The embassy of Belgium here in Ethiopia launched the first of a series of discussion events: ‘Chocolate & Coffee Talks’ with an aim of sharing expertise from world class scholars. This time around, discussions were held with the prominent economy and policy professor and author of ‘Gambling on Development’, Stefan Dercon, who was on an Addis Ababa visit.
At the session that gathered various local and foreign stakeholders he presented his book that discusses ‘Development with a Case Study of Ethiopia’.
At the discussions, Stefan articulated why some countries prosper while others fail. He also highlighted why others cannot be found in specific set of policies but rather in key development bargain of the elites.
Prof. Stefan Dercon shares development angles at the ‘Chocolate & Coffee Talks’
African Airlines to post losses as industry worldwide returns to profit in 2023
The International Air Transport Association (IATA) expects a return to profitability for the global airline industry in 2023 as airlines continue to cut losses stemming from the effects of the COVID-19 pandemic to their business in 2022; however African Airlines are set to post losses of USD 638 million in 2022 and USD 213 million in 2023.
In 2023, airlines are expected to post a small net profit of USD 4.7 billion-a 0.6% net profit margin. It is the first profit since 2019 when industry net profits were USD 26.4 billion. IATA also expects in 2022, airline net losses are expected to be USD 6.9 billion. This is significantly better than losses of USD 42.0 billion and USD 137.7 billion that were realized in 2021 and 2020 respectively.
“Resilience has been the hallmark for airlines in the COVID-19 crisis. As we look to 2023, the financial recovery will take shape with a first industry profit since 2019. That is a great achievement considering the scale of the financial and economic damage caused by government imposed pandemic restrictions. But a USD 4.7 billion profit on industry revenues of USD 779 billion also illustrates that there is much more ground to cover to put the global industry on a solid financial footing. Many airlines are sufficiently profitable to attract the capital needed to drive the industry forward as it decarbonizes. But many others are struggling for a variety of reasons. These include onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and a value chain where the rewards of connecting the world are not equitably distributed,” said Willie Walsh, IATA’s Director General during IATA’s Global Media Day held in Geneva, Switzerland from December 6 to 7, 2022.
2022
Improved prospects for 2022 stem largely from strengthened yields and strong cost control in the face of rising fuel prices. Passenger yields are expected to grow by 8.4%. Propelled by that strength, passenger revenues are expected to grow to USD 438 billion up from USD 239 billion in 2021.
Air cargo revenues also played a key role in cutting losses with revenues expected to reach USD 201.4 billion. That is an improvement compared with the June forecast, largely unchanged from 2021, and more than double the USD 100.8 billion earned in 2019. Overall revenues are expected to grow by 43.6% compared to 2021, reaching an estimated USD 727 billion.
Most other factors evolved in a negative manner following a downgrade of GDP growth expectations (from 3.4% in June to 2.9%), and delays in removing COVID-19 restrictions in several markets, particularly China. IATA’s June forecast anticipated that passenger traffic would reach 82.4% of pre-crisis levels in 2022, but it now appears that the industry demand recovery will reach 70.6% of pre-crisis levels. Cargo, on the other hand, was anticipated to exceed 2019 levels by 11.7%, but that is now more likely be moderated to 98.4% of 2019 levels.
On the cost side, jet kerosene prices are expected to average USD 138.8/barrel for the year, considerably higher than the USD 125.5/barrel expected in June. That reflects higher oil prices exaggerated by a jet crack spread that is well-above historic averages. Even with lower demand leading to reduced consumption, this raised the industry’s fuel bill to USD 222 billion (well above the USD 192 billion anticipated in June).
“That airlines were able to cut their losses in 2022, in the face of rising costs, labor shortages, strikes, operational disruptions in many key hubs and growing economic uncertainty speaks volumes about peoples’ desire and need for connectivity. With some key markets like China retaining restrictions longer than anticipated, passenger numbers fell somewhat short of expectation. We’ll end the year at about 70% of 2019 passenger volumes. But with yield improvement in both cargo and passenger businesses, airlines will reach the cusp of profitability,” said Walsh.
2023
In 2023 the airline industry is expected to tip into profitability. Airlines are anticipated to earn a global net profit of USD 4.7 billion on revenues of USD 779 billion (0.6% net margin). This expected improvement comes despite growing economic uncertainties as global GDP growth slows to 1.3% (from 2.9% in 2022).
“Despite the economic uncertainties, there are plenty of reasons to be optimistic about 2023. Lower oil price inflation and continuing pent-up demand should help to keep costs in check as the strong growth trend continues. At the same time, with such thin margins, even an insignificant shift in any one of these variables has the potential to shift the balance into negative territory. Vigilance and flexibility will be key,” said Walsh.
Ethiopia successfully hosts the 17th Internet Governance Forum
Ethiopia successfully hosts the 17th edition of Internet Governance Forum (IGF) under the overarching theme, ‘Resilient Internet for a Shared Sustainable and Common Future’, from November 28 to December 2, 2022. The forum called for more investment in building resilient internet infrastructure to tap digital opportunities and accelerate social and economic transformation to connect the unconnected community in order to benefit more from the internet.
The forum brought together various stakeholders including representatives from the United Nations, both local and International organizations, startups from across the world, private companies, representatives of countries and youth interested in tech.
“The internet should be for everyone and it should be a safer and more reliable space for everyone to use. Thus we have both large and small opportunities to achieve these objectives,” said Vint Cerf, vice president and Chief Internet Evangelist for Google, indicating that the IGF and its constituents have been shedding light on these opportunities for 17 years and counting.
“Technologies are transforming lives and livelihoods and are also outpacing regulations and exacerbating inequalities. We often hear that the future will be digital but a digital future must be human centered. That ambition is as reflected on this year’s theme,” said UN-Secretary General, Antonio Guterres, addressing participants through a video message for the official opening of the forum on Tuesday, adding, “ It’s also the motivation behind my proposal for the Global Digital Compact, on an open, free, inclusive and secure digital future for all.”
“The internet’s contribution to social development is immense. The democratization of knowledge and communication, access to entrepreneurship skills and new employment opportunities, health care access and education are a few noteworthy ones,” said Prime Minister Abiy Ahmed in his opening remarks.
Delegates called for more capacity-building, greater multi-stakeholder engagement and the coherent development of policies that effectively harness the use of advanced technologies. The private sector was cited as a crucial partner as they are at the forefront of innovative technological advances.
Similarly, with Africa having a large number of unconnected populations to the internet, the forum underscored the importance of digital technologies as tools for enhancing development across Africa.
Acting Executive Secretary of the Economic Commission for Africa (ECA), Antonio Pedro highlighted that reducing the digital divide is essential to building new pathways for rapid economic growth, innovation, job creation and access to services in Africa.
“Harmonizing regulations to remove barriers to connectivity both within African nations and across the continent is crucial,” said Pedro, whilst explaining that harmonized regulations will facilitate the operationalization of the African Continental Free Trade Area (AfCFTA).
The AfCFTA is key to Africa’s food and energy security and fosters competitiveness through economies of scale and improved market access.
Statistics show that an estimated 871 million people are not connected to the internet in Africa and access was even limited in rural areas. Though 70% of Africa’s population technically has access to mobile internet, less than 25% are making use of the internet due to the high cost of mobile internet across the region.
“The lack of digital and literacy skills is another key barrier to achieving digital inclusion,” said Pedro, adding that, “These skills gaps have been further exacerbated by the COVID-19 pandemic, where the expansion of online education, e-healthcare, e-commerce and remote work, have left a large portion of the population, without internet access, even further behind.” He said the need for meaningful digital connectivity to boost sustainable development, particularly for the Least Developing Countries, has never been more urgent. Despite this, Africa has made some progress in promoting digital access.
Addressing the participants, Li Junhua, UN Under-Secretary-General for Economic and Social Affairs (UNDESA), said the internet is a springboard to rescue the Sustainable Development Goals (SDGs) through digital empowerment.
“Digital technologies and the internet are serving as engines of growth and providers of essential services including the support to e-government and growing economies,” said Junhua, adding, “The digital frontier is where the truly transformational power will be realized and the important space for accelerating projects towards the SDGs.”
According to the Ministry of Innovation and Technology more than 3000 participants have participated on the forum. The IGF is the first international forum with a large number of participants that Ethiopia has hosted after the outbreak of Covid-19.
Learning poverty becomes more pronounced, reports signal
Learning poverty has increased by a third in low- and middle-income countries, with an estimated 70 percent of 10-year-olds unable to understand a simple written text, a new report reveals.
This report comes at the back of the tenth high-level ministerial forum on Innovation Africa held in Lusaka, Zambia that focuses on major education projects, skills development and the upsurge in investments leveraging technology for education in Africa.
According to the new report published by the World Bank and its partners like UNESCO and UNICEF, the estimated rate was at 57 percent before the pandemic, but now the learning crisis has deepened. This generation of students now risks losing USD 21 trillion in potential lifetime earnings in present value, or the equivalent of 17 percent of today’s global GDP, up from the USD 17 trillion estimated in 2021.
This report titled, ‘The State of Global Learning Poverty: 2022 Update’, also tasks countries on the need to concentrate their efforts on the most cost-effective approaches to tackle learning poverty.
It states that these interventions must be implemented as part of a national learning recovery program that can also serve as a springboard for building more effective, equitable, and resilient education systems.
Benjamin Piper, Director of Global Education, Bill and Melinda Gates Foundation was quoted as saying, “We have solutions that can work at scale and in government systems. Committing to substantial learning recovery programs is a start, but the composition of those programs matter: measure learning outcomes, but also invest in improving instruction through structured pedagogy.”
In Africa, based on these suggestions, there are bright glimmers of hope for effective scalable education transformation as seen in some nations like the Liberia Education Advancement Program.
NewGlobe is one of the most widely talked about technical partners in education, supporting multiple state and national Governments in Africa to improve learning outcomes through system transformation.
All programs supported by NewGlobe empower every teacher with digital tools to deliver expertly planned lessons based on the local national curriculum.
This holistic learning methodology was the subject of a 2-year study led by 2019 Nobel Prize winning Professor Michael Kremer.
Hundreds of ministers and officials came across the continent attended the summit including delegations from Ethiopia, Uganda, Rwanda and South Africa.
High-level delegations along with counterparts from at least 24 other African countries engaged with other stakeholders on topics key to the education agenda of the summit.
Among the topics covered at Innovation Africa was digital transformation across Africa’s education sector, teacher training, digital strategies for school leaders, technology innovation and solutions for improving school connectivity, curriculum reforms.
The focus on education in this year’s event is pivotal to the learning poverty crisis currently faced in Africa and beyond.
The Innovation Africa summit education rich agenda provides an opportunity for African countries to fulfill this call to action, which is key as the learning poverty has become even more pronounced in post pandemic Africa.
