Nearly all African ambitions depend on thriving agriculture to support modern economies across the continent.
Strictly Personal
Why Morocco’s OCP and Africa Need Each Other, By Jasper Hamann
Published
11 months agoon
Rabat – Countries across the African continent currently stand at a crossroads, facing choices that could determine their fate for decades or even centuries to come. While developed countries around the world are currently focusing on Artificial Intelligence (AI) as the driver for economic growth in the coming years, African countries are still struggling with issues that keep their economies stuck in the 20th century. Left behind?
Decision-makers at last week’s World Economic Forum summit in Davos salivated over the potential of AI as a means to boost their primarily service-oriented economies. Meanwhile, most African countries are still struggling to fully industrialize. African economies are making a sincere effort to reach a stage of development, that of an industrial manufacturing economy, which is a type of economy that the richest countries in the world have abandoned decades ago…
This disturbing trend can be attributed to a multitude of factors, and there are various interesting articles that point to corruption, poor leadership, the lingering effects of colonialism, as well as ongoing conflict and poverty as the prime or even sole reason for Africa’s continued lagging behind in the global economic race. While these articles often provide well-reasoned arguments to point to one factor or the other, in reality it appears to be exactly the complexity of these intertwining issues that has kept African nations where they currently are.
So how can such a complex web of issues be resolved, on a continent that has witnessed an onslaught of coup-d’etats, famine, drought, violent extremism and poverty? I would argue that the key is to start with the absolute fundamentals, the core drivers of stability and sustainable growth. This is the first stage that developed nations have taken, and it is a stage only a handful of African countries have (partially) reached.
I am talking about a country’s ability to produce enough food to feed its population, and the resulting freeing up of labor to support other sectors of the economy. Most European countries reached this stage during the “agricultural revolution,” between the 17th and 19th century, which freed up large parts of the population to instead work in trade, industry, the arts, or academia.
Often referred to in the rather abstract term of “food security,” this phase is crucial in a nation’s development because it creates the foundation for a stable economy where the nation’s talents can flourish.
African ambitions
Still, African nations are definitely not lacking vision when it comes to their economic development. There’s Senegal’s “Emerging Senegal” plan, Ethiopia’s “Growth and Transformation plans,” or Morocco’s own “New Development Model,” which embarrassingly still features a typo in the title of its official English government publication.
If you crave more vision, just have a look at Kenya’s “Vision 2030,” or Egypt’s “Egypt Vision 2030,” or perhaps you can find inspiration in Tanzania’s “Vision 2025.” If that is not enough vision for your liking, there is always Rwanda’s “Vision 2050,” or Cameroon’s “Vision 2035.”
What these documents lack in terms of originality in their naming, they all share in ambitious targets and dreams of becoming a thriving modern economy.
Yet nearly all of these documents also recognize a significant issue plaguing this development. Africa’s top resource, its vibrant young and talented population, is stuck tilling the soil to produce meager yields at their family farms. While farming is arguably one of the world’s most noble professions, ideally as a modern country you would like to have as few people as possible doing it, while producing rich yields that support both domestic consumption and exports.
Having a thriving domestic agricultural sector is a key factor in reaching nearly all of the buzzwords that regularly roll off politicians’ tongues. It is vital to sustainable development, clean energy, technology-driven economies and being a genuinely competitive international player in the coming AI era that is likely to change our labor markets and economies like never before.
Africa’s handicap
One factor that is often left unspoken in these visionary documents, is what can be considered to be Africa’s handicap, the thing that leaves it trailing its Northern and Western neighbors, as well as other developing countries in the East. This handicap is as clear as it is ever-present; African countries face more extreme weather conditions and harsher climates, and climate change is only going to make this worse in decades to come.
Still, harsh climates and extreme weather are issues that modern agriculture has its answers to, mostly in the form of modern farming techniques, water preservation, and fertilizers.
A good example is Australia, which receives the least rainfall of any inhabited continent on the planet. Despite this, and the ever-growing effects of climate change, Australia has spent the last three decades boosting its agricultural productivity and output, through modern farming techniques, technology and fertilizers.
The irony is that much of the minerals feeding Australian soil and boosting local farmers’ yields, comes from Africa. In fact, 83% of Moroccan exports to Australia are classified as “mixed mineral or chemical fertilizers,” followed by its next biggest export of “non-knit women’s suits,” at 1.87%.
These fertilizers are primarily made from Morocco’s vast phosphate reserves. This resource is so vital that when Norway in June 2023 discovered its own large reserves, the EU went out of its way to release a statement hailing it as “great news” for the continent. And phosphate is not just used for vital fertilizers; it is also a key component in various types of electric cars, batteries and solar panels, all important products for Africa’s envisioned economic boom.
Yet for farmers in many African countries, fertilizers have long been the missing ingredient to take the step toward self-sufficiency that could become the foundation of true sustainable economic growth.
Quality fertilizers are often too expensive for African farmers, reducing agriculture from being an “engine of growth” to becoming a brake on national economic development.
This has dire effects far beyond agriculture, as low yields and inefficient agriculture does not just hurt farmers and consumers, but also limits the amount of people available to work in every other sector of the economy.
It is important to recognize the wonderful irony that boosting agriculture means fewer people have to work in agriculture. This means that smallholder farmers can send their children to universities, and young Africans can focus their talent on building technology, providing healthcare or services or starting businesses.
Perfect match
Moroccan fertilizers have long fed agriculture from the US to Australia, yet remain inaccessible to many farmers in Africa. This problematic fact is not just a concern to those farmers, but also to Morocco’s largest fertilizer producer: the OCP Group.
Over the past decades the state-owned phosphate company has evolved from a modest mining company to a fertilizer giant that outcompetes most of its international competitors from some of the world’s richest countries.
As OCP Group evolved into a global player in its sector, its vision has also evolved, primarily around its focus on Africa, Morocco’s home continent. Over the past years, Morocco and OCP Group have made fertilizers a key part of diplomacy, trade, and south-south cooperation.
This focus has not just been beautiful words on the company’s “vision and mission” page, but instead has led to a variety of bilateral agreements with other African states. It has resulted in fertilizer plants being erected in Ethiopia, Nigeria and Ghana, with Togo and Senegal as two likely next candidates for such production facilities. It hasn’t just led to a wider availability of quality fertilizers, but also to a richer offering of products tailored to the context of African countries.
To support this, OCP Group and Morocco’s Mohammed VI Polytechnic University (UM6P) are building state-of-the-art digital soil maps in a variety of African countries, including Ethiopia,Senegal, Zambia, Kenya and others. These maps allow scientists to tailor fertilizers to the exact soil types of the receiving countries, which helps boost yields, while limiting the need to overuse fertilizers, which helps perverse the fertility of the soil and limits the cost of fertilizing land.
Fertilizers have even become a tool for emergency aid, which became apparent in 2022, when Morocco gifted 1,200 metric tons of fertilizer to Jamaica amid the island nation’s disastrous local supply crisis.
Mutually beneficial
It is important to recognize that this larger strategy is not a form of charity, and OCP Group is not trying to act like a benevolent patron. Morocco and its OCP Group need Africa as much as the reverse.
Africa currently is home to 60% of the world’s uncultivated arable land, the world’s youngest population, the richest reserves of natural resources, and the most room to develop.
By boosting African nations, OCP Group and Morocco build their own list of clients, closer to home, which means transport can be done more sustainably. It means being a key partner in feeding billions of people with locally-sourced food. It means building positive relations with fellow African countries, and it means being part of the broader economic success of the continental economy, when current treaties like the African Continental Free-Trade Area (AfCFTA) can blossom and become a driving force in a complementary pan-african economic boom.
But the benefits of genuine cooperation on fertilizers and agri-tech go well beyond economics. The results of such cooperation can ensure nations thrive and avoid coups, which in turn can help feed and develop restless remote areas where violent extremism could otherwise rise. In short, societal prosperity brings stability, promotes good governance, and a strong civil society — all crucial needs across the continent.
For Morocco and the wider region, this means using local resources to produce African development, without the need for foreign capital or foreign multinationals to “help” extract a nation’s resources.
Furthermore, when we connect Morocco’s phosphate wealth with Nigeria’s gas reserves, or DR Congo’s vast areas of uncultivated fertile land, the compounding effects of this Africa-oriented approach could help elevate a continent full of young motivated people.
Of all the ambitious national plans and government documents with the word “vision” on their cover, the symbiotic relationship between Morocco’s OCP and the broader African continent represents a potential blueprint for sustainable development. It shows that action speaks louder than words and that trade is not a zero-sum game where one party’s wealth has to come at another’s expense.
This narrative is more than just about fertilizers or agriculture; it’s about rewriting Africa’s story from one of dependence on the outside to one of African interdependence and strength. In this vision, Africa’s potential is fully realized, not just for the continent but as a vital contributor to the global community. The story of Morocco and Africa, therefore, is one of hope, resilience, and the unyielding belief that together, they can rise to meet the challenges of the 21st century and beyond.
But to meet these ambitions, we need a focus on the core issue that handicaps African development. While boosting agriculture might not sound as “sexy” to political leaders as topics such as high-tech manufacturing or AI, recognizing the need to prioritize it paves the way for the continent’s nations to build a new modern economy on a solid foundation.
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Strictly Personal
Let’s merge EAC and Igad, By Nuur Mohamud Sheekh
Published
4 weeks agoon
November 27, 2024In an era of political and economic uncertainty, global crises and diminishing donor contributions, Africa’s regional economic communities (RECs) must reimagine their approach to regional integration.
The East African Community (EAC) and the Intergovernmental Authority on Development (Igad), two critical RECs in East Africa and the Horn of Africa have an unprecedented opportunity to join forces, leveraging their respective strengths to drive sustainable peace and development and advance regional economic integration and promote the African Continental Free Trade Area (AfCFTA).
Already, four of the eight Igad member states are also members of the EAC and, with Ethiopia and Sudan showing interest, the new unified bloc would be formidable.
Igad’s strength lies in regional peacemaking, preventive diplomacy, security, and resilience, especially in a region plagued by protracted conflicts, climate challenges, and humanitarian crises. The EAC, on the other hand, has made remarkable strides in economic integration, exemplified by its Customs Union, Common Market, and ongoing efforts toward a monetary union. Combining these comparative advantages would create a formidable entity capable of addressing complex challenges holistically.
Imagine a REC that pairs Igad’s conflict resolution strengths with the EAC’s diplomatic standing and robust economic framework. Member states of both are also contributing troops to peacekeeping missions. Such a fusion would streamline efforts to create a peaceful and economically prosperous region, addressing the root causes of instability while simultaneously promoting trade investment and regional cooperation.
These strengths will be harnessed to deal with inter-state tensions that we are currently witnessing, including between Ethiopia and Somalia over the Somaliland MoU, strained relations between Djibouti and Eritrea, and the continually deteriorating relations between Eritrea and Ethiopia.
The global economy experienced as a result of the COVID-19 pandemic, compounded by the Ukraine war and competing global crises, has strained donor countries and reduced financial contributions to multilateral organisations and African RECs. Member states, many of which are grappling with fiscal constraints, are increasingly unable to fill this gap, failing to make timely contributions, which is in turn affecting key mandate areas of Igad and EAC, and staff morale.
A merger between Igad and EAC would alleviate this financial pressure by eliminating redundancies. Shared administrative systems, integrated programmes, and a unified leadership structure would optimise resources, enabling the new REC to achieve more with less. Staff rationalisation, while sensitive, is a necessary step to ensure that limited funds are channelled toward impactful initiatives rather than duplicative overheads.
The African Union (AU) envisions a fully integrated Africa, with RECs serving as the building blocks of the AfCFTA. A unified EAC-Igad entity would become a powerhouse for regional integration, unlocking economies of scale and harmonising policies across a wider geographical and economic landscape.
This merger would enhance the implementation of the AfCFTA by creating a larger, more cohesive market that attracts investment, fosters innovation, and increases competitiveness. By aligning trade policies, infrastructure projects, and regulatory frameworks, the new REC could serve as a model for others, accelerating continental integration.
The road to integration is not without obstacles. Political will, divergent institutional mandates, and the complexity of harmonising systems pose significant challenges. However, these hurdles are surmountable through inclusive dialogue, strong leadership, and a phased approach to integration.
Member states must prioritise the long-term benefits of unity over short-term political considerations. Civil society, the private sector, the youth, and international partners also have a critical role to play in advocating for and supporting this transformative initiative.
The time for EAC and Igad to join forces is now. By merging into a single REC, they would pool their strengths, optimise resources, and position themselves as a driving force for regional and continental integration. In doing so, they would not only secure a prosperous future for their citizens and member states but also advance the broader vision of an integrated and thriving Africa.
As the world grapples with crises, Africa must look inward, embracing the power of unity to achieve its potential. A combined Igad-EAC is the bold step forward that the continent needs.
Nuur Mohamud Sheekh, a diplomatic and geopolitical analyst based in London, is a former spokesperson of the Igad Executive Secretary. X: @NuursViews
Strictly Personal
Budgets, budgeting and budget financing, By Sheriffdeen A. Tella, Ph.D.
Published
1 month agoon
November 20, 2024The budget season is here again. It is an institutional and desirable annual ritual. Revenue collection and spending at the federal, State and local government levels must be authorised and guided by law. That is what budget is all about. A document containing the estimates of projected revenues from identified sources and the proposed expenditure for different sectors in the appropriate level of government. The last two weeks have seen the delivery of budget drafts to various Houses of Assembly and the promise that the federal government would present its draft budget to the National Assembly.
Do people still look forward to the budget presentation and the contents therein? I am not sure. Citizens have realised that these days, governments often spend money without reference to the approved budget. A governor can just wake up and direct that a police station be built in a location. With no allocation in the budget, the station will be completed in three months. The President can direct from his bathroom that 72 trailers of maize be distributed to the 36 states as palliatives. No budget provision, and no discussion by relevant committee or group.
We still operate with the military mentality. We operated too long under the military and of the five Presidents we have in this democracy, two of them were retired military Heads of State. Between them, they spent 16 years of 25 years of democratic governance. Hopefully, we are done with them physically but not mentally. Most present governors grew up largely under military regimes with the command system. That is why some see themselves as emperor and act accordingly. Their direct staff and commissioners are “Yes” men and women. There is need for disorientation.
The importance of budget in the art of governance cannot be overemphasized. It is one of the major functions of the legislature because without the consideration and authorisation of spending of funds by this arm of government, the executive has no power to start spending money. There is what we refer to as a budget cycle or stages. The budget drafting stage within the purview of the executive arm is the first stage and, followed by the authorisation stage where the legislature discusses, evaluates and tinkers with the draft for approval before presenting it to the President for his signature.
Thereafter, the budget enters the execution phase or cycle where programmes and projects are executed by the executive arm with the legislature carrying out oversight functions. Finally, we enter the auditing phase when the federal and State Auditors verify and report on the execution of the budgets. The report would normally be submitted to the Legislature. Many Auditor Generals have fallen victim at this stage for daring to query the executives on some aspects of the execution in their reports.
A new budget should contain the objectives and achievements of the preceding budget in the introduction as the foundation for the budget. More appropriately, a current budget derives its strength from a medium-term framework which also derives its strength from a national Development Plan or a State Plan. An approved National Plan does not exist currently, although the Plan launched by the Muhammadu Buhari administration is in the cooler. President Tinubu, who is acclaimed to be the architect of the Lagos State long-term Plan seems curiously, disillusioned with a national Plan.
Some States like Oyo and Kaduna, have long-term Plans that serve as the source of their annual budgets. Economists and policymakers see development plans as instruments of salvation for developing countries. Mike Obadan, the former Director General of the moribund Nigeria Centre for Economic and Management Administration, opined that a Plan in a developing country serves as an instrument to eradicate poverty, achieve high rates of economic growth and promote economic and social development.
The Nigerian development plans were on course until the adoption of the World Bank/IMF-inspired Structural Adjustment Programme in 1986 when the country and others that adopted the programme were forced to abandon such plan for short-term stabilisation policies in the name of a rolling plan. We have been rolling in the mud since that time. One is not surprised that the Tinubu administration is not looking at the Buhari Development Plan since the government is World Bank/IMF compliant. It was in the news last week that our President is an American asset and by extension, Nigeria’s policies must be defined by America which controls the Bretton Woods institutions.
A national Plan allows the citizens to monitor quantitatively, the projects and programmes being executed or to be executed by the government through the budgeting procedure. It is part of the definitive measures of transparency and accountability which most Nigerian governments do not cherish. So, you cannot pin your government down to anything.
Budgets these days hardly contain budget performance in terms of revenue, expenditure and other achievements like several schools, hospitals, small-scale enterprises, etc, that the government got involved in successfully and partially. These are the foundation for a new budget like items brought forward in accounting documents. The new budget should state the new reforms or transformations that would be taking place. Reforms like shifting from dominance of recurrent expenditure to capital expenditure; moving from the provision of basic needs programmes to industrialisation, and from reliance on foreign loans to dependence on domestic fund mobilisation for executing the budget.
That brings us to the issue of budget deficit and borrowing. When an economy is in recession, expansionary fiscal policy is recommended. That is, the government will need to spend more than it receives to pump prime the economy. If this is taken, Nigeria has always had a deficit budget, implying that we are always in economic recession. The fact is that even when we had a surplus in our balance of payment that made it possible to pay off our debts, we still had a deficit budget. We are so used to borrowing at the national level that stopping it will look like the collapse of the Nigerian state. The States have also followed the trend. Ordinarily, since States are largely dependent on the federal government for funds, they should promote balanced budget.
The States are like a schoolboy who depends on his parents for school fees and feeding allowance but goes about borrowing from classmates. Definitely, it is the parents that will surely pay the debt. The debt forgiveness mentality plays a major role in the process. Having enjoyed debt forgiveness in the past, the federal government is always in the credit market and does not caution the State governments in participating in the market. Our Presidents don’t feel ashamed when they are begging for debt forgiveness in international forum where issues on global development are being discussed. Not less than twice I have watched the countenance of some Presidents, even from Africa, while they looked at our president with disdain when issues of debt forgiveness for African countries was raised.
In most cases, the government, both at the federal and state cannot show the product of loans, except those lent by institutions like the World Bank or African Development Bank for specific projects which are monitored by the lending institutions. In other cases, the loans are stolen and transferred abroad while we are paying the loans. In some other cases, the loans are diverted to projects other than what the proposal stated. There was a case of loans obtained based on establishing an international car park in the border of the State but diverted to finance the election of a politician in the State. The politician eventually lost the election but the citizens of the State have to be taxed to pay the loan. Somebody as “Nigeria we hail thee”.
Transformation in budgeting should commence subsequently at the State and federal level. Now that local government will enjoy some financial autonomy and therefore budgeting process, they should be legally barred from contracting foreign loans. They have no business participating in the market. They should promote balanced budget where proposed expenditures must equal the expected revenues from federal and internal sources. The State government that cannot mobilise, from records, up to 40 percent of its total budget from IGR should not be supported to contract foreign loans. The States should engage in a balanced budget. The federal government budget should shift away from huge allocations to recurrent expenditure towards capital expenditure for capital formation and within the context of a welfarist state.
Sheriffdeen A. Tella, Ph.D.
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