Africa/Global - Editor´s Commentaries, 2019

analysis

Just before this year's global climate summit opened in Madrid recently, researchers announced that emissions of carbon dioxide from fossil fuels will hit a record high in 2019. Deeper and faster cuts are needed, beginning immediately and continuing over the next 10 years. The primary responsibility for cutting fossil fuel emissions falls to the developed countries that are historically the greatest contributors to the problem, as well as to countries with large populations such as China and India that are also now among the top in global emissions. Africa is the continent most vulnerable to the devastating effects of climate change, which are already being felt. But with a thriving off-grid solar market and hundreds of millions of people waiting for electricity, Africa also offers huge potential for contributing to solutions.

As regular readers are aware, AfricaFocus coverage of the climate crisis has stressed both the vulnerability of the continent and Africa´s potential to take its own initiatives to move beyond dependence on fossil fuels. Yet such messages need to be heard by people beyond those who are already paying attention to African realities. This year I have reached out to wider audiences by distributing content developed for AfricaFocus through other online outlets as well.

These include Foreign Policy in Focus, which has a large audience of U.S. progressives who are interested in global issues but who do not, in many cases, regularly follow sources covering Africa.

This AfricaFocus Bulletin contains the full text of two recent commentaries for Foreign Policy in Focus on the climate crisis, as well as excerpts and links to five more commentaries published there this year. I am pleased that four of these were also featured on Commondreams, which carries articles on a wide range of issues and is one of the largest online sources read by progressive U.S. activists.

Regular readers of AfricaFocus will find that much of the content in these articles is familiar to them. But I hope you find them interesting and readable enough to share with your U.S. friends who may not be AfricaFocus subscribers. If you visit the original articles on FPIF or Commondreams, you will see a share icon for Facebook, as well as other social media platforms, and many shares already. Sharing on your own social media is one of the most effective ways to help ensure that these critical topics reach wide and diverse audiences.

Announcement, thanks, and request for your continuing support

This issue of AfricaFocus Bulletin is the last for 2019. Publication will resume in mid-January 2020.

This also marks 25 years that I have been editing and publishing AfricaFocus and its predecessor publications (for more details and links to a very short survey for readers, visit https://mailchi.mp/igc/25-years).

I am grateful to those of you who have made this quarter-century run possible, whether by providing financial support to AfricaFocus or in other ways. As you know, AfricaFocus strives for a multiplier effect by reposting selected content that is available online but getting less attention than it deserves. This model would not have been possible without those of you who have directly or indirectly shared your insights with me over the years.

At 77, I will refrain from promises to continue AfricaFocus for another 25 years. But I plan to do so as long as I am able and as long as readers find it useful, hopefully for at least several more years into the decade of the 2020s. I also hope to do other writing such as that featured below, aimed at a larger audience concerned about global issues but for whom the critical role of Africa is rarely front and center.

Special thanks to those of you have contributed this year through a voluntary subscription payment or contribution.

If you find AfricaFocus useful and believe that it is worth continuing, but have not contributed, I hope you will consider making a contribution now through the links below.

You can make secure contributions of any amount through Paypal: https://paypal.me/AfricaFocusBulletin

Visit http://www.africafocus.org/support.php to see suggested voluntary subscription payments or to print out a form to send in with your check or money order. Checks should be made out to William Minter and designated for AfricaFocus, and mailed to William Minter, 4401-A Connecticut Ave NW, #341, Washington, DC 20008.

Editor's Note

Africa Could Power a Green Revolution

With a thriving off-grid solar market and hundreds of millions of people waiting for electricity, the continent offers huge potential for renewables.

By William Minter, December 5, 2019

https://fpif.org/africa-could-power-a-green-revolution/

Just before this year's global climate summit opened in Madrid recently, researchers announced that emissions of carbon dioxide from fossil fuels will hit a record high in 2019.

Although the 0.6 percent rate of growth is less than last year's 2.1 percent, the total which must be cut to prevent the most catastrophic and irreversible scenarios is still increasing. Deeper and faster cuts are needed immediately and over the next 10 years. The primary responsibility to cut fossil-fuel emissions falls to developed countries that bear the greatest historical responsibilities, as well as to countries with large populations such as China and India that are also now among the top in global emissions.

However, from off-grid solar home systems to utility-scale solar and wind, the potential for major advances in the use of renewable energy is also growing rapidly on the African continent.

With stepped-up adoption of these technologies, African countries could contribute significantly to mitigating the global climate crisis. This would also reduce the ongoing damage to the health of their citizens, whether from kerosene lamps in rural areas, gasoline generators to backup unreliable power grids, or massive coal pollution in South Africa.

Driven by technological innovation, steadily falling costs, and the visible effects of the climate crisis, this transition is still hampered by vested interests in fossil fuels and by foot-dragging on the part of government planning agencies. But there is more and more evidence that renewable options are not only better for the climate and for health, but also the least expensive path. There is much untapped potential for replacing kerosene lamps, backup power generators, and coal power plants with cost-effective renewable alternatives. Innovative energy companies and investors are taking note.

East African countries have pioneered off-grid solar, laying out a model that other African countries could follow. While rural areas are still the primary markets for solar home systems, power grids in most African countries are so prone to power outages that many homes and businesses on the grid must rely on gasoline or diesel generators for backup. Solar systems can already begin to replace smaller generators, and further technological progress could make even larger systems cost-effective.

South Africa is still overwhelmingly dependent on expensive and unreliable coal-fired power plants, which supply 77 percent of the country's electricity. Recent studies show that for new energy installations, renewable energy is already the cheapest. But such a shift faces enormous obstacles, not least the multiple dysfunctions and effective bankruptcy of Eskom, the scandal-ridden state-owned electricity agency.

Off-Grid Solar

Rapid expansion in solar home systems has been well documented as feasible.

In September 2019, the Global Off-Grid Lighting Association (GOGLA) reported on research in Kenya, Mozambique, Rwanda, Tanzania, and Uganda with customers of seven off-grid solar companies. Researchers tracked 1,419 customers who bought solar home systems, with interviews at 3 months and 15 months after purchase. Ninety-five percent of respondents reported significant improvement in quality of life, with 95 percent saying they would recommend their product to a friend or relative.

According to Forbes, there are 600 million people without access to electricity in Africa, 71 million of them in Nigeria. "At this point, we are barely scraping the surface" of potential demand, said Alistair Gordon, chief executive of Lumos, the largest provider of off-grid solar in Nigeria and Côte d'Ivoire. The company currently has 100,000 customers and expects to provide solar power to 100 million people in the next 5-7 years.

There is also the potential to replace backup generators, notes the International Finance Corporation.

"With rapid improvement in efficiency, performance, and economies over recent years, distributed solar and storage technologies now offer a superior and effective alternative to the backup generators that are proliferating across much of the developing world." In Nigeria alone, an estimated 22 million small gasoline generators (excluding larger diesel generators) are reported to have a collective capacity as much as 8 times the capacity of the electric grid. They are essential to many small businesses as well as to households.

According to the Access to Energy Institute, "An effective substitute for small gasoline generators, such as solar systems, can tap into a $12 billion-a- year market in Nigeria alone." Upfront costs are still high, but savings come from eliminating the need to buy fuel. Further research on more efficient systems, they calculate, has the potential to reduce the break-even period to 5-7 years. And while gasoline generators last approximately 5 years, solar systems have a life span of approximately 20 years.

Trapped in Coal in South Africa

The release of South Africa´s Integrated Resources Plan (IRP) in October 2019 was preceded by considerable optimism among renewable energy advocates. The government promised to "articulate the lowest- cost option for the future energy mix for South Africa, with increased contributions from renewable energy sources." And President Ramaphosa spoke of an $11 billion green-energy initiative.

But when the IRP was announced, the plan called not only for decommissioning 10,500 MW of aging coal plants, but also for launching 1,500 MW of new coal plants. This was inconsistent with the least- cost path scenario detailed by the government Council for Scientific and Industrial Research in November 2018. And it was vigorously criticized by South African environmental justice organizations.

"There is no reasonable basis for building new coal plants when the technology and costs are clearly in favour of renewables and flexible generation," says Makoma Lekalakala of Earthlife Africa. Coal plants built in the 2020s are likely to be abandoned long before they are paid off, the coalition of environmental groups noted.

The South African Parliament has approved a $4 billion bailout for Eskom's debt, much of it due to cost overruns of $20 billion on the giant Medupi and Kusile coal plants.

And a devastating report by an outside corporate consulting firm concluded that Eskom has become "an operationally dysfunctional, financially insolvent, unreliable, and corrupt entity," arguing that urgent attention to fixing these basic problems must take priority over renewable energy. Renewable energy advocates agree that implementation of any plans, including integration of renewables into the grid, requires fundamental reform in Eskom's management. But, they say, doubling down on coal will worsen rather than improve the situation.

Unless South Africa's policies change, therefore, the potential for advance in renewable energy is likely to be realized more rapidly by hundreds of thousands of off-grid consumers around the continent than by entrenched power companies such as South Africa's Eskom.

Tax Dodging 101: The Aircastle Model

The GOP has made it easier than ever for companies to pay $0 in taxes. A Connecticut-based airplane company shows it was already too easy.

By William Minter

Foreign Policy in Focus, September 4, 2019

https://fpif.org/tax-dodging-101-the-aircastle-model/

Aircastle Ltd. is not a household name, but if you've flown on South African Airways, KLM, or any of more than 80 other airlines, you've probably traveled on an airplane the Connecticut-based company owns and manages.

The company´s business model is based on buying, selling, and leasing aircraft worldwide. Its corporate structure minimizes the payment of taxes by using a complex arrangement of subsidiaries, all managed from Connecticut, Ireland, or Singapore.

These arrangements, recently highlighted in the #MauritiusLeaks investigation by the International Consortium of Investigative Journalists (ICIJ), are legal. But they have allowed the company to pay minimal taxes, including no corporate taxes in the United States on income from their aircraft leases.

Aircastle, of course, isn't alone among large American companies in lowering their taxes through creative accounting. Well-known giants such as Amazon and Apple do so as well.

But the recent revelations on Aircastle's use of Mauritius as a tax haven provide a helpful window into how such tax dodges can use offshore companies set up primarily for that purpose. Getting to zero with tax avoidance became even easier with the new Republican tax cuts in 2017, but Aircastle was already well on the way to that objective.

For example, when Aircastle decided to do business in South Africa in 2010, as the ICIJ and Quartz Africa revealed in July 2019, it turned to a Bermuda-based law firm to help it set up six subsidiaries in Mauritius: Thunderbird 1 Leasing Ltd. along with five other companies named Thunderbird 2 through 6. As was Aircastle´s common practice, each company was to own a specific aircraft. South African Airways made their lease payments to the subsidiaries in Mauritius, each of which was owned in turn by an Aircastle subsidiary in Bermuda or Delaware.

Since South Africa and Mauritius have a tax treaty allowing this, Aircastle paid Mauritius at the low Mauritius rates on the income from the leases ($772,735 a month for the first A300-200 leased by South African Airways from Thunderbird 1 beginning in 2011). From 2011 through 2014, according to documents leaked to ICIJ, Thunderbird 1 paid a total of $382,600 in Mauritius taxes, a 1.59 percent tax rate on $24 million in operating profits.

Aircastle paid no taxes on these profits either in South Africa or in the United States.

[ more ...]

The Green New Deal Must Be Global

For a planet-wide climate crisis, solutions must also span the planet.

By William Minter. Originally published in OtherWords.

Foreign Policy in Focus, August 14, 2019

https://fpif.org/the-green-new-deal-must-be-global/

June 2019 was the hottest June in recorded history. July was even hotter - in fact, it was the hottest month ever recorded worldwide, as a wide swath of the continental United States sweltered with heat indexes of over 100 degrees.

Unless new action is taken to curb emissions driving the climate crisis, warns the Union of Concerned Scientists in a new report, the worst is yet to come. By mid-century, nearly one-third of Americans could be experiencing a month or more every year with a heat index above 105 degrees.

Port Arthur, Texas and Buzi, Mozambique

Add in more frequent storms, flooding, and wildfires, and the scale of the crisis is harder and harder to ignore. Public opinion polls show that a majority of registered U.S. voters now favor the ambitious Green New Deal, details of which remain to be spelled out. But it's clear that the crisis is global, and that solutions cannot be limited by national borders.

This means action on multiple fronts in all countries to prevent catastrophic worldwide damage. But both the drivers and the effects of climate change are distributed unevenly. The most vulnerable countries have contributed the least to causing the crisis. Rich countries, through their greenhouse gas emissions, have contributed the most.

This is hardly a new observation. As the 1992 Earth Summit declared, rich countries "should take the lead in combating climate change and the adverse effects thereof."

Rich countries need to step up their role in coping with the impact of worldwide climate disasters. Cyclone Idai hit Mozambique and neighboring countries in March, leaving over 1,200 dead and some 2 million acres of crops destroyed by floods. Meanwhile, storms hitting the U.S. Midwest caused terrible floods just as farmers were preparing to plant crops.

In each case the impact was devastating. Yet the toll was far greater in Mozambique, and the capacity to recover far less. Even now, the United Nations appeal for humanitarian aid to Mozambique is less than half funded.

Minimizing future climate damage depends on stopping the use of fossil fuels — most urgently coal. In China and the United States, as well as Western Europe, the decline of coal is well under way, a response to its inefficiency and the health damages from air pollution.

But these major economies are also still financing and exporting coal technology. Local activists in Kenya recently won a court ruling that blocked a proposed Chinese- and American-backed coal plant in Lamu, on Kenya's coast.

Actions against fossil fuels will fail unless matched with gigantic investments in renewable energy and green jobs. Here too, technologically advanced countries need to step up cooperation with developing countries as they adapt renewable technologies to local conditions.

In Kenya and other African countries, off-grid solar energy is now lighting homes for hundreds of thousands of rural consumers. The potential for expansion is great. For example, cooking with solar electricity could help curb deforestation and prevent deaths caused by pollution from indoor wood fires.

Such measures can slow greenhouse emissions. But a new study also shows that tree planting on a massive scale can have significant effects in removing carbon dioxide from the atmosphere. New initiatives such as those in Madagascar and Ethiopia, which plans to plant 4 billion trees, offer both local and global payoffs.

Like the Green New Deal in the United States, the agenda for combating the global climate crisis must include many different components. First, however, our vision must match the scale of the problem.

Sending Money Overseas Needs to Cost Less

Remittances outpace foreign aid and investment in much of the world, but transfer companies can skim a significant percentage.

Foreign Policy in Focus, July 2, 2019

https://fpif.org/sending-money-overseas-needs-to-cost-less/

When Ismail Ahmed was a schoolboy in Somaliland, he received remittances from his brother, one of thousands of Somalis who went to work in the Saudi Arabian oil industry. After Ahmed left Somaliland to study economics in London, he himself sent remittances to relatives back home. He used traditional money transfer models controlled by agents of large companies — a process both costly and cumbersome. He wondered if there wasn't a better way.

Now WorldRemit, a company Ahmed founded in 2010, is one of the leaders in the transition to lower-cost digital transfers. It has competitors, such as Paypal's Xoom and TransferWise, founded by Estonian entrepreneurs in 2011. Who will prevail in the global marketplace is still to be seen. But so far WorldRemit is the one with the greatest momentum in Africa.

Remittances are a vital component of the global economy and of African economies in particular. Annual remittance flows to low- and middle-income countries are likely to reach $550 billion in 2019. That would make remittance flows larger than either foreign direct investment or official development assistance flows to these same countries.

Families in Africa, Latin America, and other parts of the world depend on remittances from relatives working abroad for daily survival and special expenses — to pay school tuition or medical fees, repair or build homes, or invest in new livelihood enterprises.

Worldwide, remittances are a critical, if underestimated, component of national income. Nigeria, for example, received remittances of $24.3 billion in 2018, accounting for over 6 percent of the country's national income. In some African countries the percentage is even higher. [more ...]

To Fund African Development, Curb the Looting of African Wealth

Foreign Policy in Focus, May 8, 2019

http://www.fpif.org/to-fund-african-development-curb-the-looting-of-african-wealth

When the UN forum on development finance met last month at UN headquarters in New York, the issue of illicit financial flows — aka stolen wealth — was buried deep within the forum's report.

Meanwhile, examples of stolen African wealth, hiding in plain sight, could be found only blocks away, parked in high-end real estate like Trump Tower or passing through global banks such as Credit Suisse.

Multinational corporations, corrupt officials, and financial intermediaries around the world are siphoning off African wealth. Illegal tax evasion and legal-but-sleazy tax avoidance, together with misguided policies such as tax treaty giveaways, drain revenues before they can be taxed. This leaves national budgets starved for resources to invest in Africa's health, education, and sustainable economic growth.

These are the conclusions of a UN Economic Commission for Africa (ECA) report released in March, which stressed the urgency of curbing "revenue leaks" to find funds for African development.

[more ...]

The Next Ebola Epidemic

Foreign Policy in Focus, April 19, 2019

http://www.fpif.org/the-next-ebola-epidemic/

The Ebola epidemic in West Africa from 2013 to 2016 left more than 11,000 dead and panicked the American public when a few isolated cases turned up on U.S. soil. By the time the outbreak was contained, the international community had learned valuable lessons about how to combat the virus.

Now, a new outbreak in the Democratic Republic of the Congo (DRC) is testing that knowledge — and the political will of the global community to mount a robust response.

With more than 830 deaths since August 2018, the epidemic in northeastern DRC is the second- largest recorded, behind the multi-country epidemic in West Africa. The DRC outbreak has not yet crossed international borders. Moreover, responders are applying new solutions, including a vaccine that has proved effective.

But many health experts argue that the threat is underestimated, leading to a dangerously inadequate global response.

[ more ...]

In the Wake of Cyclone Idai, the North Has a Climate Debt to Pay

Foreign Policy in Focus, April 4, 2019

http://www.fpif.org/in-the-wake-of-cyclone-idai-the-north-has-a-climate-debt-to-pay/

Weeks after Cyclone Idai struck the coast of Mozambique, near Beira, the flood waters have receded to reveal a shattered landscape.

Houses and roads were washed away; crops awaiting harvest were destroyed. Confirmed deaths number in the high hundreds across Mozambique, Zimbabwe, and Malawi, with the total still unknown. Emphasis has shifted from the rescue of survivors clinging to treetops and rooftops to provision of food, housing, and medical care for hundreds of thousands left homeless.

Even as local and international relief efforts gear up, there is a need to also focus on broader global implications. The causal connection between climate change and extreme weather events, such as Cyclone Idai, is clear. The need for climate actions in both poor and rich countries is beyond dispute. These include making the response to crises sustainable, increasing resilience to the effects of climate change through adaptation, and rapidly accelerating action to cut greenhouse emissions from fossil fuels.

Whose responsibility should this be? At the 1992 Earth Summit in Rio de Janeiro, the first global climate agreement affirmed that much of the burden should be shouldered by the wealthy countries. [more ... ]

AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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