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1. How to encourage private sector climate initiatives in Kenya

Author:
Judith Mulwa and Marie Ladekjær Gravesen
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Climate change is a particularly pertinent issue in Kenya because the country’s economy is highly dependent on its natural resource base (such as agriculture and fisheries), which are sensitive to temperature and rainfall variabilities. As a party to the United Nations Framework Convention on Climate Change (UNFCCC), Kenya must work to mitigate and adapt to climate change. This requires significant financial resources. Per the UNFCCC framework, some national climate actions are not expected to receive financing from international financial sources. Therefore, the country must look for innovative ways of domestically sourcing finances for low-carbon development and climate resilience programmes. Kenya has, in this regard, set up and implemented a national climate fund for financing adaptation and mitigation projects, ideally from various sources, including the private sector. This policy brief explores the legal, price-based, property-based, and information-based incentives for private sector investment and engagement in climate adaptation and mitigation in Kenya. The analysis is based on desk research and 51 stakeholder interviews from identified private sector institutions and industries in Kenya.
Topic:
Climate Change, Environment, Natural Resources, Investment, and Private Sector
Political Geography:
Kenya and Africa

2. Promoting diaspora investment in fragile settings: The case of Somalia

Author:
Guido Lanfranchi
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
This policy brief analyses the extent to which diaspora investment can support economic development and livelihoods, with a particular focus on fragile settings. Using the case study of Somalia, the brief explores some of the main advantages and risks associated with this tool. On the one hand, diaspora investment can channel finance into productive activities in the diaspora’s country of origin, supporting the creation of revenue streams, while also generating returns for diaspora investors. On the other hand, particularly in fragile settings, these investments can also undermine social cohesion and even increase the likelihood of violent conflict, especially if they are channelled along identity lines. On the basis of this analysis, the brief offers the following recommendations to donor governments interested in promoting diaspora investment in Somalia and beyond: (i) to ensure effectiveness, donors should gather comprehensive, in-depth data on the needs and preferences of both potential investors in the diaspora and investees in the country of origin; (ii) to avoid exacerbating tensions and conflict, donors should be as inclusive and transparent as possible in their engagement with stakeholders, most notably in the selection of beneficiaries; (iii) any efforts to promote diaspora investment in fragile settings should be grounded in a thorough understanding of the specific context in which they are implemented, in order to understand both the economic and political implications of such investment.
Topic:
Economics, Politics, Diaspora, Investment, and Fragility
Political Geography:
Africa and Somalia

3. China’s Provinces as Global Actors: Evidence from China-Africa Relations

Author:
Charlotte Lenz
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
With the launch in the early 2000s of China’s ‘Going Global’ Strategy, Chinese provinces became one group of actors participating in China’s South-South relations. In this Strategic Update, Charlotte Lenz investigates the role of Chinese provinces as foreign policy actors and explains their internationalisation strategies, challenging the prevalent perception of China as a unitary actor on the world stage. Drawing on evidence from Africa-China relations, the report identifies two strategies employed by Chinese provinces in pursuit of their foreign policy interests: (1) Formal and informal “twinning” as a collaborative model between central and local actors, wherein central actors design policies and provincial governments execute projects; (2) and “clustering” according to a sectoral logic of investment and diplomacy in which a certain Chinese province engages a certain foreign country. Despite ongoing bureaucratic centralisation under Xi Jinping, provinces continue to pursue their own internationalisation strategies to help meet local economic and employment targets. Understanding their agency, interests and limitations is thus key to deriving a better understanding of China’s evolving global presence.
Topic:
Foreign Policy, Diplomacy, Bilateral Relations, Investment, and Internationalization
Political Geography:
Africa, China, and Asia

4. Maximising the impact of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP)

Author:
Vincent Obisie-Orlu
Publication Date:
12-2023
Content Type:
Policy Brief
Institution:
Good Governance Africa (GGA)
Abstract:
This briefing assesses South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). It acknowledges programme achievements while addressing challenges, including delays to the procurement process and financial issues facing REIPPPP projects. It underscores the necessity for electricity industry reform and more cohesive energy policies. It proposes changes to how investment decisions are made, and collaboration occurs alongside the REIPPPP process to promote private sector investment, develop localisation within the REIPPPP and reduce supply chain vulnerabilities. Lastly, it provides a thorough analysis to inform recommendations that will maximise REIPPPP’s role in realising South Africa’s energy objectives.
Topic:
Reform, Finance, Investment, Electricity, Renewable Energy, and Procurement
Political Geography:
Africa and South Africa

5. Investing in inclusive governance yields dividends in Africa

Author:
Pranish Desai, Monique Bennett, Nnaemeka Ohamadike, and Chrissy Dube
Publication Date:
06-2023
Content Type:
Special Report
Institution:
Good Governance Africa (GGA)
Abstract:
Over the long term, there is a clear association between accountable and inclusive governance on the one hand and broad-based economic development on the other.1 We find empirical support for this assessment at the global, African, and regional levels within Africa across both shorter and more extended periods of time. The explanation is that a long-term governance environment which embraces accountability is also more politically stable, enabling consistent policymaking, which can sustain economic dynamism and meet citizens’ needs. Concerningly, there are African countries, including Angola, which have recently sought to repress rather than encourage participation. This has been one contributing factor to the recent stagnation and reversals which Angola has experienced in critical measures of human development pertaining to education, health and economic outcomes. This intelligence report identifies the critical implications that this finding has for companies with committed financial interests in African countries: • The importance of inclusive governance is that a more participatory, accountable and nondiscriminatory society will also see corresponding improvements in broad-based economic development, which benefits businesses and citizens in tandem. • The private sector has both an incentive and a responsibility to actively invest in mechanisms that encourage accountable governance in African countries where they operate. Investing in these mechanisms minimises the reputational risk companies open themselves up to by engaging in opportunistic behaviour which bolsters rather than blocks repressive behaviour by African governments. • Through supporting inclusive governance initiatives emanating from African civil society and local communities, companies can demonstrate that they have a long-term commitment to fostering economic development in the world’s fastest-growing continent.
Topic:
Governance, Investment, Economic Development, Private Sector, and Inclusion
Political Geography:
Africa

6. Taxation, infrastructure investment, growth, and poverty reduction: A case study of Zimbabwe

Author:
Hans Lofgren and Martin Cicowiez
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
In recent decades, Zimbabwe’s development record has been disappointing. In the last few years, a severe drought and the Covid-19 pandemic have added to the country’s development challenges. This paper is concerned with the long-run need to find a path toward faster growth in GDP, employment, and incomes, accompanied by more rapid progress on poverty reduction and other parts of the global sustainable development agenda. As part of this search, the country will need to address structural constraints including a large infrastructure gap, an inefficient government, and unhospitable business climate. Among these, this paper is focused on infrastructure and alternative means of financing scaled-up investments – what are the consequences of relying on domestic taxes compared to foreign financing? To address these questions, the paper draws on simulations with SDGSIM, a computable general equilibrium (CGE) model, designed for SDG analysis but applicable to analysis of policies in a wide range of areas, including growth, fiscal space, and external shocks. The model was adapted to the Zimbabwean context and calibrated to a database for 2016. The simulations cover the period 2016-2030 and analyzes the effects of alternative levels and priorities for government spending and resource mobilization (domestic and foreign). The simulation results cover a wide range of economic indicators, including some related to the global Sustainable Development Goal (SDG) agenda. The differences between the scenario results for GDP growth, household consumption, and poverty point to the importance of strong public investment management and, other things being equal, of targeting TFP gains to tradable sectors. The advantages of reliance on domestic taxation for the funding of expanded investment include slower debt accumulation and less reliance on the decisions of external actors. Tax reliance may also give the funders, the citizens, a stronger sense of ownership and right to monitor how the money is used, with a positive impact on investment productivity. On the other hand, before the investment have yielded sufficient returns, reliance on taxes reduces private purchasing power, leading to some combination of lower private consumption and investment. Raising the tax burden by 2-3 percent of GDP may also be administratively difficult. It would of course be possible to consider scenarios that split the funding burden between domestic taxes and foreign financing.
Topic:
Poverty, Infrastructure, Economic Growth, Tax Systems, and Investment
Political Geography:
Africa and Zimbabwe

7. Shared fortunes: Why Britain, the European Union, and Africa need one another

Author:
Nicholas Westcott
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
Britain and Africa are deeply connected through their history and people as much as through trade, investment, aid, and culture. They can both benefit greatly from this relationship – especially in areas where their interests converge, including economic development, security, education, and climate. But political forces on both sides could push them apart – even as, increasingly, Britain needs Africa more than Africa needs Britain. The British government and the EU need to understand the relationship in its geostrategic context – the influence of China, Russia, Gulf states, and others affects African countries’ views on their place in the world. A closer and more responsive relationship between Britain, Africa, and the EU would have significant benefits for all sides – partly because each is weaker individually than they are together, and because Britain still has strengths that are most useful in cooperation with others. But this will only be possible if the British government significantly changes its approach to Europe as well as to Africa.
Topic:
Foreign Policy, European Union, Investment, and Trade
Political Geography:
Africa, United Kingdom, and Europe

8. Correlates of Politics and Economics: How Chinese Investment in Africa Changes Political Influence

Author:
Carla D. Jones, Mengge Li, and Hermann A. Ndofor
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Foreign Policy Research Institute
Abstract:
This study investigates the impact of Chinese economic engagement in Africa (FDI and loans from China to African countries) on African countries’ international political alignment as evidenced by voting patterns in the UN General Assembly. We find three seasons of Chinese policy in Africa. Pre 2008, Chinese economic engagement in Africa was driven primarily by economic considerations, market seeking for FDI and likely resource seeking for loans. During the Great Recession, China came to terms with its rise as an economic power and thus started leveraging its economic power in international relationships. During this season, both Chinese FDI and loans were no longer driven by economic considerations but rather by international relations which led to increased political alignment with recipient African countries. The final season captured the Xi Jinping era beginning 2013. During this season, Chinese FDI had no effect on African countries’ foreign policy alignment with China, but Chinese loans still had a significant positive effect. This likely reflects a movement away from FDI to less transparent bilateral loans as a means of utilizing Chinese economic power to influence foreign policy. During the entire period of the study, Chinese FDI to Africa resulted in reduced political alignment between African countries and the United States.
Topic:
Foreign Policy, Economics, Politics, Investment, and Influence
Political Geography:
Africa, China, and Asia

9. ABCs of the IFIs: The African Development Fund’s 16th Replenishment

Author:
Jocilyn Estes and Erin Collinson
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Many African countries, particularly those in sub-Saharan Africa, continue to grapple with the consequences of the COVID-19 pandemic while simultaneously confronting the challenges posed by slowing global growth, private capital outflows, debt distress, and the impacts of climate change. An estimated 55 million people on the continent have been pushed into extreme poverty since the onset of the pandemic. This devastating trend has been exacerbated by the ripple effects of Russia’s invasion of Ukraine—supply chain disruptions, tightening fiscal space, and growing pressure on the cost of food, fuel, and fertilizer. International financial support for the continent has fallen woefully short of levels required to prevent the current crisis from derailing long-term development. The African Development Bank (AfDB) is the largest regional multilateral development finance institution on the continent. It provides critical financial support to countries across the region, including investment in vital infrastructure projects. The African Development Fund (AfDF) is the Bank’s concessional window, providing financing in the form of grants and concessional loans to resource-constrained governments responding to the growing challenges on the continent, including gaps in critical infrastructure and rising debt burdens. Amid ongoing and overlapping global emergencies, the stakes for the AfDF’s upcoming replenishment could hardly be higher. The AfDF is making the case to donors—who will come together later this year for a final meeting of the AfDF’s 16th replenishment (AfDF-16)—that the Fund needs substantial new resources to continue to support African people, businesses, and governments and make up lost ground in the fight against poverty. An ambitious 16th replenishment—coupled with policy and governance reform commitments—presents an opportunity for donors, including the United States, to complement long-standing investments in regional growth and infrastructure, offer a sustainable alternative to non-concessional Chinese lending, and make headway on the long road to economic recovery from the pandemic and worsening food security crisis.
Topic:
Development, Investment, Pandemic, and COVID-19
Political Geography:
Africa

10. Characterisation of Danish agricultural investments in Tanzania and Uganda

Author:
Rikke Broegaard, Helle Monk Ravnborg, Evelyne Lazaro, Teddy Nakanwagi, and David Tumusiime
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
This DIIS Working Paper presents key characteristics of each of the six cases including main crop focus, size and business model, as well as types of investors, their investment approach and the factors that motivate them. It also presents the different objectives that the investors have expressed wanting to achieve. As most of the investments involve private funds, it is reasonable to expect that one important goal is to ensure a viable economy in the investment. However, in addition to an economically sound investment, all of the investors behind these six cases have ambitions regarding ways in which they see themselves - through the investment - as contributors towards a positive societal development in the area of the investment. Thus, the paper presents the different ways the investors see their investments contributing to development in the area. The paper is based on interviews with the investors and field work in the areas of investments.
Topic:
Agriculture, Development, Environment, Poverty, Natural Resources, Food, Inequality, Investment, and Land Rights
Political Geography:
Europe, Denmark, Tanzania, and Africa

11. Copper is king – Zambia stands to win

Author:
Busisipho Siyobi
Publication Date:
09-2021
Content Type:
Special Report
Institution:
Good Governance Africa (GGA)
Abstract:
The copper price is booming. Experts are divided over whether this boom is structural rather than cyclical. It is our considered view, in light of the current evidence, that copper prices will continue to climb due to medium to long-term supply deficits and the comparative inefficiency of copper’s potential substitutes. Very few high-grade copper deposits remain. Once they are exploited, lower-grade jurisdictions such as Zambia will become increasingly attractive. Investment opportunities into Zambia are therefore ripe for bold investors. However, the country presents a challenging operating environment. Only if investors are deeply committed to high impact Environmental, Social and Governance (ESG) performance, will sustained, long-run yields flow. The corollary is that investors should commit to building state institutions that serve the interests of Zambia’s citizens, and crowd out irresponsible players.
Topic:
Development, Natural Resources, Governance, Investment, Institutions, and Copper
Political Geography:
Africa and Zambia

12. Establishing the empirical basis for tracing the development outcomes of agricultural investments

Author:
Helle Munk Ravnborg, Bernard Bashaasha, Rikke Broegaard, Michael Byaruhanga, Evelyne Lazaro, Festo Maro, Khamaldin Mutabazi, Teddy Nakanwagi, and David Tumusiime
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
This DIIS Working Paper describes the design of a questionnaire survey developed and implemented in order to trace the development outcomes of foreign agricultural investments in six research locations in Tanzania and Uganda. The questionnaire survey was conducted as part of the Agricultural Investors as Development Actors (henceforward AIDA) research programme which, in particular, focuses on development outcomes in terms of employment, migration, food security and wider dynamic economic effects, such as access to technology, infrastructure and markets; land markets and perceived security of land tenure; and water access and security of tenure. The working paper which serves as a methodological reference document describes the approach which was employed for drawing six independent samples of 400 respondents each, as well as the approach developed for computing a foreign agricultural investment exposure index and for computing a locally informed household poverty index.
Topic:
Agriculture, Climate Change, Development, Economics, Emerging Markets, Environment, Poverty, Water, Food, Governance, Inequality, Investment, and Land Rights
Political Geography:
Sub-Saharan Africa and Africa

13. When jihadists broker peace: Natural resource conflicts as weapons of war in Mali’s protracted crisis

Author:
Boubacar Ba and Signe Marie Cold-Ravnkilde
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Following Mali’s coup d’état of 18 August 2020, the transitional government is yet to present a roadmap for peace in central Mali outlining a new strategy for dialogue with armed non-state actors. To support this process, it is important that Mali’s international donors identify already-existing local peace agreements and support local-level dialogue with all parties to conflicts. Recommendations: Immediate de-escalation of conflicts is needed through disarmament of militias and rebuilding of trust between local communities and Mali’s armed forces, with a strong focus on protecting civilians. Mali needs a national, comprehensive strategy for how to include jihadists and local militias in dialogue, reconciliation and dispute resolution. International donors need to identify already-existing local peace agreements and support local-level dialogue between all parties to conflicts. Long-term solutions regulating equal access to natural resources for different population groups are key.
Topic:
Agriculture, Climate Change, Democratization, Environment, Terrorism, Water, Food, Non State Actors, Governance, Fragile States, Investment, Peace, and Land Rights
Political Geography:
Africa and Mali

14. Quantifying Investment Facilitation at Country Level: Introducing a New Index

Author:
Axel Berger, Ali Dadkhah, and Zoryana Olekseyuk
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
This article introduces a new and unique dataset for measuring the adoption of investment facilitation measures at country level. The Investment Facilitation Index (IFI) covers 117 individual investment facilitation measures, clustered in six policy areas, and maps their adoption for 86 countries. This article presents the conceptual and methodological background of the IFI and provides a first analysis of the level of adoption of investment facilitation measures across countries participating in the investment facilitation for development negotiations in the World Trade Organization (WTO). Our dataset reveals novel insights. Countries which have lower levels of adoption belong to the low-income and lower-middle-income country group and are often located in Africa, the Middle East and to some extent Latin America and the Caribbean. The strong correlation between FDI and the IFI score shows that countries with the lowest levels of FDI, and thus in need of policy tools to attract FDI, have the lowest levels of adoption when it comes to investment facilitation measures. Our dataset has direct relevance for current policy discussions on investment facilitation for development in the WTO but also for domestic-level policy-making. Furthermore, the IFI provides the basis for a future research agenda to assess the design and impact of a future WTO agreement.
Topic:
Development, Investment, and WTO
Political Geography:
Africa, Middle East, Latin America, and Caribbean

15. A Look at the Legal Framework and Constraints of Credit Granting In Cameroon

Author:
Steve Tametong and Martial Nteme
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The realisation of an investment depends, in certain cases, on the use of credit. The granting of credit requires a prior credit operation. According to section 3 of Law No. 2019/021 of 24 December 2019 to lay down certain rules relating to credit activity in the banking and microfinance sectors in Cameroon, a credit operation means “the act by which a reporting institution, acting for consideration, advances or promises to advance funds to a natural or legal person, or makes a commitment by signature in the interest of the latter”. In reality, the credit applicant is faced with challenges that stem partly from his or her ignorance of the legal framework for granting credit in Cameroon. It is therefore necessary for each credit applicant to master the legal environment that governs the granting of credit. This is the first articulation of this analysis (I). The second section examines the conditions and constraints of credit granting (II). The third section sets out recommendations for improving the framework for granting credit in Cameroon (III).
Topic:
Infrastructure, Finance, Investment, and Credit
Political Geography:
Africa and Cameroon