The Board of Directors of the African Development Fund has approved a $5.5 million technical assistance grant to kick-start the roll-out of the flagship Desert to Power initiative in the Eastern Sahel region countries of Djibouti, Eritrea, Ethiopia and Sudan.
Known as the East Africa Regional Energy Project, it will be financed through the ADF-15 Regional Public Good window of the African Development Fund, the concessional arm of the African Development Bank Group. The project will develop technical studies for regional solar parks and associated battery storage near regional energy interconnectors, high-voltage cables that connect the electricity systems of neighboring countries. The initiative will also strengthen the technical capacity of the implementing agency, the Intergovernmental Authority on Development (IGAD), a trade bloc that includes governments from the Horn of Africa, Nile Valley and the Great Lakes region.
ADF approves $5.5 million grant to fund phase two of flagship Desert to Power energy project
UN: “Great finance divide” amid COVID-19 poses major setback for sustainable development
The crippling cost of debt financing for many developing countries has hamstrung their recovery from the COVID-19 pandemic, forced cutbacks in development spending, and constrained their ability to respond to further shocks, according to a new report launched by the United Nations today.
The 2022 Financing for Sustainable Development Report: Bridging the Finance Divide finds that while rich countries were able to support their pandemic recovery with record sums borrowed at ultra-low interest rates, the poorest countries spent billions servicing debt, preventing them from investing in sustainable development.
The pandemic shock plunged 77 million more people into extreme poverty in 2021, and by the end of the year many economies remained below pre-2019 levels. The report estimates that in 1 in 5 developing countries’ GDP per capita would not return to 2019 levels by the end of 2023, even before absorbing the impacts of the Ukraine war.
“As we are coming up to the halfway point of financing the world’s Sustainable Development Goals, the findings are alarming,” UN Deputy Secretary-General Amina Mohammed said. “There is no excuse for inaction at this defining moment of collective responsibility, to ensure hundreds of millions of people are lifted out of hunger and poverty. We must invest in access for decent and green jobs, social protection, healthcare and education leaving no one behind.“
DIGITAL HEALTHCARE
Digital health, or digital healthcare, is a broad, multidisciplinary concept that includes concepts from an intersection between technology and healthcare, the application of information and communication technology to provide digital health interventions to prevent disease and improve quality of life.
Digital health innovations are designed to help save time, boost accuracy and efficiency, and combine technologies in ways that are new to healthcare.
Also, the cornerstone of Ethiopia’s Health System Transformation Plan is using innovative digital health interventions and informed policy decisions based on quality data to improve the health and wellbeing of Ethiopians.
Several private companies are on their way to starting these new platforms aimed to improve the health service delivery, through Elebat solution is one of them.
Elebat is an operator of digital finance & e-commerce which recently launched a new platform called Awo Doctor which engages in digital healthcare.
Emnet Terefe is a medical doctor with public health background. Currently, she is working as the director of E-health and health services. Capital caught up with Dr. Emnet for an insider view of the digital healthcare scene in Ethiopia. Excerpts;
Capital: Give us a brief overview of “Awo Doctor.”
Dr. Emnet: Awo doctor is a preventive lead digital platform that seeks to create accessible and affordable health services. It has been a month since we launched our service, it’s very much a new product. And we do that to empower youth and women who are fresh graduate medical doctors. Our main objectives can be summarized into four.
The first one is job creation. In Ethiopia, there is a paradox that we have relatively few doctors to which according to reports the ratio is 2.5 medical workers to 100,000, and yet, we have unemployed medical workers which we find very ridiculous and ironic, and we want to sort that, through this platform.
In addition to medical professionals, we also employ nonprofessionals since there is a big ecosystem in the whole value chain that accommodates women, youth, and dropouts who can also assist with the medical services.
So the first one is job creation, and the other is looking at financial inclusion. In our country, medical services are thought of as luxuries, not as necessities, owing to the mind-blowing price of hospitals. So we want to bridge the financial inclusion gap by giving preventative medical care.
The other is promoting prevention. Usually in countries like Ethiopia where resources are limited, preventing diseases at early onset has a very big impact.
Digitally enabled health services are also our goal, usually physician to patient interactions are just paper-based and we want to transform this. So, these are the four main objectives.
Our pillar is to transform medical checkups from luxury to necessity. It is a necessity because our rationale is to prevent non-communicable diseases.
So, currently, all CDC guidelines emphasize that in resource-limited settings, especially in developing countries like Ethiopia tackling disease before it outspreads is the most effective method owing to our limited resources and manpower.
In line with that even when we look at the statistics of the most recent reports, 41% of global deaths are because of non-communicable diseases. These diseases include; lung diseases, cardiac issues, liver issues, kidney issues, cancer, diabetes, hypertension, and so on.
When we see Ethiopia, according to WHO and the Federal Minister of Health’s joint data in 2019 when it comes to premature deaths there has been an 18% increase in risk when people don’t implement regular physical checkups. Coming to the financial impact, 31 billion birr is used annually to treat non-communicable diseases and indirectly more than 26 billion birr.
When you think about the loss in the workforce, and productivity due to non-communicable diseases, the figures are staggering. That is in addition to the health burden is why we implemented this platform, in order to have access to health care as well as the creation of a foundational basis for preventive health care.
We conducted our own study before developing the platform. In our research, we went to large communities and went door to door inquiring about their routine when it comes to healthcare. We identified that 64.3 percent of the community has never made medical checkups, and from these, 88 percent would actually want to have it but are unable due to accessibility and affordability.
We took this input to develop and prepare our business model, so as to provide a service that is accessible and affordable.
Capital: How are you going to provide these services?
Dr. Emnet: We provide the services door to door. To this end, we recruited fresh graduates from medical school with zero experience. Our initiative gives priority to women, to which we give them the necessary training backed with technology. Our trainees then go door to door and provide the needed screening.
So far we’ve deployed more than 500 medical doctors and the findings that we’re getting are staggering. People who think they’re healthy, have results that show different, and thus we have been able to identify certain diseases at the early stages.
We have an application called Awo Doctor. In this App, doctors living near you will be notified if you want medical services. The app is well-rounded in that, you can book the service and pay for it, all at a click.
Capital: What type of outcomes have unfolded from the research?
Dr. Emnet: The outcomes of our research have served as the basis of how we operate and the service that we provide.
Our research which is done by medical doctors who collect data door to door in almost all the sub-cities of Addis Ababa has been able to gather primary data which is well on its way to being published. actually in the way of being published.
The results have contributed greatly because initially, we did not know the specific focus. Now the main outcomes that arose stem from the issues of accessibility and affordability, thus outcomes that unfolded helped to guide us, since it is data-driven.
Capital: How accessible and affordable are your services?
Dr. Emnet: It is very much affordable and accessible for all. The triangulated income in this country shows that there is a huge gap between the upper half and the lower climbing class. We target 85% of the middle class because the upper half have the capability of taking care of themselves whilst the lower end of the spectrum have access to subsidized services.
As a business, we are targeting the middle or median group. We have done our market analysis and did a price range and we actually tested that so far people are very happy with our product.
Capital: Is the service you provide limited to Addis Ababa or accessible throughout the country?
Dr. Emnet: Currently, we are giving our services in Addis Ababa, but on the way forward we have a plan to incorporate it all over the country across all regions. We have also planned to build a chain of digitally enabled medical centers throughout the country.
Capital: How are you planning to cope with the undeveloped digitalization markets?
Dr. Emnet: So we have two options, that is, call centers and the application. So the young population can just download the app and the other population can dial 6061, to gain access. So when it comes down to the clients, they do need to be that knowledgeable of the digital background. It’s we who need to utilize the platform even a person with no knowledge can easily have the services if they have the need.
Capital: What ways have you put in place for job creation in this industry?
Dr. Emnet: We are striving to build an ecosystem. It’s not just medical services. We aim also to provide sustainable waste disposal which we are conscious about. So it’s not just the doctors providing medical services but also building an ecosystem with a lot of partners, government and non-government offices, and local and international organizations are a priority for us.
We are working to build this ecosystem so as to provide numerous jobs to potential employees we see fit, whether it’s medical professionals or youngsters who fit into the value chain. So we are actually creating jobs for a lot of people in the process and have so far deployed 500 medical workers. Within the next year our aim is to incorporate 10,000 medical and non-medical professionals.
The majority will be women and youth, in addition, we are planning to reach out to more than 1 million households throughout the country within one year.
Preventing developing-economy debt disasters
Skyrocketing food and energy prices, together with widening sovereign bond spreads, have placed balance sheets in emerging-market and developing economies under severe strain. To avoid disaster, the international community must urgently support bold debt restructuring.
By RABAH AREZKI and MAHMOUD MOHIELDIN
The world’s breadbasket is being wrecked by war. Ukraine and Russia together account for 30% of global wheat and barley exports, and they are leading exporters of other grains. The two countries also are the source of nearly 70% of the world’s sunflower oil exports, while Russia accounts for 13% of all crude petroleum exports. As the conflict in Ukraine rages and sanctions on Russia escalate, food and energy prices which were rising even before Russia invaded Ukraine are spiking in countries far away from the front lines, with devastating implications for the world’s poor.
The Ukraine war is having two distinct effects on food markets. First, it has caused prices to soar. Last month alone, world wheat prices surged by nearly 20%. This trend will be exacerbated by the second effect: likely shortages of food supplies and agricultural inputs from Russia and Ukraine.
Since the conflict began, Ukrainian farmers have lacked access to crucial resources – from fertilizer to fuel – not to mention facing insecurity and violence. With the wheat planting season fast approaching, there is good reason to expect significantly reduced crop yields. And, given that Russia is a leading fertilizer exporter, other producers’ yields might suffer as well.
Even the supply that is available will not necessarily make it to the countries that need it. Port closures and other transport barriers have impeded Ukrainian exports, while sanctions on Russia threaten to impede its trading activities. For countries that import directly from Russia and Ukraine, severe food-supply disruptions are likely, as it will be difficult to secure replacements from alternative suppliers quickly. Meanwhile, oil and gas prices have risen sharply.
Ultimately, it is the world’s poor – 70% of whom live in Africa – who will bear the brunt of these shocks. Refugees across Africa and the Middle East, and people in post-conflict or conflict-affected countries, are particularly vulnerable. But in any low-income country, energy and food expenditures account for at least half of total expenditures for most households, meaning that the current crisis could well increase global poverty.
Moreover, while rural populations are typically less vulnerable to food-import shortages than their urban counterparts, a series of droughts, including in Madagascar and the Horn of Africa, have already left people in many food-producing areas hungry. The World Food Programme estimates that 13 million people are facing hunger in the Horn of Africa alone.
Governments are responding to this emerging crisis with a combination of policies. Countries with universal consumer subsidies or price controls are enforcing them. Others are implementing targeted subsidies, including cash transfers, in order to support their most vulnerable citizens. The effort to bolster food security at home has also led to limits on food exports. And countries with strategic reserves of food might deploy them, though many have already exhausted their stocks.
All of these schemes carry a price. Food-export bans threaten to drive up international prices and weaken local producers’ incentives. And cash transfers can prove costly, especially if private companies have oligopoly power; in the face of inelastic demand for food, these firms might decide to raise prices beyond international market rates.
There are better options. In the medium term, many African countries can develop better-functioning food systems and transform the agricultural sector to limit food dependency and bolster food security. The key will be to address long-standing issues relating to land, access to capital, and competition, including in the transport and distribution sectors.
But perhaps the single best way to protect people from poverty and food insecurity is to build a more inclusive and efficient social-protection system. The problem is that most developing and emerging-market economies lack the necessary fiscal space, especially after years of strain from the COVID-19 pandemic.
Even countries that are benefiting from higher prices in one area are largely suffering from higher prices in another. Oil-exporting countries, such as those in the Middle East and North Africa, are heavily dependent on food imports. Likewise, major food exporters tend to depend on energy imports, leaving them with few gains from rising food prices.
But countries that are net importers of both food and energy are in the most difficult position. Their external deficits are now set to widen, and their already-elevated debt levels will rise further a trend that lower global GDP growth will exacerbate. The spread on sovereign borrowing has doubled for many developing and emerging-market economies. And unlike the advanced economies, these countries cannot typically borrow in their own currencies.
Making matters worse, the United States Federal Reserve is expected to accelerate its interest-rate hikes, thereby tightening global financial conditions. As a result, borrowing costs for developing and emerging-market economies are set to soar, potentially triggering balance-of-payment and debt crises.
To avoid disaster, the international development community should increase financial support to vulnerable countries. At the same time, the world must urgently support much bolder debt restructuring for emerging-market and developing economies. The G20 Common Framework for Debt Treatments has thus far not provided the impetus for debtors and creditors alike to embark in debt restructuring.
The invocation of force majeure which the United Nations International Law Commission defines as an unforeseen or foreseen-but-inevitable event, which makes it impossible for the debtor to meet its obligations can help here, by precluding creditor holdouts. Otherwise, most of developing countries’ resources including any international financial support they receive could end up in the pockets of foreign bondholders.
Rabah Arezki, former chief economist and vice president at the African Development Bank and former chief economist of the World Bank’s Middle East and North Africa Region, is a senior fellow at Harvard Kennedy School.
Mahmoud Mohieldin is UN Special Envoy on Financing the 2030 Sustainable Development Agenda.
