Thursday 11 April 2013

How Ghana fared in the Hunger and Nutrition Commitment Index 2012

Hunger puts lives at greater risk

The Institute of Development Studies with funding from DFID and Irish Aid has released the Hunger and Nutrition Commitment Index (HANCI) for 2012. The index measures the political commitment to reduce hunger and undernutrition in developing countries. It also measures what governments achieve and where they fail in addressing hunger and undernutrition to help provide greater transparency and public accountability. The HANCI compares 45 developing countries for their performance on 22 indicators of political commitment to reduce hunger and undernutrition. It considers three basic areas of government action: policies and programmes, legal framework and public expenditures.

To me, the index has come at such a good time when global consultation on the post 2015 Development Agenda is still happening. Guatemala has set the pace as the country with the highest political commitment score (hunger and undernutrition) of 240 while Guinea Bissau with a score of 74 sits comfortably at the bottom with the least political commitment to fight hunger and undernutrition. 

The “State of Food Insecurity in the World” report[1] and the “Global Hunger Index”[2] make revelations on the perversity of hunger and under-nutrition. The “State of Food Insecurity in the World” report indicates that about 870 million people, or one in eight, were suffering from chronic undernourishment in 2010-2012. The vast majority of these, 852 million, live in developing countries, where the prevalence of undernourishment is estimated at 14.9 percent. The “Global Hunger Index” also reveals that world hunger though has declined somewhat since 1990 remains “extremely alarming” in sub-Saharan Africa and South Asia. According to the International Fund for Agriculture Development (IFAD), there are close to 1 billion people suffering from hunger.

These statistics reflect lack of a basic necessity in life, food. The lives of children are at risk. Hunger and undernutrition threatens progress and meaningful development especially to countries in Asia and sub-Saharan Africa.

How did Ghana fare in the HANCI? This is precisely my concern. A country with huge contribution from agriculture supporting GDP growth, hunger and undernutrition must not be tolerated in anyway. Ghana with the score of 198 ranks 10th position with Burkina Faso. Though statistics indicates that Ghana is on track to achieving the Millennium Development Goal 1 of eradicating extreme poverty and hunger, the worry is that investment in agriculture has reduced [and is reducing] over the years.

Between 2003 and 2009, Ghana spent an average of 8.7% of the budget on agriculture. In 2011, however, GHC 84.2 million ($44.3 million), or 1.1% of total budget was spent on agriculture and food sector. Ghana has backtracked on its commitment to increase investments in agriculture it promised by signing the Maputo Declaration in the July 2003 African Union (AU) summit. Where is the promise to allocate 10% of national budget to agriculture? 

Ranking 10th is not bad. But Ghana can do better. It is high time Ghana got its agriculture policies right. You cannot neglect investing in the agriculture sector and expect to develop. This is not possible. Agriculture is still substantial to contributing to the overall growth of the economy. Structural transformation of the economy must revolve around agriculture. This we should get right. Proper investment and growth in agriculture is needed to address the increasing threats of hunger and undernutrition. And we need of course investments that trickle down to benefit the majority smallholder farmers in the rural areas who feed the country.

The HANCI has emerged as a useful tool to press on reviving the ‘dull’ commitment of politicians in developing countries especially in sub-Saharan Africa. I think it should be made clear that the fight against poverty would make no meaning if there is still high prevalence of hunger and undernutrition. The political will of leaders in sub-Saharan Africa is needed! This is a rude awakening. LET’S FIGHT HUNGER AND UNDERNUTRITION.

Find more on the Hunger and Nutrition Commitment Index here.

By: Stephen Yeboah, Geneva, Switzerland [profstephenyeboah@gmail.com]



[1] International Fund for Agriculture Development (IFAD), Food and Agriculture Organization (FAO) and World Food Programme (WFP)
[2] International Food Policy Research Institute (IFPRI)

Tuesday 9 April 2013

European Union reaches deal on historic oil and mining transparency law

Transparency ensures accountability
As transparency campaign in the extractive industry gets major boost.
The European Union has today agreed historic new rules which will require oil, gas, mining and logging companies to publish the payments they make for access to natural resources in all countries where they operate.
The provisional deal reached by European negotiators on Tuesday evening will ensure that citizens around the world are better able to hold their governments to account for the exploitation of their country’s natural resources.
“The oil, gas and mining sectors can bring great wealth to countries if they are managed well”, said Marinke van Riet, Publish What You Pay International Director. “Unfortunately, revenues from the sector have too often been squandered through corruption or mismanagement.”
The new legislation, which must now be formally agreed by member states and the European Parliament over the next few weeks, is contained within the revised European Accounting and Transparency Directives. All EU-listed or large privately owned oil, gas, mining and logging companies will be required to publish all payments over €100,000 to every country where they operate and for each extractive project.
The United States has already passed legislation through a provision in its 2010 Dodd-Frank Act which requires all oil, gas and mining companies listed on US stock exchanges to publish their payments to all countries and for every project without exception.
Crucially, the EU rules will not contain any exemptions. A number of oil companies had claimed that there were countries which forbid the disclosure of payments to governments in their criminal law. However, EU lawmakers were not persuaded by any of the examples put forward by the industry.
“Today’s EU agreement is the culmination of years of work by the Publish What You Pay coalition. It shows what collaboration can achieve and we’d like to thank our members worldwide for their commitment,” said Ms Van Riet. “We also salute the lawmakers in all EU institutions who held out for the strongest deal possible.”
The agreement comes at an important time. UK Prime Minister David Cameron has made globalising these laws beyond the US and Europe a key pillar of his G8 chairmanship this year.
“We now look to strong implementation of the legislation in the EU and for similar rules to be adopted in other jurisdictions around the world including Canada and Australia, as well as emerging markets in Brazil, Russia, India, China and South Africa”, said Ms Van Riet.
Source: Press Release [09-04-2013], Publish What You Pay International.

Tuesday 2 April 2013

Swiss Miss: Switzerland Soft-Pedals on Transparency in Commodities Industry

Transparency in commodity trading is crucial
Source: Alexandra Gillies, Head of Governance, Revenue Watch Institute. Read more here www.revenuewatch.org

Swiss companies dominate global physical commodity trading. This places a unique responsibility on the Swiss government to require these companies operate in a transparent and responsible manner. Bloomberg reports Switzerland is "the world’s leading commodities trading hub, accounting for about 35 per cent of global physical oil trade and a 60 per cent of metals and minerals." This amounts to more than $3 trillion in world trade, according to Al-Jazeera.

The government of Switzerland recently ducked an important opportunity to protect against the potentially damaging effects of opaque deals between its companies and commodity-producing countries. On March 27, 2013, following months of debate within government, a cross-departmental body finally issued its report to the Federal Council on the country’s commodity sector. The report was meant to outline the associated risks and suggest appropriate policy responses. Instead (as explained further by Swiss NGOs), it offered vague suggestions and placed too much confidence in voluntary international mechanisms rather than binding national regulation.

Swiss trading companies—which include energy giants Trafigura, Glencore and Vitol—have attracted scrutiny of late, due to the sector's explosion in size over the last 10 years, the Iraq Oil-for-Food scandal, and, as the Financial Times reports, "increasing public resentment in Switzerland towards highly paid executives and bankers."

The poverty, corruption and weak governance prevalent in many resource producing countries has led transparency advocates like RWI to call for stricter reporting standards of commodity sales. For example, Glencore was just awarded the license to buy oil from the government of Chad. In late January, the company lifted its first cargo of 950,000 barrels. This single sale would net at least $80 million. This may be a small- or medium-sized deal for Glencore, but for a poor country like Chad, this is a massive transaction. The revenues from this single sale are enough to pay for half of the country’s yearly education budget.
Without the disclosure of basic information around commodity sales, corruption risks increase, and there is little chance for citizens, journalists and parliaments to know how much their country receives for its public resources.
In its announcement Wednesday, the Swiss government said it would rely on global standards such as the Extractive Industries Transparency Initiative (EITI) and various U.N. mechanisms to police its commodity companies. These standards are useful, but insufficient. The report heralds the EITI, and frames Swiss support for the initiative as the major plank of its efforts to promote transparency. But EITI is only a voluntary initiative and not implemented by many resource-producing countries with major corruption and governance problems, like Angola, Equatorial Guinea and Turkmenistan.
To promote consistent transparency, governments which host extractive companies should regulate reporting by the companies based within its borders. The U.S. and the EU are taking such steps through Section 1504 of the Dodd-Frank Act and forthcoming EU regulations respectively. The Swiss, rather than follow suit, said they would revisit this issue later. Should this occur, commodity trading (rather than just extraction) must be at the center of the discussions. Otherwise, such a law would be a largely symbolic gesture that avoids the biggest part of the Swiss sector. 

Requiring companies to operate in a transparent and responsible manner does not constitute unfair or uncompetitive treatment. Trading companies are huge global players that buy billions of dollars of oil and minerals from poor countries. Wherever they are headquartered in the world, they should be the subject of robust oversight and scrutiny. Ensuring this is the case is a basic responsibility of the home government, and one which the Swiss should not avoid.

**Stephen Yeboah participated in the Swissaid workshop in Geneva this year on Transparency in the Extractive Sector: the role of Commodity Superpower Switzerland.

The reality check: Minerals and Conflict in Central African Republic

Diamonds and other minerals fuel conflicts
Central African Republic is rich in minerals. In 2011, it was ranked 11th among the world’s leading producers of rough diamond by volume and 12th by value. Mining accounted for about 2.8% of the country’s gross domestic product. There are also the production of clay, gold, and sand and gravel. Mineral resources including copper, graphite, ilmenite, iron ore, kyanite, lignite, manganese, monazite, quartz, rutile, salt, tin, and uranium however remain largely underdeveloped. Despite these potential natural resources, the country is one of the poorest in the world. In the 2013 Human Development Index (HDI), Central African Republic ranks among the bottom six in 180th position and a low value of 0.352. 

Aside from its poor development performance, Central African Republic has been trapped in long-standing and deep-seated political and military crises. The country today faces severe humanitarian crisis. The United Nations High Commissioner for Refugees (UNHCR) estimates that as of mid-2012, approximately 65,500 people were internally displaced and more than 150,000 Central Africans had found refuge in neighbouring Chad and Cameroon.

Few weeks ago, the Seleka rebel alliance ousted the sitting the president Francois Bozize citing failure of the power-sharing deal signed in the Gabonese capital Libreville in January. The announcement by the rebel leader Michel Djotodia on Friday, March 30 that he will review resource deals raises critical issues. The reason for toppling Bozize government goes beyond the failure on his [Bozize] part to fulfill the deal. The crave to control mineral resources is the factor. It is obvious that natural resources have fueled the general insecurity and militancy in poor Central African Republic and Democratic Republic of Congo. This is however not new.

Conflict minerals have funded the rebels and it is no surprise that they have succeeded in toppling the Bozize government. The Kimberley Process, the international certification scheme established to stop the trade in blood diamonds, has done little. Trade in conflict diamonds is still commonplace and increasing. Global Witness, a vibrant non-governmental organization that investigates and campaigns to prevent natural resource related conflict and corruption, and associated environmental and human rights abuses, withdrew from the Kimberly Process on December 5, 2011. It indicated in a press release that “The Kimberley Process’s refusal to evolve and address the clear links between diamonds, violence and tyranny has rendered it increasingly outdated.” The Kimberly Process has not done enough.

Little has been done to combat trade in conflict diamonds. Trade in “blood diamonds” is still pervasive. It incentivizes activities of rebels in most of mineral-rich countries in Africa. The recent insurrection of rebel group M23 in Democratic Republic of Congo indicates that a global action against conflict minerals is needed to clamp down on trade in conflict minerals. The M23 as well survives on conflict minerals. The Kimberly Process has to do more to bolster improved governance and transparency in trade of these minerals. Trade in conflict minerals is putting the lives of the poor and the state of economies at great risk. Global discourse on the "resource curse" has for sometime now concentrated on the economics of natural resources leaving security perspective. It is about time adequate consideration was given to the apparent increase in trade of conflict minerals and the proportionate rise in rebel activities in mineral-rich countries in the African region.

Despite the increasing humanitarian and governance crises, self-imposed president Djotodia could only call for review of resource deals. This reveals one obvious factor. Minerals have been an important incentive to his capturing of power. According to the UNICEF, at least 4.1 million people, almost half of whom are children, are now directly affected by the crisis, which includes not being able to attend schools or getting enough to eat. This however means little. The focus is rather on getting mineral deals reviewed. There should be clear governance structure and accountability mechanisms in diamond trade. This is to clamp down on the rise of trading conflict minerals.

International non-governmental organizations, bilateral and multilateral donors need to increase their voice and support to stop the recent spur in trade of conflict minerals. The Dodd-Frank Wall Street Reform and Consumer Protection Act passed in July 2010 makes an important attempt at addressing issues of conflict minerals. Section 1502 of the Act requires the  American Securities and Exchange Commission (SEC) to make the sector more transparent by formulating rules that require companies to disclose the origin of their minerals through due diligence over the supply chain. However, the Dodd-Frank Act disclosure also does not ban or penalise the use of conflict minerals. According to the section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, “the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation therein […]” pp. 838. If companies discover they have been sourcing conflict minerals from DRC or adjoining countries, they can continue to do so; however, they must submit a “conflict minerals report” to the SEC and thus make public their imports (Source: International Crisis Group: “Conflict Minerals in DRC” accessed: April 1, 2013).

This is a useful step but it is not enough. The Dodd-Frank must make a provision to penalise the use of conflict minerals. Such a punitive measure will have real impact. The European Union must also pass a similar regulation since European market is one of the largest consumers of these minerals. José Manuel Barroso, President of the European Commission, in pursuance of transparency has committed to advancing similar legislation in Europe. The EU must consider and address conflict minerals. Trade in conflict minerals must end! We cannot promote riches and enslave the lives of the majority poor. At the end, it is the poor people in these mineral-rich countries who suffer from brutal militancy fueled by the desire to control and trade diamond and other minerals.

Read more articles written by the author on transparency in mining and oil and gas sectors in Ghana here


By: Stephen Yeboah, Researcher and Journalist based in Geneva, Switzerland. [profstephenyeboah@gmail.com]