis, the headline carried unwarranted Afro-pessimism – “Africa is woefully ill-equipped to cope with Covid-19”. The Guardian’s Afua Hirsch provided a subtle correction and provocatively asked: “Why are Africa’s coronavirus successes being overlooked?”

On Africa Day, it is well worth noting that any given set of data visualisations reveal that African countries have thus far been spared the worst of Covid-19’s direct effects, though the knock-on effects of global and local policy decisions are still to be fully accounted for. In a unique contribution to understanding the variation in governance responses from different countries, Africa in Fact will be running a special 12-week digital edition of the journal with authors from six African countries – Nigeria, Cameroon, Ethiopia, Kenya, Zimbabwe and South Africa. Each author will write six short blog posts, working in teams of three. In other words, every week, starting on Wednesday, 27 May, we will publish three posts. Over the first two weeks, we cover the first theme – type of leadership response; over the next two weeks, the second theme, and so forth. Don’t miss them.

A quick glance across sub-Saharan Africa reveals that the highest death rate (outside of South Africa) is Cameroon with 5.88 deaths per million. Spain’s is more than 10 times that, with the UK only slightly lower – horrible tragedies that we lament. So, was The Economist wrong? It’s hard to say. But what it didn’t appear to factor in is that, in general, African countries have become adept at dealing with infectious diseases. Moreover, our demographic profile (youth-heavy), and the fact the elderly tend to live at home (rather than in care homes with other elderly people), means that vulnerability to severe infection may be lower than in countries with different demographics and spatial concentrations of elderly people. Despite technological and capacity deficiencies, we’ve found ways and means of addressing health disasters. Ghana and Senegal have led the way in demonstrating innovative, professional responses. Of course, a lack of data and testing at scale remains a challenge for most countries. And death rates in places like South Africa (6.22 per million) are climbing exponentially.

Nonetheless, six weeks after The Economist’s first pessimistic article (linked above), the newspaper published another article titled “Why Covid-19 seems to spread more slowly in Africa”, commending the Ghanaian government for its swift response. From the available data, it notes that the World Health Organization (WHO)’s analysis suggests that “the virus is spreading more slowly in Africa than elsewhere”. While variation is high, and undercounting is likely, “official data are still a rough reflection of reality in many countries”.

The graphs below, produced by our in-house data specialist, Monique Bennett, annotate relevant policy interventions over time in each of the six African countries featured in our special edition. Each graph plots positive infections against recoveries. The recovery rate is particularly important, as it provides epidemiologists with an idea of potential immunity levels, which can help to inform lockdown decision-making and potentially tell us something about the possibility of achieving herd immunity (provided we have a similarly good idea of R – the rate of spread of the disease, which will depend on having far more data).

Our proviso, of course, is that the graphs are a reflection of data that we deem useful to visualise from a governance perspective. We are not suggesting that where infection rates appear to slow (or increase) after a particular policy intervention that these two events are causally connected. We are simply plotting a timeline of how things have unfolded according to the public data that we have at our disposal. The y-axes have been differently scaled for each country, so please do take note of that, too.

Each country has very different screening, testing and contact-tracing capacities and strategies; the data presented on the graphs above is ultimately a reflection of those policy decisions, and a function of the number of tests completed. These differences will be addressed in the blog series. So, the bottom line is: don’t miss out on this unique pan-African contribution.

 

Dr Ross Harvey is a natural resource economist and policy analyst, and he has been dealing with governance issues in various forms across this sector since 2007. He has a PhD in economics from the University of Cape Town, and his thesis research focused on the political economy of oil and institutional development in Angola and Nigeria. While completing his PhD, Ross worked as a senior researcher on extractive industries and wildlife governance at the South African Institute of International Affairs (SAIIA), and in May 2019 became an independent conservation consultant. Ross’s task at GGA is to establish a non-renewable natural resources project (extractive industries) to ensure that the industry becomes genuinely sustainable and contributes to Africa achieving the Sustainable Development Goals (SDGs).

GANDHI NOW, COVID-19 AND THE NEED FOR SOLIDARITY ECONOMICS

A GGA RESPONSE

MAY 2020
GANDHI NOW, COVID-19 AND THE NEED FOR SOLIDARITY ECONOMICS

Reflections from GGA’s Programme on Ethics, Culture and Spirituality

Blessed are the peacemakers and sustainers of life

When we set out on our journey to celebrate the 150th anniversary of the birth of Kasturba and Mohandas Gandhi in October 2019, the world was a very different place. The ashram in Phoenix, Durban, where the Gandhi family lived, was surrounded by the hustle and bustle of colourful daily life emanating from the informal settlement now surrounding it.

My guess is that Ba and Bapu would be pleased to know that their legacy continues to provide for this local community in terms of care, schooling, computer literacy and social outreach. True to the title Mahatma (Sanskrit for great soul), first ascribed to Gandhiji by the poet Rabindranath Tagore, the Gandhis as prototypical satyagrahis or soldiers of peace would surely take delight in knowing that their animus continues to permeate the air of those people living most on the margins of society, the so-called “untouchables”. But this begs the question, who are the untouchables today?

The outbreak of the Coronavirus disease in Wuhan, China, in late 2019, has changed everything. In some sense, we are all untouchable now. I’m writing this from lockdown, in isolation, along with 55 million other South Africans and hundreds of millions others confined around the world. We are masked and gloved, and exceptionally hesitant to share contact with anyone, especially with family and friends. Taken at face value, this seems to be the wrong way around, counterintuitive and highly abnormal, but this avoidance is undertaken mainly to protect our loved ones from the unknown: whether we have the virus or not and to stop transmission to them. Read more here: Gandhi Now, COVID-19 Document

COVID-19

A GGA RESPONSE

MAY 2020

CHILD DEVELOPMENT AND YOUTH FORMATION

Recommendations on child and youth advocacy, ECD centres and the implementation of the proposed Department of Basic Education Response Document

On 19 March, 2020 classrooms and learning environments across South Africa closed their doors in an attempt to keep the Coronavirus disease at bay. At midnight of 26 March, the entire country was placed under lockdown in an effort to flatten the curve of infections. Initially, it was planned that schools would resume on 18 April, which would have resulted in an extended holiday and two weeks to catch up – but the virus has proved more taxing than initially thought. The lockdown has been extended and now in mid-May, a month later, there is still uncertainty. The pandemic is challenging the education sector with a simple, yet pressing question: “what now?”

At the outset, the pandemic has revealed just how far-off many countries in the region are from realising the Sustainable Development Goals (SDGs) set by the United Nations to address global challenges. The pandemic has had both a direct and indirect impact on child and youth access to quality education, and it serves to challenge their health, current development efforts to address high youth unemployment rates, and their social protection (UN Sustainable Goals/2030). The following serves as a tool for policy development to assist in a response. The South African Basic Education Minister, Angie Motshekga, and Blade Nzimande, the Minister of Higher Education, have been grappling with how to phase back learner attendance and “save the academic year”.

It is clear that doing nothing about this pandemic is not an option for government and the private sector alike. To quote Hubert Mweli, Director-General of the Department of Basic Education, during a briefing on the way forward for schools on 29 April, 2020, “We die from the virus or we die from poverty and hunger.” Mweli’s statement clearly indicates that South Africa and the wellbeing of its citizens is not being taken lightly. International experience has taught us a great deal. South Africa is in the more fortunate position of being able to learn from other countries, yet the national context is not that simple; South Africa – with nine provinces, 11 official languages, 12,408,755 learners with a wide variety of backgrounds and learning abilities, 24, 998 schools (excluding informal ECD centres and private home-schooling clusters) and 407,000 educators spread across rural, peri-urban and urban areas, and the biggest wealth gap globally between rich and poor – faces its challenges. Every country is unique and needs a contextually relevant and flexible strategy for a COVID-19 response in our schools (National Development Plan 2030).

A phased approach to learners returning to schools seems like the most viable option. This document explains the points the Department of Basic Education (DBE) has addressed in their COVID-19 development plan draft, released on 29 April, 2020, with added input and suggestions from GGA to consider for education development and youth formation. Read more here: Department of Basic Education Response Document

Between the lines

Nairobi: youth unemployment

The simplistic narrative of a Kenyan rags-to-riches tale reveals how the media is complicit in ignoring the human cost of bad governance

The Kosovo area of Mathare, Nairobi’s largest
informal settlement Photo: Kanyi Wyban

Last year, an investigative journalist working for Kenya’s Citizen TV reported a heartrending story. The story was about Kelvin’ Ochieng’, a young man who had ended up homeless on the rough streets of Nairobi after graduating with a first-class honours in actuarial science. The 24-year-old had scored straight As at the famous Maranda High School before proceeding to the University of Nairobi. He had managed to pay for his university studies through a government loan, as well as a Chinese scholarship. But having completed his studies, he could not afford to pay 4,000 shillings (about $40) for his graduation, and so could not attend the ceremony. Now, he lived in the Kosovo area of Mathare, one of Kenya’s largest informal settlements. A friend, Christopher Oloo, had rescued him from the streets, offering him a place in the tiny single room he already shared with three other men. Ochieng’ had applied for many jobs but to no avail, despite his excellent qualifications. Because of that, he feared going back to his rural home.

The last time he had visited, he had found his family living in absolute poverty and clinging to the belief that he, the star of the family who had made it to university, would be their salvation. He told the reporter that he had sometimes contemplated suicide. The story is not, in fact, unusual. In Kenya, many young people work hard at their studies and excel, only to find that their certificates are meaningless. At the time of the interview, Ochieng’ was just one of many other young people scrambling for casual work, for example washing cars in the CBD. Badly served by a failing system, most of the country’s young people are condemned to live in poor socioeconomic conditions. The few who do not have to struggle have access to education and jobs through family or close contacts in government. So the story raises serious questions. What about the many other Ochieng’s one never hears about? In places like Mathare, many young people without even half of his level of education have to grapple with harsh daily realities.

People like the selfless Oloo, whose altruism was mentioned only in passing in the report. His role in the story was “normal” and less interesting than the “special” case of an unemployed graduate. The journalist got some of the details of living in Mathare right: the lack of proper latrines, the heavy stench of raw sewage. But she went on to claim that Mathare is one of the most dangerous slums in Nairobi, a scary place where you have to watch your back 24/7 because of the armed gangs. She did not notice that it was, at least partly, Oloo’s act of kindness that had brought her down into “the valley”. Implicitly, the report suggested that people with first-class degrees didn’t deserve to be homeless and without an income. The insecurity and stench of Mathare were the “normal” preserve of the “less educated”. In a tweet on 21 July, 2019, Mwalimu Wandia Njoya (a scholar, social and political commentator and blogger) said that Kenya’s system compounds a kleptocracy with “education-based discrimination”. I couldn’t agree more. With or without an education, nobody deserves to be poor. Every person should be at least economically able, regardless of their education level.

But bad governance prevails, dehumanising the very people politicians are supposed to serve. This is Christopher Oloo’s story. Like me, he was born in Mathare. Just this fact means that the limits of our ambitions are almost certainly set forever. His story is my story. My story is that of hundreds of thousands of other young Kenyans. His story is representative of thousands of young Kenyans whose futures are being ruined by political corruption, which steals resources that could be used for development and, hence, job creation. I am not on the outside looking in, nor am I on the inside looking out. I’m in the dead centre, looking around. Young people, and particularly young men, are stereotyped as “dirty”, and as “criminals” who threaten public security. The police operate in the valley as if the only social issues here are drugs and weapons. Encounters with police and other officials are to be avoided at any cost. As a young man, you are a target. The cops, commonly known as wakubwas (“the big men”), are simply uniformed robbers. They can stop and search you at any time, supposedly for evidence of illegal possessions, when, actually, they’re rifling your pockets for cash.

They might sniff your fingers, to check whether you have been smoking bangi (local term for marijuana). In some cases you will be made to spit on the ground, the idea being that a habitual smoker always has a dry throat. Everything has a price. Should the smell of marijuana be confirmed, negotiations about the cost of your freedom begin at a thousand shillings. If you are nabbed with something on you, it will cost you between two and three thousand shillings more. Failure to warm the fervent palm of the mkubwa in question may result in a smack to your head. Nyinyi ndio mnatemebea bila pesa, mkisumbua watu hapa! they say. (“You are the type that goes about without money while making a nuisance of yourself.”) As a young man in Mathare, you are guilty until proven innocent. Above all, do not make the elementary blunder of claiming to know your rights. The only time you ever hear the words, Kijana, rudi hapa (“come back soon, you are welcome, young man”), or a kind tone from the cops is when you part with “a little something”. The media almost never reflect such realities of everyday life in Mathare. Young people are constructed as central to the problems of urban criminality and idleness.

Then again, people like to say, “If you don’t like the ghetto, why don’t you just leave?” But where are we to go? Mathare is all the life Oloo has known. It’s the same for me. This is home. You are attached. People raise their children here and have invested what little capital they have here in their neighbourhood. The few who are lucky enough to “make it out” of Mathare often end up in another immiserated part of the Eastlands, with the same limited basic amenities, or worse. Following a fire at our house about two years ago, I helped my mother relocate to Githurai, another low income neighbourhood in Nairobi, where I thought that she would not have to worry about the risk of fire and other ghetto hazards. Less than three months later she moved back to Kosovo, in Mathare. At first, I could not make peace with her decision. But I had to accept that she ached for a familiar environment where she knew people and could trust them, and where she had learned her survival hacks. As they say, an old broom knows the room’s corners all too well.

Soon after the report about Ochieng’ was broadcast, the Nairobi News website reported that he had received more than a dozen job offers, including one from Nairobi county government, the Kenya Red Cross and Kenya’s forestry service. Many of these companies would already have received Ochieng’’s application and CV. What made the difference for him? That report on Citizen TV. Ochieng’ was selected as a worthy story – and good luck to him on that. But I would suggest that the story should not have stopped there: it should have been understood as a case study that reflected the problems many young Kenyans face. And that should have stimulated a search for real, tangible solutions to the problem of youth unemployment. We never see sustainable solutions to young people’s issues. Most often, the solutions proposed turn out to be short-term fixes that have more to do with harvesting cheap labour through catchy words like “platform”, “stipend”, “youth inclusion” and so forth, than with creating real opportunities for young people. An example is the government programme Kazi Kwa Vijana (KKV), launched in March 2oo9, which responded to post-election violence in 2008 by campaigning to “put youth to work”.

Six months later, Kenya’s media reported the project was already failing, citing mismanagement, corruption and late payments from Treasury. The initiative failed. Anyway, the campaign offered only low-wage manual labour with no prospect of skills development. Very often, too, we see issues relating to young people being discussed in their absence at cosmetic symposiums and panel discussions. Thus, their input and perspectives are not taken into account. This strips young people of the power to determine their own futures, and brings generational conflict. I accuse our mainstream media of complicity in this. Indirectly, well intended but misguided reporting affects hundreds of thousands of lives. The media’s profit-driven mentality denies people like Oloo the opportunity to speak truth to power. Sure, there are tensions between the demands of media ownership and editorial independence, but it would appear that, to the media owners, “news” is only about increasing readership or viewership subscription. I don’t bear any ill-will against the journalist who covered Ochieng’’s story, or her news team, for their blindness to reality.

They were only doing their jobs. But there’s the problem. Media owners have enormous power to shape public discourse – but apparently very little sense of accountability. In Kenya, moreover, they are sometimes state actors who use media platforms as propaganda machines to push tribalistic agendas. Many argue that our national independence has moved the country forward. However, this claim has very little to do with the everyday dilemmas of poor Kenyans, young, old, male and female. From their perspective, the country is a rusty tramp steamer with no lifeboats for the crew. On this ship, the traditional rule that women and children go first in the event of a problem has been turned on its head: now, they are the first to sink or swim. To many young people today, Kenya is a country that sets you up for failure. It often looks as if it is the intention that we should perish, one way or the other, sooner or later. In Mathare, young people are putting aside imposed social differences of religion, tribe and education to organise and empower themselves. This includes initiatives such as registering a youth group so as to be able to operate a car wash, getting into the boda boda (motorcycle transport) business and ventures in urban farming (see article in Africa in Fact 46, the Youth edition).

For them, this is the only way forward to economic liberation. In this way, we are rebelling against the status quo, which says that we should be patient and wait for opportunities to be thrown our way. In Mathare, young people are working to create a future for themselves, because it is clear that our government is not going to do so.

Kanyi Wyban is a young writer and musician based in Mathare – Nairobi, Kenya. He is the founder of Heroes of Mathare, a storytelling project aimed at telling beautiful narratives by celebrating heroes from a community otherwise branded a “slum”. He is also coordinator of the Mathare Green Movement, an ecological justice campaign aimed at reclaiming the humanity of Mathare by planting trees and making it green.