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Economic growth in East Africa strong despite Drought: report | Coastweek

LAKE NAIVASHA (Xinhua) -- Fishermen search for the bodies of two fishermen who drowned after their boat capsized while on a fishing mission in Lake Naivasha. Two fishermen are feared dead after their boat capsized in Lake Naivasha on Wednesday night. The death brings to six the number of fishermen who drowned in the lake in the last two months. The boatman in charge of the engine here is also showing a certain disregard for his own life by failing to wear the now mandatory safety 'life belts' issued to lake fishermen. XINHUA PHOTO - ROBERT MANYARA

Economic growth in East Africa strong despite Drought: report

by Chrispinus Omar NAIROBI (Xinhua) -- Economic growth in East Africa remains strong despite the adverse effects of severe drought across the region, said a report by an accountancy and finance body released on Thursday.

The latest report by the Institute of Chartered Accountants in England and Wales (ICAEW) said the economic is being proposed by infrastructure growth across the region.

"Infrastructure development continues to stimulate industry across the region, while expanding services to the largely un-serviced markets remains the key driver behind growth," said Michael Armstrong, Regional Director of ICAEW Middle East, Africa and South Asia.

The report "Economic Insight: Africa Q1 2017" pointed out that authorities from various East African nations have attempted to mitigate the effects of the drought by stimulating economic activity through other channels such as substantial fiscal stimulus and loosened monetary policy.

According to the report, Tanzania is set to hit a real GDP growth of 6.9, followed by Uganda at 6.8, Ethiopia at 6.7, and Rwanda and Kenya at 6.6 and 6.4 despite the drought.

It said both Rwanda and Uganda have loosened monetary policy during the first quarter of the year, while Ethiopia counterweighed the drought effects through substantial fiscal stimulus—the construction sector reportedly expanding by 25 percent during the 2015/16 fiscal year.

ICAEW said the adverse effects of the drought have been most notable in Uganda, with agriculture decreasing during the first three quarters of 2016.

It notes that poor crop production has also had a marked impact on food price inflation across the region.

"While not particularly intense in historic terms, inflationary pressures in recent months can almost entirely be attributed to high food prices, with non-food price inflation remaining subdued," the report said.

Agriculture in most East African nations is highly dependent on the weather, and adverse rainfall is directly reflected in both agricultural production and food prices.

The report, commissioned by ICAEW and produced by partner and forecaster Oxford Economics, focuses specifically on Kenya, Tanzania, Ethiopia, Nigeria, Ghana, Cote d’Ivoire, South Africa and Angola.

Meanwhile, the report said Botswana and South Africa are still struggling to gain traction due to the slump in commodity prices as well as the drought. Real GDP growth of 1.2 percent is forecast for both these countries in 2017.

According to ICAEW, South Africa’s growth will be supported by widespread rains an improved outlook for consumer demand and a recovery in commodity prices, while Angola remains optimistic of improved oil production and the commencement of infrastructure projects.

Botswana on the other hand, is forecast to record growth of 4.1 percent due to demand in the international diamond market.

ICAEW said Senegal’s strong growth in its primary and secondary sectors as well as the government’s collaborative efforts to improve infrastructure, particularly in electricity supply, has tremendously stimulated the country’s economic growth.
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EARLIER REPORT:

Study calls for tailored decisions for agriculture expansion in Africa

SAN FRANCISCO United States (Xinhua) -- A new study calls for policymakers tailor decisions regarding deforestation around Africa’s unique dynamics and uncertainties while the region expands production of in-demand commodity crops such as cocoa, soy and oil palm, at the cost of tropical forests.

Published in Environmental Research Letters, the study provides the first comprehensive assessment of how international demand for commodity crops is affecting sub-Saharan Africa’s tropical forests, second in size only to the Amazon in South America and almost 30 percent of the world’s total.

Since 2015, agricultural production in the region has grown at the fastest rate globally, and cropland is predicted to expand more than 10 percent by 2025.

With its abundant cheap land and labor, sub-Saharan Africa would seem an obvious next step for multinational companies looking to expand farther, as integrated production of in-demand crops has moved away from areas where land is scarce and where natural resource regulations are robust, and moved to tropical regions such as Southeast Asia and South America, where Brazil and Indonesia alone accounted for more than 60 percent of global tropical deforestation from 2000 to 2005.

Although deforestation rates in Africa remain well below those in South America and Southeast Asia, the region has lost an area of intact forest about the size of Iceland since 2000.

Africa’s forests, contained primarily in the Congo Basin, are an important source of local income.

In addition to regulating climate, safeguarding water quality and controlling disease, the forests feed and provide subsistence means to at least 100 million people living nearby.

Forest products such as logs generate an average of 6 percent of sub-Saharan Africa’s gross domestic product, triple the world average.

"We are starting to better understand issues related to large-scale agricultural expansion in the tropics," said lead author Elsa Ordway, a graduate student in the Stanford University School of Earth, Energy and Environmental Sciences.

"In Africa, we have the opportunity to take lessons learned from other regions and recommend preventive policies."

Expansion of commodity crop production in sub-Saharan Africa has so far been driven primarily by small- and medium-scale local farmers who boost the regional economy and can expand with less disruption to forests.

As multinational companies move in, they are more likely to acquire land by clearing intact forest due to property conflicts resulting from the region’s land tenure complexities.

These companies have bought up a land area larger than Costa Rica in the Congo Basin, mostly for crops such as oil palm and soy, in recent years.

The study’s authors suggest Africa could be spared the massive deforestation that large-scale monoculture has wrought on regions such as Southeast Asia by implementing policies that prioritize forest conservation and local control of the land.

In particular, they recommend policies that would alleviate poverty in local regions and incentivize forest conservation rather than the widespread deforestation that has accompanied agricultural expansion in other regions.

"Civil society, policymakers and private companies can benefit from many years of trial-and-error with anti-deforestation policies in South America and Southeast Asia to design more effective interventions in sub-Saharan Africa," co-author Eric Lambin, a professor in the School of Earth, Energy and Environmental Sciences, was quoted as saying in a new release from Stanford.

Among the possible solutions: promoting investment that ensures small and medium-scale farmers continue to drive agricultural expansion in order to alleviate poverty and avoid land tenure conflicts, encouraging shade cultivation of crops such as cocoa to incentivize forest cover conservation, and finding ways to engage African consumers on deforestation issues.

             

 

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