16 Years Merkel. Europe is suffering from Germany’s irresponsible behavior - Reflect Germany’s energy policy since 2005.
The Exchange, Kenya: Impact of logistics and supply chain infrastructure development in Africa
Logistics and supply chain infrastructure would improve trade and economic connection across diverse African economies
Developing logistics and supply chain infrastructure in Africa improve trade links across the continent’s fragmented economy and even within individual nations.
Logistics and supply chain infrastructure crucial for trade
African nations wanted to increase intra-African trade. That was the impetus behind the creation of the?African Continental Free Trade Area ?(AfCFTA). The AfCFTA came into effect on January 1, 2022. The facilitation of intra-regional trade is critical to African economic success.
According to World Bank projections, the free trade agreement would increase intracontinental exports by more than 81 per cent and non-African exports by 19 per cent, potentially lifting tens of millions of Africans out of poverty by 2035.
While the AfCFTA has great promise for improving African nations’ socioeconomic growth, numerous historic difficulties need solving if the union must realise its full potential. One such impediment is Africa’s lack of regional connection due to weak transport and logistics infrastructure, which will undoubtedly impede the free movement of products, services, and people throughout the continent.
International trade relies on logistics. Logistics and supply chain infrastructure improves connection across diverse economies and even within individual nations. Investing in logistics and supply chain infrastructure helps to accelerate trade significantly.
Consolidating supply chains
The difficulty of transferring commodities throughout Africa is not new to the continent. It is currently a key impediment to the AfCFTA’s prospects, especially in building regional industrial supply chain clusters. Africa’s massive infrastructure deficit has hindered regional trade and economic integration for decades, notably in transportation and supply chain fragmentation.
Some parts of the continent, specifically areas surrounding East African nations, do?far better in cross-border movement and?trade. However, most African countries fare poorly on metrics such as cross-border clearance processes. According to the World Bank’s Logistics Performance Index, the regions also struggle with trade quality, infrastructure, inconsistent tax regimes, and consignment trace and track techniques.
Digitalisation in Africa’s logistics industry will address some of these difficulties. Furthermore, the development of digital logistics startups has aided in the facilitation of connection, which is critical to the movement of commodities within the area and across borders.
E-logistics enterprises may assist transport players throughout the continent in saving money and increasing income by offering technology that streamlines pricing, payment, and the seamless flow of products and data that provides vital business analytics. The businesses’ experience adopting digital technologies to improve logistical efficiency and transparency across the continent may well help decide if the free trade zone is a success.
Infrastructural investments vital under AfCFTA
Most of Africa falls behind its worldwide equivalents in important infrastructure classifications, such as road and rail transportation. The issue has persisted for decades. Despite recent attempts to resolve this, African governments exacerbate it by failing to invest enough in connections and infrastructure.
Over the years, infrastructure investment on the continent has steadily increased. Furthermore, multinational investors desire the resources to spend much more throughout the continent.
Africa’s development banks remain undercapitalized, according to UNCTAD. As such, Africa lacks significant infrastructure and connectivity investment.
With the implementation of the AfCFTA, the need for infrastructure development in Africa has become even more pressing. The continental trade pact allows African states to actively address the transportation and logistical issues that have long hindered intra-regional trade and migration.
Smooth intra-Africa transportation, as well as an unrestricted movement of commodities, services, and people inside and beyond national boundaries, remain crucial in operationalising the AfCFTA. Massive and intelligent investments in connectivity and infrastructure are necessary to reverse the significant issue of infrastructure deficiencies and supply chain fragmentation, but without raising the danger of financial distress.
Mobilising financial resources to enhance logistics and supply chain infrastructure
African states must mobilise the continent’s financial resources to fund the regional infrastructure to make the AfCFTA a regional game-changer. Without this, the continent-wide accord would undoubtedly be hampered by a lack of transportation infrastructure.?Consequently, African commercial integration will remain a pipe dream for the foreseeable future.
It is no secret that Africa suffers from an infrastructure deficit. The deficit has hampered trade growth and logistics on the continent. While stakeholders have made serious attempts to address the situation, there is still space for improvement. Significant actions remain necessary to guarantee that Africa reaps the most benefits from the AfCFTA.
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Developing logistics and supply chain infrastructure in Africa improve connection across the continent’s fragmented economy and even within individual nations. The development would improve the capacity to transit trade from the bottom of the nation, where the port lies, to the top of the country, where agricultural production typically gets done in large quantities. Infrastructure investment would significantly speed up trade.
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Project-Syndicate: The Failure of European Energy Policy
Sep 1, 2022 - ANDERS ?SLUND
Surging energy prices following Russia's invasion of Ukraine have made it clear that the European Union needs a stronger, more unified, and more coherent common energy strategy. Many years of irresponsible and craven behavior by key players, particularly Germany, made today's crisis only a matter of time.
STOCKHOLM – Skyrocketing energy prices are a disaster for the European economy and its politicians. But given how feckless European energy policies have been, the economic pain they have caused should surprise no one.
European politicians must rethink their approach. The mess in which Europe now finds itself was caused not so much by European Union policy as by the absence of one. The EU needs a stronger, more unified, and far more coherent common energy strategy.
For years, EU energy policy has moved in fits and starts in response to unexpected problems, most of which were caused by Russia. For example, Russia cut off gas deliveries to Europe in the cold January of 2006; but because this disruption lasted for only four days, Europe did not wake up to the longer-term implications.
Then, in the freezing January of 2009, Russia punitively cut off gas deliveries via Ukraine,?disrupting supplies to 18 European countries ?for two weeks. This time, the EU did wake up – at least a little – and adopted its third joint energy package for gas and electricity. By advocating diversification, marketization, and energy-sector unbundling, the package had a real impact, because it meant that gas and electricity producers were no longer allowed also to own pipelines and grids. Gazprom was forced to sell its pipelines in the Baltics, and Lithuania and Poland were prompted to establish liquefied natural gas (LNG) terminals.
But Germany was too big and self-important to be bothered with such changes. It went in the opposite direction, making fundamental mistakes along the way. Just before losing power in the 2005 elections, German Chancellor Gerhard Schr?der approved the Nord Stream 1 gas pipeline from Russia to Germany via the Baltic Sea. And even after Russia annexed Crimea in 2014, he and other German notables continued to advocate for Nord Stream 2, which would have rendered Germany even more dependent on Russian gas. Not only would Germany buy all the gas it needed from Russia; it also would become a major transit country.
Adding to the problem, in 2011, Chancellor?Angela Merkel ?had decided on a whim to close Germany’s safe, well-functioning nuclear-power stations, following the tsunami that struck Japan’s Fukushima nuclear plant. That decision also left Germany far too dependent on Russian gas – so much so that until the Kremlin halted gas deliveries to Europe this year, Germany?accounted for ?about one-third of Europe’s gas imports from Russia. Making matters worse, German companies sold most of the country’s gas storage facilities to Gazprom, which emptied them last year in a blatant act of price manipulation.
Thus, while most other European countries have long worried about overreliance on Russian gas, Schr?der and Merkel made Germany wholly dependent on it, completely ignoring their country’s energy security. And while other European countries built new LNG terminals (enabling gas imports from the United States and elsewhere), Germany simply doubled down on Russian supplies. Now, all of Europe is suffering from Germany’s irresponsible behavior. Today’s sky-high gas and electricity prices in Europe largely reflect Germany’s energy policy since 2005.
True, Germany has not been alone in its folly. Hungary and Austria have been equally pro-Putin, and Bulgaria, the Czech Republic, and Slovakia have failed to adjust to changing geopolitical conditions; but they are much smaller and less consequential than Germany. And while Italy did allow itself to become the second-biggest gas importer from Russia, it has swiftly found alternative suppliers in Algeria and Azerbaijan. The buck therefore stops with Germany.
What is to be done? No single company has caused the EU more pain through its market manipulation than Gazprom, which is clearly too unreliable to deal with. Ideally, the EU would block or sanction Gazprom from participating in any economic activities within the EU. The 2009 energy package had the right idea about unbundling; but it did not go far enough. Gas producers and exporters – notably Gazprom and Qatar – should not be allowed to own gas storage facilities in the EU. Furthermore, the EU needs to establish compulsory norms so that its storage capacity is reliably filled to a certain minimum level.
During the 1970s oil crisis, Europe had no qualms about imposing norms to achieve energy savings. It should do so again, starting by pressing Germany to restrict the driving speed on its highways, as all other EU countries have already done. The EU should also require member states to maintain sufficient LNG terminals. The absence of a single LNG facility in Germany is just one of the many shortcomings of Merkel’s 16-year tenure.
Moreover, since national energy companies naturally want to monopolize their markets, energy connections between many EU countries are insufficient or nonexistent. While Spain and Portugal have abundant LNG terminal capacity, there is very limited pipeline capacity to supply France, largely because the French have?maintained a blinkered policy ?of keeping cheap Spanish gas out of the domestic market.
Similarly, the electricity price in northern Sweden and Norway is?many times lower ?than it is in the southern parts of these countries, simply because there are insufficient power lines connecting the supply of northern electricity (most of which comes from hydropower) to effective demand in the south. The EU should require that these countries expand their grids.
Finally, Ukraine has vast energy supplies – natural gas, electricity, and petroleum – that are going unsold because of incomprehensible trade obstacles in Europe. To reduce its inflated energy prices, the EU urgently needs to open its market and demand that gas pipelines and the electricity grid be expanded to create a level marketplace.
The European Commission needs to take broader responsibility for European energy policy to ensure that the energy market works, and to protect Europeans from irresponsible and incompetent national-level politicians. The 2009 energy package was a step in the right direction, but the EU needs to go further. Within the next year or two, Europe must be able to declare itself completely independent of the capricious Russians.
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