Cape Town – Conservation has become a prominent and important factor in global tourism, and the move to responsible and sustainable practices is long overdue.
But while legislation and planned shifts are admirable, the move to more sustainable tourism practices globally has been slow. This, mainly because it’s difficult to change an already-operational hotel or tourism establishment from the top down.
This is where South Africa and the whole African continent has an ironic advantage on sustainable tourism – tourism growth is behind that of first world countries with leading economies.
In Africa, for example, the hotel industry grew nearly 30% over the past year and is expected to grow exponentially in the coming years. With the high pressure and great rewards that come with going green, this means that new developments will be able to lay foundations for green hotels from the ground up, instead of having to adopt existing infrastructure to slot in with green practices.
It’s a concept that’s already gaining international recognition.
Hotel Verde in Cape Town serves as a prime example. This hotel opened in 2013 and was built on green-only principles. Within one year of existence, the hotel was already named a World leading establishment when became the very first hotel in the world to be awarded double platinum for Leadership in Energy and Environmental Design (LEED) from the United States Green Building Council (USGBC).
But more and more African and South African establishments are being recognised for their sustainable achievement.
So much so that an incredible one-third of tourism organisations – 28 out of 75 – that have been longlisted for the 2016 World Responsible Tourism Awards can be found on the African continent. Of these, 11 establishments are South African.
The longlist was announced on #AfricaDay2016.
Tom Blees, president of the Science Council for Global Initiatives, offers his opinion on the topic of nuclear presence in South Africa
South Africa’s current debate over deploying nuclear power is taking place at a time when similar discussions are going on in many countries around the world. Accessibility to global communication is leading people around the world to understand that social justice demands the opportunity for everyone to have a standard of living comparable to what the so-called developed countries enjoy.
The correlation between standard of living and energy usage is virtually synonymous, since what is considered a measure of a comfortable life necessarily includes refrigeration, lighting, transportation, heating and air conditioning, electronics for both entertainment and business, and other appurtenances that consume energy.
The effort to raise global living standards, plus the expectation of a few billion more people on the planet by mid-century, means that energy demands can be expected to at least double, though it is certainly realistic to expect that we may even see a three-fold demand or more within the next fifty years.
Carbon conscious resources
With climate change being widely recognised as one of the most pressing challenges of our time, the search is on for environmentally-benign yet dependable energy sources that can meet this inevitable energy demand. Unfortunately, the widespread belief that wind, solar, and other less-developed so-called renewables can provide for our energy needs, is considered by most energy specialists as wishful thinking at best.
Besides the obvious unreliability of these intermittent energy sources, the basic issue is one of energy density. It’s easy to say that enough sunlight falls on the earth every day, or enough wind blows, to provide many times the energy needs of humanity. It is altogether a different issue to harvest that energy.
We can easily see the problem in Germany, the country that has devoted vast sums of money to wind and solar deployment. There are entire weeks at a time when solar produces virtually nothing in Germany. During those times, even if Germany had a hundred times as many solar panels as they do now, there would still not be enough to meet their electricity demand.
This demonstrable flaw in renewables thus has to be met with so-called ‘back-up power’, a disingenuous misnomer if ever there was one, for ‘back-up’ power systems usually provide about 70-80% of the electricity, even in countries that have the biggest and most expensive renewable programmes.
Back-up power alternatives
Because there are times when neither wind nor solar provide more than trivial amounts of power, back-up power systems must be in place to provide sufficient power to meet peak demand, which is often two to three times the average demand.
The uncomfortable question is this: what will be used to provide that power when renewables fail?
Presently, that power is provided primarily by gas and coal, and less frequently by hydroelectric or nuclear power. But if we are to eliminate carbon emissions, gas and coal have to be eliminated, leaving the other two options.
Hydroelectric power, however, will always be limited by both geography and politics.
Carbon emissions, cause for concern
Carbon sequestration is often touted as being the panacea that could allow gas and coal to provide back-up power, but this is illusory at best. In the case of coal, the strip mining of coal exposes vast amounts of shale and mudstone to the atmosphere, releasing massive amounts of greenhouse gases directly from the mines into the atmosphere.
Even if the coal that was mined had 100% of its CO2 sequestered, in many cases the amount of GHGs escaping from the mine itself would exceed the amount sequestered. Even ignoring the obvious environmental issues with strip mining coal and its other detrimental effects (such as vast ash heaps), this direct GHG effect of mining is a deal-breaker for coal.
Recognition of at least some of these shortcomings of coal has led to a Faustian bargain between many environmental groups and the gas industry. Yet even in the best of conditions, gas produces a vast amount of CO2 when it’s burned under even the best conditions.
As with coal, large-scale sequestration has yet to be proven to be economical or even feasible for its widespread use.
Then there is the issue of leakage from the drilling, transport, and end-use of gas. For example, the thousands of kilometers of pipelines that transport gas from Siberian gas fields to customers in western Europe, end up losing about 40-45% of the gas by the time it reaches the customer. Some of that is gas that is burned to power the pumping stations along the pipelines, but much of it is direct methane leakage into the atmosphere. Since methane is 20-30 times as potent as CO2 when it comes to its greenhouse effect, that is certainly no small matter.
So if we’re to be serious about climate change, no matter how much we might wish for a planet powered by renewables, we have little choice but to embrace nuclear power to provide so-called back-up power. Fortunately, the development of new and ultra-safe nuclear power plant designs hasn’t stopped in the last few decades while nuclear construction was moribund.
There are several innovative designs that are very near to demonstration that are walk-away safe. Some are also designed for mass production that will assure both excellent quality control and superior economics, as well as rapid deployment.
These are the realities of energy today, as uncomfortable as they may seem to those who hold ideological positions on energy matters. Recognition of these realities is behind the nuclear advocacy of many committed environmentalists, many of whom have previously been decidedly anti-nuclear in the past. This trend is masterfully presented in the movie Pandora’s Promise, which will be screened in several events around South Africa in May.
It is my honor to have been invited to participate in the African Utility Week conference in Capetown, May 17-19, as well as other events around South Africa. These presentations will include up-to-date information on cutting-edge nuclear technologies, a topic of particular interest as South Africa contemplates the deployment of nuclear power to provide reliable and economical energy for future development. We can expect lively discussions about all aspects of nuclear power, including solutions to nuclear waste, safety, non-proliferation, and intriguing technologies like nuclear batteries (for mini-grids in isolated areas) and ship-mounted full-scale power plants. I look forward to engaging with concerned citizens in South Africa and hope you’ll make plans to participate in these discussions.
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An important paradigm shift is underway. Over the course of last century, global trade was growing faster than global GDP (read: income). However, post-2008, this trend is reversing. Presently, world trade is growing more slowly than world GDP. Recent estimates by OECD in 2015 indicate trade figures for the G-7 group of countries fell by 7.1 per cent while trade figures for major emerging economies including Brazil, China, India, Indonesia, Russia, and South Africa slumped by 9.5 per cent.
This trend is worrisome. The beneficial effect of trade in increasing productivity and income growth is well known. Economies such as South Korea, Taiwan, and much of the South East Asian nations catapulted to a higher growth trajectory through trade. In fact, as evidence from China suggests trade has been instrumental in lifting millions out of poverty.
Economists argue four important reasons as to why growth in global trade is slowing down. First, the financial crisis in the US, and more recently in Europe has slowed down world trade. These two regions account for more than half of world trade volumes, and a slowdown in these regions will naturally have an impact on global trade. Second, with an economic slowdown there will be a concomitant fall in investment across national boundaries, which means lower trade.
Third, a slower intra-industry trade, particularly, those associated with the international fragmentation of production. A fall in investment flow negatively affects trade in similar in commodities such as cars, computers, air conditioners, and refrigerators. Finally, in event of slower trade growth, individual countries turns protectionist. Protectionism is becoming evident in terms of an increase in applied tariffs (although, keeping them below the rates countries bound at WTO) and non-tariff barriers (NTBs), mainly in the form of anti-dumping measures, sanitary and phytosanitary sanctions, and even through the provisions granting subsidies to domestic producers.
In the event of this global scenario, India has a lot to worry about. Recent trade data for India (April-February 2015-16) suggests, in dollar terms, cumulative value of exports were at $238.4 billion as against $286.3 billion during corresponding period a year earlier, registering a negative growth of 16.7 per cent.
Apparently, Prime Minister Narendra Modi’s aim to almost double goods and services exports to $900 billion in the next four years, and grabbing a 5 per cent share of global trade by 2020 (up from 1.7 per cent global exports share at present) seems overly ambitious. India’s largest export item, namely, refined petroleum products has fallen by 15 per cent, lowest in nine years. Interestingly, this fall is not only due to a fall in international crude price (as some experts would argue) but also because of declining export volumes. Growth of other important export items such as metal, electronics and machinery are also falling.
Interestingly, despite the Chinese economy slowing down, the export figures for China in 2014 was recorded at $2,342.3 billion in comparison to India’s $317.5 billion. If one takes into consideration items such as iron and steel, chemicals, machines and telecommunication equipment, textiles and clothing, where China and India compete with each other in international market, the former’s share in the world market is much higher.
Indian businesses are losing competitiveness due to high borrowing costs and because of country’s long-standing weaknesses such as bad infrastructure, red tape and corruption.
In this regard there are important lessons to be learnt from China. The relative success of China lies in its ability to provide better physical infrastructure and easy availability of cheap credit. Within infrastructure funding, the contribution of India’s private sector is only 36 per cent in comparison to China’s 48 per cent. This is notwithstanding the fact that China’s GDP is almost four times the size of India’s GDP.
In many instances, Indian exporters of edible items like rice, tea etc., find it difficult to ship their product from the nearest port of exit. For example, exporters in eastern India are forced to transport edible items by road to Kakinada – a port in Andhra Pradesh which offers mid water loading facilities – to avoid contamination. The congested Kolkata port handles export of iron ore and other metals scraps, items which cause pollution (read dust particles) and thereby expose edible items to the risk of contamination.
The Chinese government offers other goodies as well. On top of cheaper credit, Chinese manufacturing units also avail cheaper power, water and land. Besides providing these indirect subsidies, the government also gave differential subsidy. For example, production of staple fibres, meant for domestic consumption, attract lesser subsidy as compared to when it is used as an input for making exportables, like, polyester yarn. The special economic zones (attracting zero tariffs) were built with the idea of making China the assembly hub of the world – where inputs were imported from neighbouring Asia, assembled in China and thereafter exported to the rest of the world. Coupled with these, a much larger scale of operation by lowering per unit cost of production, explains China’s much higher share of world exports.
Lower transaction costs have also given Chinese exports a much-needed competitive edge. For example, it takes around 40 days to book a container for exports in India as compared to just one day in China. On the contrary, logistics costs in India are among the highest in the world at 13 percent of GDP. For instance, trucks in India have to pass through multiple checkpoints and stop at state borders to pay toll taxes and octroi, for inspections, etc. An estimate of the time taken at checkpoints shows that for a journey of 2,150 kilometres between Kolkata and Mumbai a truck had to stop at 26 checkpoints for as much as 32 hours. This torturous journey is likely to continue unless the government implements GST. With respect to ‘Trading Across Borders’, in 2013, India ranked 132 out of 189 countries, while Bangladesh, Nepal, Pakistan and Sri Lanka ranked 130, 177, 91, and 51, respectively.
Inadequate infrastructure is responsible for holding back GDP growth by roughly 2 per cent, or an annual hit of approximately $20 billion to economic progress. The government, on its part, has set a huge target of doubling investment in infrastructure from Rs. 20.5 trillion ($0.33 trillion) to Rs. 40.9 trillion ($0.65 trillion) during the twelfth five year plan period (2012-2017). To achieve this target, the government will require investment from the private sector.
Ease of doing business
Although reforms in India are taking place, they are far from complete. Companies face a maze of government orders, regulations, rules and procedures, which raise the cost of doing business in India. In its Doing Business Report-2015, the World Bank placed India in the 142nd position out of a sample of 189 countries, with a ranking that is worse than China, Sri Lanka, Bangladesh, and Pakistan when it comes to the convenience of doing business. The Doing Business Report-2016, saw India’s performance improved, moving up by 12 places to 130th position, mainly because Central government specifically stepped in to improve the ease of doing business in Delhi and Mumbai (as opposed to the rest of India) – the two cities where World Bank observers undertake surveys to examine the ease of doing business.
Even in terms of productivity and efficiency, India needs to improve. According to the APO Productivity Database 2014, average Total Factor Productivity (TFP) growth in India rose from 2.0 per cent in 2000-05 to 4.7 per cent during 2005-10, but fell to 0.9 per cent in the following two years. However, for China average TFP growth was 3.9 per cent during 2000-05, rising to 4.2 per cent during 2005-10, and falling to 2.1 per cent over the next two years. During 2010-12, while TFP contributed 11 per cent to GDP growth in India, its share in China’s GDP growth was 26 per cent. Average TFP growth over the last four decades in India has been 1.4 per cent as compared to 3.1 per cent in China.
Equally important is to undertake a more effective stance at regional trading forums. The South Asian Free Trade Area (SAFTA) has met with limited success. Negotiators from ASEAN regions accuse Indian policymakers of not willing to give them market access to items originating from ASEAN countries. Most of the tradable items are under negative lists (outside the purview of basic zero custom tariffs). India-Japan CEPA has resulted in limited gain for services involving movement of professionals such as nurse and yoga teachers, and trade in Indian generic pharmaceutical products. India policymakers need to indulge in more effective negotiation to sell our Mode 1 and Mode 4 services, areas where we have a comparative advantage.
SINGAPORE, March 9 (Xinhua) — Global Platform for Sustainable Cities (GPSC), funded by part of a Global Environment Facility (GEF) initiative, was launched on Wednesday when city leaders around the world met in Singapore.
The initiative by GEF is expected to mobilize up to 1.5 billion U.S. dollars over the next five years for urban sustainability programs in 11 developing countries, including Brazil, Cote D’Ivoire, China, India, Malaysia, Mexico, Paraguay, Peru, Senegal, South Africa, and Vietnam, according to a joint release by World Bank and GEF.
Coordinated by World Bank and supported by multilateral development banks, UN organizations, think tanks and various city networks, GPSC is a knowledge sharing program that will provide access to cutting-edge tools and promote an integrated approach to sustainable urban planning and financing.
GPSC will work with a core group of 23 cities, but it will reach many more by sharing of data, experiences, ideas, and solutions to urban challenges, and by linking the knowledge to finance that will influence investment flows toward building cities’ long-term urban sustainability.
The program is designed to help mayors and other municipal leaders take more informed decisions in the day-to-day management of their cities, including improving access to clean water, energy, and transport, as well as efforts to mitigate climate change. It also supports cities in pursuing evidence-based approaches to urban planning, including geospatial data, and establishing urban sustainability indicators.
“Linking knowledge to finance is critical to directing investment flows to quality and sustainability. We see this platform as a great opportunity to connect cities not only to cutting-edge knowledge, but also to development banks and financial institutions,” said Ede Ijjasz-Vasquez, Senior Director of the World Bank’s Social, Urban, Rural, and Resilience Global Practice.
GPSC launch event was held during Singapore Urban Week, which lasts from Monday to Friday. The program is the foundation of “Sustainable Cities Integrated Approach Pilot”, a wider GEF sustainable cities initiative which is expected to create a strong network of cities that will act as global ambassadors for urban sustainability planning, with tangible benefits at both the local and global levels.
The results showcased South Africa as one of the top performers worldwide, reporting the highest percentage of green building projects currently under way. Even more impressive is the fact that South Africa’s commitment to green building isn’t triggered by regulatory requirements, as is the case in many other jurisdictions, but by ‘doing the right thing’.
Dodge Data & Analytics and United Technologies published ‘World Green Building Trends 2016’ this month, on which the World Green Building Council (WorldGBC) was a research partner.
The report states that respondents in South Africa believe the green activity so far is just laying the groundwork for an overall shift in the market. If this degree of commitment to green building holds, South Africa will be a leader in the global green market in the next three years.
The report finds that, internationally, twice as many companies are expecting their building projects to be certified green by 2018 – an increase to 37%. In comparison, respondents in South Africa indicated that 41% of their work is already green.
“South Africa will continue to outperform with almost two thirds of respondents expecting more than 60% of their projects to be green by 2018,” says Green Building Council South Africa (GBCSA) CEO, Brian Wilkinson.
Especially noteworthy is that South African green building is driven by an acknowledgement that green building is ‘the right thing to do’, rather than by regulations, according to the report.
“In South Africa, there is an absence of regulatory requirements – which, in countries like the UK, Australia and Singapore, are in fact the trigger for green building,” explains Wilkinson. It’s testimony to the work being done by the GBCSA.
The GBCSA certified South Africa’s first green building project in 2009. In May 2015, the council certified its 100th building project, and today, there are 167 certified projects.
“It’s a clear sign that green building practices are gaining significant momentum in South Africa, along with an acknowledgment that Green Star certified projects are not only world-class and innovative, but benefit people, the planet and profits,” concludes Wilkinson.
There are about 500 million small-scale farmers on Earth, and most of them live on less than $1 a day. That’s half a billion people laboring below the global poverty line, surviving and sometimes struggling to improve their harvests. They’re often separated from larger population centers, or lack the means to educate themselves on specialized farming methods, or run up against natural and man-made obstacles that leave the futures of their farms in jeopardy. In these situations, knowledge is as valuable a tool as a shovel, a seed or a plow. But whereas the internet is readily available to Western nations on the grid, farmers in Africa and parts of South America operate on a digital deficit.
That’s why WeFarm calls itself, “The internet for people without the internet.”
Founded in 2014, WeFarm is a free, peer-to-peer service designed for farmers living around the world. It enables farmers to share information with each other via SMS (Short Message Service), or text messaging. WeFarm translates and connects queries from continent to continent, and has thus far provided more than 100,000 answers to its 43,000 registered farmers.
WeFarm CEO and founder Kenny Ewan developed the service after spending seven years working in sustainable agriculture with indigenous communities in Peru. Many of the communities he lived and worked in were remote and without regular access to the internet, which left them isolated from their neighbors. Ewan was largely concerned about the effects of climate change on the region, and how global warming will necessitate a change in harvesting techniques.
Today, over 97 percent of scientists agree that global warming will increasingly impact the way human beings live. Developing countries will be hit the hardest of all, making them the critical locus for climate adaptation strategies.
According to Zoë Fairlamb, WeFarm Comms and PR Manager, the idea for a peer-to-peer service came to Ewan when he saw how innovative certain farmers could be when meeting the challenges of climate change. “Kenny noticed, quite soon on, that people could come up with these low-cost, ingenious solutions, but farmers five miles down the road wouldn’t have heard about what these people were doing,” she told Planet Experts. “So that prompted him to think about communication and really pose the question, ‘Why isn’t there a global resource for information on agriculture?'”
Ewan began the process of creating that resource in 2009 when he joined Cafédirect Producers’ Foundation (CPF), a UK-registered charity that works with smallholder farms and their organizations.
Connecting Farmers and “Changing the Conversation”
Internet connections might be less common in the developing world, but mobile technology is pervasive. GMSA estimates that there are 7.5 billion mobile connections, and 3.7 billion unique subscribers, worldwide. By comparison, a little more than a third (36 percent) of the planet is online. In Africa, many countries have leapfrogged landline technology and gone directly to mobile phones. According toPew, some 90 percent of adults in Nigeria and South Africa own cell phones (mostly “basic feature” phones capable of calling and texting).
Indeed, for most Africans, SMS technology is already an invaluable tool. In 2007, Vodafone launched M-Pesa, a mobile phone-based money transfer system, for mobile network operators in Kenya and Tanzania (the “M” stands for mobile, the “pesa” is Swahili for money). It was the success of mobile tech like M-Pesa that spurred WeFarm to make its initial launch in Kenya in February 2015.
“In East Africa, people are very used to using mobile technology for other services,” said Fairlamb. “There’s also a very strong culture in Kenya and Uganda of people sharing and giving. People trust one another and want to share and help each other.”
In 10 months, WeFarm registered about 33,000 Kenyan farmers with its service. “People love it,” said Fairlamb.
The ultimate goal is to create a global network for small-scale farmers in Africa, Asia and Latin America. As Fairlamb explains, “Basically, a farmer can register on WeFarm’s service completely for free just by sending an SMS message to our national number. Once they’ve signed up to the service, they can then ask any question regarding farming and we distribute that question to other farmers locally, nationally and internationally, and the farmer who asked the question should receive between three to five crowd-sourced answers within a couple of hours without having to leave their farm, without having internet access and without having to spend any money.”
It’s a fast, free and convenient solution for farmers on the edge of developing infrastructure, yet marketing the service proved an initial challenge. By definition, these unconnected farmers are scattered and separated, remote and difficult to reach. “We’ve had to be quite inventive in solutions of ways to reach these people,” said Fairlamb. Part of that has been making use of CPF’s farming network and training farmers to become WeFarm ambassadors, which then go out and train others in turn. The most successful method for getting the word out, however, has been radio.
Interviews with radio presenters on both the local and national level have had incredible results, said Fairlamb. “There was one occasion where we did a national radio show and within the space of an hour we had 4,000 people sign up to the service. It was really exciting seeing everyone registering that quickly.”
WeFarm’s Uganda network has also shown promising growth. After launching in late November, they had already signed 2,500 farmers by mid-December. A Peru launch earlier in the year has also added invaluable insights to WeFarm’s information network. “We’re seeing some amazing things, pieces of advice, coming through the system from Peru,” said Fairlamb.
The growth of the service in Africa alone has been extremely gratifying for the WeFarm team. “I think Kenny [Ewan] would say that it wasn’t a surprise but maybe a relief just how much farmers use it and how much they value it,” said Fairlamb.
“There were a lot of people who questioned the peer-to-peer model, but that’s the core of the business. There’s kind of a widespread approach in international development circles whereby people kind of assume and think that people who are living in poverty need to be told what to do. WeFarm wants to be about changing that conversation and giving these people a voice, showing their knowledge is valuable and giving them a way to share that information.
WeFarm’s next big launch will be in Côte d’Ivoire. A Tanzania launch is forthcoming, as are launches in India and Brazil.
Balancing Social Good With Making Profits
Though a humanitarian endeavor, WeFarm is also a for-profit business. Yet it’s a business that is following the growing economic ethos that profit is not divorced from doing good.
The social good of the WeFarm SMS service is giving farmers the means to communicate with each other and share techniques and strategies for improving crops and adapting to climate change. That service is free, so the revenue comes from the wealth of insight that emerges from that communication. Still in the pilot stage, WeFarm hopes to sign up businesses to a monthly service that provides disaggregated data about what’s going on in their various supply chains.
As Fairlamb explains, “Small scale farmers are responsible for producing 70 percent of the world’s food, but the majority of corporate food and drink businesses, retailers, any kind of consumer brand that has small scale farmers in their supply chain, has next to no visibility as to what goes on in that bottom rung. So we offer a service to these types of businesses that enables them to improve supply chain sustainability, make better decisions and help the people who are producing the products that they rely on.”
For a tea company, that might look like, “What are the top three questions that tea farmers are asking this month?” or the top two crops that tea farmers are looking to diversify into. Disaggregated data from WeFarm can also help identify challenges facing various farmers and techniques for overcoming them. WeFarm is also interested in providing lead generation and SMS advertising for more local businesses.
“Constantly on the system we see people asking questions about ‘where can I find this type of seed’ or ‘where can I buy a solar panel,’ ‘I’m interested in a micro-finance loan, how do I go about finding that?’ We’re quite well positioned to be able to connect these farmers to the products and the services that they’re looking for,” said Fairlamb.
WeFarm is currently seeking investment to scale up their operations and connect a million farmers by the end of this year. Thus far, the company has received £500,000 in seed funding from Google.org and Wayra, Telefonica’s incubator. WeFarm recently opened its Series A funding round and is seeking £2.3 million in investment.
The global mining crisis, which has affected mining regions around the world, has also taken a heavy toll on South Africa’s mining sector. External pressures such as plummeting commodity prices, of sometimes well over 50%, have had a severe effect. But these global pressures have been worsened by South Africa-specific conditions.
South Africa’s mining industry faces the additional impact of what is internationally considered a very poor and volatile labour relations climate, regulatory uncertainty, and tough and disruptive government safety interventions (Section 54s).
It has also felt the impact of Eskom’s load-shedding and sharply rising power costs, increasing limits on ready access to infrastructure, and an aging and maturing mining base.
The outlook for 2016 is muted to say the least. Although the mining industry has been provided some relief from a sharply weaker rand following the [former finance minister Nhlanhla] Nene crisis, as evident in the financial results of some of the companies which have recently reported results for 4Q 2015, few experts expect US commodity prices to recover in the year ahead. Platinum group metals have already suffered six to seven years of pain. Although several mine closures and capital curtailment have already had a modest impact on supply, further closures in 2016 are expected as difficult decisions have to be taken to bring sustainable margins back to the industry.
The ferrous industry (iron ore and manganese) has probably seen the most brutal price corrections and, structurally, has the weakest outlook as new mines coming on line globally operate at far lower costs than those in South Africa, while high-cost Chinese production tends to act irrationally due to heavy state support. South Africa, however, has unique quality assets and post the necessary heavy cost restructuring, should be able to sit out the storm.
Despite the more than halving of export coal prices, high quality key export mines seem to be holding up with the help of the weaker rand. Reduced prices have, however, highlighted the continued need for cost-effective infrastructure for bulk commodities. The Richards Bay line, for example, has managed to maintain volumes, although the far more expensive Maputo export route has essentially halted most coal exports.
Mining companies have responded to pressures by reducing overheads and head office costs, often radically, with Kumba Iron Ore, for example, having reduced head office by 61% in the past year. As this proved to be insufficient to negotiate the current price crisis, severe cuts at the operational level were also announced recently.
South African banks, in general, have relatively broad exposures to companies active in the mining sector. Consequently, the global mining crisis is forcing most banks to critically re-assess and track their existing exposures, and proactively manage these. When, for example, company credit downgrades occur, risk management frameworks often force banks to reduce facility sizes to affected companies when they come up for re-financing. In addition, new projects able to attract bank debt funding also reduce substantially.
With commodity prices having declined significantly, few projects can meet funders’ risk management requirements. Essentially, lower cost projects should survive financially, while many higher cost producers will encounter financial difficulties. The restrictions on sources of funding as the crisis bites will act as an additional brake on industry capacity growth which, in time, should put a firmer floor under commodity prices.
Importantly, banks will focus foremost on the ability of companies and projects to generate cash in tough commodity environments.
However, South Africa’s regulatory, labour and investment mining climate imposes further questions on the reliability and predictability of these cash flows.
It therefore remains imperative to avoid the type of disruptive and radical industry upheavals seen in the South African mining industry over the past few years. Confidence is at a low, and if this results in further limitations on the ability of the industry to fund continuation and growth, the consequences will be far graver beyond the impact of the [commodity price] upheaval itself.
According to a study (see attachment) entitled, World Green Building Trends 2016, Developing Markets Accelerate Global Green Growth, the percentage of companies expected to have more than 60 per cent of their building projects certified green is anticipated to more than double by 2018, from 18 per cent currently, to 37 per cent.
The anticipated growth will largely be driven by countries that still have developing green markets, with firms from Mexico, Brazil, Colombia, Saudi Arabia, South Africa, China and India reporting dramatic growth in the percentage of their projects that they expect to certify as green.
The study, from Dodge Data & Analytics and United Technologies Corporation, on which the World Green Building Council (WorldGBC) was a research partner, features the results of more than 1,000 building professionals from 69 countries – including Green Building Councils and their corporate members, from architects and contractors, to owners and engineers.
The study identified a green project that is either certified or built to qualify for certification under a recognised green standard, such as LEED, BREEAM, the DGNB System, Green Star and many other tools.
Other key findings from the report include:
- Global green building continues to double every three years.
- Brazil expects six-fold growth in the percentage of companies that expect to certify the majority of their projects green (from 6 per cent to 36 per cent); five-fold growth is expected in China (from 5 per cent to 28 per cent); and four-fold growth is expected in Saudi Arabia (from 8 per cent to 32 percent).
- Building owners report seeing a median increase of 7 per cent in the value of their green buildings compared to traditional buildings (an increase that is consistent between new green buildings and those that are renovated green).
- The most widely reported benefit globally is lower operating costs. But around 30 per cent of respondents also consider documentation and certification providing quality assurance, education of occupants about sustainability, and higher value at the point of sale as additional benefits which are important in their markets.
- The top sector for green building growth globally is commercial construction, with nearly half (46 per cent) of all respondents expecting to do a green commercial project in the next three years.
- Reducing energy consumption continues to be the top environmental reason for building green (selected as one of the top two reasons by 66 per cent of all respondents), protecting natural resources ranked second globally (37 per cent), and reducing water consumption ranked third (at 31 per cent).
Terri Wills, CEO of WorldGBC, and who is interviewed as a thought leader in the study, said: “This study offers further evidence on the strong business case for green building – the growth of which is now truly a global phenomenon. Green building is playing a critical role in the development of many emerging economies, particularly as their populations grow and create a pressing need for a built environment that is both sustainable and ensures a high quality of life.
“Green Building Councils and their members around the globe will play a pivotal role in delivering this projected growth, and their leadership and expertise will be vital in realising the multiple social, economic and environmental benefits that green buildings offer.”
As countries across sub-Saharan Africa grapple with the challenges of sustaining high levels of economic growth, plunging commodity prices, and the effects of climate change, revitalizing agriculture must become a priority on the continent.
The latest World Bank report warns that anemic recovery in emerging markets will weigh heavily on global growth prospects. Its 2016 growth forecast for sub-Saharan Africa stands at 4.2 percent, up from 3.4 percent in 2015.
A vibrant, sustainable and resilient agriculture sector is vital for sub-Saharan Africa’s economic future. Indeed, African agriculture stands at the cusp of transformational change. The numbers are compelling:
Farming is the primary source of food and income for Africans and provides up to 60 percent of all jobs on the continent.
Food production in sub-Saharan Africa needs to increase by 60 percent over the next 15 years to feed a growing population. Africa’s food and beverage markets are buoyant and expected to top $1 trillion in value by 2030.
The continent is bursting with potential: At 200 million hectares, sub-Saharan Africa is home to nearly half of the world’s uncultivated land that can be brought into production. Africa uses only 2 percent of its renewable water resources compared to 5 percent globally. Together with abundant resources, including a resourceful, enterprising youth population, strategic investments in agriculture can unleash virtuous growth cycles. How can Africa, then, capitalize on these opportunities?
First, African farmers need new technology—higher-yielding, more resilient food crops that deliver bountiful harvests. New techniques are beginning to boost yields in rice and cocoa, among other crops. Second, African farmers need more electricity, more irrigation, and better infrastructure that links them to lucrative regional food markets. Third, we need sound policies that do not discriminate against the farm sector. Women produce the bulk of food in Africa, and yet they are largely locked out of land ownership, access to credit, and productive farm inputs such as fertilizers, pesticides, and farming tools. Further, they are often bypassed by extension services, limiting their productivity.
At the just-concluded climate talks in Paris, the World Bank unveiled a bold new plan that calls for $16 billion in funding to help Africa adapt to climate change and enhance the continent’s resilience to climate shocks, including a focus on climate-smart agriculture and supporting the vision for accelerated agricultural transformation of the Malabo Declaration.
As policymakers struggle to accelerate growth and tackle prevailing headwinds, it is worth noting that the agriculture sector has been shown to be two to four times more effective than other sectors in raising incomes among the poorest people.
Banking on African agriculture is an idea whose time has come.
The two operational domestic airlines in the country, Starbow and Africa World Airliners (AWA), have received the International Air Transport Association (IATA) Operational Safety Audit (IOSA) certificate — a measure of the sound safety, management and quality control systems of the two operators.
The IOSA is the benchmark for global safety management in airlines. All IATA members are registered and must remain registered in order to maintain IATA membership.
About 24 airlines operate within the West African sub-region with a relatively young population of about 300 million. However, though operational efficiency and safety is high among various airlines in Ghana and the sub-region, just five airlines are IATA-certified.
Aside from the two Ghanaian carriers, Nigerian airlines Arik and Aero, and Lomé-based Asky Airlines are the other IOSA certified airlines.
According to the International Air Transport Association (IATA) — the global trade association for the airline industry with over 250 member-airlines which comprise 84% of total air transport — the IOSA programme is an internationally recognised and accepted evaluation system designed to assess the operational management and control systems of an airline.
The attainment of IOSA certification means that indigenous carriers can now compete favourably with their peers in the sub-region for big-ticket international-organisation clients.
It will also make it possible for them — Starbow and AWA — to enter into commercial agreements with foreign carriers like KLM, Lufthansa, BA, Tap Portugal, Emirates and others to handle passengers travelling on itineraries that require multiple airlines.
For instance, passengers travelling from Frankfurt in Germany to Kumasi via Accra or from London to Takoradi through Accra. Domestic carriers can partner foreign airlines to operate the domestic end of such travellers’ itineraries.
“We intend to deepen our partnership with South African Airways (SAA) given the attainment of IOSA certification. One of the things that was preventing us from doing the code share was getting this IOSA certificate. So once we have it, we are working at deepening it so we have a better code share,” said Samuel Thompson, Chief Operations Officer of AWA.
“Our current fleet is not very suitable for the regional flights so we are looking at getting something bigger, like a medium-haul aircraft with a seat range of about 120-160, then we will start doing Lagos, Abuja, Monrovia and Freetown. We will still do what we are doing and improve on our safety, management systems, and our quality management systems,” he added.
Mr. Eric Antwi, the Chief Executive Officer of Starbow — whose company received its IOSA certificate in September 2015, noted that: “When this is through it will increase our business with other airline service providers who will give us passengers and vice versa.
“We are happy to be among the listed airlines which include major intercontinental and regional carriers that have successfully gone through this rigorous auditing process.”
The IOSA certification audit is an internationally recognised and accepted evaluation system designed to assess the operational management and control systems of an airline, with emphasis on universally accepted best practices in the Airline industry.
IOSA uses internationally recognised audit principles and is designed to conduct audits in a standardised and consistent manner.