Economic Development and Peace Building
The private sector’s ability to prosper is imperative to job creation and investments necessary for human security. Armed conflict and post-conflict situations constitute severe constraints on economic life and present a hostile environment to business and investments. Economic analysts, however, seriously argued that the positive connections between the role and needs of the private sector and peaceful development are however still less explored.
Considering the multiple risks and associated high costs of violence, a peaceful development and improved socio-economic conditions typically converge with the self-interest of businesses with a long-term objective. The private sector, international and local, has the ability to contribute in at least two rather different ways: by conducting its core business and by actively promoting certain elements of peace-building.
Taking years of practical experience from private sector development in complex environments as point of departure, Sofia Svingby, a private sector development specialist at Stockholm University argue that through conscious engagement and active dialogue promotion business can and does take on an important role for both economic development and peace-building in fragile contexts.
While potentially highly profitable, fragile or complex environments present a multitude of challenges for an international company. According to Sofia Svingby, this risk-opportunity balance must be carefully managed to cater for long-term success. Weak formal institutions, opaque power structures, commercial and political interdependencies and ethnic tension are some examples of particular challenges of the fragile context any business company needs to navigate.
The private sector’s main contribution to developing economies and societies stems from its core activity of its ability to offer products and services meeting local demand, and the related effects on job creation and economic growth. Brian Ganson, Associate Professor at the Business School of Stellenbosch University stated that in their interaction with suppliers, consumers, employees and governments and institutions, companies may transfer know-how, promote peaceful tools of conflict management and good governance through their core business conduct. Herein lie both the inherent challenge and opportunity. According to him a company’s ability to steer towards sustainably successful business models rather than short-sighted and exploitative practices is pivotal.
Brian Ganson, however, argued that in order to be successful, companies cannot go about doing ‘business as usual’. In complex or fragile environments, operations and products need to contribute to a virtuous rather than vicious circle of economic and societal development. If implementing conflict sensitive approaches in strategies and operations, companies can facilitate economic development while also contributing to establishing essential conditions for peace-building.
Brian Ganson further noted that a context-sensitive governance model, including means of ensuring local compliance with the corporate code of conduct, is required, but key to implementing such approaches is leadership. Leaders’ ability to navigate complex environments which is harvesting opportunity and managing risk determines if a business can successfully provide benefit to stakeholders, employees and society. In order to do this, leaders need to incorporate an attitude of attentiveness to any aspects in the local context that may influence the company’s operations. According to Sofia Svingby, the key attribute of such an attitude is inquisitiveness, continuously striving to understand the environment in which the company operates.
Joanna Buckley, development economists at Oxford Policy Management Consultancy on her part argued that this approach helps business leaders anticipate and manage the way the company influences the local context, positively or negatively. Moreover, and equally important, it supports the management’s grasp on how the local context, for instance its conflict dynamics, affects the company and its ability to meet the financial, reputational, legal, and other requirements placed on international firms.
Joanna Buckley explained that in addition to conducting business sustainably and responsibly, private sector actors such as individual companies, multinational or local, as well as organised business, may offer channels and methods for trust-building outside the traditional arenas. This potential can be manifested by a well-functioning labour market dialogue or improved interaction between private sector and policymakers. The ability of individual employers or that of business organisations to contribute to conflict resolution, either at the workplace level or in society at large, may be decisive in establishing a dialogue-centred rather than conflict-oriented interaction.
The fact that companies often have an acute awareness of the challenges facing citizens in local communities is sometimes overlooked. Organised business on local and national level, meanwhile, can have an important role to play in holding governments and public institutions accountable. The achievements of the 2015 Nobel Peace Prize laureates, the Tunisian Quartet, clearly demonstrate how business and labour market parties, when engaged in broad cooperation, were able to provide an alternative, peaceful political process at a time when the country was on the brink of civil war.
Jonas Borglin, a known Swedish private sector and industrial analyst argued that business should be viewed and view itself as a stakeholder in sustainable development, even though a company’s status as a commercial entity may render it difficult to engage in far-reaching development work as such. The interests, capacity and mandate of companies and business associations need to be acknowledged if business actors’ potential in building resilient, prosperous societies is to be efficiently utilised.
According to Jonas Borglin, sustainable, responsible business practices and values are not complementary features of long-term successful business, but a pre-requisite. As such, the core business and the way it is conducted is the major contribution of a company not only as a source of financing, innovation, job creation and growth, but through its impact on stability and governance issues, including anti-corruption, peace and security and the rule of law.
Eng. Terefe Raswork’s legacy gets cemented through new award
The pioneering work of Eng. Terefe Raswork lives on as the first-year commemoration of the telecommunications trailblazer are recalled on Saturday, May 5, 2023, at the Science Museum.
Government officials, notable professors, religious leaders, friends and relatives of the late engineer attended the event organized by his children in partnership with Tewedaj Media and Communication. As part of the event, a biographical book of the late Terefe, titled “Man of Ankoboru in Geneva” was prepared by journalist Ezra Ejigu, CEO of Tewedaj Media and Communication, depicting research and the life of the engineer since 2013.
Eng. Terefe is renowned for his development of technology such as the Amharic tele-printer in Ethiopia, which he created at the age of 25 under the reign of King Haile Selassie to which he travelled to Germany and obtained an intellectual property patent for his new invention.
The dynamic Engineer served on the Telecommunications Board for ten years; and was in charge of the African affairs at the International Telecommunication Union for more than 40 years and had also preserved the country’s heritage by rebuilding the Ankober Palace Lodge, Menelik’s palace; without leaving its former possession.
At his first year’s commemoration event, the Terefe Raswork Technology Award was also announced. Through this award, each year scientists and researchers who have made a significant contribution to technology and communication are said to receive a financial award of up to 500,000 birr.
On the day, the Amharic tele-printer invented by Eng. Terefe Raswork 55 years back was handed to the Ethiopian Heritage Authority for conservation.
AFRICA OPPORTUNITY: Investment into Africa’s Water and Sanitation Sector
Africa’s need for increased Water and Sanitation Infrastructure Investments
Water is an essential human need, and access to clean water and proper sanitation is a fundamental human right. Yet, millions of people in Africa lack access to these basic services. In 2020, the World Bank reported that over 300 million Africans do not have access to clean drinking water, over 700 million live without good sanitation, and more than 800 million lack or have limited access to basic hygiene services.
Africa’s already limited water infrastructure will likely face increased strain as the continent experiences rapid urbanisation. By 2030, more than 350 million Africans will be living in cities, yet currently, cities are already running dry, with the liveability of major cities compromised as bulk water supply runs short. Water insecurity is a major developmental challenge in Africa, exacerbated by the climate emergency and the lack of infrastructure development. For Africa to achieve its Sustainable Development Goals for water and sanitation (which means universal access to safe and affordable drinking water, and equitable sanitation and hygiene, by 2030), it will require improved operations and maintenance, efficient management of water resources, strengthened policy and regulatory frameworks and most importantly, consistent investment into water infrastructure.
The investment gap for water and sanitation infrastructure to achieve water security and sustainable sanitation by 2030 is estimated to be about US$ 50 billion annually. However, the current foreign direct investment (FDI) inflow for water and sanitation ranges between US$ 10 billion and US$ 19 billion a year, well below the amount needed, leaving financial deficits between US$ 11 billion and US$20 billion annually. This deficit has caused significant economic and human development costs, resulting in sub-Saharan Africa losing an estimated 5% of its GDP annually due to water shortages or poor sanitation. If this trend continues, African nations could lose up to US$ 50 billion annually due to climate effects caused by water-related hazards.
As governments play an integral role in repositioning the region’s water security and sanitation, a cross-sectoral political leadership at the highest level of governance should be created with a commitment to increase budgetary allocations for water and sanitation activities. Government funding remains the chief and most important source of funding for these projects and, therefore should be centred around efficient sector management. Therefore, governments will need to establish national investment programs which mobilise domestic resources and create predictable and transparent revenues that are backed by strong and credible institutions. By leveraging private and partner financing, governments can further attract private sector capital where opportunities exist to bridge the accessibility gap.
Additional strategic actions to close the funding gap include exploring innovative financing mechanisms that support climate resilience, impact investing and social impact bonds, and blended public-private financing options to attract private capital. Stronger institutional regulations for water investment will also trigger more incentives besides outlining penalties which will boost water efficiency across various industries. Investment programs should be based on solid institutional policies and regulatory frameworks whereby national investment programs can be effective vehicles to scale up accessibility. These programs can be built if anchored in a stable institutional framework with strong government participation, improved intergovernmental coordination, and strengthened oversight, regulation, and reporting.
With a renewed commitment to water and sanitation, the outlook for infrastructure investment in this sector is positive, with an increase in large-scale private investment expected in the next 2 years. Ultimately, development partners, donors, and the private sector have a unique opportunity to provide technical and long-term financial commitments through public-private partnerships and innovative co-financing mechanisms that support sustainable water and sanitation investments. By working together to transform the investment outlook and improve water and sanitation throughout the continent, there is an opportunity to ensure a peaceful, prosperous, stronger, and equitable Africa, now and in the future.
With a positive outlook on investment trends in water and sanitation, Frost & Sullivan Africa tracks major infrastructure investments throughout the continent.
