WTO head Ngozi Okonjo-Iweala: how trade can help beat inequality
- Dorrit Posel
Creating employment and fighting corruption are two of the subjects discussed in the wide ranging discussion.
In a recent study South Africa was identified as ranking first of 164 countries in the World Bank’s global poverty database. Underlying this inequality is its very high rates of unemployment. Professor Dori Posel spoke to World Trade Organisation (WTO) Director General Dr Ngozi Okonjo-Iweala about why trade is important in tackling joblessness and inequality. And her experiences of fighting corruption in Nigeria.
Professor Posel: You’ve said that the WTO is all about people. How do we ensure that global trade reduces inequality both between and within countries?
Ngozi Okonjo-Iweala: Trade tends to have a bad name, especially among young people. For them it’s synonymous with globalisation, which they don’t see as a good thing.
But trade has been an instrument for lifting over a billion people out of poverty. It’s worth remembering that in 1980, over 40% of the world’s population lived on less than $1.90 a day, and that just before the pandemic this had gone down to 10%.
And a lot of that was due to the effects of bringing into the global trading system countries that were outside of it. Admittedly, China is a shining example of a country that benefited the most from this trade.
So trade has had its benefits.
That being said, it is undoubtedly true that poor countries were left behind. Now, the WTO charter is about creating employment, enhancing living standards, supporting sustainable development. It’s all about people.
I’m constantly looking at how rules for trade can bring micro, small and medium enterprises that are usually left out into the national, regional and global value chains. This includes women, many of whom own these kinds of enterprises. This is one way you can help create more employment, enhance incomes and so on.
The discussion now about the diversification of supply chains presents an opportunity to use trade as an instrument for inclusion. And I call it re-globalisation. We are talking to companies in developed countries to adopt a strategy of global diversification of value chains. That way they can look at Africa. Take South Africa. It is capable of attracting some of these supply chains. Other African countries that are capable are Ghana, Senegal, Rwanda and Nigeria.
Prof Posel: Could you elaborate on how WTO mechanisms can be used to benefit African countries?
Ngozi Okonjo-Iweala: Africa contributes less than 3% of world merchandise trade. And that is tiny. So how do we turn it around?
We have to trade more among ourselves. Trade among ourselves is only about 15% to 16% (of our trade). But we are all selling the same things. So we need to step back a little. We need to see how we add value. I don’t think we can grab a bigger share of world trade without adding value to the products we have.
So that is why I’m passionate about supply chains.
I see a big opportunity in pharmaceuticals because everybody’s eyes have now opened to the fact that Africa cannot continue with 99% of its vaccines produced elsewhere and 95% of other medicines. Africa has the unique opportunity not just about vaccines, but bringing in the pharmaceutical supply chains on the continent.
We’ve been working with the CEOs to see how we can encourage them to diversify their supply chains in Africa.
We should also have the same approach on the continent to attract companies that can help us add value to our products, to help create employment for young people. Actually, if we don’t do this we will have social instability. And it’s already happening in many of our countries. So this is no joke.
There’s a branch of the WTO called the International Trade Centre. Its job is to really focus on SMEs – small and medium enterprises – and on women, and try to help them penetrate external markets. But they need help. For example, there are lots of sanitary and phytosanitary requirements they must meet to export. In Nigeria, the centre has been working with shea butter producers who had been trying to break into world markets, but were banned from the US and Europe because they didn’t meet the standards. And over five or more years, they worked with them to upgrade the quality of their shea butter. Now they are exporting to the US. This is a group of women cooperatives that are exporting to Europe. They’ve more than doubled their incomes.
Prof Posel: I would like us to move on to another set of constraints on job growth in South Africa. And this concerns issues around trust and corruption. What is your advice to us in South Africa on this particular issue?
Ngozi Okonjo-Iweala: All I can do is share some of my experiences in Nigeria. And some of the ways we approached it. Before I do that, let me say that, you know, a lot of public corruption is also linked to public procurement.
One of the things to look at immediately is how to institutionalise transparent processes. We looked at how to set up a system with lots of transparency because we found a lot of corruption was coming from public procurement. So we introduced rules of the game that had to be followed at certain thresholds.
Was it 100% successful in curbing that?
No, but it did introduce a safeguard into the system so that people didn’t have a free for all.
But let me tell you one thing that has been quite helpful, at least in my time in fighting corruption, is technology.
I’ll just give one example. When I took office as minister of finance in Nigeria, we would get the payroll, let’s say the ministry of agriculture would come to me and say we have X number of people on the payroll, they would send this in, and then we would pay against that.
A lot of things were manual. And corruption had become entrenched because people could introduce ghost workers who became ghost pensioners.
I stood back and with the the economic team and with the support of the president, of course, we thought about introducing government financial management systems based on technology, so that we could take out as much of the manual and human intervention as possible. And we had an integrated payroll and personnel management system that had technology built in so that everyone could be identified.
We had a government financial system that was based on technology that linked the budget, the Treasury, to the other departments, so we didn’t have all this manual stuff.
So again, did that solve the entire problem? The answer is no. But it did solve a lot. We were able to save about US$1 billion by wiping out a lot of these ghost workers and ghost pensioners from the payroll. It’s still not perfect, but we did a lot.
So when you have stealing of state assets, we now have all sorts of technology that can be introduced to see what’s actually happening. We all know we have systems of cameras and drones and things that can be used to monitor what is going on. Technology helps in prosecutions. Prosecutions must take place so people know they can’t get away with it.
There’s no magic bullet, you need an array of policies, technologies, you need to be crystal clear. And people need to know that fighting corruption starts with them. Technology is not the perfect solution, but it can help in certain circumstances.
It starts with you, you have to take responsibility, not just waiting for government or some nebulous organisation to fight it. But that demands courage.
*This is an edited excerpt of the Wits School of Economics and Finance’s centenary webinar titled 100 Years of Economics at Wits: Reflecting on the Past, Looking to the Future. The event can be watched here.
Colonial diaries help scientists reconstruct weather patterns from past to protect future
- Stefan Grab
A project to transcribe Dutch colonial records of the weather in Cape Town can benefit modelling of future climate scenarios.
The current climate crisis raises many questions. Some are forward-looking: how can this be fixed? Some look to the recent past: how did we get here? And some reach further back into history: are today’s extreme heat waves, catastrophic droughts and floods all due to climate change? Was climate and weather this bad 100 or a few hundred years ago?
For scientists to answer those last two questions, they need to consult reliable instrumental weather records. But these only go back a few decades for many regions of Africa. The continent’s longest continuous single station weather record is that of the South African Astronomical Observatory in Cape Town, starting in 1841. This record shows that rainfall has gradually declined since about 1900.
Yet, it also demonstrates that while Cape Town’s 2015-2017 drought was severe, it was little different from a much earlier drought (1930-1939). Looking even further back could help to create a more complete, nuanced picture of weather and climatic shifts in Cape Town. But given the absence of instrumental weather records prior to the 19th century – or during times well before human-induced accelerated global warming – this hasn’t been possible.
Now some answers are being provided by what seems at first glance an unlikely source: a massive project to photograph and transcribe daily registers kept by the Vereenigde Oost Indische Compagnie (VOC), or Dutch East India Company, between 1651 and 1795.
All of the trading company’s activity in the Cape Colony was carefully documented in the VOC’s daghregisters, its daily registers or journals. Since 2016, these detailed records, held by the Cape Town Archives and Nationaal Archief in The Hague, have been photographed and digitised by the non-profit Tracing History Trust. By 2021, 2.5 million words had been transcribed for the VC Daghregister Project.
As we outline in a recent research paper, the digitised records are a treasure trove for climate scientists. They represent the longest and oldest known corporate chronicle of near-continuous daily weather recording for the southern hemisphere.
Here’s what we’ve learned from them so far – and what they may have to teach us about current and future climate.
Detailed entries
The VOC had a monopoly on shipping trade between what is today the Netherlands and southeast Asia through Indian Ocean trade routes at the end of the 16th century. By the mid-17th century, the company realised it needed a permanent reprovisioning and resting station. Table Bay at the Cape was deemed the most suitable. Jan van Riebeeck was then commissioned to establish the settlement as the first governor at the Cape from 1652.
Daily journal entries were written by trained scribes in a relatively informal style. The language used was an older version of modern Dutch of the Netherlands and Flanders, and also of Afrikaans, which evolved as a South African language from such early Dutch.
The register entries detail a wide range of human activity: trade, politics, diet, health, diplomacy, religion, governance and so on. They also contain environmental observations, such as daily weather phenomena. Daily weather observations were written into the registers in a consistent and systematic manner. Particular attention was given to sub-daily wind direction and force, which was important to shipping.
Other regular observations included precipitation (rainfall, hail, snow) and conditions of the sky (cloudiness, visibility). Extreme events such as violent storms, gale force winds, exceptionally hot or cold conditions, flooding and drought were noted and at times elaborated on with detail on human, agricultural, infrastructural, and environmental consequences and responses.
Historical climate extremes
Our initial investigation focused on the period 1773 to 1791. We outlined extreme inter-annual climate variability ranging from the highest number of annual rain days on record and flooding in 1787, to severe drought in 1788. Temperatures must have also been highly variable. Even though we do not have thermometer values, anecdotal accounts regularly speak of “excessive heat” during summer and icy winter conditions.
It is clear that society had to cope with “wild weather” and climate extremes during historical times. But coping mechanisms were not advanced and so societal suffering was often considerable – the weather records also provide valuable context to notable historic events such as shipwrecks and chronic food shortages.
Vergaan van schepen aan de Kaap de Goede Hoop, 1693, by Jan Luyken: Illustration of the stormy Cape weather.Rijksmuseum
This is not the end of our research; the records hold far more information from which we can learn about the Cape’s historical climate and weather. Our ongoing work aims to extend the climate chronology back to 1652 and establish the causes of climate variability and extreme weather during the 17th and 18th centuries. If we are better able to identify the drivers of past climate variability and extreme events, it will benefit our modelling of projected future climate scenarios and assist in forecasting expected short-term (the next few months) weather conditions.
All the transcriptions of the VC Daghregister Project will be made available in the public domain on a website to be hosted by the Nationaal Archief Nederland.
Former South African president is trying to turn the contestation of a court hearing into an all-out war and chill those who pursue justice against him.
Zuma faces 16 counts of corruption for taking a monthly payment of US$34,000 from French arms firm Thales while he was deputy president from 1999 and later president from 2009 to 2018. Thales was involved in South Africa’s massive arms purchase deal during that period.
Zuma had originally laid charges against the prosecutor in his corruption case, Billy Downer, for giving a medical certificate from the investigation to Maughan. When the police declined to prosecute Downer, Zuma initiated a case against both him and Maughan for disclosing the information.
Zuma’s supporters jumped on Maughan on social media, lashing her – with some racist and misogynist language - for allegedly exposing Zuma’s medical records.
But the South African National Editors’ Forum expressed “disgust” at the serving of summons on Maughan.
It was “a clear case of intimidation solely intended to silence Maughan” as the information “was of public record and not confidential”.
My own organisation, the Campaign for Free Expression, said Zuma had “a pattern of taking legal action against his media critics in an attempt to stifle scrutiny and criticism and to divert attention from and delay his own prosecution.
It should be seen for what it is: an attempt to make it risky for journalists to scrutinise him, and discourage critical journalism.
Maughan’s case will be interesting and important, and is likely to go all the way to the Constitutional Court. It will test a journalist’s right to publish court material in the public interest.
What is at stake is more than her innocence or guilt: it is whether South Africans have an open court in which reporters can gather information, canvass all the parties and report freely on proceedings. And whether we can have swift justice and not allow for endless delays.
What the law says
The law is clear: it is illegal to disclose information that the prosecutor has as part of the investigation without permission of the office of the National Director of Public Prosecutions. It appears that Downer, without the necessary permission, told his colleagues to give the documents to Maughan under embargo, as they were due to be tabled in court and become part of the public record.
Maughan argues that she only published them after they were tabled in court, that neither party had applied for them to be sealed and there was nothing particularly sensitive about them. It was only a medical certificate, not his private records.
What she was doing was routine court reporting: getting information from the parties to the dispute, and publishing them in the public interest.
Why then has it caused such a rumpus? It is because of Zuma’s long use of what has been called a Stalingrad defence: slow down proceedings and wear down the other side by appealing every unfavourable ruling and using whatever other means possible to delay proceedings and divert attention from the core case. So far, this has worked in his favour. Started in 2005, the case is still in its early stages. Now he is trying to have prosecutor Downer dismissed and is lashing out at the media at the same time.
But the courts and much of the public have grown tired of it. His supporters cheer him on, portraying him as a hapless victim of persecution and political conspiracy. And the courts under close scrutiny have to be meticulous to ensure that his rights are respected, even when this causes undue delay.
Zuma is trying to disrupt the process and to harass and intimidate prosecutors and journalists. He did not raise the matter with the media house that published her work, nor did he take her to the Press Council, the body that oversees journalism ethics.
He chose to label her a criminal who belongs in prison. A private prosecution against a journalist covering a person’s court case is unheard of in South Africa.
He is attempting to turn the contestation of a court hearing into an all-out war and chill those who pursue justice against him. He is trying to put the justice system and the media on trial, rather than himself.
The action against Maughan says more about Zuma and his lawyers than it does about Maughan. It shows a contempt for democratic and court processes, as well as for journalists and their role in ensuring court cases are public, open events.
It demonstrates his willingness to attack whoever is in his way in his attempt to delay and divert attention from his own case. It reveals his capacity – Trump-like – to portray himself as the constant victim of conspiracies. That is why the community of journalists has rallied to Maughan’s defence.
The fight is not just to protect her, but to defend an open justice system, in which reporters play a key role.
Africa’s dinosaur discoveries: five essential reads
- Natasha Joseph with Femke Holwerda, Julien Benoit, Kimberley E.J. Chapelle, Lara Sciscio and Miengah Abrahams.
The African continent is a rich repository for dinosaur fossils, including teeth and track marks.
Few prehistoric creatures generate as much excitement and awe as dinosaurs. Whether it’s the “tyrant” T-Rex or a slim-necked Brachiosaurus, people are fascinated by these creatures that dominated landscapes all over the world - including across the African continent - hundreds of millions of years ago.
The dinosaurs are long gone (though we’re still surrounded by their direct descendants, birds). But researchers are still hard at work piecing together the fossil record to create a fuller picture of how dinosaurs lived, walked, ate and raised their young. Their discoveries offer a glimpse into ancient landscapes, helping modern scientists to better understand today’s climates and ecosystems.
The Conversation Africa has showcased a number of dinosaur finds on the continent. Here are five essential reads:
A rich record
Africa is widely acknowledged as the birthplace of humankind. But less attention is paid to its incredibly varied fossil record. Many of the planet’s most important life forms originated on the continent: bacteria-like organisms; many dinosaur species and, of course, primates – including humans. Even the rocks on the continent are among the oldest in the world. Some of them date back more than three billion years.
That’s what prompted Julien Benoit to create a syllabus for his palaeontology students that centred African fossil discoveries rather than focusing on finds from elsewhere in the world.
Hidden in plain sight
Many museums and universities keep extensive fossil collections. Their contents have been studied, labelled and catalogued. Sometimes, however, they hold secrets that can only be uncovered through a combination of scientific hunch and cutting-edge technology. That’s how Kimberley E.J. Chapelle discovered and described an entirely new species: Ngwevu intloko (“grey skull” in isiXhosa).
A giant African dinosaur
Researchers are constantly rewriting the fossil record thanks to new discoveries. Dinosaurs’ fossilised footprints are a useful tool for this work, as evidenced by a – literally – gigantic find in Lesotho.
It was previously thought that ancient southern African landscapes were dominated by small and agile two-legged carnivorous dinosaurs called theropods. But Lara Sciscio and her colleagues’ study in Lesotho unexpectedly revealed that very large carnivorous dinosaurs with an estimated body length of between 8 and 9 metres (or 26 feet) – that’s a two-storey building or two adult rhinos nose to tail – lived in the region too.
Footprint finds
Still on the subject of footprints, it turns out that fossilised dinosaur prints hold incredible detail about more than just the size and shape of the creature that made them. As Miengah Abrahams explains, they can reveal what organism made the tracks – different animals have different footprint shapes. They offer clues to the creature’s behaviour and may even contain evidence of what sort of environment dinosaurs roamed – did they sink into wet sand, or were they standing firmly on dry gravel?
A toothy morsel
Moving from feet to teeth: dinosaurs’ chompers hold important clues to their lives, diets and how they moved across landscapes. That’s why Femke Holwerda ventured to the Kem Kem beds, a geological formation in North Africa, to seek out fossil dinosaur teeth. Her discoveries allowed her to create a fuller picture of the long-necked, plant-eating (herbivorous) dinosaurs, called sauropods, from the Early Cretaceous period of North Africa.
Queen Elizabeth adjusted with aplomb and good grace – personally and as monarch – as countries achieved their independence from Britain.
On her 21st birthday, 21 April 1947, when Britain’s Princess Elizabeth was accompanying her parents and her sister on a tour of South Africa, she spoke “to all the peoples of the British Commonwealth and Empire, wherever they live, whatever race they came from, and whatever language they speak”.
She went on to declare that she would devote her whole life “to the service of our great imperial family.”
By the time she died at Balmoral as Queen Elizabeth II, on 8 September 2022, the Empire had vanished.
Britain’s process of quitting Empire had begun before she ascended the throne (when she was holidaying in Kenya in June 1952) with Britain’s withdrawal from India and Burma in 1947. This had been heralded by the demands of the Indian National Congress throughout the previous half-century.
Even after India’s departure from the Empire, it was widely assumed that Britain would stay on in Africa for many decades. But how quickly things changed. Riots in the Gold Coast in 1948 led swiftly to the appointment of Kwame Nkrumah as Chief Minister and the introduction of self-government.
Within the space of just a few years, the Gold Coast became independent as Ghana in 1957. The process of colonial withdrawal from Africa had begun, hastened by the political and economic cost of Britain’s bloody suppression of Mau-Mau in Kenya in the early and mid 1950s.
British prime minister Harold Macmillan was to acknowledge that a historic and unstoppable shift was taking place when he delivered his famous “winds of change” speech to the South African parliament in 1960.
The decade and a half that followed saw one African country after another proceeding to independence. Most experienced a brief period when they retained the queen as head of state. Yet it was not long before they abandoned even this colonial relic, opting instead for executive presidents to lead them into the future.
The queen’s private thoughts about all this will remain obscure until the release of royal archives in years to come. Yet the outward signs are that she adjusted personally and as monarch to these immense changes with aplomb and good grace.
As far as Africa was concerned, she was no reactionary.
Relationships
Her personal relationships with many African leaders were an important marker of the social and attitudinal changes which accompanied the shift from Empire to Commonwealth. One indicator was her famous dance with Kwame Nkrumah when she visited Ghana in 1961.
At the time, Nkrumah was developing his personality cult, and seemingly moving Ghana into the orbit of the Soviet Union at the height of the Cold War. The British government saw her visit as a way of strengthening the former colony’s ties to the Commonwealth.
In The Crown, the recent Netflix series on the monarchy during her reign, the incident of her dancing with Nkrumah is presented as having major political implications, as if on the dance floor her embrace of the Ghanaian president was key to holding him within the political grip of Britain.
Historians dismiss this as rubbish. Yet this does not mean that the dance was without its wider significance.
Back in 1948, the British government had sought to stand in the way of the marriage of Seretse Khama, then a student in Britain, to a white British woman, Ruth Williams.
Establishment horror of inter-racial marriage was backed by a visceral fear of offending South Africa, where the white electorate had backed the election of a National Party government and opted for a programme of greater racial separation and apartheid.
Yet by 1961, the queen was visibly demonstrating that such blatant racism was no longer acceptable, and that she did not shrink from the close touch of black on white skin.
The Commonwealth
Politicians came and went during the queen’s long reign, but she remained a constant as head of the Commonwealth. Its foundations rested on the British government’s grant of self-rule to the white “dominions”, confirmed with the passage of the Statute of Westminister in 1931.
Yet it was not until the period after the second world war that there was any thought in London that black Africans were capable of running their own governments. However, once the British had decided that Africans could stand on their own feet (a convenient realisation which coincided with British self-interest), African governments were invited to join the Commonwealth, which had expanded to include India and Pakistan in 1947.
It is widely acknowledged that Queen Elizabeth played an important role in holding what was (and remains) a highly disparate organisation together through many disputes.
The most important differences revolved around the issue of race, or more specifically, the continuance of white rule in the southern part of the African continent.
Here the queen’s warm personal relations with key leaders, notably Julius Nyerere of Tanzania and Kenneth Kaunda of Zambia, served to contain African states’ differences with Britain over its policies towards Ian Smith’s Rhodesia and apartheid South Africa.
What accounts there are suggest that she was quietly supportive of the pressure which African Commonwealth leaders exerted on Margaret Thatcher to maintain sanctions on South Africa during the crises of apartheid in the later 1980s.
Indeed, it is thought that Thatcher was perhaps her least favourite among the 14 British prime ministers who served under her.
Subsequently, there is every evidence that she delighted in meeting Nelson Mandela, the one political leader who ignored royal protocol by simply greeting her by her Christian name whenever he met her, and she took no offence.
But then Nelson Mandela was as monarchical as Queen Elizabeth herself.
Uncertain future
Queen Elizabeth’s background role in keeping the Commonwealth together during many fractious disputes about race raises the question about what will happen to the body now that she has gone.
Many observers argue that the Commonwealth is increasingly a political irrelevance in a constantly changing world. Furthermore, there is talk that if it continues to exist, the British monarch should not necessarily stay on as its head, and that the post should rotate among the membership. Meanwhile, it is likely that some countries that have retained the monarch as head of state will dissolve their formal relationship with the British crown.
Despite such currents, the Commonwealth seems destined to stay for the foreseeable future. Indeed, it is becoming even more inclusive, having been recently joined by states such as Mozambique and Rwanda which were never ruled by Britain as part of the Empire. They are doing this because they see advantage to themselves in terms of trade, aid and investment.
It remains to be seen whether King Charles III can emulate his mother in helping to keep the Commonwealth together. Yet the signs are there that he holds views that are more progressive, notably on tackling climate change, than the wearying succession of Conservative governments which are ruling contemporary Britain.
Hopefully he will receive a positive reception from African governments, which – ironically in this post-imperial age – are more likely to attach importance to the Commonwealth than Britain itself.
Job creation in South Africa: the president’s advisors discuss what it will take
- Dorrit Posel
Three of the president’s advisors talk through what is needed to change the status quo.
At the end of 2021, South Africa recorded its highest unemployment rate since the dawn of democracy, at 35.3%. The figure has marginally dropped but there is still concern about how the country will tackle this issue. Dori Posel spoke to Trudi Makhaya, economic advisor to South Africa’s President Cyril Ramaphosa, as well as Kenneth Creamer and Liberty Mncube, who are on the Presidential Economic Advisory Council, about unemployment, job creation, the informal sector and the country’s challenges with excessive market power.
Dori Posel: South Africa has not been very successful in chipping away at a very high rate of unemployment. What could help?
Kenneth Creamer: There is a strong correlation between growth and job creation. The question is, why doesn’t South Africa have enough growth? I would say that there are historical and current factors.
Historically, colonialism and apartheid have meant that the country’s capital markets, our capital formation, has been distorted, and infrastructure investment has been distorted. If you look around the country, you can see that people in areas that were designated as “bantustans” under apartheid still don’t have the same level of health, education, and access to security services.
And capital formation itself was pretty much linked to mining. There was some diversification, but the country’s industrial policy was stunted and shaped in a way that didn’t create enough jobs.
The current reasons include vested interests that make it difficult to implement the policies that we need. For example, it is difficult to do the right thing and to implement the energy transition due to vested interests.
A second current problem has been weak state capacity, corruption and stealing.
We need growth to create jobs. And we need more growth to create enough jobs to cater for the growing size of South Africa’s labour market. In particular, we need expanded capital formation and infrastructure. And it’s really important that we look at our fixed investment levels. During the COVID pandemic, capital investment fell to 13% of GDP – a historic low. Government, state-owned companies and the private sector must all double their capital investment if South Africa is to increase its capital investment to the 25%-30% of GDP level required to reduce unemployment.
Dori Posel: Why are there so few people starting very small businesses in the informal sector?
Trudi Makhaya: The informal sector in countries similar to South Africa creates lots of jobs. In South Africa, the informal sector accounts for about 10% of jobs. That tells us South Africa has diverged from other emerging markets.
Our regulatory frameworks are geared towards corporates. And you can go through many aspects of regulation – zoning, how municipalities enforce bylaws, regulations and safety standards for food. You need safety standards, but you also need an enabling environment where you could have a street food culture like in Asian countries. South Africa’s regulatory environment doesn’t do that. We really over-regulate. We have a lot of requirements that are not appropriate for smaller businesses. That’s why we’ve been working on red tape reduction.
The human capital element is also important. South Africa’s education system has not given people the basic education and technical skills they need – to become plumbers, for example. It’s those those kinds of activities that become self employment activities in many developing countries. India comes to mind in terms of coding, and people being able to develop businesses from that. It involves fairly low skills.
A lot of the work that we need to do is in improving the quality of basic education. And it’s not about the quantity of money that’s been spent. As a proportion of GDP, South Africa’s education expenditure is already in line with many other countries. We’re not getting the outcomes that we need to get.
There are other factors too, including access to finance. There are so many concentrated industries; it becomes quite difficult for small businesses to thrive.
Dori Posel: Excessive market power could also inhibit the growth of small businesses. Is there excessive market power in South Africa and what has been the response to this from competition policy?
Liberty Mncube: South Africa has an excessive market power problem. Here are a few examples. For those lucky enough to afford private healthcare services, there are only three main hospital groups; in air travel, there are two main airlines. One firm controls more than 40% of each of the beer, spirits, ready-to-drink and cigarette industries.
The competition authorities have uncovered anti-competitive practices facilitated by excessive market power in many areas of business activity, including maize meal, bread, milk, poultry, beer, wheat flour, healthcare, aluminium, steel, bricks, cement and ticketing services. In the last two years, the Competition Tribunal has issued 48 orders in which firms have admitted to excessive market power and excessive pricing, not only in personal protective equipment including face masks, hand sanitisers and surgical gloves, but also in eggs and maize meal.
Excessive market power increases the cost of goods and services for consumers, depresses wages, stunts investment, blocks entrepreneurship, and retards innovation. It also concentrates economic power, which monopolies and oligopolies use to win favourable policies and further entrench their dominance. At the same time, excessive market power creates profits that flow disproportionately to the affluent in society. The left-out majority of South Africans are more likely to be the victims of excessive market power and have the least ability to avoid its costs. This dynamic exacerbates income inequality and inequality of economic opportunity.
There have been two responses from competition policy.
The first one has been embedding equality considerations into competition law. The 2018 amendments exemplify this, by placing emphasis on participation by black owned firms and small businesses as well as promoting a broad spread of ownership (inclusive of workers).
The second response concerns the effect competition policy generates through the promotion of greater competitiveness and subsequently on economic equality. For example, when Pepsi wanted to buy Pioneer Foods, one of the major agro-processing firms in South Africa, the Competition Tribunal approved the deal subject to a condition that it set up a broad based worker trust and implement a broad based black economic empowerment ownership plan. Last year, when ECP, a US based investment fund, sought to buy Burger King, the Competition Tribunal approved the deal subject to local procurement and creation of a worker owner plan in Burger King South Africa.
Dori Posel: I would like us to consider another set of constraints on job growth, and this concerns issues around trust and corruption. South Africa is often described as having a “trust deficit”. What are your thoughts on how trust can be rebuilt in our institutions, and by implication, how our institutions can be made more trustworthy?
Trudi Makhaya: The one thing that has been highlighted in various instances in the South African case is the culpability of the private sector. We see a lot of the companies slowly coming to the reckoning.
But I think if we’re going to rebuild trust, I would suggest that they have a lot more to do in terms of showing they have turned a corner, and understand the economic harm that has been done.
On the flip side of it all, we have a demoralised public sector. We do have good people who tend to err on over-compliance, being afraid to take risks. Being afraid to be innovative.
We also have to strike the balance between transparency and due process, and accepting genuine mistakes which are not related to corruption.
*This is an edited excerpt of the University of the Witwatersrand School of Economics and Finance’s centenary webinar titled 100 Years of Economics at Wits: Reflecting on the Past, Looking to the Future. The event can be watched here.
Joe Biden and Cyril Ramaphosa: finding common ground
- John J Stremlau
Both presidents are committed democrats operating in hostile environments. They are also committed to forging mutually beneficial ties.
US president Joe Biden’s invitation to South Africa’s President Cyril Ramaphosa to meet at the White House, and the latter’s acceptance, are positive signs of renewed cooperation. But they do not suggest a return to the 1990s era of heady optimism between the two countries.
These two diverse democracies are currently too divided domestically, amid new and escalating tensions globally that affect Africa. These negatives, however, add weight to the importance of the Biden-Ramaphosa meeting in Washington on 16 September 2022.
There are four reasons for its political significance. Two speak to the two countries having a common agenda: both presidents are committed democrats operating in hostile environments. They are also committed to forging mutually beneficial ties.
But there are two prominent issues that could be divisive, and about which the two heads of state may well seek clarity. These have to do with the changing relations among the major powers of concern to South Africa and the rest of Africa. Two specific topics uppermost for Biden and Ramaphosa will be the consequences for Africa of Russia’s invasion of Ukraine and China’s expanding role on the continent.
Agreements and disagreements
Biden and Ramaphosa represent progressive democratic factions after very narrow electoral victories.
Ramaphosa won by only 167 votes to head the ruling African National Congress (ANC) in 2017 and become its candidate for national president. The ANC has held power for the 28 years since the end of apartheid.
For his part Biden defeated Donald Trump in 2020 by barely winning the necessary electoral college votes in three swing states. Trump and his supporters still dominate the Republican Party in a two party federal system in which Biden’s Democrats now have a slim majority.
Both leaders won large national votes. Yet they both continue to struggle to sustain liberal democracy after the assaults on core democratic institutions by predecessor regimes.
The similarity in their political challenges is not their only source of empathy. Biden was a prominent opponent of apartheid as a US senator in the 1980s. An American of Irish heritage, he surely values Ramaphosa’s critical role in 2000, monitoring a fragile Irish peace.
A second reason to find common ground relates to what both governments have announced as their “official” agenda. Listed topics are: trade and investment; infrastructure; climate and energy; and health.
Practical progress in these areas is vital in gaining popular support for democracy in the two troubled nations. They, in turn, could share lessons and resources with other African nations trying to overcome poverty and domestic divisions.
But there are areas of tension between the two countries.
They have divergent views about Russia’s invasion of Ukraine. National and international media typically give this issue top billing.
But American and South African officials have downplayed their differences. And it’s likely they will be able to productively discuss several urgent dimensions of that crisis. These include food scarcity hardships in Africa, economic effects of inflation of essential goods, and supply chain disruptions constraining global trade.
Fresh announcements of joint mitigation efforts would be welcomed in South Africa as well as the hardest hit parts of Africa.
Two other Russia-related topics could be usefully discussed. They are politically sensitive because facts and salience are uncertain. One would be the actual battlefield conditions in Ukraine. South Africa has repeatedly called for an end to hostilities but neither side in the conflict has shown a willingness to compromise. An effort to clarify conditions in Ukraine would help planners in both countries.
The other subject is vital to the future of South Africa and American liberal democracy. There has been speculation in South Africa’s independent media about Russian president Vladimir Putin’s political and financial interests, along with his oligarch allies, in bankrolling the governing ANC and in the expensive and allegedly corrupt nuclear power deal. Ramaphosa suspended the contract after becoming president, but concerns remain about the ANC’s ties with Moscow.
This has not been as well documented as Russian support for Trump in his 2016 presidential campaign, or in the extensive reports in US media of Russian financial help to Trump’s businesses. Exchanging views on Russia’s alleged partisan efforts in both democracies deserves discussion, if only informally.
A related public topic is the “Malign Russian Activities in Africa Act”, pending in the US Senate. The act would require the secretary of state to report to Congress on issues such as the role of Russian mercenaries, military assistance, and the dissemination of politically consequential disinformation.
South Africa and other African governments oppose the legislation. The reason given is that its real aim is to punish African states that declined to support the US position in United Nations resolutions condemning Russia.
Ramaphosa and Biden might well find a formula whereby US intelligence could be quietly shared with African governments on Russian activities in Africa, especially those deemed detrimental to democratic sustainability.
Another subject that will require careful handling is the issue of China’s relations with the continent.
Tensions between the US and China have intensified in recent years, discouraging hopes for Africa-China-US cooperation. Yet Africa is one region where the two major powers might experiment with restrained competition responsive to Africa’s agreed priorities.
South Africa has excellent relations with both China and the Biden administration. Perhaps Ramaphosa and Biden could revisit what was once known as a “win-win-win” formula for parallel and even joint actions.
Managing China-US competition in response to African priorities could be good for peace and development.
A partnership
Will the two men be able to cement a resilient, productive partnership between two diverse liberal democracies?
This depends on the degree of trust between them, despite occasional foreign policy differences, such as how to respond to the war in Ukraine.
Tensions between sovereign countries are inevitable, whether they are allies or adversaries. The US and South Africa are neither firm adversaries nor firm allies. They have a complex and sometimes troubled relationship.
A positive rapport between their leaders at a time of deep domestic divisions and rapid global change could help advance and sustain democracy in both nations. If they make progress in overcoming their domestic divisions, this should allow them to play more active and constructive roles in Africa, a region that is the most important for South Africa, and of growing importance for the US.
Obesity costs South Africa billions. We did the sums
- Micheal Boachie
Lowering obesity and overweight rates will lift the burden on healthcare spending.
Globally, it is widely acknowledged that obesity-related conditions and their complications add hugely to healthcare costs and productivity losses. In turn this adds a large burden on individuals, their families and on governments.
One estimate suggests that of the total health expenditure on the continent, 9% is attributed to dealing with people who are overweight and obese.
We conducted research to calculate the cost of obesity to South Africa’s health system. Our aim was to estimate the direct healthcare costs associated with the treatment of weight-related conditions based on public-sector tariffs.
Based on our calculations overweight and obesity are costing South Africa’s health system R33 billion (US$1.9bn) a year. This represents 15.38% of government health expenditure and is equivalent to 0.67% of GDP. Annual per person cost of overweight and obesity is R2,769.
Among the most expensive conditions to manage were diabetes and cardiovascular diseases.
Our analysis shows that overweight and obesity impose a huge financial burden on the public healthcare system in South Africa. It suggests an urgent need for preventive, population-level interventions to reduce overweight and obesity rates. The reduction will lower the incidence, prevalence, and healthcare spending on noncommunicable diseases.
Quantifying the financial costs of overweight and obesity also gives national policy-makers a sense of the scale of the cost to the state, those of managing their diseases, and the costs to the community.
Scale of the problem
Half of all adults in South Africa are overweight (23%) or obese (27%). And the World Obesity Federation anticipates an additional 10% increase (37%) in obesity among adults by 2030. Overweight and obesity hugely increase the risk of noncommunicable diseases. This burden contributes to the country’s high prevalence of diabetes, or example. An estimated 11% of people older than 15 had diabetes in 2021. This is much higher than Nigeria’s prevalence of 4%.
Around 12 million people suffer from weight-related diseases for which they receive treatment in the public sector. These include diabetes, hypertension, cardiovascular disease, arthritis and some cancers.
This does not include the numerous undiagnosed people with diabetes and hypertension who are not on treatment. Nor does it include people being treated in the private sector.
These noncommunicable diseases cause life-altering illness, disabilities, and premature death.
What we found
Our research calculated the cost of obesity starting at age 15. In doing our calculations we looked at the following: cancers , cardiovascular diseases , diabetes , musculoskeletal disorders , respiratory diseases and digestive diseases.
We costed each in detail and used the prevalence of those diseases to measure the cost to the system, taking account of healthcare use patterns.
In South Africa, the biggest share of the R33-billion (US$1.9 billion) annual cost comes from treating diabetes (R19,86-billion). Cardiovascular disease (ZAR 8,87-billion) had the second biggest share. These costs are, in turn, mainly driven by the cost of medication and hospitalisation. Diabetes and hypertension-related conditions are among South Africa’s top-ten causes of death. Digestive diseases, such as gallstones and diseases of the gallbladder, contribute the least (R395-million).
Diabetes (95%) and arthritis (58%) are the diseases that are mostly caused by overweight and obesity.
Overall, 53% of total healthcare costs of managing and treating these diseases in the public sector was attributable to the overweight and obesity problem. South Africa shares this dubious distinction with other high- and middle-income countries such as Brazil, South Korea, Thailand and Colombia. Our results are similar to the World Obesity Federation’s estimate of R36bn.
We also warn that the R33-billion is an underestimation of the economic cost. We used public-sector tariffs, which we calculated as 60% of private sector costs. We also excluded costs such as clinical screening and the treatment of comorbidities, such as amputations as well as potential costs for the undiagnosed.
And our findings don’t include the indirect costs of productivity losses resulting from absenteeism. We also didn’t consider premature death as a result of overweight- and obesity-related diseases.
Next steps
Putting a health problem in monetary terms may create a sense of urgency to find ways to reduce future expenditure on the direct costs of healthcare, and to reduce future losses to the state from the consequences of illness and premature death, including the knock-on effects of worsening poverty as a result.
Until now, no detailed country-specific information on the economic cost of overweight and obesity in sub-Saharan Africa has existed. Based on our research, South Africa’s burden is even higher than the African or global averages: 15.38%of overall government health budget, which equates to 0.67% of GDP.
Unless rapid steps are taken to decrease obesity and overweight, the health system will buckle under this strain, and the planned National Health Insurance scheme will not succeed in producing equity in health services.
The opportunity costs of overweight and obesity – and the diseases they often bring with them – are both personal and national. It is difficult to quantify the personal disability in monetary terms – the benefits of vastly improved quality of life are priceless.
Five steps Nigeria must take to stop buildings collapsing in Lagos
- Olasunkanmi Habeeb Okunola
Lagos, Nigeria’s commercial capital city, is notorious for frequent building collapses.
Buildings in Lagos state, Nigeria’s economic hub, have in recent years been collapsing in greater numbers than ever. Between 2000 and 2021 the city experienced 167 reported cases, with significant human and economic losses.
Ghana’s capital, Accra, in contrast, had only eight building collapses between April 2000 and February 2016.
This grim Nigerian data reflects the failure of the Lagos state government to protect its citizens.
Drawing from my previous research, I have identified that high-rise residential buildings make up most of the collapses in Lagos. The reasons include the use of substandard materials and unqualified or unskilled builders.
Other factors include non-adherence to the National Building Code, illegal conversion of existing structures and ineffective monitoring by regulatory agencies.
The recent spate of building collapse in Lagos presents an opportunity for the government to get tough on the construction industry and prevent future incidents. Citizens also have a part to play.
In this article I set out five critical issues I consider indispensable for building safety, stability and sustainability. They are all germane, given the disastrous state of building development in Lagos in the past four years.
Previous studies suggested that government didn’t implement the recommendations from past integrity tests of buildings in Lagos. This was likely due to a lack of political will to ensure fundamental standards were maintained. It suggests the government might only be paying lip service to building safety.
Urgent and frequent integrity tests of all high-rise buildings in Lagos are needed. Those built more than five years ago are in particular need of testing. A structural integrity test confirms the stability of buildings and determines whether they are fit for people to live in.
Government must also ensure that buildings that are not structurally habitable are either strengthened or demolished immediately.
2. Identify and prosecute offenders
Government must identify and prosecute landowners, investors, consultants, architects, quantity surveyors and engineers involved in previous cases. It must also publish all permits received during those projects and all documents related to safety testing.
This will show its commitment to putting an end to the loss of lives and property. It will also enable a thorough investigation into the causes of building collapses and ensure there are consequences for failures.
It will encourage more responsible practices in the construction industry.
3. Overhaul and restructure agencies and ministries
The recent resignation of the Lagos State Physical Planning and Urban Development commissioner was a step in the right direction. Nevertheless, the agencies and ministries responsible for monitoring the construction process appear overwhelmed and handicapped in enforcing building regulations. This is due to ineffective monitoring, lack of human resources and corruption among officials in charge of building approval.
There is also a serious governance issue that must be addressed. Building control should be a local government responsibility. In Nigeria, however, it falls under the state government. Nigeria currently runs a three-tier federal system comprising federal, state and local governments.
As a result of the constitutional reforms made between the 1970s and 1990s some of these tiers of responsibility were arbitrarily altered. The building control function was transferred from local to state governments.
Thus, a total overhaul and restructuring of all the agencies and ministries responsible for monitoring the construction process is urgently required. This could be done by prosecuting complicit government officials involved in the approval of previous collapsed buildings.
Improved tactics and logistics in monitoring construction could also be deployed.
Building control must be returned to the local governments and they must ensure that they have enough qualified, quality personnel.
4. Integrate governance of the construction industry
Governments, professional bodies and citizens all have essential roles to play in preventing building collapse in Lagos. The starting point is the sensitisation of citizens and building developers by the emergency management agencies and professional bodies. They should focus on the need to obtain planning permission, engage professionals in the construction of their buildings and report cases of illegal construction activities in their community.
Government must also collaborate with professional bodies and make sure that individuals or building developers consult certified professionals like engineers.
5. Enforce laws and policies
A review of enforcement and building control regulations in Lagos state shows the problem is not inadequacy of relevant laws and monitoring agencies. Rather it’s a lack of proper enforcement of building regulations.
The state government must quickly take decisive steps to implement existing building control regulations and measures for transparency and accountability in its processes. Simple but important things like information display boards at construction sites should be enforced. There is also an urgent need for public awareness of the regulatory requirements for buildings. The public should demand transparency from developers and landlords.
There’s a gap between Kenya’s public spending and its revenue. If the country owes more than it can repay, citizens will suffer.
Kenya’s newly elected president, William Ruto, has earned more legal space to borrow for his grandiose economic plan after parliament recently raised the country’s public debt ceiling to KSh10 trillion (US$100 billion). The new administration says the country is broke but Kenya is already living beyond its means and the World Bank has warned of a high risk of debt default. We asked Odongo Kodongo, a finance scholar, to explain the debt ceiling and why Kenya needs to pay more attention to it.
What is the debt ceiling?
First let’s understand what public debt is. Article 214(2) of the constitution of Kenya defines public debt as all financial obligations arising from loans raised or guaranteed and securities issued or guaranteed by the national government. Governments need to borrow money to pay their bills when they cannot fund all their activities using its revenues alone.
A public debt ceiling is a legally imposed upper limit on the stock of public debt of a country. For emerging and developing economies, a debt limit of no more than 64% of the country’s production (gross domestic product or GDP) is recommended. In Kenya, the public debt ceiling is anchored by the Public Finance Management Act of 2012.
Section 50(2) of the Act caps national government borrowing to a limit set by the national assembly. This clause was recently amended to allow the government to exceed the limit under certain circumstances. The circumstances include depreciation of the shilling, material balance of payments imbalances, or fiscal disruptions caused by wars, health pandemics, or national disasters.
Another amendment gives the Public Debt Management Office the responsibility to advise the national assembly on an annual borrowing limit. Thus, the government now has the flexibility to adjust the borrowing limit every year.
My concern is that the flexibility introduced by these new amendments can be abused by an irresponsible government.
But all is not lost. Before exploiting this flexibility, the Treasury cabinet secretary must explain the circumstances to the national assembly and provide a time-bound plan for remedying the breach of the ceiling. Thus, all would be well if the national assembly cannot be unduly influenced by the executive.
The proposed change translates to a debt ceiling of about KSh8.579 trillion for 2022. This figure is calculated from the official forecast for 2021 economic production of KSh12.1 trillion and its projected growth rate of 5.9% during 2022.
Kenya has already broken through the proposed ceiling. The national Treasury estimates the present value of Kenya’s public debt as a proportion of GDP for 2022 at 64.2%. This figure is higher than the proposed ceiling of 55%.
Given the high proportion of revenues that debt servicing gobbles up, the government appears to be borrowing beyond the country’s means. Increasingly, concerns are also being raised about the shifting composition of public debt in favour of external debt (lenders outside Kenya.) External debt burden is usually heavier because it depletes the country of foreign exchange reserves. This may trigger a fall in the value of the shilling.
The worsening overall debt burden has prompted the International Monetary Fund to downgrade the country’s debt risk from moderate to high in 2020 just two years after downgrading it from low to moderate in 2018. The downgrade of a country’s debt risk makes it more expensive for the country to borrow, leaving it with less to spend on other economic programmes.
How did Kenya get to this point?
Kenya has not witnessed such high levels of indebtedness in recent history. The country’s growing debt burden has been attributed to many causes. First, official sources point to high infrastructure spending, increased recurrent expenditures (payment of regular expenses like public wages and interest on loans), revenue collection shortfalls, and constraints in institutional capacity for public expenditure management.
Second, increased reliance on commercial external debt with short tenors (debt that must be repaid quickly) has put pressure on government to refinance at short intervals and on worsening terms. In other words, an existing debt must be replaced with new debt at a higher interest rate. The higher rate signals that lenders now have more doubts about getting their money back.
In June this year, the government had to abandon a planned KSh115 billion Eurobond issuance because yields had increased beyond 12.5%, meaning that it would have been too expensive to repay.
Third, the government has blamed unanticipated economic shocks such as drought and COVID-19. Fourth, critics have cited financial impropriety as another possible reason. They point out that the growth in infrastructure and welfare spending does not match the growth in debt since 2013 and that there are no proper records of debt spending.
Why does the debt ceiling matter?
Ceilings are imposed to ensure that countries employ public debt sustainably. Debt sustainability is about the ability of a country’s current and expected future income to cover debt servicing costs.
A breach of the debt ceiling signals the possibility that the country’s debt could be excessive and unsustainable.
Public debt is regarded as excessive if it substantially reduces the amount of goods and services available to future generations, and if the country could lose or only have reduced access to financing.
Excessive public debt has several economic consequences. First, servicing the debt reduces resources available for funding the government’s other programmes. Second, it means government cannot afford to stimulate economic activity by, for example, lowering taxes, or to provide welfare support to citizens. An example of welfare support is cash payments to dependants of dead retirees.
Third, government borrowing essentially transfers wealth from the poor, who must pay increased taxes for debt repayment, to the rich, who lend money to the government and earn interest from it. Excessive public debt therefore widens the welfare divide between the rich and the poor.
Fourth, research suggests that excessive public debt negatively affects long-run economic growth.
Finally, one of the most painful consequences of excessive debt is possible default as has recently happened to Argentina and Zambia. Debt default could result in loss of sovereignty as creditors demand austerity measures (budget cuts) as part of any debt restructuring deal. Kenya needs to draw some lessons from such undesirable cases.
How to help people stay on ARVs when life gets in the way
- Melanie Bisnauth and Kate Rees with Cathrine Chinyandura
When antiretroviral therapy is working effectively, HIV cannot be transmitted. This allows people with HIV to live fuller lives.
Antiretroviral therapy (ART) has turned HIV into a manageable chronic condition. When ART is working effectively, HIV cannot be transmitted. This allows people with HIV to live fuller lives without the fear of infecting others. It’s also led global HIV control efforts to focus on increasing ART coverage. The aim is to improve the health of people living with HIV, and to decrease and eventually halt the spread of the virus.
UNAIDS set 90-90-90 targets to measure global progress by 2020: 90% of people with HIV know their status, 90% of those with a known status are on treatment, and 90% of those on treatment are virally suppressed (a blood test result that means ART is working effectively). These targets have now been increased to 95-95-95, to be reached by 2030.
South Africa has achieved the first 90 target but it falls short on the second 90. Despite having more than 5.5 million people on treatment, only 75% of those with a known status are on ART.
Poor retention in health services is one of the most important reasons for this. People living with HIV need to be on ART for their whole lives. This is a tough ask, and although the pills are available free of charge in public health institutions, many people interrupt treatment. Modelling and programme datasuggest that the number of people re-initiating ART is as high as, or higher than, the number of people starting treatment for the first time.
Interrupting treatment is a problem for two reasons. First, people who aren’t on treatment are likely to become sick and die. Second, without consistent treatment HIV can be transmitted, leading to additional infections.
At Anova Health Institute we support the Department of Health in providing HIV services in five districts of South Africa. In a recent study, we wanted to know more about why people with HIV interrupt and return to treatment, and how we can support them to stay in care.
Reasons for stopping treatment
We surveyed 562 and interviewed 30 people returning to care after interrupting ART in three provinces in South Africa. We also explored service provider challenges in providing treatment and care.
Our analysis showed that retention in care is influenced by multiple factors. These include individual, family, societal and healthcare service barriers.
Mobility or relocation was the most common reason for treatment interruption, reported by close to a third of respondents. It was followed by ART-related factors, including side effects, and feeling too sick to continue ART (15% of respondents); and time limitations due to work (10%). Participants who move around a lot said managing their ART was difficult because of administrative hurdles.
Health service barriers included negative service provider attitudes and providers insisting on transfer letters, which led to interruption of treatment and care. Feedback sessions conducted with 99 healthcare providers revealed that people returning to care were sometimes sent to the back of the queue or turned away if they did not have transfer letters. Both these practices are discouraged in national guidelines. Most providers reported they had seen or heard other providers act poorly towards recipients of care after interrupting ART. The poor behaviours and attitudes of providers were partly attributed to limited resources and work overload.
On the other hand, we found that clinics which had flexible and extended hours services were better able to keep people in care. This shows that health services need to be more responsive to different life circumstances.
What must be done
Health systems should be set up to allow people to change where they pick up their drugs. Movement between provinces is common in South Africa. Health services need to be more responsive to people moving within and between districts and provinces, as well as outside South Africa. A functional health information system is needed to link medical records and allow movement between clinics or drug pick-up points anywhere in the country. Healthcare providers should not insist on transfer letters. The official policy requires people to be assisted without a transfer letter, in practice many are turned away. Improved treatment literacy would also empower people to understand their own treatment and demand access to care.
ART and other services relating to HIV and other chronic diseases can be provided in many ways inside and outside health facilities. In South Africa, ART and chronic medication can be provided through the Dablapmeds programme. This allows people to collect three months’ medication at pick-up points closer to home or work. Models like this should be supported and strengthened.
People with HIV told the Department of Health they wanted prescriptions for 12 months, and ART refills of three to six months. A 12-month prescription was used during COVID-19 as an emergency measure, and Anova’s programmes reported no decrease in viral suppression. This policy should be expanded.
Healthcare providers need improved working conditions and support to improve their ability to provide empathetic, quality services. Overall, the country needs more patient-centred and responsive health services to improve retention on ART.
People on ART need comprehensive support that covers medication-related issues, psychosocial support and socioeconomic support. Proactive strategies could include check-in phone calls or messages, appointment reminders, and pop-up sites to collect treatment in remote communities, and after-hours facilities. Task shifting allows different forms of treatment support to be offered and can promote ART adherence.
Why this matters
Supporting people living with HIV to stay on treatment is the biggest challenge currently facing South African HIV services.
The needs and views of people with HIV must be heard and considered to protect and build on the health gains from the country’s antiretroviral programme.
Services that are flexible and take into account people’s changing life circumstances will improve health and decrease HIV transmission.
Green hydrogen sounds like a win but cost and transport are problems
- Rod Crompton and Bruce Douglas Young
The key to reducing green hydrogen costs in the future lies mainly in technological improvements.
Hydrogen is used mainly to make chemicals such as fertiliser, and in oil refineries. Most hydrogen in the world today is made from natural gas or coal – methods associated with large carbon dioxide emissions. Developed countries are therefore looking to “green hydrogen” instead – produced using renewable electricity such as solar and wind power. Energy experts Rod Crompton and Bruce Young explain green hydrogen’s potential benefits and challenges.
What is hydrogen used for?
Global hydrogen demand reached 94 million tons in 2021, and contained energy equal to about 2.5% of global final energy consumption. Only about 0.1% of current global hydrogen production is green, but big expansions are planned.
New applications for green hydrogen are also envisaged.
Reproduced with permission from Liebreich Associates.
Since the objective of using green hydrogen is really to reduce carbon dioxide, the applications to target first should be those that will yield the largest reductions in emissions. Liebreich’s ladder shows which they are. The applications in the (green) top row are an efficient use of valuable green hydrogen.
But green hydrogen currently costs much more to make than less clean types of hydrogen. Using it to produce the 180 million tons per annum of ammonia required globally for fertiliser production would have a severe knock-on effect on food prices.
So it is difficult to see how this transition is going to occur.
How is green hydrogen made?
Green hydrogen is made from water. Using renewable (“green”) electricity, equipment called electrolysers separates the hydrogen from oxygen in water (H₂O). The process is called electrolysis.
Green hydrogen production emits no carbon dioxide, but the construction of renewable electricity infrastructure currently uses fossil fuels, which do emit carbon dioxide.
Hydrogen has traditionally been made from non-renewable energy sources like coal (“black hydrogen”) and natural gas (“grey hydrogen”). When these methods are combined with carbon capture and storage, the hydrogen produced is known as “blue hydrogen”.
Today, green hydrogen has an estimated energy equivalent cost of between US$250 and US$400 per barrel of oil at the factory gate, according to the International Renewable Energy Agency. Future cost reductions are forecast but these are uncertain. Current oil prices are around $100 a barrel – much less than it would cost to use green hydrogen instead of conventional petroleum products.
The costs of transporting hydrogen must be taken into account too.
Unfortunately, the physics of hydrogen is against low-cost hydrogen transport. It is much more challenging than oil-based liquid fuels, liquefied petroleum gas or liquefied natural gas. Ocean transport of hydrogen has to be at very low temperatures (-253℃). Petrol or diesel doesn’t need costly refrigeration: it is transported at ambient air temperature.
And hydrogen carries only 25% of the energy that a litre of petrol does, making it much more expensive to transport and store the same amount of energy.
Alternative ways to transport hydrogen have been investigated. Because ammonia (NH₃) is much easier and cheaper to transport than hydrogen, the International Renewable Energy Agency has recommended “storing” hydrogen in ammonia for shipping. But that requires additional equipment to put the hydrogen into ammonia and strip it out at its destination. These processes add costs of about US$2.50-US$4.20/kg (equivalent to US$123-US$207 per barrel of oil) according to the agency.
Hydrogen is more difficult to handle than conventional fossil fuels. It is a colourless, odourless and tasteless gas, unlike conventional hydrocarbons. This makes leak detection more difficult and increases the risk of fire or explosion. Hydrogen fires are invisible to the human eye.
Historically, hydrogen has been controlled within factory perimeters and managed by trained people. The widespread introduction of hydrogen into society will require new measures and skills, including insurance, materials handling, firefighting and disaster management.
Where are the first hydrogen mega projects likely to be built?
Construction of the first gigawatt scale green hydrogen project in Saudi Arabia has already started. Many of the pioneering projects will be built in the southern hemisphere, mostly in developing countries. This is because they are less densely populated and have better renewable energy resources (solar and wind) for generating the necessary electricity.
Although this may sound positive for developing countries, there are big risks in developing hydrogen mega projects. For one thing, the “iron law” of megaprojects states: “Over budget, over time, under benefits, over and over again”. Project owners bear the project execution risk.
Risks also include exchange rate risk, remote locations, pioneering technology, and a lack of skills. Prospective host countries will have to balance these risks against the temptations of improved investment, employment and balance of payments. They would be wise to extract guarantees from their customer countries so as to avoid the injustice of the global south subsidising the global north as it transitions to cleaner energy.
South Africa now has a “Hydrogen Roadmap” after many years of government funding. There is talk by the energy company Sasol and vehicle manufacturer Toyota of a “Hydrogen Valley”, a geographical corridor of concentrated hydrogen manufacture and application industries. And the South African government and Sasol are talking of establishing a new port on the west coast at Boegoebaai for the manufacture and export of green hydrogen. In Nelson Mandela Bay, Hive Hydrogen is planning a US$4.6 billion green ammonia plant.
Namibia also has big plans for a US$10 billion green hydrogen project.
The key to reducing green hydrogen costs in the future lies mainly in technological improvements and cost reductions related to mass manufacture and a scale-up in electrolysis. And to a lesser extent, incremental cost reductions in transport and handling.
