EAST AFRICA

Development in Africa

Fall 2012

John Brittell, Emily Koester, Daksha Shakya, Maraki Shimelis

Which East African

Countries were we assigned?

What’s missing here?

Hint: It’s not

a country.

Intro

Intro: 12 East African Countries

• Sudan • South Sudan • Eritrea • Ethiopia • Djibouti • Somalia • Uganda • Kenya • Tanzania • Seychelles • Comoros • Mauritius

Based on your current knowledge of these nations, how would you

characterize this region?

Missing from map was Lake Victoria: Africa’s largest lake (by area). World’s largest tropical lake.

Intro: Method of Study

Criteria • Targeted approach: unique

elements

• Selection of themes

• PESTE[L] analysis

• Apparent patterns (difficult because region is diverse)

• Selection of countries

• Theme-based

• Innovative/unique approaches are also highlighted

Analysis • Extent of commonality

• Comparison to other regions

• Potential causes

• Existing arguments

• Semester readings

• Selected articles

• Individual reasoning

Intro: Overview of Results

• Secessions

• Social hostilities

• Unique territories

• Climate • Challenges

• Resources (including efforts to cooperate)

• Refugees

• Aid

• Technology (case study)

Intro: Governance

Intro: Horn of Africa

• Ethiopia, Somalia and Djibouti

• + Eritrea

• + Kenya

• + South Sudan

• + Sudan

• + Uganda

• + Tanzania

• Mauritius (1968): Dutch, French, British

• Comoros (1975): French • Seychelles (1976): French and

British

Sudan (1956), South Sudan (2011), Uganda (1962) and Kenya (1964)

Tanzania (1964)

Somalia (1960)

Djibouti (1977)

Eritrea (1991)

Intro: History

Intro: Ethiopia

• 1936-1941: Italian occupation

• 1974: Coup ended monarchy

• 1991: End of civil war

• 1993: EPLF independence

• 1995: FDRE installed

Intro: Secessions

Eritrea (1991) South Sudan (2011)

East Africa’s Leaders

Ethiopia’s People

A map of the world showing the results of The Economist’s Democracy Index survey for 2011.

Each country’s democracy is rated on a scale of 0-10 with 10 being the most democratic and 0 being the

least democratic.

Intro: Democracy

Intro: Unique Territories

SOOL and

SANAAG

Intro: Somali Territories

Somaliland

• Independent in 1960 (for days)

• Secessionist since 1991

• Separate institutions

• Economy - Diaspora support & livestock exports

Puntland

• Self declared autonomy since 1998

• Economy – Livestock, herding, fishing & piracy

• IDP

Intro: Tanzanian Territory

Zanzibar Archipelago

• Semi-autonomous

• Separate parliament and president

• 1963: independence

• 1964: Revolution and union with Tanganyika

• Multi-party elections in 1995

• Economy

• Tourism

• Main exports: cloves, seaweed, coconut, and copra

Agriculture & Environment

Agriculture & Environment: Agenda

• Agriculture

• Overview - Economics

• Land Grabs

• Natural Resources

• Oil

• Deforestation

• Environment

• Drought & Climate Change or Other

• “Famine”

• Pastoralism

Interesting Facts: East Africa

• What are the lowest and highest points on the continent of Africa?

Lake Assal, Djibouti

Lowest Highest

Mt. Kilimanjaro, TZ

Agriculture

Agriculture: Rift Valley

• Its own tectonic plate

• Cradle of Humanity

Agriculture: Overview

• > 60-80% of population employed in Ag

• GDP 12-45% share in Ag

• 30-60% export earnings in Ag

• Aid in Ag (Ethiopia 2.8%, Kenya 4.3%, Uganda 5.1%...)

• Share of Ag Exports highest in EA

• So why should EA countries conform

to CAADP?

% of Exp. 2000/1 2009

Kenya 1.4% 1.6%

Uganda 5.1% 4.3%

Tanzania 2.9% 7.8%

Ethiopia 6.6% 13.7%

Agriculture: Overview

• Net Food Importer (but EA

still greatest exporter of Ag goods; Sudan, Somalia heavy importers)

• Overall (little fertilizer use, low

irrigation of farmland, little mechanization, No R&D in Ag by gov, more civil tension in region)

Agriculture: Kenya Dairy

• Net Importer of Milk: $3M

opportunity – 2.3b liters imported; 70% imports are of milk powder; KCC (co-operative creameries, Ltd) collapse limited exports of milk

• Supply – largest cattle herd in

Africa of 7m

• Growth – 2-3% / year

• Commodity – @ intl prices the most

significant commodity in Kenya

Overview of Kenya’s Dairy Market

• Production: 3rd largest producer in

Africa (behind Sudan & Egypt) 4.7b liters (2008); 3rd largest Ag sub-sector (larger than tea); contributes 3.5% of GDP (14% of total Ag GDP)

• Consumption: per Kenyan 110 liters

/ year; the highest developing country consumer (Mauritania, Mongolia); 3x as much as Ugandans; 4x as much as avg. African

• Expenditure: ~ 18% of income spent

on milk, second only to cereals (maize); 40% of income generated is from dairy (ILRI)

Agriculture: Land Grabs

• Where (see maps…)

• Drivers

• Food security as result of high global commodity prices 2007/8, as result of speculation

• Biofuels for energy security, rural and export development

• Non-food Ag commodities, like rubber

• Expectations of high returns – vertical integration, subsidy, PPP’s

• Emerging Carbon Markets, e.g. Bamboo Finance, REDD, etc.

• Policy shift towards Ag as growth driver

• Perceived abundance of land!

Agriculture: Land Grabs

• Is China to blame? • Since 2004, “Going Out’ policy for business development

• In Dec 2008, Nat. Dev & Reform Commission of China’s 20-year food security strategy: “land acquisitions abroad are not part of strategy (other than soya in Brazil).”

• Unofficial long-term hedging strategy to acquire resources abroad

Natural Resources

Natural Resources: Oil

• 28 sedimentary basins, > 37 intl. oil and gas co.’s licensed in region

• Estimated 2billion barrels of oil, 3trillion cubic feet of natural gas, just 10% of global reserves

• Uganda – Tullow Oil on Lake Albert Valley, soon drilling

• Tanzania – natural gas provides ½ of energy needs; can export too

• Kenya – China building roads AND a 5,000 meter deep well in Northwest – has hit natural gas

• China & Trade • 2nd largest source of oil, Africa

• Africa exports 1.5m barrels per day ~ 30% of China’s needs

• Largest African suppliers of oil: Angola, Sudan, DRC, Equatorial Guinea, and Nigeria

• Other suppliers: Kenya

Can EA avoid the ‘resource curse’?

Natural Resources: Deforestation

• Mabira Forest, Uganda • use 7,186 ha for SCOUL sugar production, an

arm of NRM/Museveni Gov; stems from structural adjustment programs to increase ‘export led’ economic growth

• The Kabaka offered alternative land for sugar production, so did Anglican Church of Mukono

• ‘Net Loss’ of $15M to Ugandans if SCOUL uses land (incorporates ecosystem services)

• SCOUL ‘inefficient’ at operations; productivity much better at Kakira and Kinyara Sugar farms

“…the Save Mabira activists don’t understand that the future of all countries lies in processing.” ~ President Museveni

• Rift Valley, Kenya • 1963 forest cover = 10%, by 2006 = 1.7%

• Mau Forest Complex 400k ha, last 15 years 20,000 families have deforested 100k of forest!

• Fires have contributed another 30k ha losses

• Mau Complex is ‘water tower’ feeding 8 wildlife reserves, 10m people, and providing $250m in ecosystem services

• Lake Nakuru slowly drying up as result of deforestation

• Cause/Effect? – in 2001, 60k ha of Mau allocated to settlers…then infrequent rains began…

• Oh yes, the largest tea estate is there! Kiprotich

Natural Resources: Deforestation

Environment: Drought

Environment: Drought

• Somalia Drought 2011 • Poor rains in 2010, little in July

2011?, current season rains returned, worst in 60 years

• 2.3M of 9.5M food insecure, 20% of population

• ‘back-to-back shocks’ too much stress

• Kenya drought 2009

• East Africa Affect • Refugees

• Food Insecurity, Low Production

Environment: Climate Change

Rain Fall – FEWS NET

Ethiopia

Uganda

Environment: Famine

Environment: Famine

Myth(s)

• Where was the ‘largest’* famine of the 20th century? *in terms of lives lost

• How many large* famines were in Africa in the 20th century? *in terms of lives lost

Environment: Famine

Accounting for Famine

• Poverty (coping mechanisms against

harvest failure – crop insurance, storage, trade, public action – all lacking; breakdowns in communication and transportation; cost of medical care; housing quality, literacy)

• Crop Failure (extreme weather –

droughts, excessive rain; back to back shortfalls of staple crop

• Entitlements (governance,

human agency, relief policy, public health systems, food availability and distribution)

• Wars, Totalitarian (civil strife, policy mistakes of totalitarianism, inequality, ethnic divides, non-democracy)

• Markets (inadequate regional

arbitrage, excessive hoarding, speculative withdrawal and panic purchasing, restrictions on private traders, quotas, road blocks, exports used to finance cheaper imported substitutes)

• Government Action (income transfers, policy)

• NGOs & International Aid (poor

organizational structure, bureaucratic sustainability, lag media reports)

Environment: Pastoralism

Environment: Pastoralism

• Who (Masaai, Karimojong, Teso,

Somali, etc.)

• Coping Mechanisms (Reduce consumption, Utilize the ‘bush’ for resources, Migration, Livestock sales, Turn to ag crops or wild foods)

• Problems Faced (population growth, drought/famine, loss of common property resources, Commoditization/urban migration , political turmoil/civil war)

Environment: Pastoralism

“For far too long, pastoralists in Africa have been viewed – mistakenly – as living outside the mainstream of national development, pursuing a way of live that is in crisis and decline. The reality is very different. Pastoralists manage complex webs of profitable cross-border trade and draw huge economic benefits from rangelands ill suited to other land use systems. Their livestock feed our families and grown our economies.” ~ Mahboub Maalim, Executive Secretary, IGAD.

Facts • > 90% of meat consumed in EA

originates from pastoral herds

• Pastoralism, taken as a sector = $800 million in Kenya alone

• Climate Change will amplify land use efficiency, in favor of pastoralism in drylands

Regional Integration

Regional Integration

• Intergovernmental Authority

on Development (IGAD)

• Other attempts to organization within the region: Common Market for Eastern and Southern Africa (COMESA); Community of Sahel-Saharan States; Arab League

Refugees

Refugees in East Africa & the Horn

Overview

• In 2011 there were 2.7 million refugees in Sub-Saharan Africa. About half are in East Africa.

• Kenya hosts the most refugees in Africa

• Top origins for refugees in 2011:

• Somalia:1.1 million

• Sudan: 500,000

• DRC: 491,000

1991: Barre ousted, Somaliland declares independence 2004: After 14 attempts to establish central government fail, warlords sign deal to establish a transitional government 2004: Tsunami hits , hundreds die and thousands are displaced 2009: Al Shabab blocks aid access 2011: After rains fail for a second year running, worst famine in 60 years. 2012: First vote on Somali soil since 1967 elects Hassan Sheikh Mohamed as president

Somalia

Sudan

• First Sudanese Civil War: 1955-1972

• Second Sudanese Civil War: 1983-2005

• Darfur: 2003-2008, tensions continue

Kenya: Biggest host state in Africa

• Two major camps: Dadaab and Kakuma

• The camp complex around Dadaab, Kenya is the largest refugee complex in the world, with about 460,000 refugees (95% Somali)

Dadaab, Kenya

Humanitarian Concerns in Dadaab

• Estimated $25 million short of funds (7/2012)

• Food and water shortages

• Inadequate shelter

• Lack of medical care: 2 health units for 78,000

• Child malnourishment

• 70% of children out of school

• Increase in sexual violence (up 36% from Feb-May 2011)

Demography of Dadaab (2012)

State Security versus Humanitarian Need

Host Security Concerns Humanitarian Concerns

Use of camps as military bases Safety of the refugee from former persecutors

Transfer of light weapons Safety of the refugee from host communities or other refugees

Mixture of civilians and combatants Availability of food, water, shelter and medical care

Environmental degradation, resource competition

Economic opportunities

Potential for crime Educational opportunities

Refugee acceptance as a political antagonism

Long-term prospects for a stable life

Refugee Article Overview

• Problematic refugee rights

• States prefer settlements:

- Perception of refugees as a security threat

- Idea that refugees are temporary

- UNCHR and other actors want a convenient way to provide access to social services

• Dangers to refugees: border proximity, isolation of camps, mixture of civilians and combatants, easy transfer of small arms and light weapons

• Camps perpetuate insecurity and aid dependency. Integration promotes self-reliance over aid-dependency, and freedom of movement is requisite for rebuilding one’s life.

Changes in Tanzanian policy

• 1960s – 1980s: refugees as “resident guests” • President Nyerere: “I train freedom fighters”

–refugees welcomed in African solidarity

• refugees welcomed as a labor source

• 1983 Nansen Award

• 1990s – today: refugees as “security threats” • Overwhelming numbers of refugees

• Strained resources

• Multi-party elections

Discussion

• Camps or integration?

A historical look at refugee support

• The global level:

• 1951 Refugee Convention

• Defines refugees and their rights and responsibilities,

• identifies host states has having chief responsibility for refugees.

• 1967 Protocol

• The regional level:

• Organization of African Unity (OAU) Refugee Convention: Provides a looser definition of refugee, and a strict policy of non-refoulment

• The national level

Foreign Assistance Trends

Aid Dependence

Top 10 ODA Recipients in Africa

Trends in Aid to the Largest African Recipients Since 1970

Aid Flow 2008-2010

ICT Revolution in East Africa

Kenya’s Story in Graphs

• Kenya, Tanzania, Uganda and Rwanda currently have a combined active mobile subscriber base of 43.3 million.

• Kenya, has the largest share with 18.7 million subscribers, followed by Tanzania, with 11 million and Uganda, with 8.7 million subscribers.

• Kenya’s penetration rate of approximately 42 % is the highest in the region

Kenya’s Story in Graphs

Kenya’s Story in Graphs

• Only an estimated 14.5 million bank account holders in East Africa, indicating that for every one bank account holder there are three mobile subscribers

• MMT services provide the unbanked the opportunity to send and receive funds, which they would previously have had to deliver physically.

Kenya’s Story in Graphs

Growth of the ICT Sector in Kenya

Kenya’s ICT Revolution

Fixed Lines Vs. Mobile Lines

M-Pesa

• First mobile money transfer service launched by Safaricom, a subsidiary of Vodafone

• Pilot phase 2005-2006; initially piloted as a mechanism for MFI loan repayments

• National launch in 2007

• Public –private partnership, Central Bank of Kenya insures deposits in the M-Pesa system

• SMS based system that enables users to deposit, send, and withdraw funds

• M-transfers: domestic and international money transfers

• M-payments: bill payments, transaction payments

• M-banking: withdrawals, savings, insurance, micro-loan repayments

• M-Pesa provides all three services

M-Pesa

M-Pesa’s Popularity was Driven By:

• Security– MPESA was a safe way to send money, and customers had no need to carry cash.

• Convenience– Using MPESA negated the need to travel to the bank and queue

• Efficiency– Customers can bank money and pay loans without leaving their businesses or homes

• Simplicity– MPESA is fast and easy to use

M-Pesa

Transfer of Remittance

Financial Access in Kenya

Financial Services in Kenya

M-Pesa Customers and Agents

Transaction Costs

M-Pesa Reaching the Poor and Unbanked

Factors Critical to M-Pesa’s Success In Kenya

• Illiteracy was no longer a barrier with simple registration procedures handled by agents

• No minimum balances required; fees only to send money

• Wide coverage of M-Pesa agents and service providers

• By reducing the cost of sending money, eliminating middlemen and utilizing technology to make sending money faster, convenient, reliable and safe, M-PESA solved these problems associated with other preexisting methods of sending money, hence its rapid growth and popularity.

Uses of M-Pesa

How Households Save in Kenya

Has M-Pesa Really Been Transformational?

The four overarching economic effects at the community level are: local economic expansion, security, capital accumulation, and business environment.

• Money circulation - (local economic expansion) • Money and physical security – (security) • Human capital accumulation – (capital accumulation) • Expansion of businesses – (local economic expansion) • Employment opportunities – (local economic expansion) • Financial capital accumulation – (capital accumulation)

Can This Success Be Replicated Elsewhere?

M-Pesa in Tanzania

• Vodacom launched M-Pesa services in Tanzania in 2008

• Remarkable difference in user uptake between the two countries; one year after launch there were 280,000 users in Tanzania vs. 2.5 million in Kenya

• Remittances was crucial to the success of M-Pesa in Kenya

• Tanzania has a higher dependence on remittances (28% of households) vs. Kenya (17%)

• Similar success was expected but uptake in Tanzania is very low

Factors Influencing Lower Uptake in Tanzania

• Market share of the Mobile Network Operator

• Agent network

• Marketing

• Geography/Demography- equal population but Tanzania is twice the size of Kenya

• Economy

• Existing banking structures

• Pricing Structures

Final Thoughts

• Studies show that the success in Kenya is hard to replicate because it all happened to soon

• Mobile money transfer services in other developing countries is more likely to follow M-Pesa’s development in Tanzania

• The low cost and widespread unmet demand for financial services means that mobile money has the potential to reach remote corners of the socio-economic as well as geographic spectrum

Questions

Appendix

Reading: Case – Pastoralism & Land Grabs

• Pastoralism challenged by misappropriation of rangelands by actors with significant political and financial capacity

• Land grabs compelling in dryland locales, sense of nothing happening

• States assert rights and privatization process, dislocating pastoralists

• Historically, pastoralists gained rights by using force of arms

• Pastoralists see land for its pathways connecting various resources, not a Western view

• Misconception: land being acquired is unused and there is land scarcity!

• Land transfers assessed by local value based on good produced locally

• Rise in African land value has created a speculators market

• FDI flows = “rents” for officials; competing with its own citizens for sources of revenue

• Rangeland systems have led to land insecurity, destabilizing local systems of tenure, increasing corruption and speculation, stripping land from pastoralists

Sources for Intro & Governance

Articles

• Chege, M. (2007). Political parties in East Africa: Diversity in political party system. Institution for Democracy and Electoral Assistance. Stockholm, Sweden: International IDEA.

• Clapham, C. (2012). From Liberation Movement to Government: Past Legacies and Challenge of transition in Africa. The Brenthurst Foundation.

• Dagne, T. (2011). Tanzania: Background and Current Conditions. Congressional Research Service.

• Hopper, M. S. Globalization, slavery, and East African Poverty in the Longue Duree. Cal Poly, San Luis Obispo.

• Ibhawoh, B. and Dibua, J. I. (2003). Deconstructing Ujamaa: The Legacy of Julius Nyerere in the Quest for Social and economic development in Africa. African Journal of Political Science.

• International Crisis Group (2011). Politics and transition in the new south Sudan. International Crisis Group.

• Maiyo, J. (2008). Political parties and intra-party democracy in East Africa: From representation to participatory democracy. Leiden University.

• Metz, S. (1982). In Lieu of Orthodoxy: The Socialist Theories of Nkrumah and Nyerere. The Journal of Modern African Studies. Cambridge University Press.

• Mpangala, G. P. (2004). Origins of political conflicts and peace building in the great lakes region. University of Dar es salaam.

Sources for Intro & Governance

Data Bases

• British Broadcasting Corporation (2012). Country profiles. Retrieved from http://news.bbc.co.uk/2/hi/country_profiles/default.stm

• The Guardian (2012). Data blog. Retrieved from http://www.guardian.co.uk/news/datablog/2012/sep/20/religious-restrictions-index-intolerance-rise#

• United Nations Development Program (2012). Country profiles and international human development indicators. Retrieved from http://hdr.undp.org/en/data/profiles/

• United Nations High Commissioner for Refugees (2011). Africa. Retrieved from http://www.unhcr.org/refworld/region/456d621e2.html

• World Bank (2011). Africa. Countries. Retrieved from http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,menuPK:258649~pagePK:158889~piPK:146815~theSitePK:258644,00.html

• World Bank (2012). World databank. Retrieved from http://databank.worldbank.org/Data/Home.aspx

Reports

• United Nations (2012). The millennium development goals report 2011. Retrieved from http://www.un.org/millenniumgoals/11_MDG%20Report_EN.pdf

• World Bank (2011). Africa development indicators 2011. Retrieved from http://data.worldbank.org/sites/default/files/adi_2011-web.pdf

Sources for Intro & Governance

Links for the Images

• Region Introduction: http://www.hsc.edu/Wilson-Leadership/Newsletters/May-2012/Horn-of-Africa-Symposium.html

• Horn of Africa: http://www.unicefusa.org/work/emergencies/horn-of-africa/

• Map of African Colonies: http://www.newworldencyclopedia.org/entry/Africa

• Map of Ethiopia: http://www.ethiopia.gov.et/English/Information/Pages/RegionalStates.aspx

• Map of Eritrea: http://www.releaseinternational.org/pages/country-profiles/eritrea.php

• Map of South Sudan: http://www.24point0.com/product-reviews-and-applications/editable-south-sudan-map-ppt-presentations/

• Democracy: http://en.wikipedia.org/wiki/Democracy_Index

• Map of Conflicts in Eastern and Central Africa: http://www.unhcr.org/refworld/country,,OCHA,,GAB,,4993eaf92,0.html

• Map of Somaliland and Puntland: http://www.bbc.co.uk/news/world-africa-14114727

• Map of Zanzibar: http://www.bbc.co.uk/news/world-africa-14115176

Sources for Integration & Refugees

• BBC Country Profiles. Retrieved from: http://news.bbc.co.uk/2/hi/country_profiles/default.stm

• Bekoe, D. A. (2006). East Africa and the Horn. London: International Peace Academy Occasional Paper Series.

• Collier, S. (2011, June 20). Refugees in Tanzania: from “resident guests” to “threats to national security." Think Africa Press. Retrieved from: http://thinkafricapress.com/refugees/refugees-tanzania-%E2%80%9Cresident-guests%E2%80%9D-%E2%80%9Cthreats-national-security%E2%80%9D

• Kamanga, K. (2005). The (Tanzania) Refugees Act of 1998: Some legal and policy implications. Journal of Refugee Studies, 18(1), 100-116.

• Martin, A. (2005). Environmental conflict between refugee and host communities. Journal of Peace Research, 42(3), 329-346.

• Mogire, E. (2011). Victims as security threats: Refugee impact on host state security in Africa. Vermont: Ashgate Publishing Company.

Sources for Integration & Refugees

• Morel, M. (2009). The lack of refugee burden sharing in Tanzania: tragic effects. Afrika Focus, 22(1), 107-114.

• Weldesellassie, K. I. (2011). IGAD as an international organization, its institutional developments and shortcomings. Journal of African Law, 55(1), 1-29).

• UNHCR: www.unhcr.org

• US State Department: Bureau of Populations, Refugees and Migration. Retrieved from: http://www.state.gov/j/prm/

Sources for M-Pesa Case Study and Foreign Aid

• Development Aid At a Glance: Statistics By Region, 2. Africa. 2012 Edition. OECD.

• Kenya Economic Update. Edition No. 3. December 2010. Poverty Reduction and Economic Management Unit Africa Region. World Bank.

• Claire Alexandre and Billy Jack. Mobile Banking and Financial Inclusion: The M-Pesa Case Study. February 2011. USAID.

• Mobile Money Transfer Services in East Africa. December 2009. Frost and Sullivan.

• Gunnar Camner & Emil Sjöblom. Can the success of M-PESA be repeated? – A review of the implementations in Kenya and Tanzania. Available at: http://mobileactive.org/files/file_uploads/camner_sjoblom_differences_ke_tz.pdf.

Agriculture

Environment: Climate Change

Ethiopia’s Ecological Regions Ethiopia

Less Arable Land,

Shifting Rain Patterns,

Food Security Stress

Environment: Climate Change

Ethiopia’s Ecological Regions Ethiopia

Less Arable Land,

Shifting Rain Patterns,

Food Security Stress

Environment: Famine

Ethiopia Cast Study Agricultural Production • The table shows that enough

food was produced in Ethiopia during the drought

• Only a 7% shock was realized if aggregating food production

• A minor shock!

Famines Shrinking

Date Avg. Mortality

Pre 1900 1M – 13M

1900-1961 2M-15M

Since < 1M

Environment: Famine

“…the likelihood of major famine today, even in Sub-Saharan Africa, is vanishingly small.”

~ John Seaman