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Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JULY 2024 by Mmamagang Geoffrey Modisha   Abstract   The local government audit outcomes of the 2021/22 financial year showed a continuing deterioration of the financial health of South African municipalities. According to the Auditor-General South Africa (AGSA), this can partly be attributed to lack of accountability and oversight at the local government level. This paper aims to assess the state of accountability and oversight at local government level in South Africa and to establish whether enhancing the scrutiny and oversight role of municipal councils could contribute to improving the financial management and service delivery mandate of municipalities. Using documentary analysis – particularly the municipal accountability legislative framework and AGSA’s local government audit outcomes – and literature reviews on the topic, the paper shows that the current conceptualisation and practise of accountability and oversight in South Africa has taken an elitist approach that marginally involves councils. As a readily available army of accountability and oversight at local government level, councils and non-executive councillors could help in closing the principal-agent gap between the municipalities, the provincial and national government, and the public. The paper shows that the practice of accountability and oversight must go beyond availability of oversight committees and tools to include a deliberate stimulation of its potential and capability. To this effect, it is recommended that councils be empowered through the development of a local government oversight model that combines all the guidelines and frameworks developed by various state organs so far, considers the variations in municipalities, and involves the public in the oversight process. It is argued that the rise of coalition politics in South African local government is providing an opportunity to empower councils and non-executive councillors to efficiently and effectively play their scrutiny and oversight role.   Keywords: Accountability; Audit Outcomes; Coalition Politics; Local Government; Municipal Finances   Introduction   In her last consolidated audit report of the 4th political term of local government (2016-2021) in 2022, the Auditor-General South Africa (AGSA) decried the lack of accountability and oversight at the local government level. This, according to AGSA, is one of the contributing factors to the unfavourable audit outcomes of the municipalities in South Africa (AGSA, 2022). Without accountability and oversight, communities are not able to determine whether municipalities used the budget as intended, achieved their service delivery objectives, and are in a good financial position. AGSA argues that this leads to erosion of public trust in local government. Through oversight, municipal councils can investigate and deal with unauthorised, irregular, fruitless and wasteful (UIFW) expenditure, fraud and corruption, non-performance, and any legislation transgression. This will ensure that public funds are used for what they are intended, namely, service delivery.   The aim of this paper is to assess the current state of the local government accountability system and provide recommendations for the municipalities to improve on this front. It asks the question as to whether the role of municipal councils in South Africa could contribute to overseeing the financial management and service delivery of the municipalities. The paper analyses the legislative framework of municipal accountability and oversight, assesses AGSA’s audit findings and recommendations, and draws from conducted research, both in South Africa and internationally, to achieve this objective. It argues that the current conceptualisation and practise of accountability and oversight seems to render councils, as the legislative bodies of local government, irrelevant.   It is shown that as the source of horizontal accountability, councils might be the missing link to close the principal-agent gap that exists between the municipalities and provincial and national governments in the accountability cycle. It is further illustrated that the failure of the interventions experimented with over the years might be attributed to misdiagnosis of the actual problems besetting municipalities, which non-executive councillors may help with if empowered to do so. The paper calls for more attention to be given to councillors as an army of accountability, scrutiny and oversight, and suggests that coalition politics at local government level provides an opportunity to do that.   The following section defines municipal accountability and oversight, outlines different accountability tools, as well as different dimensions of accountability and what it must achieve. This is followed by a discussion of the legislative framework governing accountability and oversight at the local government level, as well as how the accountability system is understood by providing a sketch of the local government accountability system.   The next section delves into AGSA’s latest local government audit outcomes and the state of municipal accountability in the country. It is shown that most interventions have so far excluded the role of councils as the centre of oversight at the local government level and concludes that it is perhaps time the government focusses on this to complete the accountability and oversight architecture of local government.   After this, the paper turns to coalition politics at local government level, as this seems to be the future of local government in South Africa. It is shown in that section that, although there is no sufficient empirical research on the impact of coalition governance on service delivery, governance and council functionality, coalition governments present an opportunity to strengthen the oversight function of council. The last section makes recommendations on how to bring councils into the accountability chain of local government in South Africa.   Understanding Municipal Accountability and Oversight   Accountability in the context of public institutions can be defined as a process whereby public authority or the state responds to citizens on its past, present and future actions in implementing its constitutional mandate of service delivery to the society (Schedler, 1999; Buttler, 2011). It is characterised by one person (the principal) appointing the other (the agent) to do work on their behalf, either because it is impractical or too complex for the principal to do so (Pelizzo & Stapenhurst, 2012; 2014). Unfortunately, this relationship tends to give rise to principal-agent problems, where the agent – because of their information, expertise and technical superiority – avoids being accountable to the principal (Pelizzo & Stapenhurst, 2012).   Accountability can further be seen in terms of answerability and enforcement, it can be spatial (horizontal and/or vertical), it can be internal and external, and can be studied by looking at the degree of control imposed by the principal on the agent (Schedler, 1999; Lindberg, 2009; Pelizzo & Stapenhurst, 2014). Vertical accountability can be both upward – such as local government’s accountability to the provincial and national governments – and downward, which denotes citizens’ attempts to hold the government accountable for its actions, conduct and performance (Lindberg, 2009). Meanwhile, horizontal accountability, also called intra-state accountability or ‘accountability amongst peers’, refers to the processes of checks and balances as espoused by the principle of separation of powers and/or between institutions of the same state machinery (ibid.). When the actors of horizontal and vertical accountability collaborate in their oversight efforts it is called diagonal accountability [1] . The degree of control denotes the level at which the overseer is doing his/her job in enforcing accountability, which can range from interrogation of the minute details of the department’s day-to-day activities, such as financial auditing, to the socio-economic impact of its policies, as is the case with elections (ibid.).   Accountability and oversight are two sides of the same coin (Pelizzo & Stapenhurst, 2012; Pelizzo & Kinyondo, 2015; Malapane, 2019) because both the accountable and accounting or oversight actors must speak and engage on how the allocated/delegated power was utilised (Schedler, 1999). In other words, there is no accountability without oversight, which is a mechanism to ensure transparency and openness of the executive, financial accountability, uphold the rule of law, and hold the executive accountable for its actions and general performance (Madue, 2012). In its Public Sector Oversight Model (PSOM), the Parliament of the Republic of South Africa (2012) defines oversight as:   “The proactive interaction initiated by a legislature with the executive and administrative organs that encourages compliance with the constitutional obligation on the executive and administration to ensure delivery on agreed-to objectives for the achievement of government priorities”.   Although this definition of oversight encompasses both answerability and enforceability, it is biased towards oversight as a retrospective exercise, i.e., it happens after implementation of government policies, programmes and actions (Malapane, 2019; Kolisang, 2019). The most comprehensive definition of oversight must include both ex ante  and post ex  aspects (Pelizzo & Stapenhurst, 2012; Madue, 2012; Malapane, 2019; Verhelst & Peters, 2024).   Political accountability and oversight presupposes an exploration of separation of powers within different arms of the state. Also called trias politica , separation of powers doctrine is one of the political philosophical ideas that originated from the enlightenment scholarship of the 17th and 18th centuries, as a vehicle to keep government power in check  (Chikwema & Wotela, 2016). In this arrangement, argued Montesquieu, the parliament is responsible for law-making, judiciary to interpret the laws, and the executive is tasked with implementing the laws for the good of the populace (ibid). In South Africa, the real trias politica  is at the national level, and not the provincial and local spheres of government, because the judiciary is an exclusive national mandate in the country. Therefore, accountability and oversight is mainly between the executive and legislature at provincial and local government levels.   For legislatures to have an impact on policy and the decision-making of the executive, they must have oversight tools that include committees, motions of no confidence, an oversight and scrutiny model, and a relationship with key internal and external accountability institutions such the Internal Audit and Audit Committees, as well as the Auditor-General (A-G) and Public Protector (Pelizzo & Stapenhurst, 2014). Availability of these oversight tools, however, only signifies the legislature’s oversight capacity and potential and should not be equated to its effectiveness, as this still needs to be activated. Rockvic and Ivanis (2013) posits that the activation of oversight potential requires at least three conditions, namely, authority, ability, and attitude or political will. The latter is underpinned by such factors as party politics, executive-legislature interface, opposition parties, society’s political consciousness and the nature of civil society activism.   According to Koppel (2005), there are five dimensions of accountability, each seeking to address a different area and question as follows:   Transparency – did the organisation reveal all the facts of its performance? Liability – did the organisation or people involved in wrongdoing face consequences for these? Controllability – did the organisation do what the principal desires? Responsibility – did the officials follow the law or policies in performing their duties? Responsiveness – did the organisation fulfil the substantive expectations of the public  or deliver on the public good?   Koppel (2005) highlighted that it is important for organisations to be specific and clear in defining their accountability as uncertainties can lead to ‘multiple accountabilities disorder’. This means a situation where the organisation is confused about the sense in which it is accountable. Because of lack of clarity, argues Koppel (2005: 95), organisations find themselves “accountable in the wrong sense, or accountable in every sense…[thus]... pleasing no one while trying to please everyone”. Clarifying accountability is particularly important in South African local government because of different types of municipalities, their structures and service delivery models [2] .   The following section locates municipal accountability and oversight in the legislative framework of South Africa. It also uses the above discussion to provide a conceptualisation of the accountability system at local government level as understood in this paper.   Legislative Framework of Municipal Accountability and Oversight System in South Africa   While separation of powers at the local sphere of government is not provided for in the Constitution in South Africa, local government legislation – such as the Municipal Structures Act (117 of 1998) “Structures Act”, Municipal Systems Act (32 of 2000) “Systems Act”, and Municipal Finance Management Act “the MFMA” (56 of 2003) – provides mechanisms through which the municipalities can separate the executive and legislative powers held by council. Section 151(3) of the Constitution provides that a municipality has the right to govern the local government affairs of its own community, subject to national and provincial legislation, as provided for in the Constitution (RSA, 2015a). In terms of section 160(1) of the Constitution, a municipal council can make decisions concerning the exercise of its powers and the performance of its functions. Section 160 (6) of the Constitution empowers municipal councils to pass by-laws prescribing rules and orders for its internal arrangements, business and proceedings, and the establishment, composition, procedures, powers and functions of its committees (RSA, 2015a).   Section 59 of the Systems Act makes provision for a municipal council to develop a system of delegation to maximise its administrative and operational efficiency and provide for adequate checks and balances in the utilisation of power in the municipality (RSA, 2015b). Sub-section 59(2) of the Systems Act provides that delegation of powers to the executive “does not disinvest the council of the responsibility concerning the exercise of the powers or the performance of the duty” (RSA, 2015b).   The MFMA provides for a clear separation of roles of various role players in the financial management of the municipalities (RSA, 2015d). For instance, the mayor must provide political guidance over the fiscal and financial affairs of the municipality, become a conduit between the executive and council on budgetary matters; and the municipal manager is accountable for the financial management of the municipality. Meanwhile, the council must approve the budget and ensure that the budget is utilised as intended for the benefit of the communities. It must play an oversight role over the utilisation of the budget (RSA, 2015d).    In order to assist councils with their oversight function, sections 33 and 79 of the Structures Act provide for the establishment of committees (RSA, 2015c). Section 79 of the Structures Act further provides for the council to establish necessary committees to assist in efficiently and effectively performing any of its functions or exercising any of its powers. In 2001, the Structures Act was amended to strengthen the accountability and oversight function of council by giving the Speaker of Council a responsibility to ensure efficient and effective oversight committees, enabling the Whip of Council to assume responsibility for facilitating relations between the executive and the legislature, and making municipal public accounts committees (MPACs) statutory committees of council to be established by all 257 municipal councils (RSA, 2021).    To appreciate the nuances of municipal accountability and oversight, it must be put within the context of the broader accountability regime of a country (Verhelst & Peters, 2024). Figure 1 is a schematic representation of how accountability and oversight at local government level can be contextualised in South Africa.   Figure 1: Accountability and Oversight System [3]   It shows that municipal councils are central to the accountability and oversight processes of local government, as vested by the Constitution of the Republic of South Africa (RSA, 2015a). Through a delegation of powers system, a municipal council must establish the mayoral or executive committees – together with the bureaucracy or administration – to execute its policies and by-laws and deliver services to the communities (horizontal accountability). The municipality, including councils, the executive and the administration, is also accountable to the national and provincial governments, as well as directly to the citizens through public participation [4] . This can be regarded as vertical accountability, both upward (to provincial and national governments) and downward (citizens) [5] . The diagramme also shows other key role players, namely, the internal audit departments and audit committees, as well as chapter 9 institutions, particularly the Auditor-General and Public Protector and law enforcement agencies such as the South African Police Service (SAPS) or Special Investigating Unit (SIU). Together with council, the relationship with these structures constitutes horizontal accountability, because of their statutory support role. While the council, internal audit and audit committee are internal structures, chapter 9 institutions are external structures.   Financial Management in the South African Local Government – State of Accountability and Oversight   The 2021/22 local government audit outcomes have shown a continued deterioration of the financial health of the municipalities, as they are not reporting as required, there is an increase in supply chain management (SCM) contraventions, and information and communication technology (ICT) systems are not utilised efficiently (AGSA, 2023). In addition, very little consequence management has been imposed on those involved in wrongdoing (AGSA, 2023). Only 14,8% of South African municipalities achieved clean audit outcomes, with two out of the eight metropolitan municipalities, i.e., the City of Cape Town and the City of Ekurhuleni, being able to achieve clean audit outcomes. While it can be noted that 33 municipalities improved their audit outcomes in the 2021/22 financial year, there was a decline in 29 municipalities in comparison with the 2020/21 financial year.   At the end of the 2021/22 financial year, the A-G identified R25,47 billion in unauthorised expenditure, R30,34 billion in irregular expenditure, and R4,74 billion in fruitless and wasteful expenditure. The total outstanding balance of unauthorised expenditure stood at R107,38 billion, irregular expenditure at R136 billion, and fruitless and wasteful expenditure totalled R14,65 billion (AGSA, 2023). This means that some of the R539,13 billion budget of the municipalities was spent on things not budgeted for, unlawfully and/or without a benefit to the South African communities. This state of affairs is attributed to lack of accountability by the municipalities, weak institutional capacity, political and leadership instability, and ineffective interventions from the provincial and national governments (AGSA, 2023; Khaile, 2023). As it is always the case in the first year of the local government political term, stated the A-G, political instability in the transition to a new political term worsened the failures seen over the years (AGSA, 2023).    Generally speaking, there have been three intervention thrusts tried in order to deal with this situation throughout the years. First, the provincial and national government have used section 139 of the Constitution to put municipalities under administration. According to Khaile (2023), 33 municipalities were under section 139 intervention in February 2022. However, this has not been helpful in improving the financial management of the municipalities (ibid.). In a study conducted to assess effectiveness of section 139 interventions in 14 municipalities in the Limpopo, North West and Free State provinces, it was found that only one municipality, i.e., Mangaung Metro, has recorded notable improvement in audit outcomes after the intervention, although it did not achieve a clean audit (Khaile, 2023).   Second, according to the A-G, the audit findings are being thoroughly discussed with the leadership at the national, provincial and local government levels, including the ministers, provincial premiers, mayors, mayoral committees, the speakers of councils, accounting officers and senior management. Thus, the national and provincial departments responsible for local government are given elaborate recommendations by the A-G on how to improve their support to the municipalities and commitments are made to enhance oversight and implement consequence management every year. To this effect, considerable financial and human resources – from national and provincial treasuries, Cooperative Governance and Traditional Affairs (COGTA), including deployment of experts and consultants (who do not come cheap) – are being pumped in a desperate attempt to ensure that the municipalities produce quality reports for audit purposes. For instance, the municipalities spent a total of R1.2 billion on consultants in the 2021/22 financial year without any tangible results on financial reporting (AGSA, 2023).   Finally, the Public Audit Act (24 of 2004) was amended in 2019 to give the A-G consequence management powers. The amendments empower the A-G to report non-compliance with legislation, fraud, theft or breaches of fiduciary duties to relevant law enforcement bodies like the Public Protector, recommend action, take binding remedial action and/or issue a certificate of debt in cases where the accounting officers and authorities do not resolve them appropriately. It remains to be seen whether the implementation of this act will make any difference to the situation. Nonetheless, the above interventions seem not to help as the audit outcome results have remained the same over the years. According to Hamza (2021:11) this may be because the provided interventions “do not match the actual needs of the municipalities”, resulting from the fact that the higher levels of government do not have a comprehensive understanding of the problems besetting the municipalities. The failure of the interventions to have an impact on audit outcomes of the municipalities may be an indication of a wide principal-agent gap between the municipalities, other spheres of government and the public. Because of this, the municipalities are able to utilise their expertise and specialised information to avoid accountability and ostensibly resist interventions from the provincial and national governments.   Indeed, an assessment of the above interventions indicates an incomplete accountability and oversight function. It only involves (1) chapter 9 institutions, particularly AGSA; (2) the national and provincial government – through section 139 interventions and recommendations on what is to be done; and (3) the leadership of the municipality. The latter includes the executive committees and administration in the form of the mayors, accounting officers or municipal managers, and chief financial officers (CFOs). Councils, which are supposed to be central to the accountability and oversight processes at local government level, seem to matter very little in the municipal accountability and oversight discourse as outlined above. There seems to be a tacit assumption that the national and provincial governments are more qualified to deal with local government issues than councils. This is clearly an elitist approach to accountability and oversight at local government level.    Section 79 of the Municipal Structures Act (117 of 1998) provides for the establishment of the municipal public accounts committees (MPACs), and other committees, manned by non-executive councillors, to assist in efficiently and effectively performing any council functions or exercising any of its powers tasked specifically with overseeing municipalities’ financial management (RSA, 2015b). Particularly, section 79(A) gives MPACs a duty to study the A-G’s recommendations with the view to establish whether they have been implemented. This involves initiating investigations especially on UIFW expenditure, as well as fraud and corruption. Unfortunately, these committees are close to non-existent in many municipalities. Where they exist, they are not sufficiently empowered and capacitated to do their jobs (AGSA, 2023). In comparison to the support drummed up to be provided to the national and provincial departments responsible for local government, the municipalities’ financial departments, as well as provincial legislatures, there is little, if any, advice on processes and procedures to empower such oversight committees.   Perhaps, more attention should be given to strengthen the oversight function of the council to complement the existing accountability and oversight mechanisms. There is a need to look into stimulating horizontal accountability to augment the vertical accountability which, hitherto, seems to have been the major focus of the above-mentioned attempts. Using Koppel’s (2005) framework of accountability dimensions discussed above, one can argue that the local government accountability practice in South Africa deals with transparency, liability and responsibility. It answers the questions as to whether the municipality revealed all the facts pertaining to its performance, followed the law and supply chain management policy in expenditure, and whether those who committed wrongdoing faced consequences.   While the A-G provides information in answering these questions, it is through the above-mentioned interventions that the dire situation of municipalities is left to be dealt with. It is the municipal leadership, provincial and national government that are entrusted with ensuring that service delivery occurs, in exclusion of non-executive councillors who might be more motivated to ensure that municipalities spend the budget as required and that they fulfil the expectations of their communities. Therefore, this constitutes an accountability disorder because, while the budget is approved by council, the bulk of accountability is done only through the municipalities’ leadership, provincial and national government. Secondly, the direct representatives of the communities who must benefit from the budget, both ward and proportional representation (PR) councillors, play a minimal role in scrutiny and oversight.   According to the Independent Electoral Commission (IEC), 9 473 councillors were elected as ward and proportionate representative (PR) councillors on the 1st of November 2021 (IEC, 2021). Assuming that the local government leadership referred to above makes up approximately 15% of these councillors, if section 43 of the Municipal Structures Act (117 of 1998) [6] is anything to go by, over 8 000 councillors could be additional eyes and ears on the ground to complement the good job done by the A-G in an attempt to improve accountability and oversight over financial management and service delivery in local government.   In relation to accountability, the fact that they are closer to the executive, live in communities, and meant to serve communities on a daily basis, suggest that they might have more incentives to genuinely play a role in improving accountability and service delivery in local government. That these councillors are at the coalface of service delivery – and most likely to become the first victims of violent community protests – could spur them to action if given an opportunity to ensure that their communities are given basic services. This observation was also made by Verhelst and Peters (2024: 137) who observed that “although it was assumed that small but efficient elite suffices [to run municipalities], modern accounts stress the importance of involving every councillor in the process, as they all bring personal history, values, and political perspective to the role”. Perhaps, non-executive councillors are the missing link in overseeing the financial and non-financial performance in the municipalities.   Involving ordinary councillors in scrutiny and oversight processes can serve other purposes (Verhelst & Peters, 2024). First, it can enhance councillors’ political consciousness and elevate the status of the ward office. Through scrutiny and oversight, councillors would have a deeper understanding of council policies and decisions and, in return, improve their performance on constituency work. Second, such an involvement could assist councillors in developing their political careers. As both their scrutiny and community representation work improves, councillors’ reputation in their communities would increase, which would augment their political stature (Verhelst & Peters, 2024).     In a seminal work discussing different modes of legislature-executive interface in parliament, Anthony King (1976) shows that scrutiny and oversight is triggered when parliament is in a non-party or private mode. This happens in various parliamentary committees, which bring together backbenchers from both the ruling party and the opposition. In these committees, public representatives are forced to work together for the benefit of the community, far from intra-political party and factional issues and opposition politics dominating the plenary. In this mode, public representatives become ‘professional’ backbenchers. In an attempt to theorise the role of council in governance, Verhelst and Peters (2024: 143) hold that “the feeling of scrutiny being directly around the corner compels executives to act properly and professionally”. According to King (1976), though, the committee system generally has little influence on policy and decision-making, even less than opposition parties, in majoritarian political systems.   Nonetheless, argued King (1976), it is in coalition governments that the impact of oversight can be seen, in what is called cross-party mode. Coalitions force interaction between dominant and subordinate parties in the executive and their respective backbenchers in the legislature, as well as agreement in voting based on issues on the table (Verhelst & Peters, 2024). The marriage, however, does not eclipse the fact that the parties are ordinarily in opposition to each other. This creates an environment of robust and genuine engagement unfettered by frivolous political considerations. For instance, in cases where administrators were only accessible to the majority party, they are now accessible to both the dominant and subordinate parties in coalitions. Where only a few were consulted, even the minority parties must be consulted in decision-making. The next section discusses how coalition politics can facilitate this scenario in South Africa.   Enter Coalition Politics at Local Government Level   Coalition politics in South African local government is not a new phenomenon, as this has been in motion since the first local government elections in 2000 (Booysen, 2021). The 2000 local government elections resulted in 29 hung councils, 30 in 2006, 33 in 2011, and 27 in 2016 (Booysen, 2021). While the number of hung councils was the smallest in 2016, the coalition politics stimulated scholarly interest in how these affect governance and service delivery at local government, because three major cities in Gauteng, i.e., Johannesburg, Tshwane and Ekurhuleni, became hung councils (Booysen, 2021; Kariuki et al, 2022). The 2021 elections produced 66 hung councils out of the contested 213, with only four out of eight metropolitan municipalities achieving an outright majority (Kariuki et al, 2022; Sithole, 2023). The Cities of Johannesburg, Ekurhuleni, Nelson Mandela Bay and Tshwane were hung councils after the 2021 elections.   At the most basic, coalition government means two or more parties work together to produce the majority and form a government (Booysen, 2001; Kariuki et al, 2021; Sithole, 2023). Coalitions can be crafted through a formal agreement or informal consensus of the parties in council voting together to form a government (ibid.). One can identify different types of coalitions such as a grand coalition, a bare majority, a minority coalition, and a governance of national or local unity. The common thread on these, though, is that there is always a dominant and subordinate party or parties in the relationship, which makes the relationship a rocky one (Brooks, in Booysen, 2021). This is because the dominant parties seek coalition partners to consolidate power and small parties enter coalitions to have influence in government (ibid.).   Since 2021, South Africans have been treated to a spectacle of council fistfights and flying chairs, political horse-trading and contestations in such cities as Johannesburg, Ekurhuleni, Tshwane and Nelson Mandela Bay, because of the political instability that accompanied these coalitions. In some councils, such as the City of Johannesburg and the City of Ekurhuleni, the mayors and the mayoral committees have changed more than twice by the mid-term of the sixth political term between November 2021 and June 2024.    In response to this, the South African Local Government Association (SALGA) developed a framework on how to handle coalitions in local government (Beukes & de Visser, 2021). This is because, in the view of SALGA:   “Instability in a local coalition can have a severe impact as it may compromise the municipality’s ability to adopt policies and by-laws, make senior management appointments, or even adopt a budget. Coalition instability ultimately compromises the municipal administration’s ability to deliver services to local communities. It puts strain on the planning of the administration because it is difficult to predict whether items would pass in the council. Ultimately, local communities will continue to bear the brunt of unstable coalition politics.” (Beukes & de Visser, 2021: 4)   While the above observation is welcome to kickstart the discussion about the future of local government coalitions in the country, Mutereko (2022) cautions that the spectacle seen on coalition councils should not be equated to the reality of the functionality of municipalities in fulfilling their mandate of service delivery. Of course, there is huge media interest in the drama unfolding around the formation of coalition governments, the disagreements and conflicts during their course, and – particularly – their termination or collapse, which is usually accompanied by a frenzy of political activity. However, this should not make us hasten to castigate coalition governments without empirical research on how they negatively impact the municipalities. One can identify three research areas that would illuminate the impact of coalition governments on the municipalities, namely, financial management and delivery of services, politics-administration/bureaucracy interface, and council functionality.   With regard to financial management and service delivery, there is little evidence, if any, to support that indeed coalition governance has negative effects on service delivery. According to de Visser and Chigwata (2023), the local government administration is not able to function because if council does not approve policies such as the integrated development plan (IDP), credit control policy, zoning schemes, indigent policy, supply chain management, etc., service delivery will stall. This assertion is also based on an incredulous claim by one municipal manager that “When my council fails to meet, the next day, the trucks don’t leave the depot” (de Visser & Chigwata, 2023: 3). All the policies stated above are approved by councils once a year and some, such as the IDP and supply chain management policies, can be dealt with in an interval of five years. It is not clear how trucks can fail to leave a depot due to a failure of council meeting, because such functions are delegated to the administration and do not require a daily approval by council.   Another attempt to explain the impact of coalition on financial management and service delivery is made by Masiya (2022), who relates audit opinion outcomes of the municipalities and unauthorised, irregular, and fruitless and wasteful (UIFW) expenditure to coalition governments. Masiya (2022) claims that, for example, the fact that the cities of Johannesburg, Tshwane and Ekurhuleni had “material misstatements” in 2017/18 can be attributed to coalition governments. However, there is no evidence that such are a result of coalitions.   For instance, the cities of Tshwane and Johannesburg had achieved unqualified audit opinions with findings and material misstatements from 2010/11 and 2012/13 financial years, respectively, and this did not change over the period of the coalitions from 2016 to 2021. Furthermore, a comparative analysis of the cities’ financial performance shows that there had been a steady increase in UIFW expenditure and incidents or transactions in those cities since the late 2000s, making it difficult to see how coalition governments contributed to the trend. For example, the City of Johannesburg recorded approximately 95 UIFW transactions in the 2017/18 financial year – which is the anchor of Masiya’s (2022) argument – and the highest of 217 in the 2012/13 financial year, when there were no coalitions. Similarly, the City of Tshwane recorded 16 UIFW transactions in 2017/18 and the highest of 59 in 2015/16, when there were no coalitions.      The research conducted on the political-administrative interface is not conclusive on whether coalition governments have a negative impact. Reporting on the research conducted on hung metropolitan municipalities in the 2016-2021 political term of local government, Olver (in Booysen, 2021: 269) observes:   “The coalitions in local government have tended to accentuate problems in the political-administrative interface, even though there have been some remarkably stable coalitions, which have been able to insulate administration from political fighting and build performing administrations”.   On the one hand, the research narrates stories told by senior managers of how political tensions of coalitions spill to the administration, prolong decision-making processes, plunge municipalities into policy uncertainties, and create a conducive environment for corruption. In such a context, city managers bemoan being caught up between the warring coalition partners, having to navigate contradicting policy positions, and being isolated by both their subordinates and political principals. In the latter case, the members of the mayoral committees (MMCs) tend to give instructions – most of which are for the benefit of both the concerned MMCs and directors – directly to the directors or heads of departments (HODs) without consulting the city managers, which creates accountability confusions.   On the other hand, Olver (in Booysen, 2021) shows that some coalitions yielded very well-governed administrations. Quoting a study done by Good Governance Africa, Olver (2021) shows that out of 20 best-performing municipalities, five were under coalition governments and this could be attributed to the heightened levels of accountability and oversight. In some cases, such as Nelson Mandela Bay Metropolitan Municipality, there is a good working relationship between the mayor and the city manager. In other cases, such as the GladAfrica scandal in the City of Tshwane, corrupt activities were stopped [7] .   Olver (2021) further shows that there is a continuation of the corrupt practices seen under the majority party government, but with a different hue under coalition governments. Where conflicts were between different party factions, they are now between and amongst coalition partners. Senior managers are not angels either in this situation, as they also have a fair share of the political play, which may have a negative influence on the direction a coalition government can take. By virtue of being trusted lieutenants in the relationship, some senior managers tend to attempt to manipulate the situation for their own benefit and individual survival. But, argues Olver (in Booysen, 2021: 292), “Regardless of whether municipalities are run by coalitions or majority parties, the interface between municipal administrations and council politics are vexed”.   Some of the most rigorous research on this topic was conducted by Miller and McTavish (2012) on Scottish local government after the 2000 local government reforms, which saw the rise of coalitions not only in the municipal councils, but also at the ward level called multi-member wards or constituencies. They found that because of multiple – and sometimes contradictory – views and demands from coalition partners, policymaking and political decision-making become a tedious and painstaking process, which increases the complexity of the roles of senior managers in the municipalities. Just as it was also found in South Africa, senior managers find themselves playing the role of intermediaries between the coalition partners, which make them highly active political managers. However, this leads to a greater scrutiny of policy and decisions made in council and induces senior managers to consider the views of the majority of political parties in council, as opposed to one political party in a majority council (ibid.).   In terms of council functionality, one can argue that the political instability of coalition governments leads to the disruption of the council mandate of by-law making, oversight and public participation. Indeed, the contests make it difficult to pass by-laws, policies and scrutinise the items from the executive. In some cases, a council can go for days or weeks without a mayor or the mayoral committee or changes can happen in such rapid succession that the mayoral committees do not have sufficient time to familiarise themselves with the work of the administration to function properly (Olver, 2021). This means that during these times of leadership vacuum, there would be no one to account to council, or oversight committees such as MPAC, on the performance of the municipality. According to Brooks (in Booysen, 2021), political stability is a precondition of accountability in coalitions.      Nonetheless,  Mutereko (2022), argues that below the drama of fights and disruptions is a world of informal negotiations, consideration of others’ points of view, compromises and balancing of tensions, and efforts to satisfy multiple stakeholders with competing values and interests. According to Masiya (2022: 111-112):   “Governance authority [in coalition government] is diffused across institutions controlled by parties responsive to different societal interests in municipalities led by coalitions. This encourages sincere commitments to long-term people-centred policy stability in South Africa … With growing coalitions, it is apparent that various forms of coalition-led municipalities could influence the future of control and accountability in local government”.   This is exactly what King (1976) meant by cross-party mode. It allows for sincere and rigorous decision-making as various interests must be taken into account and this runs through the legislature-executive setting, including the executive committees and council committees. As also argued by Verhelst and Peters (2024), Masiya (2022) further holds that coalition governance creates an anticipation of scrutiny from coalition partners, which promotes good governance, financial prudence, transparency and accountability. It is this situation that could be leveraged to strengthen the scrutiny and oversight function of councils, particularly as this is now legislated through the 2021 Structures Act amendments. For instance, coalitions in most metropolitan municipalities, such as the City of Johannesburg and the City of Ekurhuleni, saw, for the first time, MPAC chairpersons being appointed from the opposition parties (Mutereko, 2022).   According to Brooks (in Booysen, 2021), legislatures can also play an important role in the oversight of coalition agreements. By scrutinising the policies of coalition governments, legislatures can serve to close the wedge created by opposition forces existing between different parties in coalition. Through accountability to both the legislature and the public, coalition governments will be amplifying their chances of success in government (Brooks, 2021; Sithole, 2023). What is to be done? Following from the above discussion, one can make a few recommendations to be considered in order to strengthen the councils’ scrutiny and oversight function in completion of the country’s local government accountability architecture. First, there is a need to empower councils for them to play a meaningful role in the accountability system of local government. This requires us to go beyond the assumption that establishment of MPACs automatically translates to effective municipal accountability and oversight and start looking at councils’ oversight potential and capacity. We need to ask ourselves about the structure of MPACs, its oversight tools, and how the oversight capacity can be stimulated to hold the executive accountable. Simply reiterating that accountability is the responsibility of council, expressing disappointment that it is not happening, and getting commitment from the councils and premiers that it will be strengthened, is not enough.   Second, just as it is the case at the national and provincial government level, there is a need for a local government oversight model at the local government level. Various guidelines produced by the National Treasury (NT), Department of Cooperative Governance and Traditional Affairs (COGTA) and South African Local Government Association (SALGA) need to be synthesised to provide an oversight cycle, section 79 committee (including MPAC) template, and a picture of what effective section 79 committees look like. In doing this, we need to consider differences in municipalities and modalities through which oversight could be done in different municipalities. For example, oversight in executive committees-type municipalities should not be the same as in the mayoral-type municipalities. Also, the organisational makeup of cities such as the City of Johannesburg, which delivers almost all of its services through municipal entities, should be taken into consideration when thinking about accountability and oversight. Such a service delivery model adds another accountability layer, which makes it difficult for the council to play its oversight role.   Furthermore, the local oversight model must make provision for the involvement of the public in the oversight process. By doing so, it will be encouraging diagonal accountability, where the oversight committees of council, as horizontal oversight actors, and the citizens, civil society organisations and the media (vertical accountability actors) would be working together to hold the executive and administration accountable. This will heighten the accountability and oversight sensibilities of the executive and administration and act as a further deterrence for wrongdoing.  As also argued by Verhelst and Peters (2024) above, the awareness of being watched by the principals makes the agents think twice before doing wrong things.     Third, coalition governments seem to be presenting an opportunity for the government to leverage on scrutiny expectation or anticipation in order to strengthen the scrutiny and oversight role of councils. This comes after the amendment of the Structures Act in an attempt to improve the scrutiny and oversight roles of councils. Therefore, the government could leverage on this to ensure that accountability and oversight is strengthened at local government level for the benefit of the communities.   At the national and provincial government level, the oversight model expressly seeks to insulate accountability and oversight from parliamentary politics by, firstly, ensuring that a certain level of service delivery to the communities occurs, even under political contestations amongst different political actors in government (Parliament of the Republic of South Africa, 2012). Secondly, the model aims to remove Parliament’s work from confrontational opposition-based oversight, famous in Westminster parliamentary style, by setting conditions for collaboration between the legislature and the executive in service delivery, thus making the former partly liable for service delivery failures of the latter arm of the state. Perhaps, the availability of a unified oversight model will serve to conscientise coalition partners, both in the executive and the legislature, of the fact that service delivery failures as a result of coalition politics make them liable. In addition to MPACs, councils should be encouraged to establish more oversight committees, manned by non-executive councillors under the stewardship of the Speaker of Council and the Whip of Council, to assist in carrying out their by-law making, oversight and public participation mandate. Depending on the size and the nature of municipalities, these committees may not be more than two in some municipalities and there might be more than 10 in others. In small municipalities, for instance, MPACs should be able and empowered to play an all-encompassing oversight role.   The committees may include standing committees and portfolio oversight committees. Just as it is the case in parliament (Republic of South Africa, 2012), the former should be permanent committees of council, comprising internal political management committees such as the programming committees, committees of chairpersons, and ethics committees; and transversal committees such as gender, youth and persons with disabilities (GEYODI) and MPAC. The latter, i.e., portfolio oversight committees, should correspond with the available portfolios in the executive or mayoral committee. For example, the Finance Department must account to the Finance Oversight Committee, and the Energy Department to account to the Energy Oversight Committee.    The powers, functions and duties of the committees must be codified in the standing orders of council, terms of reference of the committees, and the local government oversight model. The model should outline the process to be followed by the committees in scrutinising and interrogating the department’s policies, plans, budgets and their financial and non-financial performance, as well as evaluation of the impact of the municipalities in communities. Some of these documents and reports are already provided in various legislative provisions, such as section 129 of the MFMA and circular 63 released by the National Treasury in 2013, providing guidelines on how councils should handle various accountability reports such as integrated development plans (IDPs) / medium-term revenue and expenditure frameworks (MTREFs), annual reports, and in-year service delivery and budget implementation plan (SDBIP) reports, by the mayor.   Since most of these are standard throughout a year, such as the fact that the mayor must table an annual report in council by the end of January every year, the oversight model must also provide for an accountability and oversight cycle designed in accordance with these reporting requirements and expected timeframes for the committees to deal with these. It must also outline oversight tools at the disposal of committees – such as powers to call the members of the mayoral committees (MMCs) to appear before the committees, research and investigation powers, and public participation strategy –  to ensure an effective oversight process. The model must also provide guidelines on the relationship between the internal and external stakeholders such as the HoDs, audit committees, AGSA, Public Protector, media and civil society organisations.   Furthermore, the committees must be provided with enough powers to determine their own agendas, provided with sufficient resources, and provided meeting dates in the council calendar to execute their mandate. This should include enough budget to do their own investigations and benchmark their work with other committees in the country or internationally. Also, they must be given sufficient support staff including committee officers, researchers, legal advisors, and public participation officers to assist them in their daily work. With these, councils will be able to oversee not only the performance of the departments, but also coalition agreements in cases of coalition governments. Non-executive councillors would also be empowered to play their oversight roles and learn more about the operations of the municipality. The other accountability and oversight actors – such as the A-G, provincial and national governments – would be able to get timeous and first-hand information about both the financial and non-financial performance of the municipalities, as well as enriched suggestions about what can be done to improve the situation in the municipalities.      Conclusion   This article sought to assess the accountability and oversight architecture of local government and its functionality in relation to financial management in South Africa. It shows that while there are legislative provisions of accountability and oversight in the mould of separation of powers principles at local government level, these provisions have not been utilised to the fullest, as the role of councils have been excluded to a large extent. Bringing in councils may assist in improving the municipalities’ financial management and service delivery to the communities.   It is shown that the failure of the elitist interventions experimented with over the years seems to be an indication of a wide principal-agent gap between the municipalities, other spheres of government and the citizens. Locating these within the municipal accountability and oversight system, it is shown that oversight is done with little involvement of councils, which are supposed to be central to that process. The fact that the accountability and oversight practices at local government level focus only on transparency, liability and responsibility aspects of accountability suggests that there is an accountability disorder in South African local government. It is thus argued that involving councils as legislatures, and non-executive councillors, can play a role in completing this accountability and oversight architecture by bringing much-needed scrutiny of control and responsiveness as other aspects of accountability. Since they are closer to the financial management and service delivery action and live in communities, councillors can be regarded as a ready army to assist in the accountability and oversight processes of local government, if given an opportunity to do so in oversight committees. This can also serve to create better councillors and politicians to serve in other capacities after their lives as councillors.   Using Anthony King’s (1979) seminal work on different modes of legislature-executive interface, the article argues that the local government structures provide for the required non-party mode for effective oversight. Nonetheless, coalition politics in local government might be providing an opportunity to improve the situation. In coalition governments, the cross-party mode spreads scrutiny not only within the executive, but also on the political-administrative interface, legislature-executive interface, as well as within parliamentary committees. As the dominant parties need partners to hold onto power, and the minority political actors seek to have an influence in government, it becomes harder to ignore these different views and issues in running the government. This is the basis of effective scrutiny and oversight and gives rise to inclusive policymaking and decision-making, which argues well for service delivery and democracy.   Therefore, there is a need for a heightened focus on councils as the source of horizontal accountability. This requires the government to go beyond the establishment of municipal public accounts committees (MPACs) and stimulate councils’ oversight potential and capacity. As argued by Pelizzo and Stapenhurst (2014), not only do we need to ensure that MPACs and other oversight committees have appropriate oversight tools, but these need to be used for the efficacy of the oversight capacity of councils. Furthermore, there is a need for the establishment of an oversight model at the local government level. So as to avoid multiple accountability disorders, the oversight model must be specific and clear on its definition of accountability, as well as the roles of different stakeholders in the accountability system of local government. Also, the model must consider differences in municipalities, as accountability and oversight in a small municipality of 20 councillors cannot work similarly to a 200-councillors strong metropolitan city delivering 80% of its services through municipal-owned entities. It must also encourage community involvement in the oversight processes of the council.   The article further highlights some of the important characteristics of a functional accountability and oversight strategy, such as the types of committees required and the fact that the committees’ powers, functions and duties must be formalised through standing orders of council, committees’ terms of reference, and the local government oversight model. The committees must further be autonomous and independent enough to exert their influence on the affairs of the municipalities. The oversight model should provide for the modalities through which oversight must happen, oversight tools at the disposal of the committees, as well as guidelines in management of the relationship between the legislature and various stakeholders. Through these and learning from those who have done it before, it is possible to strengthen accountability and oversight at local government for the benefit of the communities.        References   Auditor-General of South Africa (AGSA). 2022. Consolidated General Report on Local Government Audit Outcomes, MFMA 2020/21 . [Online] Available at: https://mfma-2022.agsareports.co.za/ [accessed: 18 July 2024]   Auditor-General of South Africa (AGSA). 2023. Consolidated General Report on Local Government Audit Outcomes, MFMA 2021/22 . [Online] Available at: https://mfma-2022.agsareports.co.za/ [accessed: 18 July 2024]   Beukes, J. & de Visser, J. 2021. A Framework for Coalitions in Local Government Prepared for the South African Local Government Association (SALGA) . [Online] Available at: https://dullahomarinstitute.org.za/ [accessed: 18 July 2024]   Booysen, S. 2021. Marriages of Inconvenience: The Politics of Coalitions in South Africa . Johannesburg: Maphungubwe Institute for Strategic Reflections   Buttler. 2011. The Politics of the Public Sector: Political Accountability in Post-apartheid South Africa , paper presented at PARI (Public Affairs Research Institute) Symposium on Public Sector Reform, Wits University, 19 January 2011   De Visser, J. & Chigwata, T. 2023. Coalition governments: What are the options for law reform at municipal level?  [Online] Available at: https://dullahomarinstitute.org.za/multilevel-govt/publications/coalitions-background-document-03112023.pdf [accessed: 18 July 2024]   Electoral Commission of South Africa (IEC). 2021. Municipal Election Results . [Online] Available at: https://results.elections.org.za/home/downloads/me-results [accessed: 18 July 2024]   Goba, N. 2019. Tshwane and GladAfrica agree to Cancel Contract . [Online] Available at: https://www.sowetanlive.co.za/news/south-africa/2019-02-26-tshwane-and-gladafrica-agree-to-cancel-contract/  [accessed: 3 June 2024]   Hamza, L. 2021. Local Government Accountability and Oversight, and Intervention Mechanisms in South Africa . [Online] Available at: www.ipsa.org.za  [accessed: 18 July 2024]   Kariuki, P., Reddy, P. & Wissink, H. 2022. Coalition Building and Municipal Governance in South Africa: Implications for Municipal Leadership and Service Delivery . Johannesburg: UJ Press   Khaile, T. 2023. The Effectiveness of Section 139 Interventions in Strengthening the Municipal Accountability Architecture in South Africa, The Journal of Local Government Research and Innovation , 4(0): a146   King, A. 1976. Modes of Executive-Legislative Relations: Great Britain, France and West Germany, Legislative Studies Quarterly , 1(1): 11-36   Kolisang, L. 2019. The Impact of Oversight Mechanisms on Service Delivery in the Midvaal Local Municipality . Unpublished MA Dissertation: North-West University   Koppel, J. 2005. Pathologies of Accountability: ICANN and the Challenge of “Multiple Accountabilities Disorder”, Public Administration Review , 65(1)   Lindberg, S.I. 2009. Accountability: The Core Concept and Its Subtypes . African Power and Politics Programme: UK Department for International Development (DFID). [Online] Available at: www.assets.publishing.service.gov.uk  [accessed: 18 July 2024]   Madue, S. 2012. Complexities of the Oversight Role of Legislatures, Journal of Public Administration , 47(2)   Malapane, A. 2019. The Effects of the Oversight Role of Legislatures in Promoting Good Governance in South Africa with Specific Reference to the Gauteng Legislature . Unpublished PhD Thesis: University of Limpopo   Masiya, T. 2022. Financial Control and Accountability in Coalition-Led Municipal Councils in South Africa, in Kariuki, P., Reddy, P. & Wissink, H. 2022. Coalition Building and Municipal Governance in South Africa: Implications for Municipal Leadership and Service Delivery . Johannesburg: UJ Press   Miller, K. & McTavish, D. 2012. Electoral and Political Changes: The Impact of Political Bureaucratic Relationships in Scottish Local Government, Local Government Studies , 38(1): 113-129   Mutereko, S. 2022. Coalition Governance in Local Government: A Theoretical Analysis of Multi-Party Administration of Hung Municipalities in South Africa, in Kariuki, P., Reddy, P. & Wissink, H. 2022. Coalition Building and Municipal Governance in South Africa: Implications for Municipal Leadership and Service Delivery . Johannesburg: UJ Press   O’Donnell, G. 1999. Horizontal Accountability in New Democracies, in Schedler, A., Diamond, L. & Plattner, M. (eds). The Self-Restraining State . Lynne Rienner Publishers: Colorado   Olver, C. 2021. The Impact of Coalition on South Africa’s Metropolitan Administrations, in Booysen, S. (ed). Marriages of Inconvenience: The Politics of Coalitions in South Africa . Johannesburg: Maphungubwe Institute for Strategic Reflections   Parliament of the Republic of South Africa. 2012. Oversight Model of the South African Legislature Sector . [Online] Available at: www.parliament.gov.za [accessed: 18 July 2024]   Pelizzo, R. & Kinyondo, A. 2015. Nigerian Journal of Legislative Affairs , 7(1): January-June 201. [Online] Available at: www.researchgate.net/publication/292227902  [accessed: 18 July 2024]   Pelizzo, R. & Stapenhurst, F. 2012. Parliamentary Oversight Tools: A Comparative Analysis . Routledge: New York   Pelizzo, R. & Stapenhurst, F. 2014. Government Accountability and Legislative Oversight . Routledge: New York   Rockvic, V. & Ivanis, Z. 2013. Parliamentary Oversight of the Security Sector in Serbia: Perceived Effects, Problems of Post-Communism , 60(1): 55-61   RSA. 2015a. The Constitution of the Republic of South Africa (Act 108 of 1996), 14th edition . Juta and Company: Johannesburg   RSA. 2015b. Local Government: Municipal Systems Act and Regulations (No. 32 of 2000).  Juta and Company: Johannesburg   RSA. 2015c. Local Government: Municipal Structures Act (No. 117 of 1998) . Juta and Company: Johannesburg   RSA. 2015d. Local Government: Municipal Finance Management Act (No. 56 of 2003) . Juta and Company: Johannesburg   RSA. 2021. Local Government: Municipal Structures Act (117 of 1998) Amendments . Juta and Company: Johannesburg   Schedler, A. 1999. Conceptualizing Accountability, in Schedler, A., Diamond, L. & Plattner, M. (eds). The Self-Restraining State . Lynne Rienner Publishers: Colorado   Sithole, N. 2023. Coalitions in South African Local Municipalities: Is the Constitution Enabling Democracy or Not? Journal For Inclusive Public Policy , 3(2)   Verhelst, T. & Peters, K. 2024. Scrutinizing Council Scrutiny: From Theoretical Black Box to Analytical Toolbox, Local Government Studies , 50(1): 128-149 [1]  However, there is no consensus on this conceptualisation, as some scholars expand horizontal accountability to include external accountability actors. In this view, civil society organisations  and media are categorised within horizontal accountability (Schedler, 1999; Pelizzo & Stapenhurst, 2013). O’Donnell (1999) argues that categorising civil society as horizontal accountability is disingenuous because, first, they are in no way equal to other state actors in holding the government accountable. Second, state institutions such as the executive, legislature and the judiciary have clear powers to mete out sanctions amongst each other. [2]  There are three types of municipalities in South Africa, namely categories A, B, and C. Category A includes metropolitan municipalities, B are the local municipalities, and C are district municipalities established to govern several category B municipalities (RSA, 2015a). Also, there are different governance structures such as the mayoral committees, executive committees or collective executive municipalities (RSA, 2015b). Furthermore, there are different service delivery models such as the corporation  model practised  in the City of Johannesburg, where the bulk of services are delivered through municipal-owned entities, those who deliver services through departments, and those who are a mixture of the two models. [3]  Source: Figure created by author. [4]  The reason for the dotted lines from the local government executive to the national and provincial governments and active citizenry is that as a structure of council, the executive is technically accountable through councils, which does not stop them from being individually accountable to these. [5]  While some scholars regard active citizenry as horizontal accountability, this study follows O'Donnell's  assertion that, by virtue of relative powerlessness in relation to the state, and because of the decision-making powers of state institutions, civil society or active citizenry falls within the category of downward vertical accountability (O’Donnell, 1999). [6]  Section 43 of the Municipal Structures Act (117 of 1998) provides that the executive committee of a municipality should not exceed 20% or 10 councillors, whichever is the least.  [7]  In 2017, the City of Tshwane awarded a three-year contract valued at approximately R1.2 billion for project management consultancy to a company called GladAfrica. It was alleged that the appointment of the company was done irregularly, which prompted an investigation and mutual termination of the contract in 2019 before its expiry in 2020. By the time of its termination, the municipality had already spent over R498 million in payment of GladAfrica’s services (Goba, 2019). - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JULY 2024 by Douglas Ian Scott   as published in the New Agenda South African Journal of Social and Economic Policy, Volume 2024, Issue 92, April 2024.   Introduction   China’s economic rise may now be slowing down, but the lessons for South Africa, grappling with its own stubborn development challenges, remain important. While Beijing currently navigates potential stagnation after four decades of breakneck speed economic development, its “reform and opening up” era offers valuable insights for Pretoria. This article argues that South Africa should re-orientate its relationship with China so as to better learn from, and recreate, the successes of China’s development experience. To do this requires appreciating what those successes are and where, as well as which lessons are not worth repeating on South Africa’s own development path.   Currently South Africa seems to be learning many of the wrong lessons from China. Political training missions from South Africa to Beijing are intended by China to normalise China’s one-party-dominant political system in the rest of the world, rather than meet South Africa’s primary needs (Sun, 2016). This spreads the ideologically rigid message of Xi Jinping (and formerly Maoist) China, not the lessons of the “reform and opening up” period (1979-2017) [1]  that propelled China forward. South Africa already has a well-developed, vibrant and dynamic democratic system; we don’t need to be taught things that run counter to those hard-won gains.   It is worth noting that the current South African focus on centralising power in national government contrasts with the reality of the decentralised and semi-autonomous provincial power structures that have long existed in China; a decentralised system of government, born of historical and geographic necessity, that has allowed for local innovation and local accountability. Focusing on setting up Special Economic Zones, whilst a powerful tool of development, ignores the broader reforms that were implemented and the unique situation of Hong Kong as a gateway to the rest of the world. No South African equivalent to Hong Kong exists. Finally, the creation of State Owned Enterprises (SOEs) to drive development policy ignores the reality that the SOEs have always been a significant drag on China’s economy, one that the reforms usually sought to address and minimise.   So what are the lessons that South Africa can learn from China’s “reform and opening up” period? To answer that question we need to examine how China did it.   Background   In 1978, Deng Xiaoping and his coterie of pragmatic modernisers replaced almost 30 years of rigid Maoist dogma, which in turn replaced “100 years of shame” and domestic turmoil, overturning and replacing Mao Zedong’s strict ideological purity with a practical, open-minded and flexible focus on economic development (Naughton, 2006, Part III). They looked to Japanese, Korean and Hong Kong economic development policies and history (which in turn were largely based on German economic history and the writings of Friedrich List) for inspiration. This created a broad intellectual bedrock on which to build and inspire new development policies that were tailor made for China’s needs.   Reopening trade and scientific exchange with the West, particularly the US, gave them access to a vast and wealthy market to drive export-led economic growth. It also allowed for the importation of productivity-enhancing technology that would enable this export-led growth model. A pivotal move marked by China’s entry into the World Trade Organization (WTO) in 2001 accelerated growth further. Despite its entry into the WTO, China maintained various policy tools that effectively protected its own industries against foreign competition through subsidies and maintaining the low value of its currency.   High levels of domestic savings provided the capital to acquire the technology and capital goods necessary (Wang, 2018). This, along with the policy approach expanded on in this article, drove 40 years of powerful economic growth (averaging 9% a year) that lifted more than 800 million people out of poverty and resurrected one of the world’s great historical powers.   China’s strategic initiative, “Made in China 2025,” implemented in 2015, aimed to leverage its economic growth, propel a new era of reforms and policy objectives, and elevate the nation to developed nation status. The intention was to steer clear of the middle-income trap that currently challenges South Africa. Made in China 2025 sought to do this by encouraging investments in 10 key high productivity, high technology industrial sectors. These are: information technology; robotics and semiconductors; renewable energy and electric vehicles; aerospace; blue economy; railway equipment; power equipment; agricultural technology; medicine and new materials.   Made in China 2025 triggered alarm in Washington and Brussels, alienating China from its most important export markets and sources of technology imports. It fostered concern that China might be able to shed its technological dependency on the US in particular and the West in general. In this way, China failed to continue heeding Deng’s advice to “hide its strength, bide its time” under Xi’s now partially abandoned wolf warrior diplomacy.   A notable element of Made in China 2025 that caused considerable consternation in Washington was its focus on establishing import independence on microchip design and production, of which China imported hundreds of billions of dollars’ worth annually to fuel its vast electronics industry in the Pearl River Delta region. The policy prompted the Trump administration to adopt a more hostile economic and trade posture towards the country after the policy was declared a “threat to U.S. technological leadership” by the Council on Foreign Relations (Council on Foreign Relations, 2018). It, along with the later election of President Biden, also catalysed the development of new American industrial policy in the form of the CHIPS Act to fortify American dominance in this sector.   Despite pouring hundreds of billions of dollars into Made in China 2025 priority industries, the policy has produced mixed results, far from the levels of its 40-year rapid growth era. China’s dominance in renewable energy and electric vehicles has been successfully secured for the foreseeable future. However, its investments in aerospace have yet to produce a satisfactory, domestically designed and built commercial aircraft industry. A viable independent domestic aeronautics industry remains elusive.   The policy’s impact on semiconductor production has been mixed – working at the tiny scale required for the most advanced micro-chips is difficult. Whilst the hundreds of billions of dollars China has invested in developing its domestic semiconductor industry has produced some notable advances, such as the seven nanometres (nm) domestically produced Kirin 9000S chip, it has not yet been successful in establishing the strongly desired semiconductor independence or production capability at the bleeding edge 3nm level. [2]  American pressure on Dutch and Japanese suppliers of the extreme ultraviolet (EUV) photolithography machines, the super high-tech hearts of the multi-billion dollar foundries that produce cutting and bleeding edge microchips, has contributed to this outcome. It also illustrated the difficulty, enormous complexity and extreme cost needed to establish a competitive foothold in the rapidly evolving semiconductor industry.   Although this era of aggressive reform and opening up might be over now, in Xi Jinping’s China, instead of returning to the older obsession with ideological purity and state control, the lessons and legacy from this opening up period remain. The lessons for South Africa from Deng’s reforms can be broadly described as: be pragmatic; incentivise good accountable governance and innovative local government; develop a high functioning and professional bureaucracy; and ensure there is sufficient political will to successfully follow through in implementing economic development policies unhindered by unrelated policies.   Pragmatic governance – practicality ahead of ideology   No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat. – Deng Xiaoping   This quote, mentioned in a number of Deng’s speeches, encapsulates this spirit of pragmatism when pursuing the goal of economic development. So much so that it evolved into an often touted slogan and a political theory of its own, one that can be summarised as “whether it is a planned economy or market economy, it is only a means of resource allocation and has nothing to do with the political system; capitalism can have a plan, and socialism can also have a market” (Ke, 2013).   This slogan acknowledged the political backdrop of Chinese Communist Party politics and the existing economic landscape, largely controlled by inefficient SOEs. Simultaneously, it acknowledged the tangible impact of privately-led capitalism, guided by government policy, in propelling economic development. All economic policy is driven by a desire to move up the industrial value chain through beneficiation, achieve economies of scale and adopt productivity-enhancing technology.   A pragmatic, government-guided approach adopted during Japan’s industrialisation, was inspired by German and American industrial policy of the 19th century, which in turn was inspired by early English industrial policy adopted during the reign of Henry VIII (1509-1547).   Unlocking the success of this type of industrial policy necessitates a practical approach that requires getting the basics right. Total factor productivity, [3]  the ratio of aggregate output to aggregate inputs, needs to be maximised to make beneficiated goods competitive on international markets. To achieve this, productivity needs to be increased, the domestic costs of inputs decreased, economies of scale established and transaction costs minimised.   Productivity was increased through the adoption of new technologies and investments in high-end capital goods, all underwritten with government subsidies and incentives. Input costs were similarly reduced domestically through a mix of government incentives and subsidies. This also required ensuring a reliable and cheap supply of electricity which, despite occasional brownouts due to rapidly increasing demand, has largely been achieved through long-term planning and the successful rollout of new power plants. This is an area where South Africa, plagued by ever-worsening loadshedding since 2007, has notably failed. Economies of scale were established through government policies and encouraging the formation of business clusters. A good example of this is the Chinese cities that specialise in specific economic services such as Yiwu’s dominance in small commodities or Hangzhou’s 1980s era economic cluster in sock production. This is already present to a limited extent in South Africa with cities such as Gqeberha with its automotive assembly, but greater potential exists to expand this phenomenon. The minimisation of transaction costs required trade agreements to reduce export tariffs (which is why the WTO accession was so important to China) whilst improving and streamlining the country’s logistical capacity. This required large and ongoing investments in rail, road and port infrastructure whilst ensuring strong and effective management that is well maintained and run. The effective management, investment and operation of ports and rail infrastructure is another area where South Africa requires urgent attention (Naughton, 2006).   An often celebrated model to come out of this practical approach has been the establishment of Special Economic Zones at easy access points to international markets. These are areas where normal laws and taxation policies are relaxed or otherwise modified to encourage international investment and export. South Africa already has an established policy encouraging this phenomenon with a number of Industrial Development Zones (IDZs) already in the country. A good example of this is the Freeport of Saldanha IDZ, which seeks to specialise in marine engineering. However, total factor productivity still needs to be improved to enhance the international competitiveness of these IDZs.   Innovative local government   “The mountains are high and the emperor is far away,” is a popular old Chinese saying that highlights the challenges of ruling a large country. China’s approach to solving this problem has been to decentralise decision-making and give greater autonomy to local authorities.   This empowers the government to formulate policies that are more attuned to local needs and expedite their implementation. The persistent challenge lies in overcoming the corruption and mismanagement that may accompany decentralised decision- making. Much of China’s governmental history is marked by endeavours of central government officials to monitor and address these issues. However, considering both China’s geographical vastness and the enhancement of local governance, this emerges as a more viable approach, one that South Africa could potentially learn from. Indeed, certain detrimental policy debacles, such as the Great Leap Forward, stemmed from centrally imposed decisions that disregarded local realities.   The Great Leap forward was Mao’s attempt to rapidly industrialise China from 1958 to 1962. It was one of the most famous failed industrialisation efforts in history resulting in the deaths of between 15 million and 55 million Chinese. An aggressive industrial plan that focused on heavy industry and agriculture, it was implemented in a ham-fisted top-down manner that operated independently of local realities, resulting in gross distortions on the ground (Naughton, 2006). It was during this period that Deng first started advocating for less ideologically driven policies. This advocacy work would result in his temporary banishment from Chinese politics.   Following Deng’s rise to power much of China’s growth and poverty alleviation has been driven by local governments doing practical things village by village and city by city. To do this they needed a political mandate and bureaucratic flexibility to implement and experiment with policies and projects. Special Economic Zones, most notably Shenzhen which was able to develop a symbiotic economic relationship with neighbouring Hong Kong, served as laboratories for experimentation.   Local autonomy, in conjunction with the lessons outlined in this article, not only provided local governments with the flexibility to leverage regional conditions but also enabled them to experiment with fostering specialised business clusters and identifying the unique economic strengths of their respective areas. To support these initiatives, the local government established networks facilitating the exchange of outcomes and insights from local development experiments and showcasing model projects and policies to inspire and motivate others.   Local governments are free to set up business development support offices that offer practical advice and services to local businesses. This can range from encouraging local businesses to take advantage of government business development programmes to helping them access international markets to support the export of their goods. In 2008, the author visited one such support office in a rural district of Hebei province which was known for exporting peaches and being one of the largest producers of violins in the world, an achievement that would not have been possible without the practical support of their high-functioning local government-run business support office.   This does come with some risk. Without systems of accountability and adequate monitoring, local officials are more likely to pursue unproductive vanity projects or become corrupt.   Accountable governance   If government officials are not accountable for delivering results and properly motivated, it is unlikely that anything will get done. Different countries have different ways of dealing with this problem. In most democracies it is the role of the electoral process to appoint politicians who will hold bureaucrats to account if they do not deliver.   Being a one party state China has sought to resolve this problem in a different way. By setting a few simple metrics, and rigorously measuring the performance of party and government officials against those metrics, officials are strongly incentivised to focus on development priorities. During China’s period of rapid growth these metrics were primarily focused on economic growth, and included the amount of private and foreign investment each municipality’s leadership could attract. Within the context of promoting economic growth the metric was purposefully left broad so as to allow for experimentation, innovation and taking advantage of local opportunities.   So long as economic growth was maximised within the rules of the law, the best performing officials stood a good chance of being promoted into higher levels of government. This provided an effective mechanism for ambitious officials to gain higher office whilst driving growth.   Much needed anti-corruption drives, along with a change in government policies to reduce pollution (also a much needed change), have altered this approach in recent years. However, the lesson remains that strong mechanisms incentivising good local government whilst punishing non-delivery are needed as are clear lines of accountability for both local decision-makers and the public servants that execute policy on the ground. This is something South Africa is in great need of.   Professionalised bureaucracy   China has a long established norm of trying to appoint the country’s best educated and most capable to government. Culturally, working in the civil service is seen as a high-status job, adding to the allure of government employment. The kējǔ or Imperial Examination for government helped establish this tradition during the Sui dynasty over 1,500 years ago. This policy, of always trying to hire the country’s best and brightest for government, has been continued by the Communist Party government. China is not the only country with a tradition of doing this, Japan and the United Kingdom are also reputed to have a similar culture.   This has ensured that there is a strong talent pool within government that can be recruited from and relied upon to implement government policies and projects. High quality, energetic and highly motivated government officials are especially needed when trying to implement projects at a local level. High-quality politicians with an intimate understanding of local needs and the power to hold bureaucrats accountable is also vital. However, even the most talented political figure needs highly effective bureaucrats to implement policies and deliver on political promises. South Africa, sadly, has never had a culture of recruiting its best and brightest for government. Nor do we have a culture of competitive examinations for the civil service. Whilst there are many highly capable and dedicated people working for government the culture within government, at least since the formation of the Republic, has been to use the recruitment of civil servants as a tool of implementing political goals (such as entrenching Afrikaner control over the state during apartheid) instead of building an effective government. By adopting a culture of recruiting our best and brightest into the civil service, the government’s ability to implement policies and do so efficiently is enhanced allowing the country to do more with less and increasing the chances that better implementation decisions will be made.   Political will   In China, effective political support for long-term strategic planning allowed China to leapfrog over the pre-established industrial dominance of developed countries through the early development of new technologies. Established industries in electronics and steel could transition to renewable energy and electric vehicles. China’s early investment in these technologies when they were new, 10 or 20 years ago, has given it a strong head- start over other nations. Now China increasingly dominates the global export of solar panels and electric vehicles, sectors in which it enjoys a strong competitive advantage (Lin, 2023).   At around the same time, South Africa established several factories making equipment for renewable electricity, but these closed when government withdrew the promised scale of support for renewables.   South Africa has the potential to be strong in this type of industrial planning.   The Department of Trade, Industry and Competition has a long legacy of producing industrial plans. But the political will to implement these plans, unhindered by other, often contradictory policies, has not been present in the current political climate. Until a political consensus that prioritises economic development emerges in South Africa, it is unlikely that even the best conceived industrial policies will be implemented successfully.   Caution   Despite China’s extraordinarily successful example, blindly copying China’s playbook would likely invite disaster. White elephant projects and unchecked corruption are serious risks that China has been trying to come to terms with over the past 10 years. Overinvesting in specific sectors, like the construction and steel industries, distorts markets and wastes capital. Unsustainable debt-fuelled growth has created a nasty hangover which, as in Japan, might take decades to work through. Growth has slumped in the past few years and this has been made worse by the end of the country’s demographic dividend, in addition to high rates of municipal debt, shifting trends in international trade and Western industrial policy, weak productivity growth, and an economy that is overly dependent on a stagnant and highly indebted construction industry. All of this is pointing to the possibility that China might be entering into a middle income trap and a long period of low growth (Magnus, 2018).   Conclusion   China is not alone in proving the success of applying the principles of pragmatism, professional government, political will to implement industrial policy and a culture of entrepreneurship. It is an extraordinary fact that, after preaching the minimal state, avoidance of debt in an unrestricted free market economy for 40 years, the United States under President Joe Biden has made the historic turn back to the state-driven industrial policy it applied when its economy was being built, and again during the New Deal under President Franklin D. Roosevelt following the Great Depression of the 1930s. Biden has revived exactly the policies applied when the US economy was thrust into becoming the foremost economy in the world.   Although the country is currently experiencing a period of significant political partisanship there remains a surprisingly strong, although seldom talked about, consensus that has emerged in industrial policy. Similar to the Made in China 2025 strategy, the Biden era CHIPS and Science Act have injected $250billion into a raft of high technology, high productivity industries over the next 10 years, partly with the intent to re-establish its once dominant semiconductor industry. The success of its implementation, with the majority of the investments going to more conservative Trump voting areas of the country, is an example of good industrial politics enjoying – however begrudgingly – bipartisan support and a broad political mandate. His interventions to promote the green economy have been no less substantial.   Other factors have also contributed to this period of American growth. Trump tax cuts created a period of growth before the Covid pandemic. Biden’s economic stimulus spending during the pandemic through the CARES Act unlocked an enormous multi-year-long consumer spending spree driven by excess savings. A boom in productivity-enhancing technologies such as AI, along with the easy availability of capital to deploy them, has significantly increased the productivity and competitiveness of American manufacturing. This process has been further stimulated by policies supporting the reshoring of manufacturing back to the US following the country’s panic resulting from the Made in China 2025 policy.   The success of implementing these acts and industrial policies required a pragmatic approach, strong political will, a culture of enterprise, as well as autonomous and responsible government. Although very different from China in many ways, the US provides a good example of the power of applying the same principles adopted by China to drive development.   Currently the economic picture is not as good in China as it once was, partly due to the country’s current leadership abandoning the ethos and reforming drive of the previous generation of Chinese leaders (Magnus, 2018). A generation of Chinese leaders, starting with Deng Xiaoping, created the conditions for one of the most significant economic success stories in history. China’s current slowdown is a cautionary tale: abandoning reforms stifles progress and Xi Jinping’s retreat from openness underscores this.   Despite this, the country’s official annual GDP growth rate remains above 5%, much to the envy of South Africa which has averaged a sluggish 1.08% between 2012 and 2022. This number is lower than our population growth rate [4] indicating that the average South African is getting poorer.   South Africa’s current approach, fixated on SOEs and centralised control, mirrors China’s pre-reform struggles. Learning from both China’s successes and failures requires embracing pragmatism, professional governance, political will for well-designed industrial policy, and a vibrant entrepreneurial spirit. Rather than fixating on political intrigue and SOEs, the focus should shift towards pragmatism, professionalisation, experimentation, regional autonomy, incentivisation and a robust political will to foster holistic development.   China’s rise from the shadows of Maoist dogma to an economic powerhouse is a testament to strategic reforms. Deng Xiaoping spearheaded transformative changes, overhauled SOEs, revolutionised property laws, and embraced global trade and investment. This laid the groundwork for its unprecedented economic growth. Crucially, China didn’t stop at traditional sectors. It strategically cultivated industries that allowed appropriate technological leaps. From the ubiquitous presence of social media giants like WeChat and TikTok to pioneering advancements in solar energy and electric vehicles, China strategically positioned itself as a global innovator.   As South Africa navigates its own development trajectory, the key lies not in replicating political models or fixating on SOEs, but in embracing a dynamic approach. China’s journey teaches us that prosperity stems from adaptability, strategic planning and a relentless pursuit of innovation, providing a blueprint for nations aspiring to lift millions out of poverty and onto the path of sustainable progress.   Learning from China’s successful period of “opening up and reform,” South Africa should strategically reorient its relationship with China to enhance its development prospects. It should use its positive relationship to study China’s lessons in job-creating rapid growth. This involves embracing a pragmatic approach, discarding ideological dogmas and making substantial investments in domestic infrastructure and human capital. South Africa should also engage in strategic diplomacy, diversifying its international partnerships beyond a singular focus on BRICS nations to maximize development options.   Focusing on sectors where mutual benefits and synergies exist between South Africa and the rest of the world is crucial. This strategic alignment ensures that collaborative efforts contribute to both national and global development. Geopolitically, South Africa should recognize that China, like any other country, prioritises its own interests. Hence, South Africa should prioritise its own interests first and reclaim its geopolitical agency.   South Africa’s access to the Chinese leadership through BRICS provides a tremendous opportunity to learn the right lessons, and set our diplomatic priorities clearly on economic development. This also applies to other BRICS members, particularly India.   Empowering all levels of government with a strong political mandate to implement both localised and national development strategies is essential. This decentralisation approach enhances adaptability and responsiveness to diverse development needs. South Africa should address the investment strike by fostering a constructive relationship with businesses, unlocking vital development capital for economic growth.   By combining these strategic initiatives, South Africa can recalibrate its association with China, leveraging pragmatism, global engagement and domestic empowerment to fuel comprehensive and much needed sustainable development.   References   Council on Foreign Relations, 2018. Why Does Everyone Hate Made in China 2025? Blog post by Lorand Laskai, 28 March. Available at https://www.cfr.org/blog/why-does-everyone-hate-made-china-2025 (accessed 15 February 2024.)   Ke, Huaqing, 2013. On Deng Xiaoping’s pragmatic reform philosophy, 20 October. Available at https://web.archive.org/web/20220421061312/https://m.aisixiang.com/data/68735.html   (accessed 20 February 2024).   Lin, Chengyi, 2023. Three Drivers of China’s Booming Electric Vehicle Market, Harvard Business Review 3 January. Available at https://hbr.org/2024/01/3-drivers-of-chinas-booming-electric-vehicle-market (accessed 20 February 2024).   Magnus, G. 2018. Red Flags: Why Xi’s China Is in Jeopardy. Yale University Press.   Naughton, B. 2006. The Chinese Economy: Transitions and Growth. Cambridge, Mass.: MIT Press. Sun, Yun, 2016. Political party training: China’s ideological push in Africa? The Brookings Institution, 5 July. Available at https://www.brookings.edu/articles/political-party-training-chinas-ideological-push-in-africa/ (accessed 15 February 2024).   Wang, Mengkui, 2018. Thirty Years of China’s Reform, Routledge Studies on the Chinese Economy, 1st Edition. 20 April. [1] This period starts with the assent to power of Deng Xiaoping in 1979 following the conviction of the ‘Gang of Four’ and concludes in October 2017 following the conclusion of the 19th Communist Party Conference during which presidential term limits were abolished. Although there is no consensus on the exact date upon which the reform and opening up period ends, the 19th Party Congress represents an important milestone in the entrenchment of Xi Jinping’s power at the expense of Deng appointed successors. [2] Because the semiconductor/microchip and software industries develop so fast, those industries have adopted the term “bleeding edge” to describe an edge that is further ahead than “cutting edge” or “leading edge”. It’s typically an edge that is about 16 months ahead of the cutting edge competitors and comes at a cost of increased risk from the unreliability of new technology. A good example in 2024 is Nvidia’s dominance in AI chip design and production. [3] Total factor productivity (TFP) is an economic concept that describes the portion of a company’s increased output that cannot be explained by increased capital or labour inputs and thus is considered a measure of operational efficiency. [4] Average of 1.2% per annum in the same period, World Bank data, accessed January 2024 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JULY 2024 by Dr Ndiakhat Ngom   Abstract   The historical relationship between Africa and China exemplifies a successful model of South-South cooperation, marked by three critical phases: support for African independence and development, Africa's pivotal role in recognising China in global governance, and the formalisation and intensification of relations through the Forum on China-Africa Cooperation (FOCAC). This paper, presented at the China-Africa Think Tanks Forum (CATTF) in Cape Town, reflects on the current state and future directions of China-Africa relations.   FOCAC has become the cornerstone of China-Africa cooperation, with both parties benefitting from strategic trade partnerships and shared geopolitical visions. However, this relationship also faces challenges, particularly in training, economic cooperation, environmental preservation, and global governance. The paper delves into these sectors, emphasising the importance of technology transfer, the transformation of natural resources, strengthening the African private sector, addressing environmental concerns in the mining and marine sectors, and supporting Africa's representation on the UN Security Council. The analysis includes case studies on Senegal's local content initiatives, Guinea's bauxite industry, and West Africa's fishing crisis. It underscores the necessity of less unequal economic cooperation and the importance of industrial autonomy for Africa's sustainable development. Additionally, the paper highlights the need for inclusive consultations and stricter measures to combat illegal fishing and environmental degradation.   Recommendations for enhancing the China-Africa partnership include establishing a CATTF alert and analysis department, conducting studies on migration and jihadism, and improving crisis impact assessments for FOCAC. Ultimately, the paper advocates for a dynamic and inclusive multilateralism, fostering wisdom, listening, and anticipation to ensure a mutually beneficial and equitable relationship between China and Africa.   Keywords: FOCAC (Forum on China-Africa Cooperation); South-South Cooperation; Strategic Trade Partnerships; Sustainable Development; Technology Transfer   Introduction   Africa and China have historically maintained extremely fruitful relations. They significantly reflect a fine example of South-South cooperation. This relationship was built on three essential phases:   First, China accompanied African countries in their struggle for independence and their development programme. Then, Africa played a decisive role in the recognition of China in global governance. Its vote in 1971 allowed it to join the UN. Mao Zedong recognised this debt and expressed his gratitude. The last act, in 2000, is the formalisation and intensification of relations within an ambitious framework, FOCAC. The China Africa Think Tanks Forum (CATTF) is one of its branches.   More than 24 years after its creation, FOCAC has become the reference for China/Africa. For its industrial competitiveness, China sees Africa as a strategic trading partner, through the supply of raw materials, energy, fishing, agriculture, agroforestry, and mines. In return, African countries benefit from road, port, airport, and health infrastructures and from a diversification of training.   Geopolitically, both parties share the vision of a more just, equitable, and fraternal world. They support each other at the United Nations in order to influence decisions in favour of the Global South. Finally, the enlargement of BRICS to South Africa and Ethiopia in 2023 is a strong sign. We hope that other African countries will follow.   Despite these obvious successes, not everything is perfect in the relationship. Like France/Africa in the past, China/Africa raises questions, praise, fantasies, and criticism. This paper will highlight four sectors, which are training, the economy, the environment, and geopolitics, and will formulate recommendations.   Technology Transfer and Transformation of Natural Resources     During a meeting with African Heads of State invited to the BRICS summit on 23 August 2023, in Johannesburg, President Xi Jinping formulated a proposal that seemed crucial to us: "China will launch the China-Africa Talent Development Cooperation Plan. It plans to train 500 successful directors and teachers of vocational schools for Africa each year, as well as 10,000 talents who master the Chinese language and professional skills. China plans to invite 20,000 government officials and technical professionals from African countries to seminars or forums. To support the strengthening of African capacities in science, education, and innovation, China will implement the Cooperation Programme between 100 Chinese and African higher education institutions and launch 10 pilot projects between Chinese research institutes and African partners” (Xi, 2023).   Training and technology transfer are essential to the industrialisation and emergence of Africa. The African population is young, dynamic, and demanding training. It will double in 2050, from 1.4 billion inhabitants to 2.5 billion. Chinese direct investments in Africa totalled US$3.4 billion in 2022 (Agence Ecofin, 2023). China is the fourth-largest foreign investor in Africa. These investments bring growth, but they are mainly of interest in labour-intensive sectors. Africa needs less unequal economic cooperation in which China invests in industrial activities that require technology transfer. Its main sector of activity is construction and energy, an area of high demand for often low-skilled labour. Less imbalanced relationships are in high demand with China more investor than service provider and Africa more partner than customer. China is at the same time financier, service provider, customer, and supplier of goods.   Africa must step up efforts to achieve industrial autonomy. China has had a similar trajectory in the past and constitutes a perfect example for African countries. Today China has the most efficient TGVs in the world and an impressive network density, designed based on its own geographical and cultural standards. It surpasses countries such as France, Italy, Germany, Spain, and Japan – which accompanied it in the 1980s. It has achieved technological feats on the naval and aeronautical levels. Its engineers are today autonomous in the design and production of innovative equipment, a guarantee of significant economic growth.   Africa dreams of this same model of cooperation. Investing in local skills in order to gradually gain autonomy is the central objective. Senegal is collaborating with the French group, Alstom, in the operation of a regional railway line. Other countries, such as Guinea, Ivory Coast, and Ghana, express the request to locally transform their natural resources.   Guinea Conakry is the second-largest producer of bauxite in the world, of which China is the leading customer for producing aluminium. The country has immense reserves of gold and diamonds, and one of the world's largest unexploited iron reserves. Unfortunately, the economic and social benefits are weak. Guinea is one of the poorest countries in the world. President Mamadi Doumbouya demanded from mining companies the local processing of bauxite, under the 1983 agreements, for the construction of aluminium smelters.   Guinea exports more than 87 million tonnes of bauxite worth US$500 billion (Bamba, 2022). Experts estimate that the installation of refineries should multiply these figures by five. The Chinese mining company TBEA GROUP had committed to building a 200,000 tonnes/year aluminium smelter in 2018. But in 2024, nothing concrete. The only positive result concerns Simandou iron for which Guinea obtained a significant stake in mines and railway and port infrastructure.   Its neighbours, Ivory Coast and Ghana, display the same ambition for autonomy. They produce 60% of the world's cocoa production, but they buy chocolate imported from Switzerland at a high price because of the big cocoa traders (Cargill, Nestlé, Olam, Callebaut) (Drout, 2023). Out of the US$100 billion generated by the chocolate sector, these two countries only earned six. It is to fight against this economic injustice that Presidents Alassane Dramane Ouattara and Nana Akufo-Addo initiated local transformation programmes targeting 100% of the production by 2050.   Only autonomy makes it possible to capitalise on the entire value chain and boost growth. In addition to the slogan "decolonising knowledge" in African universities, there is that of "decolonising industry" among activists, youth, and civil society. China's history is a great proof of autonomy, and President Xi Jinping demonstrated this well in his speech on skills. Africa cannot develop by remaining an eternal supplier of raw materials. Africa is poor with its richness; this is paradoxical. But it would be better off by valuing them itself. Progressive control of African resources would be the perfect sign of a win-win partnership between China and Africa.   Strengthening the Private Sector in Africa     The emergence of Africa depends on a strong private sector, benefitting from the trust of States and technical and financial partners. As Africa’s first partner, China has a vital role to play, since it is the world champion in foreign exchange reserves. In August 2023, the People's Bank of China held US$3,204 billion compared to US$800 billion for the Eurozone and US$150 billion for the Central Bank of the USA. Its investment skills are impressive.   In Senegal, the private sector is organising itself, helped by the government, through the promotion of “local content”. The initiative is supervised by the Public Order Regulatory Authority (ARCOP) to ensure compliance with tender standards for the execution of projects. In the execution of projects financed by development partners, 33% of the contract amount is granted to the private sector. But Eximbank and China Development Bank have infinite financing capacities, and their infrastructures are built by one of the 3000 Chinese companies in Africa.   This exclusivity weakens the local industry because the absence of tenders creates frustration. It is why the Senegalese Investors Club  (CIS) was created. It is an employers' union that brings together companies in the construction, energy, banking, agri-food, and transport sectors. Its objective is to finance and execute projects in the name of economic sovereignty. The group collaborates with financial institutions and has created an investment fund of US$34 million (CIS, 2018).   Three examples demonstrate its success:   Creation of West Africa Energy, a 300 MW gas-fired power plant project which aims for the country’s energy autonomy. At the investors forum in Paris in December 2018, the club committed to providing US$2 billion of the US$7.5 billion needed to finance the second phase of the “Sénégal Émergent” plan. It had positioned itself alongside major international financial institutions. Creation of a modern agricultural farm of 5,000 ha in the village of Ndingler using local financing and the promotion of local agronomic expertise in order to contribute to the food sovereignty of the country. (CIS, 2018) China should strengthen the African private sector by granting it a significant share of contracts. For example, Henan Chine carries out most of the construction sectors in Senegal, although there are three large local groups: CDE, CSE, and TALIX GROUP. They have several subsidiaries in Africa and carried out all the roadworks during the 13th OIC summit in 2008 in Dakar, for which a budget of US$600 million has been allocated. Local companies in Senegal are today isolated in the execution of Chinese contracts.   Globally, FOCAC has considerably accelerated the commercial dynamic between the two parties. Selling turnkey infrastructure is good; it boosts growth and creates jobs. But China can do better. With the Belt and Road Initiative (BRI), the planet has the largest global network of integrated infrastructures whose ambition is to secure the production, transport, and distribution of natural and industrial resources between China and the rest of the world.   The BRI is an incredible opportunity for the African private sector. Africa proposes the inclusion of special clauses, in the form of quotas, in favour of the private sector in the execution of BRI mega infrastructures. To reduce the trade imbalance between Africa and China, financing from Eximbank and China Development Bank should benefit the Chinese and African private sectors. There needs to be more fairness and more confidence for the African private sector. These two aspects are crucial for creating wealth, employment for youth, and the well-being of populations.   Accentuate Efforts in the Mining and Marine Environmental Sector     Environmental preservation is an important part of China/Africa. China is the leading producer of aluminium in the world thanks to bauxite from Guinea Conakry, which represents 50% of its needs. Bauxite is valuable for the automobile, naval, and food industries. Many Chinese companies are active in Guinea on the Boké-Kindia-Fria-Boffa axis, which holds two-thirds of the country's reserves. This coastal region holds most of the country's economic and industrial activity, but it also suffers a lot of environmental damage. The air, forests, and yards around mining companies are polluted. Agricultural, livestock, fishing activities, and the health of villagers are affected.   This is why this region is regularly shaken by riots, an expression of great frustration. Between April and September 2017, extreme violence shook the city of Boké (Tchimbakala, 2017). Young people accused mining companies of only being partially involved in the community’s well-being, of destroying biodiversity, and of impoverishing populations. The absence of the State, corruption, the power of mining companies, and mismanagement are indexed. There needs to be inclusive consultations between mining stakeholders in order to avoid a breakdown in trust. The numerous complaints from young people against mining in Guinea could lead to a similar situation in the Sahel, which has put the French in a difficult position.   The second subject on which China is expected is its involvement in the regularisation of the fishing sector in West Africa. This sector is strategic; the area is one of the world’s richest in fish. It contributes to food security, income, and employment. Unfortunately, it has the highest rate of illegal fishing in the world, due to undeclared catches, weak monitoring resources, and corruption in fishing licences. Foreign vessels practise piracy and overfishing with impunity through bottom trawling, a technique that often does not comply with standards. In addition, there are national flags that belong, in reality, to foreign companies. The losses are enormous for coastal economies. Fish are becoming scarce, fishermen are becoming poorer, tensions are breaking out with foreign ships, and maritime pollution is intensifying.   And there are dramatic consequences. Today, the image of Senegal is identified with the irregular immigration of thousands of Africans, from Dakar to the Canary Islands. They are only separated by 1300 km, which is the same distance as Johannesburg to Cape Town. The canoes leave from the fishing villages along the Senegalese coast (700 km), such as Cayar, Thiaroye, Bargny, Mbour, Saint Louis, and Cape Skirring. The traffickers are former fishermen who have retrained. Not all migrants are fishermen, but it should be noted that the fishing crisis in West Africa has a major impact on the migration crisis.   According to the Spanish NGO, Caminando Fronteras (2023), sub-Saharan Africa accounts for nearly two-thirds of illegal migrants from the Canary Islands. Nearly 6,618 people died or disappeared in 2023; these figures have tripled compared to 2022. This maritime route is one of the most dangerous in the world.   China cannot ignore this crucial problem, especially since its fleet, the largest in the region, is one of the flags in question. China is contributing significantly to the implementation of alternative programmes such as fish farming, but it is important to add that it made important efforts to fight against illegal fishing. According to a press release published in February 2018, the Chinese Ministry of Agriculture withdrew fishing subsidies and licences from three Chinese companies involved in illegal fishing in West Africa. Since 2016, the cancellation of subsidies is approximately CN¥700 million (US$110.5 million) for 264 vessels belonging to 78 deep-sea fishing companies (EJF, 2018: 26).   China should step up its efforts, alongside African countries, the European Union, local associations, and NGOs. It must strengthen the means of geolocation of ships and intervention of the navy, but above all crack down hard on the corruption, which is plaguing the environment.    Supporting the African Union on the Security Council     The FOCAC and BRICS are privileged spaces for the design and execution of South-South programmes. The illustration is the involvement of China, followed by Russia, Cuba, and India, to provide medical equipment to African countries to fight against Covid-19. Medical diplomacy is one of the most beautiful proofs of solidarity in the Global South. At the UN, African countries consider China a powerful ally with whom they benefit from greater attention. China can count on Africa, in its Great South project, to reform global governance.   Africa is the ideal partner for this central objective of multilateralism. With 54 independent states, it is the largest bloc in the United Nations system, with 28% of the votes, compared to 27% for Asia, 17% for the Americas, and 15% for Western Europe. Africa holds a quarter of the votes in all United Nations governing bodies. Finally, it is the most important bloc in the WTO, the Group of 77, and the Non-Aligned Movement (Nantulya, 2023). China and Africa are working together to occupy important agencies at the UN. The rebalancing of global responsibilities, an old grievance in the South, is becoming a reality.   Observations on this theme concern two points: one is a concern; the other is a request.   The concern is about the principle of “non-interference” contained in the "Global Security Initiative (GSI)”. This programme aims for the sovereignty of States in the face of external pressures (military intervention, economic sanctions), and promotes pacifism and consultation to resolve conflicts. This was at the heart of the inaugural speech President Xi Jinping gave at the opening of the annual conference of the Boa Forum for Asia (21 April 2022) and at the third China Africa Summit on Peace and Security in Beijing (19 September to 2 August 2023).   It is important to remark that the GSI responds to the desire to deculturalise the concepts of international law inherited from the West, but realistically, the political and security context in Sahel is not favourable to this. Several facts justify the fears:   The first point is that the GSI encourages the confiscation of the electoral calendar, weakens the opposition and the populations who feel helpless in the face of the omnipotence of the military and dictators. The second point is that the GSI isolates dictatorship states from neighbouring countries and encourages the confiscation of liberties. For example, in Niger, there has been tension for several months between the military authorities and the Maison de la Presse Association, a group of 32 socio-professional media organisations. The Interior ministry suspended its activities because the group had harshly criticised the coup and the attacks on fundamental liberties. The third point is that the GSI is a threat to regional integration and solidarity. After the coups in Mali, Burkina Faso, Niger, and Guinea, the Economic Community of West African States (ECOWAS) adopted economic sanctions and considered sending military forces to Niger, before withdrawing. But these initiatives were judged as an attack on sovereignty by these countries, which nevertheless signed the ECOWAS charter on economic integration and the free movement of goods and people (1975).   Today, Mali, Niger, and Burkina Faso are cross-border and heavily impacted by jihadist attacks. So, they have formed a mutual defence pact, the Alliance of Sahel States (AES) (September 2023) and have withdrawn from ECOWAS (January 2024). The pretexts are the injustice of economic sanctions, the loss of the fundamental values of ECOWAS, and their isolation in front of jihadist attacks. ECOWAS is in a deep crisis today.   The second point is a request for reform of the United Nations Security Council. The world has changed between 1945 and 2024. There is a tipping point towards the South. The geopolitical divide, global warming, xenophobia, zoonotic diseases, extreme poverty, migration, and artificial intelligence are significant challenges that require a redefinition of global governance.   Africa remains largely absent from the UN Security Council. Since 2005, it has expressed its desire for profound reform in order to be better heard. In the name of the fight against global warming, financial institutions refuse to finance the exploitation of its rich energy deposits, while the African Union calls for a moratorium on fossil fuels. Africa is severely affected by global warming, even though it only contributes -5% of GHGs. By failing to transform its natural resources itself, it only contributes 3% to international trade. On a medical level, Covid-19 has shown Africa’s great fragility. In terms of security, it hosts seven of the 14 peacekeeping operations and supplies most of the blue helmets. These are all important subjects on which the international community takes the place of Africa and makes decisions in its place. In order to repair this geopolitical injustice, the African Union set up a committee of 10 (C10) composed of 10 heads of state and government mandated to negotiate the reform of the UN Security Council. These are Algeria, Equatorial Guinea, Congo, Uganda, Senegal, Libya, Kenya, Zambia, Namibia, and Sierra Leone.   At the 10th C10 ministerial meeting in Brazzaville (12 January 2023), President Denis Sassou-Nguesso said: "A major player on the international scene, Africa must assert its rights and duties within the United Nations, hence the urgency of establishing a reformed and renovated security council, more transparent, more democratic and more representative of global cultural diversity" (Ambassade du Congo France, 2023). He added that Africa's objective is to obtain two seats as permanent members with the right of veto, two seats as non-permanent members, and under the 2004 United Nations convention, one or two languages as a working instrument. China and Germany have expressed their desire to support Africa’s project. All the conditions are met now. China should materialise it by lobbying with partners in the South and North. It is a unique opportunity to pay off the 1971 debt, thanks to which it accessed the Security Council. The China-Africa Think Tanks Forum is facing a great challenge.   Conclusion     From 44 countries in 2000, there are 53 in addition to the African Union Commission in 2024. FOCAC has become a success. However, despite its laudable intentions and significant economic and political achievements, FOCAC’s members must remain lucid. China was admitted late into international relations. It was preceded by the former colonisers who had exclusivity in Africa. The French precinct in French-speaking countries is a great example of the power of former colonisers in Africa. But the roles are reversed today. Three factors can explain it:   The arrival of new partners, China, Russia, India, Brazil, Turkey, with new offers, A more educated youth connected to globalisation, and The tremendous mobilisation capacity of social networks, especially TikTok.   A dynamic and inclusive multilateralism has emerged and become a breath of fresh air for African countries. French economic actors were supplanted by Chinese investments, and the Sahel’s populations forced the French army to leave. However, in recent years, African youth and civil society have sent strong signals that the West has not been able to dissect. The breakup was then inevitable. This is a turning point that deserves reflection.   China/Africa must take stock after a quarter of a century of companionship. Both parties have to be reactive and anticipate trends, aspirations, and new dynamics in Africa. The China-Africa Think Tanks Forum has a pioneering role to play: that of whistleblowers. FOCAC must learn from the mistakes of former African partners in order to avoid getting confused in its strategic options.   As a contribution to the Forum’s reflection, here are four recommendations:   The CATTF must set up a department for alert and analysis. For West Africa, it is imperative to carry out a study to evaluate the relationship between migration and the fishing crisis. A second study must be carried out to evaluate the worsening of jihadism in the Sahel in relation to the recruitment of young people. Reports on crises and their possible impacts on FOCAC will be given to the authority to help with decision-making.   In short, cultivating wisdom and a capacity for listening and anticipation within FOCAC is the message from Senegal and the Sahel.   Summary   Establishing the conditions for mutually beneficial cooperation between China and Africa, within the formal framework of FOCAC, is a highly beneficial but difficult approach. The relationship arouses hope, equitable cooperation, pooling intelligence, and prosperity in the name of a common vision of the Deep South: united and peaceful. China/Africa offers symptoms of an undeniable shift in global geopolitics towards the South.   But the intensification of exchanges also arouses criticism. Beyond the statistics, the achievements, and the good intentions, there is reason to point out aspects which appear problematic and to make recommendations on subjects related to training, the economy, the environment, and global governance.   The performances achieved over a quarter of a century plead in favour of a healthy relationship, based on trust and respect. But this should not prevent China/Africa actors from maintaining the lucidity necessary to avoid past mistakes that disadvantaged Africa with other partners.   References   Agence Ecofin. 2023. Les investissements directs chinois en Afrique ont totalisé 3,4 milliards $ en 2022 . [Online] Available at: https://www.agenceecofin.com/actualites/1406-109281-les-investissements-directs-chinois-en-afrique-ont-totalise-3-4-milliards-en-2022 [Accessed: 19 November 2023]   Ambassade du Congo France. 2023. 10ème réunion ministérielle du Comité des dix chefs d'Etat et de gouvernement de l'Union africaine sur la réforme du Conseil de sécurité des Nations unies: L'Afrique veut être mieux représentée au Conseil de sécurité des Nations unies . [Online] Available at: https://ambacongofr.org/index.php/l-ambassade/actualites/929-10eme-reunion-ministerielle-du-comite-des-dix-chefs-d-etat-et-de-gouvernement-de-l-union-africaine-sur-la-reforme-du-conseil-de-securite-des-nations-unies-l-afrique-veut-etre-mieux-representee-au-conseil-de-securite-des-nations-unies [Accessed: 30 January 2024]   Bamba, M. 2022. Guinea - Bauxite: is the country ready to embark on local transformation?  [Online] Available at:   https://www.bbc.com/afrique/region-61106498.amp [Accessed: 11 March 2023]   Caminando Fronteras. 2023. Monitoring the right to life . [Online] Available at:    https://caminandofronteras.org/en/monitoreo/monitoring-the-right-to-life-2023/ [Accessed: 11 July 2024]   Drout, A. 2023. De puissance cacaoyère, la transformation de la Côte d’Ivoire en puissance chocolatière . [Online] Available at: https://www.entreprendre.fr/de-puissance-cacaoyere-la-transformation-de-la-cote-divoire-en-puissance-chocolatiere/ [Accessed: 27 December 2023]   Environmental Justice Foundation (EJF). 2018. China’s hidden fleet in West Africa: A spotlight on illegal practices within Ghana’s industrial trawl sector . [Online] Available at: https://ejfoundation.org/resources/downloads/China-hidden-fleet-West-Africa-final.pdf [Accessed: 11 July 2024]   Karsenty, A., Garcia Herrero, A., Malm, J. & Pairault, T. 2022. Chinese Influences in Africa 2. Myths and Realities in Economic Relations . [Online] Available at:    https://www.ifri.org/sites/default/files/atoms/files/garcia_herrero_et_al_influences_chinoises_afrique_part_ii_2022.pdf [Accessed: 11 July 2024]   Nantulya, P. 2023. The role of Africa in China's multilateralism strategy . [Online] Available at: https://africacenter.org/fr/spotlight/le-role-de-lafrique-dans-la-strategie-de-multilateralisme-de-la-chine/ [Accessed: 16 December 2023]   Senegalese Investors Club ( CIS). 2018. Ensemble, pour un secteur privé national fort!  [Online] Available at:   https://clubdesinvestisseurs.org/index.php/le-cis/ [Accessed: 7 January 2023]   Tchimbakala, D. 2017. Guinée: La bauxite au cœur des émeutes de Boké . [Online] Available at:   https://information.tv5monde.com/afrique/guinee-la-bauxite-au-coeur-des-emeutes-de-boke-26422 [Accessed: 5 December 2023]   Xi, J. 2023. Promouvoir ensemble la modernisation en vue d’un avenir meilleur pour la Chine et l’Afrique . [Online] Available at: http://www.focac.org/fra/ttxxsy/202308/t20230825_11132932.htm [Accessed: 23 December 2023] - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JULY 2024 by Prof Assi J.C. Kimou   Abstract   The Sino-African relationship is driven by China's political will to meet its economic growth needs through access to raw materials and expanding markets. This cooperation is mutually beneficial, offering African countries, including Côte d'Ivoire, opportunities to address infrastructure deficits and boost economic exchanges. Since 1983, Côte d'Ivoire has strengthened ties with China, focusing on development through South-South cooperation. Various agreements have been signed since 1984, and Côte d'Ivoire actively participates in the Forum on China-Africa Cooperation (FOCAC). China supports Côte d'Ivoire’s economic growth through grants, interest-free loans, and preferential loans via institutions like the China Eximbank. This support has financed significant projects, including infrastructure developments and the expansion of the Abidjan Seaport. China's foreign direct investments (FDIs) in Côte d'Ivoire have grown, with a focus on sectors like construction, mining, and manufacturing. Despite this growth, Chinese FDI remains lower compared to other foreign investors, such as France. Trade between China and Côte d'Ivoire has increased significantly since 2000, although Côte d'Ivoire maintains a trade deficit. Cultural and educational cooperation is also significant, with initiatives such as the Confucius Institute promoting Chinese language and culture in Côte d'Ivoire. Challenges in the Sino-Ivorian relationship include China's economic slowdown, potential debt risks from Chinese loans, and limited job creation due to imported skilled labour. To maximise benefits and mitigate risks, Côte d'Ivoire must diversify its economy, deepen regional exchanges, and stimulate domestic activity. This paper explores these dynamics, providing a comprehensive analysis of the opportunities and challenges in Sino-Ivorian relations.   Keywords : China-Africa Cooperation; Côte d'Ivoire Development; Foreign Direct Investment (FDI); Infrastructure Projects; Trade Balance   Introduction   The Sino-African relationship is primarily driven by a political will of the Chinese government to serve its own economic growth needs, promote restructuring, and improve its economy. In other words, China's interest lies in ensuring access to raw materials at competitive prices, given the abundance of these resources in Africa, as well as expanding markets for its exports and realising profitable investments. In return, China commits to meeting the financing needs of countries in difficulty and addressing their urgent infrastructure needs such as highways, buildings, airports, and others.   This cooperation thus becomes an opportunity for African countries to address their infrastructure deficit and boost their exchanges. In this regard, Côte d'Ivoire has directed its development efforts and strengthened its relations with China since 1983, after several years of privileged relations with the West, particularly with France. Indeed, Côte d'Ivoire aims to establish the foundations of its development through South-South cooperation focused on sharing experiences and knowledge, technology transfer, and market opening .   To concretise this cooperation, various agreements and conventions have been signed between the two states since December 1984. At the multilateral level, Côte d'Ivoire has participated in all meetings organised within the framework of the Forum on China-Africa Cooperation. The Forum on China-Africa Cooperation (FOCAC), since its establishment in October 2000 in Beijing, serves as a dialogue platform allowing China and Africa to diversify exchange frameworks and enrich bilateral and multilateral cooperation, with the aim of institutionalising and strengthening the Sino-African partnership.   Despite the advantages of this cooperation for both Côte d'Ivoire and China, the Chinese presence seems to raise concerns for the Ivorian economy, as it does in other African countries. The recommendations of the African Union (AU) summit in Banjul in 2006 on the need for research institutions to conduct studies on the challenges and opportunities represented by China for Africa are a perfect illustration of this.   This paper will explore several crucial aspects of the relationship between China and Côte d'Ivoire. First, it will examine the development support that China provides to Côte d'Ivoire, highlighting assistance projects and economic cooperation between the two countries. Next, the paper will analyse China's foreign direct investments (FDIs) in Côte d'Ivoire, studying the key sectors affected by these investments. It will also look at the trade exchanges between China and Côte d'Ivoire, examining trade flows, exchanged products, and trade trends between the two nations. Additionally, the paper will address Sino-Ivorian cultural and educational cooperation, highlighting initiatives aimed at promoting cultural and educational exchanges between the two countries. Finally, it will discuss the current challenges and future prospects of the Sino-Ivorian relationship, examining potential obstacles as well as opportunities for growth and development ahead.   Support for China's development of Côte d'Ivoire   The economic relations between China and Africa are often approached through two main channels: aid and investment, in addition to trade exchanges. Chinese foreign aid, as described in the 2011 White Paper, currently consists of two components: altruistic actions such as grants, and interest-bearing loans. These Chinese loans are granted within the framework of bilateral economic cooperation agreements, often through the China Export-Import Bank (Exim Bank), established in 1994 to modernise China's foreign aid modalities. It plays a crucial role in financing companies operating abroad, facilitating imports and exports, and promoting international economic relations.   In Africa, China cooperates through various development projects, particularly in the fields of infrastructure, agriculture, and culture. According to several studies, China has significantly increased its assistance to African countries since the 2000s, benefiting from vast currency reserves that enable it to offer loans on favourable terms. Unlike international donors, China can quickly implement projects, signing agreements in as little as one year. By primarily using national institutions such as the China Eximbank and the China Development Bank, it has become Africa's main creditor.   Regarding Côte d'Ivoire, China has supported its path to economic growth since 1985 through loans and grants for various development projects. Three types of aid can be distinguished: long-term interest-free Chinese government loans, preferential loans at low-interest rates granted by the China Eximbank, and grants from the Chinese government, which do not require repayment (Ma & Zhou, 2021). Graphic 1 illustrates the dynamics of gross loans granted at concessional rates by the People's Republic of China, the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD), and France as a historical partner of Côte d'Ivoire. Our analysis of the dynamics is thus based on Official Development Assistance (ODA) in the form of loans.   Graphic 1:  Concessional gross loans from the People’s Republic of China, the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD), and France (US Dollar) Source: Author’s From OCDE and China Africa Research Initiatives Database   The total gross loans granted at concessional rates by the OECD's Development Assistance Committee, including France, amounted to US$1,775 million between 2010 and 2021. During the same period, China provided Official Development Assistance (ODA) in the form of loans totalling US$4,227.84 million, representing 70% of the total ODA mobilised by Côte d'Ivoire over the period. This amount is four times the value of ODA provided by France as a historical partner (excluding 2012, 2013, 2014). In terms of dynamics, China represents on average 61% of the concessional loans Côte d'Ivoire receives annually between 2010 and 2022.   The sectors benefitting from China's financing are a mix of traditional and non-traditional sectors according to estimates from the Global Development Policy Center at Boston University. These sectors include, in order of importance: transportation, environment, information and communication technologies (ICT), education, defense and military, water/sanitation/waste, trade, and services.   In Côte d'Ivoire, China has supported the realisation of several projects, including the construction of the Soubré hydroelectric dam, the construction of the Abidjan-Grand Bassam highway, the provision of drinking water to the city of Abidjan, the expansion of the Abidjan Seaport, and the rehabilitation of the national electricity network, with financing ranging from US$100 million to US$1 billion.   Figure 1:  The Architecture of Chinese Aid Source: Aurégan (2014) Foreign Direct Investment from China to Côte d'Ivoire   Chinese foreign direct investments in West Africa have significantly increased in recent years, reflecting China's growing interest in this resource-rich region offering economic growth opportunities (see graphic 2). China has become one of the leading investors in many West African countries.   Graphic 2:  Evolution of FDI from China to West Africa Source: China Africa Research Initiatives Database   In Côte d'Ivoire, although state-owned enterprises with official representation are few, Chinese investments have a particular pattern. According to studies, these investments are a combination of public investments led by state-owned enterprises and private investments originating from Ivorian legal entities with Chinese capital.   Foreign direct investment inflows into Côte d'Ivoire have increased on average by 15.57% per year between 2012 and 2021. Compared to 2012, these FDI flows have quadrupled to reach US$1,392.44 million in 2021. FDI from China has experienced significant growth of 33.33%, rising from US$3.61 million in 2012 to US$64.17 million in 2021. However, compared to FDI from France, Chinese FDI is significantly lower in terms of level. These FDIs represent only 9% of the cumulative annual foreign direct investments over the period, compared to 24% for France.   Graphic 3:  Evolution of FDI from China to Côte d'Ivoire (US Dollar) Source: Author’s From OCDE and China Africa Research Initiatives Database   Chinese foreign direct investments primarily focus on five priority sectors. In order of importance, these sectors are construction, mining, manufacturing industry, scientific research, and technological services. It is interesting to note that the share of FDI allocated to the latter three sectors has remained relatively stable over time. With a diaspora estimated at over 2 500 individuals, Chinese investments in Côte d'Ivoire cover various economic sectors. Specifically, they are present in healthcare, construction, telecommunications, finance, advertising, tourism, import-export, trade, agriculture (including agricultural equipment and rubber), the fishing industry, the garment industry (especially shoes and textiles), as well as in dietary supplements.   Among the most significant investors is Huawei, a privately held company that has established its sub-regional headquarters in Abidjan, the Ivorian economic and financial centre. According to Aurégan (2014), Côte d'Ivoire hosts 92 Chinese-capital companies, with an estimated amount of €25 million over the period 2005-2011, as reported by the Center  for the Promotion of Investment in Côte d'Ivoire ( CEPICI ) . Abidjan, the economic capital of Côte d'Ivoire, hosts 95% of companies with Chinese capital, thus contributing to the economic polarisation of the southern region of the country and the geographical concentration of aid and public investment. These private enterprises are generally registered as limited liability companies (LLC or SARLU), although a few are joint-stock companies (SA). Approximately 69 companies have the status of LLC or SARLU, while 10 are SAs. The average share capital of these companies is around €34 000, although half of them have invested only the minimum required amount, which is €1524 (Aurégan, 2014).   Graphic 4:  Chinese end of the year FDI Stock to Africa, top 5 sectors (US Dollar) Source: China Africa Research Initiatives Database   The weight of China in foreign direct investments remained marginal compared to other foreign investors in 2022 [estimates from the Center  for the Promotion of Investment in Côte d'Ivoire  (CEPICI)]. Among the main partners of Côte d'Ivoire in terms of incoming FDI, Mauritius occupies the first place with an investment of XAF67 billion, followed by Singapore in second position with XAF63 billion. Lebanon, with an investment of XAF46 billion, ranks third, while France occupies the fourth place with an investment of XAF43 billion. China ranks only 13th with an investment of XAF14 billion.   China-Côte d'Ivoire trade   China has emerged as one of Africa's major trading partners, solidifying its position as an importer and exporter of African products (Nguena & Tsafack Nanfosso, 2014). It provides African countries with cheap manufactured goods, thereby reducing their reliance on traditional trading partners. By becoming a major importer of primary products, China has contributed to improving the terms of trade, which has been beneficial for sub-Saharan African countries that export raw materials. The strong demand for energy and minerals from China has boosted international commodity prices, thereby increasing the volume and value of African exports (Goldstein et al, 2006).   The observation is similar in West Africa. Indeed, graphic 5 highlights an increase in trade between China and West African countries. Consequently, these trade exchanges have strengthened economic ties between China and West African countries, offering an opportunity for countries to diversify their trading partners and develop their local production capacity. This is essential for promoting sustainable economic development.   Graphic 5:  Evolution of trade patterns between Côte d'Ivoire and West Africa Source: China Africa Research Initiatives   Trade between Côte d'Ivoire and the People's Republic of China was modest between 1992 and 1999. However, starting in the 2000s, these exchanges gained momentum. Ivorian exports to China increased from US$7.25 million in 2000 to US$970.22 million in 2022, representing an average annual growth of 25% over the period 2000-2022. At the same time, imports also recorded an average growth of 13.32% over the same period, rising from US$222.76 million in 2000 to US$3,490.90 million. This significant growth in imports and exports is indicative of a robust trade relationship between the two countries.   Graphic 6:  Evolution of the structure of trade between Côte d'Ivoire and China (US Dollar) Source: China Africa Research Initiatives   From 2000 to 2022, Côte d'Ivoire maintained a trade deficit. Although the coverage rate increased from 3.25% in 2000 to 28% in 2022, it remained well below 100%, indicating that the deficit remained significant throughout this period. This imbalance in the trade balance suggests that China enjoys greater competitive advantages than Côte d'Ivoire in their exchanges.   It should be noted that starting in 2016, China became Côte d'Ivoire's main supplier, with offers amounting to XAF1695.20 billion in 2023, compared to XAF1055.84 billion in 2019. Nigeria and France respectively occupy the second and third positions in 2023, with XAF1602.2 billion and XAF638.1 billion. However, China is not among Côte d'Ivoire's main customers during this period. Considering these observations, it is evident that China benefits from its exchanges with Côte d'Ivoire.   Graphic 7:  Côte d'Ivoire’s Main Suppliers (in Billions of CFA francs) Source: DGD/DSEE (General Directorate of Customs of Côte d'Ivoire) Sino-Ivorian Cultural and Educational Cooperation   China deploys the concept of cooperation to promote its worldview in Africa, notably by establishing Confucius Institutes tasked with disseminating the language, culture, and political vision of the country worldwide. In this context, the Confucius Institute within Félix Houphouët-Boigny University in Abidjan plays a pivotal role by conducting various activities aimed at promoting the Chinese language, Chinese culture, and cultural exchanges between China and Côte d'Ivoire. These activities include Chinese language instruction, the promotion of Chinese culture through courses, workshops, lectures, artistic performances, cultural exchanges, and community events. These initiatives aim to strengthen cultural and educational ties between China and Côte d'Ivoire, thereby fostering better understanding and increased international cooperation.   In the context of the 40th anniversary of diplomatic relations between Côte d'Ivoire and China, the Confucius Institute, in collaboration with Félix Houphouët-Boigny University, is redefining its educational mission. This reform aims to enhance the quality of education and transform the Confucius Institute into a major platform for dynamic cultural exchanges between China and Côte d'Ivoire. Objectives include improving the HSK programme, providing a solid foundation for students to study and work in China, as well as supporting a greater number of students from Félix Houphouët-Boigny University in obtaining scholarships from the Chinese government to pursue their studies in China. It is worth noting that China awards about ten scholarships annually to Ivorian students wishing to pursue higher education in China. More than 600 Ivorian students have thus been able to benefit from quality training in various academic fields, such as international finance, science and technology, commerce, accounting expertise, geoscience, journalism, business, and management, among others. These scholarships cover tuition fees, accommodation, necessary books and supplies, as well as a monthly allowance to meet their daily needs.   Challenges and opportunities   Since the early 2010s, China's economic growth has slowed, affected by several factors: a slowdown in the real estate sector, demographic changes related to its aging population, as well as trade tensions, geo-economic fragmentation, and the Covid-19 pandemic on the international stage. While it had an average annual growth rate of about 10% in the 2000s, China saw this rate drop to less than 8% in the 2010s. This trend has been exacerbated since the pandemic, with International Monetary Fund (IMF) projections announcing an average annual growth rate of about 4% over the next five years, marked by reduced investments and a transition to more environmentally friendly technologies (IMF, 2023). These developments could have negative repercussions, particularly on trade links, leading to both a decrease in export volumes and a decline in commodity prices. Consequently, Côte d'Ivoire, which exports relatively more to China, risks being more severely affected by this economic slowdown in the country.   The loans granted by China to sub-Saharan Africa have received considerable attention and criticism due to the relatively strict terms imposed on beneficiary countries, as well as the use of natural resources as collateral (Acker, Brautigam & Huang, 2020). These loans have also raised concerns about the normalisation and transparency of public debt, as Chinese lenders do not systematically document loans to each borrowing country, resulting in significant data gaps. Moreover, according to Pinaud and Reisen (2006), China's financial practices promote corruption, undermine democracy, and increase debt tolerance. China's growing presence in many African countries, as highlighted by Chaponnière (2006), leads to fierce competition that can lead to the disappearance of local businesses. Additionally, the quality of products imported from China is not always trustworthy, as traceability standards are not always adhered to during export to developing countries, often resulting in the importation of inferior quality products. This leads to considerable harm for consumers, who may not fully benefit from the purchased products in the long term despite their competitiveness.   Regarding Chinese investment in Côte d'Ivoire, it is important to note that it is not necessarily associated with significant job creation, as skilled labour is often directly imported from China (Seka & Kouakou, 2012). Consequently, the long-awaited technology transfer by African countries remains a challenge, as Chinese investments are often made with Chinese skilled labour, thereby limiting opportunities for local learning and development. The only jobs created are often unskilled jobs.   Conclusion   The relations between China and Côte d'Ivoire, which began in 1983, have significantly progressed in recent years through the signing of several partnership agreements in economic, cultural, and scientific fields. China has provided significant support to the development of Côte d'Ivoire, manifested through grants and interest-free loans. During the period 2010-2021, China granted official development assistance (ODA) in the form of loans totalling US$4,227.84 million.   Foreign direct investment in Côte d'Ivoire has seen an average annual increase of 15.57% between 2012 and 2021. Although trade exports and imports have significantly increased, the trade balance remains negative for Côte d'Ivoire. This situation could potentially lead to increased dependence on China, raising concerns about possible dominance resulting from this cooperation.   The economic relations between Côte d'Ivoire and China present considerable opportunities, particularly in terms of financing for the country's development. However, they also entail risks, such as increased dependence on raw material exports and heightened debt risks, as well as potential consequences for small and medium-sized enterprises and the informal sector.   To maximise the benefits of this cooperation while mitigating its negative effects, Côte d'Ivoire will need to strengthen its economic resilience and implement structural reforms aimed at diversifying its economy, deepening regional exchanges, improving competitiveness, and stimulating domestic activity.   References   Acker, K., Brautigam, D. & Huang, Y. 2020. Debt Relief with Chinese Characteristics . Working Paper No. 2020/39. China Africa Research Initiative, School of Advanced International Studies, Johns Hopkins University, Washington, DC   Aurégan, X. 2014. Géopolitique de la Chine en Côte d’Ivoire: La puissance chinoise à l’école ivoirienne et africaine , Carnets de géographes  [En ligne], 7   Aurégan, X. 2015. Les interventions chinoises en Côte d’Ivoire: aide, investissements et migrants-investisseurs,  Autrepart , 76(4): 89-108   Chaponnière, J-R. 2006. Les échanges entre la Chine et l’Afrique Situation actuelle, perspectives et sources pour l’analyse . Agence Française de Développement (AFD)   Goldstein, A., Pinaud, N., Reisen, H. & Chen, X. 2006.  The Rise of China and India: What's in it for Africa?  Paris: Development Centre Studies, OECD Publishing   International Monetary Fund (IMF). 2023. At a Crossroads: Sub-Saharan Africa’s Economic Relations with China, in Regional Economic Outlook: Sub-Saharan Africa—Light on the Horizon?  Washington, DC, October   Ma, X. & Zhou, R. 2021. China’s overseas development finance: review of flows and definitions, and potential support for SDG attainment in partner countries.  [Online] Available at: https://www.undp.org/china/publications/chinas-overseas-development-finance-review-flows-and-definitions-and-potential-support-sdg-attainment-partner-countries [accessed: 10 July 2024]   Nguena, C.L. & Tsafack Nanfosso, R. 2014. Banking Activity Sensitivity to Macroeconomic Shocks and Financial Policies Implications: The Case of CEMAC Sub-region,  African Development Review , African Development Bank, 26(1): 102-117   Seka, P.R. & Kouakou, K.C. 2008. Economic Relations between China and Africa: The Case of Cote d’ Ivoire.  Nairobi: AERC (mimeo) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JULY 2024 By Prof Omar Mjenga   Abstract   Africa and China's historical relationship, rooted in the liberation movements of the former, has evolved significantly over the past two decades, expanding beyond traditional government-to-government ties to encompass business-to-business and people-to-people connections. This deep-rooted relationship has flourished despite global challenges such as the Covid-19 pandemic, geopolitical conflicts, and economic disruptions, highlighting Africa's resilience and the critical role of international partnerships for its economic recovery.   China's steadfast role as Africa's largest trading partner and investor underscores the mutual benefits of this relationship. With trade reaching US$254 billion in 2022 and Chinese investments exceeding US$47 billion, the partnership has significantly contributed to Africa's economic development. As Africa advances initiatives like the African Continental Free Trade Area (AfCFTA), China's support through the Belt and Road Initiative (BRI) and other investments in infrastructure and trade is pivotal.   Tanzania exemplifies the strength of these ties, benefitting from substantial Chinese investments and cooperation in various sectors, including infrastructure, education, and technology. The historic friendship, solidified through diplomatic and developmental milestones, continues to thrive under the leadership of President Xi Jinping and President Samia Suluhu Hassan, who have upgraded the bilateral relationship to a comprehensive strategic cooperative partnership.   As Tanzania and China celebrate 60 years of diplomatic relations, their enduring partnership stands as a testament to the shared values and mutual support that have defined their journey. This relationship, built on a foundation of political trust, economic collaboration, and cultural exchange, promises to grow even stronger, ensuring mutual prosperity and development for both nations. Keywords:  Africa-China Relations; Belt and Road Initiative (BRI); Diplomatic Relations; Economic Recovery; International Partnerships Introduction   The historical and close relations between Africa and China date back to Africa's liberation movements. Over the past two decades, these relations have grown exponentially. Traditional government-to-government relations, prominent in the latter half of the 20th century, have evolved into robust business-to-business and people-to-people connections. This evolution should come as no surprise, echoing the African proverb, "A tree’s beauty lies in its branches, but its strength lies in its roots". The deep roots of these relations have enabled them to flourish beyond many people's comprehension, creating a rich, complex, and stable relationship that continues to grow stronger.   As we examine these relations, it is crucial to acknowledge the backdrop of global adverse events. Crises such as the Covid-19 pandemic, the Russo-Ukraine war, climate change effects, supply chain disruptions, inflation, debt crises, and spikes in fuel and food prices have disproportionately affected Africa and the developing world. These challenges are compounded by local problems, including insecurity from conflicts like the war in Sudan, military coups in West Africa, and high poverty rates leading to food insecurity.   Despite these daunting challenges, Africa remains resilient and has a real opportunity for economic recovery and prosperity. To achieve this, international partnerships and cooperation are key, supporting Africa's efforts to end poverty, create jobs, and reduce inequality. Peace is a fundamental prerequisite for development, and without it, progress remains elusive. China has proven to be a reliable partner in this regard, offering sustainable investment and trade.   China-Africa relations   As of 2022, China maintained its role as Africa's largest trading partner for 14 consecutive years. Trade between China and Africa rose from less than US$13 billion in 2000 to approximately US$254 billion in 2022, an increase of over 19 times. In the first five months of 2023 alone, total import and export between China and Africa reached US$113.5 billion, up by 16.4% year on year. China has also remained Africa's largest investor, with over US$47 billion in foreign direct investment (FDI) as of 2022 (Pinda, 2023). These increased investments and trade exchanges have significantly bolstered African economies, creating more opportunities.   China-Africa relations continue to grow and adapt to accommodate the evolving interests of both sides. For instance, as African countries endeavour to launch their homegrown African Continental Free Trade Area (AfCFTA) initiative, China has increased engagement with Africa's continental and sub-regional financial institutions, diversified FDI, and expanded the list of imports from Africa to support this initiative.   Once fully operational, the AfCFTA will unlock the benefits of the continental market, generating substantial opportunities for all African countries and beyond. At this juncture, international partnerships with countries like China become crucial. Africa seeks support to bridge the infrastructure gap and ensure the interconnectedness of the continent through roads, railways, airports, electricity transmission lines, and telecommunication lines. China is addressing this need through its Belt and Road Initiative (BRI), which has been subscribed to by 52 African countries and the African Union Commission (Pinda, 2023). This shared understanding ensures that once the connectivity infrastructure is in place, the focus can shift to promoting bilateral trade and reducing trade deficits with China.   Tanzania-China relations   Tanzania, with its rich history and foreign policy, prioritises African continental initiatives such as the AfCFTA. The country is poised to benefit significantly from this arrangement. Like many other developing countries, Tanzania is ripe for industrialisation, technological development, innovation, and the digital economy. Collaborating with China, a leader in these areas, will enable Tanzania to acquire necessary skills and resources, mobilise new businesses, and address unemployment.   As of 2022, China remains the largest single source of Tanzania's foreign direct investment, according to the Tanzania Investment Centre (TIC). The TIC registered a total of 1,195 Chinese projects worth US$10.73 billion, creating 141,530 jobs. In the past two years alone, 205 new Chinese projects worth US$3.1 billion were registered, providing 22,626 new jobs and mobilising essential resources (Pinda, 2023). These investments span strategic projects such as the construction of the central-line Standard Gauge Railway, the Julius Nyerere Hydropower Station, and the Tanzania National ICT backbone network.   Furthermore, Tanzania enjoys a waiver of tariffs on 98% of taxable imports from China, boosting its agrarian economy by facilitating the export of agricultural products such as avocado, soybeans, and cassava to the Chinese market. China also supports Tanzania in overcoming learning, poverty, and skills gaps by offering scholarships and technical training opportunities (Pinda, 2023).   In the multilateral arena, Africa-China relations continue to thrive. Tanzania played a crucial role in restoring the People's Republic of China's lawful seat at the United Nations. This cooperation extends to formulating and defending common positions under the G-77 and China group. The unwavering support Tanzania provided to China, reflecting a longstanding commitment to mutual interests, is evident.   Ultimately, it is the people of Africa and China who are the first-hand witnesses to the significance of these relations. The interests of their peoples are at the centre of this enduring partnership. The relationship with China must be protected and nurtured to reach even greater heights. Over the years, China has provided financial and technical support to various projects in Tanzania, reflecting the strong and flourishing partnership between the two countries.   60 Years of Diplomatic Relations Between China and Tanzania   On 26 April 1964, the People's Republic of China and the United Republic of Tanzania formally established diplomatic relations. Over the past 60 years, the traditional friendship forged by the older generation of leaders and founders of the two nations, including Chairman Mao Zedong, Premier Zhou Enlai, and President Julius Nyerere, has been passed down through generations, becoming ever stronger. Despite changes in the international situation, the two countries have always maintained a firm grasp on the direction of their bilateral relations, standing together through thick and thin, and helping each other navigate the times.   Mwalimu Julius Nyerere, the Founding Father, and indeed the Father of the Nation, initiated high-level exchanges when he visited Beijing for the first time in February 1965. Chinese Premier Zhou Enlai followed by visiting Tanzania in June of the same year. Over the past 60 years, China and Tanzania have deepened political trust. In the 1960s, China and Tanzania supported each other in the struggle for national liberation and independence of many southern African countries. In 2013, Chinese President Xi Jinping made a historic visit to Tanzania, announcing the building of a comprehensive partnership for mutual benefit and win-win cooperation (Wang, 2019). This visit pushed bilateral relations to a new level, with President Xi Jinping outlining his leadership’s foreign policy for Africa.   In 2022, President Samia Suluhu Hassan paid a successful visit to China, becoming the first African head of state received by China after the 20th National Congress of the Communist Party of China. The two heads of state agreed to upgrade China-Tanzania relations to a comprehensive strategic cooperative partnership, opening a new chapter in bilateral relations (Consulate General, 2022). Under the strategic guidance of the two heads of state, China and Tanzania have maintained closer exchanges between governments, political parties, and legislatures, effectively safeguarding the unity and legitimate development interests of developing countries.   This traditional friendship, established by the founding fathers, has continued to forge unwavering support for each other on issues of mutual interest at bilateral levels and on the international stage. Despite external pressures, Tanzania was the first Eastern and Southern African country to sign the Treaty of Friendship with China in 1965. In 1971, Tanzania led the movement to support the People’s Republic of China in restoring its lawful seat at the United Nations. Dr. Salim Ahmed Salim, Tanzania’s Permanent Representative to the United Nations, famously celebrated this victory by dancing on the General Assembly tables (Shangwe, 2021).   The Sino-Tanzania solidarity was crucial in the struggle for liberation and decolonisation of southern Africa, particularly through the front-line States, which Tanzania chaired. The most iconic cooperation came through the Chinese-financed construction of the 1,868km-long Tanzania-Zambia Railway line, known as TAZARA. This project, undertaken in the 1960s and 1970s when China was still in poverty, significantly promoted the independence of the people of southern Africa and forged a monument of China-Tanzania and China-Africa cooperation and true friendship. Mwalimu Nyerere had requested his European friends to assist in building the railway, but they declined. Chairman Mao offered China’s assistance, despite China’s economic challenges at the time (Shangwe, 2021).   The current Tanzanian Government, led by Africa’s only female Head of Government, Samia Suluhu Hassan, is open to investment and international partnerships. She has introduced the four pillars (4Rs) of consolidating democracy and ensuring people-centred development: reconciliation, resilience, reform, and rebuilding. These pillars invite domestic and international partners to cooperate for mutual benefit.   Tanzania’s relations with China are now tighter than ever. President Xi Jinping and President Samia Suluhu Hassan share a close working relationship, supporting each other on the international stage, especially at the United Nations. Recent encounters in Beijing during a state visit and in Johannesburg on the sidelines of the BRICS Summit demonstrate the commitment to this relationship. Tanzania and China’s relations have been upgraded to a comprehensive strategic cooperative partnership, aiming to elevate cooperation in all areas. Frequent government and private sector delegations from both sides further solidify this partnership.   As mentioned, China remains the largest single source of Tanzania's foreign direct investment. As of August 2023, the Tanzania Investment Centre registered a total of 1,195 Chinese projects worth US$10.73 billion, creating 141,530 jobs. In the past two years alone, 205 new Chinese projects worth US$3.1 billion were registered, providing 22,626 new jobs (Pinda, 2023). Chinese companies operate in accordance with local investment laws, paying taxes, providing employment, and facilitating technological transfer. Projects include the central-line Standard Gauge Railway, the Julius Nyerere Hydropower Station, and the Tanzania National ICT backbone network.   And to reiterate, Tanzania enjoys a waiver of tariffs on 98% of taxable imports from China, benefitting its agricultural sector by facilitating exports to the Chinese market. China also supports Tanzania in overcoming learning, poverty, and skills gaps by offering scholarships and technical training opportunities. In 2023 alone, the Chinese government awarded 46 Tanzanian students with scholarships to Chinese higher learning institutions, and another 114 students received degree programme scholarships from the Ministry of Commerce of China. More than 2,000 scholarships and numerous short courses in vocational and technical training have been offered to Tanzania to date, empowering Tanzanians to contribute to their country's growth and prosperity (Pinda, 2023).   In the multilateral arena, Africa-China relations continue to thrive. Africa and China have stood together in international fora, supporting each other’s interests. They formulate and defend common positions under the umbrella of the G-77 and China group. China had Tanzania’s unwavering support. President Mkapa’s clear message to his Foreign Minister was to "support China", reflecting a longstanding commitment to mutual interests.   Ultimately, it is the people of Africa and China who stand as first-hand witnesses to the significance of these relations. These are relationships that last because the interests of their peoples are at the centre. The relationship with China must be protected and nurtured to reach greater heights. Over the years, China has provided financial and technical support to various projects in Tanzania, reflecting the strong and flourishing partnership between the two countries.   China has supported Tanzania in many fields, including health, education, culture, agriculture, ICT, trade, tourism, energy, and infrastructure development. Notable projects include the Mbarali Rice Farm, Friendship Textile Mills Ltd, Kiwira Coal Mine, Chalinze Water Supply Project, construction of the National Stadium, and the Julius Nyerere International Convention Centre. Former President Mkapa described the relations between Tanzania and China as extending to people-to-people cooperation, with the people of Tanzania and China calling each other "Rafiki", meaning "friend" in Kiswahili (Tanzania Embassy, N.d.).   The cordial and friendly relations between Tanzania and China have continuously grown in strength and scope, thanks to the commitments of leadership on both sides. President Samia Suluhu Hassan and President Xi Jinping have reaffirmed their commitments to strengthen the bond of friendship. Recent exchanges of visits between leaders of both countries demonstrate this commitment.   There can be no doubt over the sustainability of the friendship and cooperation between Tanzania and China. This is not by mere fluke; both countries have pursued similar socio-economic policies and followed similar paths to development. Tanzania’s policy of Ujamaa and Self Reliance is akin to China’s policy of Socialism with Chinese Characteristics. Tanzania’s economic liberalisation policy mirrors China’s opening up policy. Even Tanzania’s motto of “Kazi Lendelee” has much in common with China’s “Three Represents” (Tanzania Embassy, N.d.).   At the political level, China and Tanzania have always shared similar views, taken common positions, and supported each other internationally. During Africa’s decolonisation, China stood firmly behind the oppressed. China was among the first countries to recognise the 1964 Zanzibar Revolution. When Tanzania spearheaded the liberation struggle in southern Africa, China provided moral and material support. Today, China is Tanzania’s most reliable ally.   On Monday, 15 January 2024, the Embassy of the People's Republic of China, together with Tanzania's Ministry of Foreign Affairs and East African Cooperation, launched celebrations for the 60th anniversary of diplomatic relations, culminating on 26 April 2024. Over the past 60 years, China-Tanzania people-to-people and cultural ties have solidified. The people of both nations owe much to the founding fathers and all who have contributed to these brotherly relations, including past and current leaders and distinguished individuals like Dr. Salim Ahmed Salim. In 2019, China honoured Dr. Salim for his instrumental role in facilitating China’s admission to the United Nations in 1971.   Dr. Salim’s support for China’s re-admission to the United Nations came at a personal cost when his candidature for UN Secretary General in 1981 was blocked by the US. Despite overwhelming support from Africa, Asia, Latin America, and the South Pacific, the US consistently voted against Dr. Salim, preferring Austrian Kurt Waldheim, while China strongly supported Dr. Salim. After 16 votes over five weeks, Dr. Salim withdrew his candidature, allowing Peruvian diplomat Javier Perez de Cuellar to become the first UN Secretary General from Latin America (The Citizen, 2021). This episode underscores the complex dynamics of international diplomacy and the significant role Tanzania played in supporting China.   Conclusion   The relations between Tanzania and China have been marked by mutual support, shared interests, and enduring friendship. Mwalimu Nyerere and Amani Abedi Karume crafted a foreign policy that has guided Tanzania through decades of cooperation with China. The Centre for International Policy Africa is finalising a publication documenting Tanzania’s foreign policy journey since independence, highlighting the remarkable relationship between Tanzania and China. This publication will further underscore the significance of this enduring partnership.   References   Consulate General of the People’s Republic of China in Lahore (Consulate General). 2022. Joint Statement on Establishing a Comprehensive Strategic Cooperative Partnership Between the People’s Republic of China and the United Republic of Tanzania . [Online] Available at: http://lahore.china-consulate.gov.cn/eng/zgxw/202211/t20221103_10800022.htm [accessed: 11 July 2024]   Embassy of the United Republic of Tanzania Beijing (Tanzania Embassy). N.d. Statement on Sino-Tanzania Relations . [Online] Available at: https://www.cn.tzembassy.go.tz/about/category/sino-tanzania [accessed: 11 July 2024]   Pinda, M.P. 2023. Reflections on China-Tanzania Relations on the Occasion of the 74th Anniversary of PRC’s Founding . [Online] Available at: https://dailynews.co.tz/reflections-on-china-tanzania-relations-on-the-occasion-of-the-74th-anniversary-of-prcs-founding/#:~:text=China%20remains%20the%20largest%20single,in%20Tanzania%2C%20creating%20141%2C530%20jobs [accessed: 12 July 2024]   Shangwe, M. 2021. From Friends to Partners? The Changing Nature of Sino-Tanzanian Relations . [Online] Available at: https://www.ifri.org/sites/default/files/atoms/files/shangwe_sino_tanzanian_relations_2021.pdf [accessed: 11 July 2024]   The Citizen. 2021. China’s award to Tanzanian Dr Salim Ahmed Salim rekindles UN struggle . [Online] Available at: https://www.thecitizen.co.tz/tanzania/magazines/political-reforms/china-s-award-to-tanzanian-dr-salim-ahmed-salim-rekindles-un-struggle-2692790 [accessed: 11 July 2024]   Wang, K. 2019. Reliable friends and faithful partners . [Online] Available at: https://www.chinadaily.com.cn/a/201911/20/WS5dd4a758a310cf3e35578a24.html [accessed: 11 July 2024] - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JULY 2024 by Zine M. Barka   Abstract   Algeria and China have long maintained a close relationship, dating back to before Algeria's independence in 1962. This relationship was founded on mutual support in combating colonialism and imperialism. Following independence, Algeria adopted a socialist development model, leveraging oil revenues to establish a significant public sector, particularly after the first oil shock in 1973 and the nationalisation of foreign oil companies in 1971. In the 1990s, Algeria began liberalising its economy, lifting trade restrictions and state monopolies, which led to increased imports of competitive Chinese products. This economic engagement was reinforced by high-level visits, including the exchange of visits between Chinese President Hu Jintao and Algerian President Bouteflika in 2000, establishing strategic cooperation relations (Bustos, 2021; El Kadi, 2023). Currently, President Tebboune seeks to revive and strengthen economic cooperation with China, exemplified by his official visit to China in July 2023, during which several memoranda were signed to expand cooperation across various fields (Djebril, 2023). This paper is structured as follows: a brief history of Algerian-Chinese relations, the opening of the Algerian economy and the increase in trade with China, the legal framework of the strategic partnership, and an analysis of the real and potential benefits of this partnership for both economies. The conclusion offers remarks on the partnership's impact on Algeria's structural reforms needed to reduce its reliance on hydrocarbon exports.   Keywords:  Algeria, China, independence, colonialism, socialism, oil revenues, liberalisation, trade, strategic cooperation, economic cooperation   A Brief History of the Strong Relationship between China and Algeria   The relations between China and Algeria are considered the strongest of all Arab-Chinese relations, rooted in diplomatic, commercial, and socio-cultural ties (El Kadi, 2023). The starting point was Algeria's struggle for independence from France in the 1950s. China supported the Front de Libération Nationale (FLN) – the socialist revolutionary party – and was the first non-Arab country to recognise the FLN as the Algerian provisional government in December 1958 (Leopardi, 2022). Between 1958 and 1962, China assisted the Armée de Libération Nationale (ALN) – the armed wing of the FLN – with funds, arms, and training for Algerian officers (Calabrese, 2021). After Algeria gained independence in 1962, China continued to provide support, including sending a medical team, donating wheat and school equipment, and offering a $50 million low-interest loan (El Kadi, 2023). This phase was crucial in establishing the partnership between the two countries.   The Opening of the Algerian Economy and the Trade Boom with China   In the early 1990s, Algeria undertook structural reforms to transition from a command economy to a market economy, characterised by privatisation and reduced state intervention (Bustos, 2021). This period saw a decline in hydrocarbon prices from 1985 to 1987, impacting Algeria's social and economic stability. Algeria sought financial assistance from the IMF, leading to structural adjustment plans and debt rescheduling (Leopardi, 2022).   In 1993, over 98% of Algeria's exports were hydrocarbons, and the country was heavily dependent on foreign imports for food and medicines. Debt servicing absorbed more than 70% of Algeria's resources during 1989-1993, exceeding 80% in 1993 (El Kadi, 2023). Attempts at economic liberalisation in 1990 under Prime Minister Mouloud Hamrouche were reversed by his successors, hindering foreign investment and the return of emigrant capital (Sahbani, 2020).   By 1994, the transition to a market economy was reinforced through currency devaluation, trade liberalisation, price freedom, and debt rescheduling. Despite these efforts, 30 years later, the Algerian economy remains under-industrialised, with the industrial sector contributing about 5% to GDP. The energy sector still accounts for over 93% of foreign revenues and 60% of the state budget, with oil and gas comprising 19% of GDP (Sahbani, 2020).   With economic liberalisation, Algeria turned to China in the early 2000s to import essential goods. Bilateral economic and political relations boomed, driven by high oil prices in 2003, enabling Algeria to fund major infrastructure projects, including low-cost housing, the East-West highway, and the largest mosque in Algeria (Bustos, 2021). Numerous projects were signed with China, particularly in the oil sector and low-cost car imports. By 2023, annual bilateral trade volume reached approximately $7 billion (El Kadi, 2023). China primarily imports mineral fuels from Algeria. In 2021, Algeria exported $961 million to China, mainly refined petroleum ($702 million), petroleum gas ($176 million), and semi-finished iron ($51.5 million). China exported $6.34 billion to Algeria, including iron pipes ($312 million), vaccines and medical supplies ($288 million), and passenger and cargo ships ($211 million). China has become Algeria's largest trade partner, surpassing France (El Kadi, 2023).   Formalising and Deepening a Strategic Partnership   Algeria is the only Maghreb country with a comprehensive strategic partnership (CSP) with China, the highest level of Chinese diplomatic partnership (El Kadi, 2023). This CSP reflects Beijing's commitment to a significant multi-level engagement. With China’s accession to the World Trade Organisation (WTO) in 2001, the creation of the Forum on China-Africa Cooperation (FOCAC) in 2000, and the China-Arab States Cooperation Forum (CASCF) in 2004, relations between China and the Maghreb, including Algeria, grew stronger (El Kadi, 2023).   Several cooperation and partnership contracts have been signed between Algeria and China, aiming to reinforce their relations. Algeria joined the Belt and Road Initiative in 2018, and the "Three-Year Plan 2022-2024 for Cooperation in Strategic Areas" was signed, alongside the second Five-Year Plan for Comprehensive Strategic Cooperation 2022-2026 (Djebril, 2023). These agreements underscore the desire to enhance Algerian-Chinese relations and promote them at the highest levels.   Through these agreements, the two countries committed to intensifying political consultation, consolidating security cooperation, deepening economic partnerships, and expanding cooperation across various fields. Key areas targeted include the automotive industry, space sciences, agriculture, tourism, port construction, logistics services, water desalination, infrastructure, manufacturing, metallurgy, finance, the digital economy, energy, and mining (Djebril, 2023).   An ambitious economic programme includes establishing a large lithium battery factory in Algeria, reflecting the global shift towards electric vehicles. China also aims to support Algeria in developing hydrogen production capacities, anticipating significant global demand (Djebril, 2023).   Algeria's commitments to the African Union's Agenda 2063, particularly in economic integration and the African Continental Free Trade Area, highlight its efforts to promote intra-African trade (El Kadi, 2023).   In July 2023, President Tebboune's official visit to Beijing elevated the partnership to a more strategic level. The two countries signed 19 cooperation agreements and memoranda across sectors such as rail transport, technology transfer, agricultural cooperation, communications, sports, investment, trade, urban planning, scientific research, justice, social development, renewable energy, and hydrogen (Djebril, 2023). This visit was seen by Chinese authorities as an opportunity to deepen mutual trust, further solidifying the comprehensive strategic partnership established in 2014 (El Kadi, 2023).   Concluding Remarks   The various partnership agreements have raised concerns about the competitiveness of local Algerian industries against Chinese products. Increased Chinese involvement has been perceived as potentially detrimental to North Africa's development aspirations due to its impact on local industries and employment (Calabrese, 2021). Assessing China's investment sectors and job creation is crucial to understanding the benefits of South-South cooperation (El Kadi, 2023).   While the economic dimension of the Sino-Algerian relationship has yielded modest contributions to Algeria's progress, the trade balance remains heavily tilted in China's favour. Most projects undertaken by Chinese companies have been state-funded, with limited technology or expertise transfer. Despite efforts to attract foreign investment, Algeria's economic relationship with China has not met the expectations of the Algerian leadership or caused significant unease in Western capitals (El Kadi, 2023).   To achieve better economic growth, Algeria needs to diversify its economy, implement economic and financial reforms, and improve the business climate. Energy and mining sectors are key levers for reducing food dependence and supporting industry (Sahbani, 2020). The World Bank recognises the positive steps taken by Algeria, including the 2022 investment law, the abolition of the 51/49 rule for non-strategic sectors in 2020, and the 2019 hydrocarbons law. However, bureaucratic challenges continue to hinder progress (Sahbani, 2020).   Recommendations   To advance mutually beneficial outcomes, the following recommendations are proposed:   Reduce barriers to foreign investment to attract more investors and diversify the economy. Ensure Chinese investments create quality jobs to address Algeria's unemployment challenges. Address the trade deficit in China's favour. Facilitate training for young Algerians in Chinese vocational schools and universities to enhance their understanding of Chinese culture and improve employment opportunities in Chinese companies operating in Algeria. Publish data on contracts and trade between the two countries to enable empirical studies and inform policy adjustments.   References   African Development Bank (AfDB). 2012. Chinese Investments and Employment Creation in Algeria and Egypt . [Online] Available at:    https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Brochure%20China%20Anglais.pdf [accessed: 9 July 2024]   Algerian Foreign Trade Statistics. 2015. Statistiques du commerce exterieurs de l’algerie . [Online] Available at: https://douane.gov.dz/IMG/pdf/annee_2015-2.pdf [accessed: 9 July 2024]   Bustos, R. 2021. Economic Liberalisation and Political Change in Algeria: Theory and Practice (1988–92 and 1994–99) . [Online] Available at:   https://docta.ucm.es/entities/publication/64ced0c4-9054-4dd2-8c7f-00bcfcea0a93 [accessed: 9 July 2024]   Calabrese, J. 2021. “The New Algeria” and China . [Online] Available at:   https://www.mei.edu/publications/new-algeria-and-china [accessed: 9 July 2024]   Djebril, H. 2023. L’Algérie et la Chine signent 19 accords de coopération et mémorandums . [Online] Available at:   https://www.aa.com.tr/fr/afrique/lalg%C3%A9rie-et-la-chine-signent-19-accords-de-coop%C3%A9ration-et-m%C3%A9morandums/2948727 [accessed: 9 July 2024]   El Kadi, T.H. 2023. China in the Maghreb: engagement, perceptions and prospects . [Online] Available at:   https://media.realinstitutoelcano.org/wp-content/uploads/2023/06/china-in-the-maghreb.-engagement-perceptions-and-prospects-elcano-royal-institute.pdf [accessed: 9 July 2024]   El Moudjahid. 2022. Algérie-Chine Coopération Stratégique globale 2022-2026: Le deuxième Plan quinquennal enclanché . [Online] Available at:   https://www.elmoudjahid.dz/fr/economie/algerie-chine-cooperation-strategique-globale-2022-2026-le-deuxieme-plan-quinquennal-enclenche-191416 [accessed: 9 July 2024]   Journal Officiel De La Republique Algerienne (JORA). 2019. Loi n° 19-13 du 11 décembre 2019 régissant les activités d’hydrocarbures, Journal Officiel , 79, 4-34   Kaidi, S. 2023. Algérie-Chine: un partenariat stratégique global . [Online] Available at:   https://www.elmoudjahid.dz/fr/l-evenement/algerie-chine-un-partenariat-strategique-global-202703 [accessed: 9 July 2024]   Kamara, S. 2024. 50 years later, the nationalization of Algerian oil remains at the heart of the memorial conflict.  [Online] Available at: https://afriquechronique.com/en/50-years-after-the-nationalization-of-Algerian-oil-remains-at-the-heart-of-the-memorial-conflict/ [accessed: 9 July 2024]   Leopardi, F.S. 2022. Algeria’s reforming decade (1988–1998): neoliberalism as a tool for survival, Middle Eastern Studies , 58(5), 797-813   Ministère des Affaires Étrangères et de la Communauté Nationale à l’Étranger. 2022. Algérie-Chine: signature du deuxième Plan quinquennal de coopération stratégique globale 2022-2026 . [Online] Available at:   https://www.mfa.gov.dz/fr/press-and-information/news-and-press-releases/algeria-china-sign-2nd-five-year-comprehensive-strategic-cooperation-plan-2022-2026 [accessed: 9 July 2024]   Sahbani, L. 2020. Revue des principales mesures de la nouvelle loi sur les hydrocarbures en Algérie . [Online] Available at:   https://pwcalgerie.pwc.fr/fr/files/pdf/2020/01/fr-algerie-pwc-loi-hydrocarbure-2020.pdf [accessed: 9 July 2024]   World Bank. 2022. The Setting of Economic Reform . [Online] Available at:   https://www.elibrary.imf.org/display/book/9781557756916/ch02.xml [accessed: 9 July 2024] - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Articles Click on the article title below to read: Accountability and oversight over municipal finances: Council oversight as a missing link in service delivery Mmamagang Geoffrey Modisha FOCUS ON AFRICA-CHINA RELATIONS Lessons for South Africa: China during the era of 'reform and opening up' Douglas Ian Scott Overview of the cooperation between China and the West African Region: The Ivorian Case Prof Assi J.C. Kimou Listen and build trust among social, economic and environmental actors in Africa Dr Ndiakhat Ngom A case of the United Republic of Tanzania Prof Omar Mjenga Policy priorities to strengthen the Sino Algerian relations in a way that will advance mutually beneficial outcomes Zine Barka

The Inclusive Society Institute is on the move in Gauteng Province , conducting “Taking the Constitution to the People”: Know your Rights and responsibilities workshops to schools in and around Gauteng. Patrick Morathi, the Gauteng Province ISI representative for the school's programme, conducted the workshop at Babinaphuti Secondary School in Soshanguve, Block BB, Tshwane North District on 22 July 2024, Monday. A total of 52 Grade 11 learners attended the workshop which seeks to empower learners with a full understanding  of the history of the South African Constitution, how it was crafted, structured and also importantly how it impacts on our daily lives. It also explains citizens' rights and obligations under the constitution. Gauteng Province will continue to see more of such workshops being rolled at its Secondary schools.

The Chairman and CEO of the Inclusive Society Institute, Prof Zweli Ndevu and Daryl Swanepoel, undertook an outreach visit to New York and Washington over the period 11 to 20 July 2024. The purpose of the outreach was to engage American think tanks and policymakers with the objective of establishing and strengthening the South Africa US think tank dialogue with regard to relations between the two sides and Africa in the broader sense.   The visit also served as a platform for sharing of ideas on how to consolidate democracy and human rights globally, to reform the international multilateral system and the strengthening of trade ties.   The delegation met with representatives of:   US mission to the United Nations The US State Department The New York City Commission on Human Rights The New York City Comptroller Council for Foreign Relations Flushing Chamber of Commerce Director for African Affairs, Office of the US Trade Representative Africa Center for Strategic Studies, National Defense University National Endowment for Democracy National Democratic Institute Congressional Research Service Senate Foreign Relations Committee Centre for American Progress   To programme was to designed to:   Discuss best practice and exchange perspectives on addressing social policy issues, such as human rights, anti-corruption, and economic growth; Examine perspectives of civil society and economic practitioners regarding UU business and trade policies; and Explore civil society and US government ap proaches to modernizing the United Nations agenda to better address shared global challenges.

The C20 is the recognised civil society body that feeds into the G20 deliberations. The Inclusive Society Institute is participating therein. The G20 is meeting later this year in Rio de Janeiro in Brazil.   In preparation for the G20 meeting the C20 inception meeting was held in recife, Brazil, from 26 – 28 March 2024. A number of roundtable discussions were held and followed up by discipline specific workshops. Topics discussed were:   Inclusive, anti-racist and democratic economies to eliminate inequalities within and between countries Civil Society response to the Triple Planetary Crisis Promoting Indivisible Rights with regard to health, education and culture, and access to technology The role of international cooperation and philanthropy in financing sustainable development   The are 10 working groups, namely:   Fair, Inclusive and Anti-Racist Economies Food Systems, Hunger and Poverty Environment, Climate Justice and Just Energy Transition Sustainable and Resilient Communities and Disaster Risk Reduction Integrated Health for All Education and Culture Digitalization and Technology Women’s Rights and Gender Equality Philanthropy and Sustainable Development SDG16 – Democratic Governance, Civic Space, Anti-Corruption and Access to Justice, in which working group the Inclusive Society Institute is participating.

The convening think-tanks of the Global South Perspectives Network (GSPN) met in Cascais, Portugal over the weekend of 6 and 7 July 2024 to chart the way forward for the network.   The meeting discussed various aspects of the network, amongst others the it’s organisational development and programme for the coming year, which promises to be exciting and productive. It will include various online and in-person dialogues, interactions with global decisionmakers/organisations and research and publications.   The network also aims to expand its network of participants within the current functional areas of Africa, MENA and South America, and will be reaching out to Asian think tanks in order to bring that region into the network as well.

28 June 2024 Director General For the attention: Mr Nhlamulo Mathye Department of Cooperative Governance Private Bag X804 PRETORIA 0001   By email: Comments.coalitionbill@cogta.gov.za ; Comments.GLAB@cogta.gov.za   Director General,   LOCAL GOVERNMENT: MUNICIPAL STRUCTURES AMENDMENT BILL, 2024: WRITTEN COMMENT   Your invitation for written submissions on the Local Government: Municipal Structures Amendment Bill, 2024, as published in the Government Gazette No. 50682  of 2024, refers. Thank you for the opportunity.   1. Legal and constitutional concerns   1.1. Insertion of section 12A in Act 117 of 1998 – Change of a mayoral executive system to a collective executive system   This section sets out an amendment that requires a municipality with a mayoral executive system to convert to a collective executive system where no single party has a majority in the council, be it as the result of a declared election or by-election.   In a legal opinion obtained by the Inclusive Society Institute, it is submitted that this section would be in contravention of the prescript in section 155(5) of the Constitution that provincial legislation must determine for each category of municipality the different types of municipalities that may be established in that category in the province.   The more detailed argument is included in the legal opinion, which we attach hereto for your insight.   Whilst the Institute has a further concern with regard to the policy rationality of this clause as set out in point 2 below, a remedy is proposed in the attached legal opinion, namely (insertions underlined):   “ 8. Types of category A municipalities.—There are the following types of category A municipalities:   (a) a municipality with a collective executive system; (b) a municipality with a collective executive system combined with a subcouncil participatory system; (c) a municipality with a collective executive system combined with a ward participatory system; (d) a municipality with a collective executive system combined with both a subcouncil and a ward participatory system; (e) a municipality with a mayoral executive system where one political party holds a majority of seats ; (f) a municipality with a mayoral executive system combined with a subcouncil participatory system where one political party holds a majority of seats ; (g) a municipality with a mayoral executive system combined with a ward participatory system where one political party holds a majority of seats ; and (h) a municipality with a mayoral executive system combined with both a subcouncil and a ward participatory system where one political party holds a majority of seats ”.   A further amendment to section 16 would be required to facilitate changes in the municipality type following elections (whether general or by-elections). Such an amendment to section 16 could take the form of adding a new subsection, namely (insertions underlined):   “ 16. Amendment of section 12 notices —   (4) Following an election or by-election, the MEC for local government in a province must,   (a) determine whether each municipality in the province still meets the conditions for the existing type of that municipality; and (b) if the MEC finds that a municipality no longer meets the conditions for the existing type of municipality, commence the process to amend the section 12 notice in respect of that municipality in terms of subsection (1)(a) ”.   1.2. Amendment of item 13 of Schedule 1 to Act 117 of 1998 - The 1% threshold introduced for allocation of seats   Once again, in line with the legal opinion obtained by the Institute, it is highly questionable as to whether the amendment would pass constitutional muster, since:   1.2.1. It flies in the face of the right to free political choice as set out in section 19 of the Constitution; 1.2.2. It is also likely in conflict with the constitutional requirement in section 157 in that the outcome of the election cannot be viewed as resulting in proportional representation; and 1.2.3. The rationality of the proposed 1% threshold can be questioned on the basis of the lack of rational connection between the proposed rule and the reason given for it.   The legal arguments for the aforementioned assertions is set out in the legal opinion, which has been attached for your insight.   2. Policy concerns   2.1. Change of mayoral executive system to a collective executive system   The Bill, in the proposed amendment of section 43 of Act 117 of 1998, envisages the establishment of coalition governments in municipalities in which no party has a majority of seats on the council. But at the same time the Bill, through the insertion of section 12A in Act 117 of 1998, councils in which no party holds a majority, are automatically converted into a collective executive system.   It is the Institute’s assertion that under an arrangement whereby municipalities are automatically converted into collective executive systems, the need for coalition agreements fall away. It is, however, the Institute’s considered view that the democratic system should be flexible enough to allow for mayoral executive systems through coalitions in instances where no party obtains an outright majority. To this end it is suggested that the Department further amend section 12A as set out hereunder (insertions underlined):   “12A. A municipality with a mayoral executive system, in which no political party obtains a majority of seats when the municipal council is declared elected or after a by-election contemplated in section 25,  and where two or more parties fail to within 30 days from when the elections have been declared, form a coalition in which the parties in the coalition hold a majority of the seats in the council,  must, in accordance with section 16, be changed to a type of municipality with a collective executive system by the MEC for local government within 30 days after the municipal council was declared elected or after a by-election contemplated in section 25”.   The abovementioned amendment would obviously require a revision of our proposed amendment contained in point 1.1. above.   2.2. The 1 percent threshold   In reading the memorandum on the objects of the Bill, it appears that the Department’s motive for the introduction of the 1 percent threshold is twofold. Firstly, to reduce the number of political parties in the system, and secondly, to ensure more stable coalitions.   2.2.1. Reducing the number of small parties   On the issue of eliminating parties that receive less than one percent of the vote, it is the Institute’s assertion that it results in a re-engineering of the will of the people. As voting patterns in previous South African elections have shown, a substantial percentage of votes are cast for parties that receive less than one percentage of the vote. For example, in the last national election, the combined vote of parties in parliament that received less than one percent of the total vote, amounted to 3,42 percent.   Under the system proposed in this Bill, that would have disenfranchised 3,42 percent of the electorate, which would fly in the face of all votes being equal.   Secondly, apart from deviating from the constitutional principle of general proportionality raised earlier in this submission, the electoral system should enable the empowerment of citizen’s political rights as espoused in section 19 of the Bill of Rights. This was again confirmed by the Constitutional Court in their ruling on the Electoral Amendment Act (Case CCT 158/23).   The following points were made in the ruling, amongst others:   The principle of one person one vote is foundational to our representative and participatory democracy.  It is an inherent component of the right to free and fair elections. It is important in a democracy that equality of the vote is complemented with equality of voice.  Any limitation of a right must be reasonable and justifiable in an open and democratic society based on human dignity, equality, and freedom. The electoral scheme must not infringe any of the fundamental rights enshrined in Chapter 2 of the Constitution.   The one percent threshold is inconsistent with the aforementioned.   South Africa’s history has shown us that one cannot assert that small parties are disposable. Under apartheid, the lone anti-apartheid voice of the PFP’s Helen Suzman would have been silenced under the scheme being proposed in the Bill, as would the ability of the Good party to participate in the Executive’s 6th administration. The simple point made here is that small does not mean that the party doesn’t have the capacity to make a valuable contribution in the body politic of the nation.   2.2.2. Stable coalitions   There is no evidence to substantiate the claim that by limiting the number of parties in municipal councils, more stable coalitions will be promoted. Coalitions comprising only larger parties can also be unstable, and coalitions comprising a number of smaller parties can be stable. There are many examples in history where coalitions comprising only larger parties have collapsed. And, in any event, it is absurd to assert that a one percent party will ensure greater stability in a coalition than a 0,99 percent party?   Coalition stability has little to do with the number of parties participating. It has much more to do with the political maturity of the leaders.   Once again, thank you for the opportunity to make our submission to you.   Sincerely yours, DW SWANEPOEL CHIEF EXECUTIVE OFFICER   ________________________________________________________________________ PO Box 12609, Mill Street, Cape Town, South Africa, 8010 Spaces ▪ 1006 One Thibault, 1 Thibault Square, Cape Town, South Africa, 8001 Tel: +27 (0) 21 201 1589, Email: admin@inclusivesociety.org.za, Website: www.inclusivesociety.org.za, 235-515 NPO PBO 930069173 VP Khanyile (Chairperson), Z Ndevu (Deputy Chairperson), K Millard, K Khoza, S Muller, D Swanepoel (CEO)

The Academic Council on the United Nations System (ACUNC) Annual Meeting was held in Tokyo from 19 – 22 June 2024. The Inclusive Society Institute’s Chief Executive Officer, Daryl Swanepoel, was a panellist during the roundtable discussion on Assessing institutional capacities to deliver in a changing world. In an era of shifting geopolitics, the roundtable delve into the evolving roles of intergovernmental institutions on the international stage. The starting point of the discussion was the existing multilateral system centred around the United Nations, and its apparent failure to adequately address today’s global challenges, both traditional peace & security and human security, including sustainable development and human rights. The question to be answered was whether a different configuration of existing institutions and/or new institutional arrangements would allow the tackling of global challenges more efficiently and effectively? The  roundtable attempted to assess the current and potential role of institutions like the G20, BRICS and G7 individually and their interconnections, taking into account the interests of individual states or groups of states, as well as broader human and planetary well-being. The assessment was based on each institution’s performance in terms of challenge/problem identification, awareness-raising, leadership, decision-making and implementation, and grades were allocated according to each institution’s effectiveness, coherence and legitimacy. Other panellists included Richard PONZIO (Stimson Center), Richard KINLEY, who chaired the panel (Foundation for Global Governance and Sustainability (FOGGS)),  Cilene Victor DA SILVA (Methodist University of Sao Paulo) and Mohammad Taher Gholi TABAR (University of Religions and Denominations (URD)). Click here for the introductory remarks by Daryl Swanepoel

The Academic Council on the United Nations System ( ACUNS ) held its annual meeting in Tokyo on 20 – 22 June. The Inclusive Society Institute was represented at the meeting by Chair of the Advisory Council, Ms Buyelwa Sonjica, and International Rapporteur, Dr Klaus Kotzé. ACUNS which seeks to unite people active in the work and study of the United Nations is an important platform to better understand and address the most pressing global issues of our time. By looking at a broader range of global issues such as the effects of climate change, pandemics, human insecurity and extremism, the work of ACUNS not only aligns with that of the Institute, but also offers it the opportunity to raise its own concerns. Under this year’s theme, “Global Governance and Sustainable Development: Revitalising Research to Support Multilateral Solutions”, the meeting recognised the urgent need to maintain and adequately reform the global multilateral arrangement, led by the United Nations. In pursuit of equitable and representative reform, the Institute actively participated in the meeting’s various sessions. It was particularly involved in the panel titled “Addressing human security challenges: What would a Global Resilience Council bring?” This panel, which was chaired by Ms Sonjica, was hosted by the Foundation for Global Governance and Sustainability (FOGGS). FOGGS, a partner of the Institute in the Global South Perspectives Network, is creatively pursuing pathways to ensure appropriate responses to the inadequacies of the current United Nations framework. The Institute will continue to partner with like-minded organisations to ensure effective solutions that address the myriad challenges the world faces.

The Inclusive Society Institute (ISI) organised a brainstorming session between the Institute for Global Dialogue (IDG), the Foundation for Global Governance and Sustainability (FOGGS), the Thabo Mbeki Foundation (TMF) and themselves on Tuesday 11 June 2024, in order to enhance the synchronisation of approaches to UN reform. The IDG and TMF team was led by Dr Philani Mthembu (IDG Executive Director, whilst the FOGGS team was led by their Executive Director, Dr Georgios Kostakos. The ISI team was led by its Chief Executive Officer, Daryl Swanepoel. The objective of the session was to assess the feasibility and desirability of the UN reform proposals of the various participants, and tom assess areas of overlap and compatibility of the proposals. The aim was to determine whether there is potential for collaboration going forward. On reflection it was agreed that there was a high level of compatibility and that the next step to forge the modalities of the collaboration should be set in motion.

The Inclusive Society Institute’s (ISI), Chief Executive Officer, Mr Daryl Swanepoel and research associate Ms Nicola Bergsteedt are undertaking a study into managing diverse communities. The second visit of the four case studies was to Helsinki, Finland from 3 to 8 July 2024. A major focus of the learnings from this trip was the social cohesion between Swedish-speaking Finns and Finnish-speaking Finns. The ISI team explored various initiatives and avenues that drive this harmony, highlighting Finland's robust commitment to inclusivity. One of the key engagements was with the Non-Discrimination Ombudsman, Ms Kristina Stenman, where the ISI team gained comprehensive insights into Finland's efforts in promoting equality and combating discrimination. This meeting provided an in-depth understanding of the country's policies and initiatives. Additionally, the team had the opportunity to engage with a Swedish MP, Hon Mr Mikko Ollikainen MP, to discuss the role and functioning of the Swedish People’s Party (SPP) of Finland in the Finnish Parliament. This was followed by a visit to the SPP’s head office where a meeting was held with the Secretary General, Mr Fredik Guseff. The delegation also paid a visit to the Swedish Assembly, where they were hosted by a team led by its Secretary General, Ms Christina Gestrin This discussion highlighted the unique role and impact of the Swedish Assembly, offering a deeper appreciation of its contribution to Finland's social structure. The visit also included a meeting with the Ministry of Economic Affairs and Employment, a delegation led by Ms Minna Säävälä, where discussions centered on policies aimed at fostering economic inclusion and job creation. This was folowed by a meeting with Dr Pasi Saukkonen, a social cohesion policy expert at the Foundation for Cultural Policy Research. The meetings provided valuable knowledge on Finland's strategies to ensure broad economic participation and inclusivity. Overall, the visit to Finland was both engaging and educational, equipping the Inclusive Society Institute with a wealth of knowledge and new perspectives. The insights gained from this trip will be compiled into a comprehensive report, which will form part of ISI's ongoing research series that examines social cohesion in four different countries, that is Singapore, Finland, the United Arab Emirates and a to be identified African country. Through these international explorations, the ISI aims to draw valuable lessons and insights to enhance social cohesion in South Africa.

On the 10th of May 2024, a ceremony was held at Freedom Park in Pretoria to commemorate the 30th anniversary of former President Nelson Mandela's landmark inaugural address, delivered on that very same date in 1994. The ceremony was a poignant and powerful reflection on the hard-won freedoms and democratic progress that South Africa has achieved over the past three decades. Daryl Swanepoel, the CEO of the Inclusive Society Institute, was invited to deliver a speech, which captured the spirit of Mandela's vision and the ongoing challenges facing the country. Swanepoel spoke about the immense sacrifices and struggles that paved the way for democracy, reminding the audience of the long and arduous journey South Africa has traversed since the dark days of apartheid. He highlighted how Mandela's message of reconciliation, unity, and equality continues to inspire and guide the nation, even as it grapples with stubborn socioeconomic disparities and the need to build a truly inclusive society. Swanepoel's words resonated with the crowd gathered at the historic site, who were moved by his tribute to Mandela's enduring legacy and the unfinished work of transforming South Africa into the just, prosperous, and equitable society that was Mandela's dream. The ceremony was a poignant reminder of the progress made, the work that remains, and the abiding spirit of hope that Mandela's leadership instilled in the hearts of all South Africans. Click here to read the speech by Daryl Swanepoel - - - - - - - - - - - - - - - - - - - - - - -

Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JANUARY 2024 by Prof Amiena Bayat, Prof Claire Quinn, Prof Julian May & Dr Hemish Govera Original print: New Agenda: South African Journal of Social and Economic Policy, Vol. 2023, No. 90 Published Online: 1 September 2023 Abstract A goal of the United Nations is to end hunger by 2030 but diverse factors, including global warming, conflict and now the war in Ukraine, place that ambition in jeopardy. AMIENA BAYAT, CLAIRE QUINN, JULIAN MAY and HEMISH GOVERA argue that the world can end hunger in Africa if it takes proper note of the framework of the African food systems approach. Introduction The 17 Global Goals that make up the 2030 Agenda for Sustainable Development includes the goal to end world hunger by 2030. Sustainable Development Goal (SDG) 2 aims to ensure that everyone has access to enough food that is nutrient-rich throughout the year by 2030, particularly children and the most vulnerable sections of society. The 2030 target to end world hunger, however, is under threat due to a number of issues, including resource shortages, food insecurity, obesity, malnutrition, climate crisis, inequality, conflicts and environmental degradation. These developments will have an adverse effect on food systems, which are predicted to deteriorate, made worse by the conflict in Ukraine (Global Report on Food Crises, 2022). Food security is a condition in which everyone has physical, social and financial access to enough safe, wholesome food that satisfies their nutritional needs and food preferences so that they can lead active, healthy lives at all times (FAO, 1996). Food security also emphasises the significance of eating a balanced diet (Battersby, 2022; FAO, 2004). Three variables affect food security i.e. whether the geographical region produces enough food to feed its population; whether the food supply is steady and able to withstand risks such as droughts; and whether people are able to access food both physically and financially (Johns Hopkins Center for a Liveable Future, 2016). Food availability refers to supply- side factors and is determined by inter alia stock positions, rates of food production and trade performance. People’s access to food considers the economic and physical aspects of the demand side and is concerned with incomes, expenditure, markets and prices. Utilisation deals with food preferences, the quality and safety of diets, and the intra-household distribution of food. The stability of these factors over time and vulnerability to their fluctuations are also important. The stability dimension includes risks and shocks arising from climate change, political instability, economic conditions and pandemics (FSNet- Africa, 2021). In 2020, the High-Level Panel of Experts of the UN’s Food and Agriculture Organization (FAO) proposed adding two further dimensions: agency and sustainability. Agency refers to the capacity of individuals and groups to make their voices heard and make decisions about their food systems. Sustainability refers to the long-term viability of the ecological and social bases of food systems (Clapp et al., 2022). If due attention is not paid to all six dimensions, food security cannot be achieved (Battersby, 2022). A food system can be defined as the process that turns natural and human- made resources and inputs into food (Pinstrup-Andersen, 2007). It is the result of all of the activities and interactions that take place along the entire food value chain, which includes the provision of inputs, the production of agricultural products, transportation, processing, retail, wholesale, and food preparation, as well as consumption and disposal (Bendjebbar and Bricas, 2019). Although each food system functions differently, the majority have some of the same fundamental production, processing, distribution, consumption and waste management procedures. Along with ensuring food security and nutrition, food systems also need to have a positive impact on the environment and the socioeconomic system. This article highlights the African food systems approach as a conceptual framework to identify and formulate transformative interventions to mitigate food system crises which pose significant current and future risks and challenges for food security in South Africa and Africa as a whole. Food insecurity in Africa According to the British Red Cross (2022), Africa is facing a food crisis that could see 146 million people go hungry due to various enduring reasons. In Africa, food availability is at risk from population increase, soil degradation, conflict, deforestation and urban sprawl which crowds out productive land and limits opportunities to extend cropped areas. When combined, these factors significantly increase the vulnerability of food systems, which impacts food access, availability, use and stability placing millions of people at risk of extreme hunger. Food safety is a major concern: a third of world deaths attributable to food safety are in Africa (Bendjebbar and Bricas, 2019). Conflicts have a detrimental impact on food security. In 2017, conflict and disasters displaced an additional 30.6 million people, which affected the food security of 143 African nations and territories. One impact of conflict is stunting, which affects 34% of children under the age of five in countries affected by conflicts compared to 20% of all children of that age in non-conflict countries (Bendjebbar and Bricas, 2019). In South Africa, households are also facing a food insecurity crisis (Battersby, 2022). According to Statistics South Africa (2022), the percentage of South Africa’s population impacted by moderate food insecurity and the number of people categorised as seriously food insecure was 10.1 million (17.3%), while the number of people with severe food insecurity was 4.1 million (7%) in 2019. Abrahams (2022) concurred that food insecurity is a result of income and affordability levels, with roughly 55.5% of South African households living below the upper bound poverty line in a state of food insecurity. Food insecurity was exacerbated by the Covid-19 pandemic, which induced lockdowns that significantly disrupted food supply chains and resulted in the loss of lives and revenue. Data from Statistics South Africa (2020) state that around 23.6% of South Africans faced moderate to severe food insecurity in 2020 as a result of Covid-19, while approximately 14.9% experienced severe food insecurity. The pandemic has seriously hindered efforts to achieve South Africa’s National Development Plan (NDP) and the SDGs aim of eliminating hunger by 2030 (Statistics South Africa, 2020). The food systems approach Food systems differ across multiple dimensions according to how food production, distribution and consumption activities are defined with regard to their impact on the environment, societies and economies. The food systems approach takes a more comprehensive approach to agricultural production and offers a framework for understanding how food system changes relate to food security and the environment. The approach considers the various components of the food system as well as the connections between them. It looks at all activities connected to food production, processing, distribution and consumption on the one hand, and the outcomes of these activities in terms of food security (including nutrition), socioeconomic factors (income, employment) and the environment (biodiversity, climate) on the other. Systems thinking is distinguished by its view of behaviour as an interaction between subsystems in which feedback plays a crucial role, as opposed to a straightforward chain of cause-and-effect interactions. The method emphasises the connections between the many components of the food system and the results of systemic actions in terms of socioeconomics, the environment and climate (FSNet-Africa, 2021). This sets system thinking apart from other techniques where interventions are frequently created to make the most use of the available resources (natural resources, labour, capital). In order to increase efficiency and profitability, this typically entails using technical breakthroughs across companies, industries and/or chains (Van Berkum et al., 2018). Other approaches analyse the effects of interventions on the environment (CO2 emissions), the market (prices, incomes) linked to natural resource depletion, whilst not considering feedback from the ecosystem and/ or socioeconomic system for the farm, industry or chain. Food systems thinking provides a chance to add feedback from outcomes outside of those that directly relate to food production and consumption when analysing the results of policy actions. This way of thinking “steps back” from the scene of the intervention (Van Berkum et al., 2018). Additionally, the food system approach emphasises policy directions that affect the food production system rather than just the value chain (Van Berkum et al., 2018). In some situations, strategies for tackling food and nutrition security have placed an undue emphasis on agriculture, portraying the problem as the result of weak production, market imperfections or poor governance. With the emphasis on boosting food production, bridging yield gaps to increase availability and reducing costs and wastage to promote access, the utilisation and stability dimensions as well as the agency of food system players run the risk of being overlooked. It may also deflect attention from factors that contribute to food security but are unrelated to the food system, such as inequality, poverty and prejudice. These cannot be addressed by traditional food and nutrition policies and necessitate an integrated, intersectoral strategy. The holistic food systems approach is a better analytical model than a strategy that merely takes the production component into account (Van Berkum et al., 2018). FSNet-Africa’s approach to the African food system The Food Systems Research Network for Africa (FSNet-Africa) is a collaboration between the University of Pretoria (UP) – which is host of the African Research Universities Association’s (ARUA’s) Centre of Excellence in Sustainable Food Systems – the University of Leeds (UoL) and the Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN). FSNet-Africa’s research on African food systems is based on its “Framework for Researching African Food Systems” project, which aims to strengthen the analytical capabilities of food systems researchers through a structured programme of research leadership development. The project presented a conceptual outline of the definitions, components of, and linkages within, the African food systems. It drew on several levels in the operation of food systems and their dynamics and explored the characteristics and challenges confronting the food systems in Africa using the Economic Commission for Africa’s (ECA’s) evidence base. In mapping African food systems, the primary drivers influencing food systems in low-income nations fall into seven groups: bio-physical and environmental; socioeconomic; economic; territorial; demographic; infrastructure and technology; and political and governance. Bio-physical and territorial drivers refer to the availability, pollution and climate with regard to natural resources that shape the production side of food production. Examples of demographic drivers include population expansion, urban crawl and population displacement. These factors have a significant impact on food demand with regard to quantity required, type and quality of food consumed and the context in which food is produced. Innovations in technology and infrastructure are crucial factors in the food system influencing both supply and demand. Social traditions, education, health, values and identity are all examples of socio-cultural drivers. They also include culture, religion and rituals. By affecting lifestyles, social norms, attitudes and cultures with regard to food, these have an impact on diets and the food environment. Political factors include government, laws, conflicts and humanitarian crises, which also have an impact on many factors affecting food systems (Bendjebbar and Bricas, 2019). The framework considers the dynamics of growth and development in a particular environment (nation, region, livelihood zone or sub- national district), modifications to infrastructure and technologies, drivers of power and governance at local, national and international levels, socioeconomic characteristics such as skills and patriarchy, and demographic changes such as health systems and the effects of global pandemics (Van Berkum et al., 2018). The analytical framework includes the institutions, values and cultures that influence preferences and choices in the food system, along with the capitals (combinations of financial, natural, physical, human and social assets used to produce or acquire food), the biological and ecological realms available to the system and the activities carried out by the various actors in the system. The principle of “farm to fork” is present, with food waste and loss occurring at each stage. These activities of a food system may be organised as value chains that are short (low-input subsistence farmer to her family) or long (agro-chemical company to urban consumer via industrialised farms and multinational retail corporations) (Van Berkum et al., 2018). The food system impacts on three conditions/goals essential for human existence and has the potential to guide policies that address all three objectives: security of access to food and nutrition; rural and urban livelihoods, and specifically rural development; and environmental sustainability. The conceptual framework proposes capitals that are relevant to food systems, including political and cultural capitals. Recently digital capital has been identified as a potential new asset that brings together access and use of information and communication technologies (FSNet-Africa, 2021). The model also focuses attention on the interconnected components of the physical environment within which a specific food system operates and includes the atmosphere, hydrosphere, biosphere and lithosphere (Van Berkum et al., 2018). The environment in which food is produced, the environment in which it is consumed, the value chains connecting them, and the waste that occurs are all parts of the food system. When these components are analysed, supply-oriented assessments that concentrate on increasing food production in the face of demographic and climatic pressures may be included. The value chain, which connects supply (production) and demand (consumption), is the subject of midstream-oriented analysis. Here, better institutions and markets as well as lower transaction costs and risks are the keys to improving performance. Demand-oriented strategies place special emphasis on consumer behaviour, food access and cost, and balanced diets. Last but not least, system-wide approaches focus on developing responsive, adaptable food systems through better governance to resolve trade-offs and make use of synergies (Van Berkum et al., 2018). Social institutions are acknowledged as being a part of the food system, although only being tangentially related to food demand/production and food supply/consumption. Instead of organisational structures, institutions in this case are the official and informal rules that govern behaviour. The Framework for Researching African Food Systems identifies these as regulative, normative and cognitive establishments. Regulative institutions refer to public sector conventions, policies and procedures. Normative institutions are not as formal as regulative institutions and are morally controlled. Cognitive institutions guide what is culturally or conceptually acceptable to actors and include priorities, problem agendas, beliefs, paradigms, models of reality and language (Van Berkum et al., 2018). The Framework’s objective was to critically translate evidence generated from the research findings into policy solutions that are feasible and practical interventions aimed at supporting the attainment of Africa’s SDGs. The achievement of the SDGs is viewed as the primary transformative function of the African food system. That is the scope of the transformation’s paths for institutional, social and environmental change, as well as its sustained elimination of famine and universal access to affordable, safe, healthy and nourishing food (SDG 2). This idea emphasises the potential for food systems to improve inclusive and fair livelihood options towards eradicating poverty (SDGs 1, 8 and 10). As a result, dismal developments could result in loss of livelihoods, especially for the most vulnerable individuals, hence escalating inequality and environmental devastation. The realisation of SDGs 12, 14 and 15 depends on the reparative effects of food systems transition on biodiversity and natural resources. Increased resilience and adaptation to risks and shocks at all levels are essential for addressing the challenge of climate change (SDG 13). Promoting demand restraint (i.e. encouraging consumers to choose fewer items of higher nutritional quality over more items of lower quality) and improving governance, coordination, accountability and stakeholder agency are other methods to realise transformative paths (FSNet-Africa, 2021). Regarding African food systems, the continent comprises diverse food cultures and food environments owing to its heterogeneity, with over 2,000 languages and 3,000 ethnic groups across 54 countries. As a result, the biosphere, the globalising political economy and the globalisation of culture are all included in the global food regime, which includes the drivers and mechanisms of a food system. However, the concept of African food systems acknowledges, among other things, the common history of colonialism and underdevelopment and its detrimental effects on Africa’s integration into the global food system and the investments, international partnerships and laws made under the auspices of pan-African governance and institutional experiments, such as the African Union (AU) and ARUA. Other examples include the growing integration of African nations as trading partners, investors, farmers, workers and consumers, which is prioritised by programmes such as the Africa Continental Free Trade Area (AfCFTA) and the shared understanding of the opportunities and challenges that face African governments and citizens as well as how to address them, as encapsulated by Agenda 2063, the Comprehensive Africa Agriculture Development Programme (CAADP) and the One Africa Voice initiative (FSNet- Africa, 2021). Developments in the African food system indicate a declining employment and agricultural share as well as a slow performance when compared to other regions. The environment for producing food on a worldwide scale has evolved from family farms to industrialised commodity production and ultra-processing (sold through fresh produce marketplaces and small businesses). Food consumption based on mass distribution, globalised trade, etc. are further characteristics of this. Similar structural change is taking place in Africa, and it has improved overall wellbeing while reducing rural poverty (FSNet-Africa, 2021). However, those who work in the food industry are disproportionately affected by poverty, hunger and significant food insecurity. Unfortunately, smallholder farmers have diminishing access to land and receive inadequate compensation as a result of the current trends of capital-intensive, industrialised and large-scale commercial and farmland consolidation. Insecure employment on industrial farms and rural-to-urban migration in pursuit of employment prospects are other detrimental effects. Small-scale enterprises, insufficient utilisation of non-organic inputs and technology, condensed local supply chains and spot-exchange-based market transactions are the main characteristics of many African food systems. However, 60% of the world’s uncultivated arable land is found in Africa, with only 8% of this land area being used for crop production, while its people are overly reliant on agriculture for a living (FSNet- Africa, 2021). The majority of food produced in Africa is produced by small and medium-sized businesses along all value chains, including street vendors in the unorganised sector. This exemplifies how the African food system is represented in context. In spite of this, African food systems and their outcomes are evolving quickly. Over the past three decades, supply linkages between rural and urban areas have grown by 600-800%, which has boosted food availability and accessibility. Between 1990-92 and 2014-16, the prevalence of undernutrition in Africa, which is defined as having insufficient food consumption to meet nutritional energy requirements, decreased from 33% to 23.2% (FSNet-Africa, 2021). Changes are occurring in all areas of food production and consumption in Africa with regard to the food ecosystems, though the effects on changes in poverty, food and nutrition security, and livelihoods are uneven. African food markets are expected to rise sixfold by 2025, with urban demand for processed staples driving the majority of the growth. Between 2010 and 2040, this is anticipated to increase five to tenfold, having a substantial influence on the continent (FSNet-Africa, 2021). FSNet-Africa has proposed certain evidence-based interventions that are essential for aiding stakeholders in the food system to make decisions that are well-informed. This calls for “mapping food systems,” “mapping the policy landscape” and “understanding paths to the plate” across the priority nations of FSNet-Africa. The many functions of participants in the informal food economy, which are largely disregarded by policy, should receive due consideration. The project highlights the necessity for research into the processes by which better agribusinesses and lucrative jobs are created and lost, and why. It also emphasises the necessity of recalibrating the assistance required by players in the formal and informal food sectors to encourage workforce development, small, medium and microenterprises, and the employment of young people (FSNet-Africa, 2021). Conclusion In conclusion, the primary trends influencing African food systems and economies include rapid urbanisation, rising incomes and a growing middle class. These trends work in concert to affect consumer demand and alter consumer lifestyles, tastes and choices. Trends in the supply of staples and increased processed food consumption have westernised African food supply systems and altered the makeup of the labour market in terms of the shares of non-agricultural jobs in country regions. In the same way structural transformation patterns have been reinforced. Building resilient food systems that can withstand risks of climate change and safeguarding the livelihoods of underprivileged and marginalised food stakeholders are among the challenges facing African food systems. Therefore, improved sector governance and integrated African food systems are crucial to the viability of changing to sustainable food systems in Africa. The territorial balance between urban and rural areas, as well as across administrative and related boundaries, should serve as the basis for this. References Abrahams, M. 2022. Over half SA households are food insecure: Women must first pay for transport, electricity, debt, New Agenda: South African Journal of Social and Economic Policy, 86, Institute for African Alternatives, 36-38. Available at https://ifaaza. org/wp-content/uploads/2022/10/Over-half-SA- households-are-food-insecure.pdf. Accessed 9 November 2022. Battersby, J. 2022. Revised food security policy needed to reshape SA food system. New Agenda: South African Journal of Social and Economic Policy, 86, Institute for African Alternatives, 26-30. Available at https://ifaaza.org/wp-content/uploads/2022/10/ Revised-food-security-policy.pdf. Accessed 9 November 2022. Bendjebbar, P. and Bricas, N. 2019. Major Trends in Food System Drivers, Food Systems at Risk, 25.Available at https://books.google.com/books?hl=en&lr=&id=jIa4DwAAQBAJ&oi=fnd&pg=PA25&dq= Bendjebbar,+P.+and+Bricas,+N.+2019.+Major+Tren ds+in+Food+System+Drivers&ots=DEm4tgqvZa&si g=fkGMrGU4ivqn-4cZ-pWGEkAK7IU British Red Cross. 2022. Africa food crisis: 146 million people are going hungry. Available at https:// www.redcross.org.uk/stories/disasters-and- emergencies/world/africa-hunger-crisis-100- million-struggling-to-eat. Accessed November 2022. Brunori, G., Bartolini, F., Avermaete, T., Mathjis, E., Brzezina, N., Moragues Faus, A., Sonnino, R. and Marsden, T . 2015. D2.1 “Conceptual framework”. TRANSMANGO FP7 project. Assessment of the impact of global drivers of change on Europe’s food and nutrition security (FNS) KBBE.2013.2.5-01. Available at: https://transmango.files.wordpress. com/2017/09/d2-1-conceptual-framework-final.pdf. Accessed 19 September 2023. Clapp, J., Moseley, W.G., Burlingame, B. and Termine, P. 2022. The case for a six-dimensional food security framework, Food Policy, 102164. FAO. 1996. The State of Food and Agriculture 1996 (No. 29). Food & Agriculture Organization of the United Nations. FAO. 2004. Voluntary guidelines to support the progressive realization of the right to adequate food in the context of national food security. Rome: FAO Council. Retrieved from http://www. fao.org/docrep/meeting/009/y9825e/y9825e00. htm FAO. 2022. Joint Analysis for Better Decisions. Available at https://www.fao.org/fileadmin/templates/faoitaly/documents/pdf/pdf_Food_Security_Cocept_Note.pdf. Accessed 1 November 2022. FSNet-Africa. 2021. Framework for Researching African Food Systems. Available at https://fsnetafrica.com/ publications/framework-for-researching-african- food-systems/. Accessed 1 November 2022. Global Report on Food Crises. 2022. Joint Analysis for Better Decisions. Available at https://www.fao.org/3/cb9997en/cb9997en.pdf. Accessed 1 November 2022. Johns Hopkins Centre for a Liveable Future. 2016. Hunger and Food Insecurity. Available at https:// www.foodsystemprimer.org/food-and-nutrition/ hunger-and-food-insecurity. Accessed 1 November 2022. Pinstrup Andersen, P. 2007. Agricultural research and policy for better health and nutrition in developing countries: a food systems approach, Agricultural Economics, 37, 187-198. Statistics South Africa. 2020. Measuring Food Security in South Africa: Applying the Food Insecurity Experience Scale. Available at https://www.statssa. gov.za/?p=15273. Accessed 1 November 2022. Statistics South Africa. 2021. What do South African households look like? Available at https://www. statssa.gov.za/?p=15473. Accessed 1 November 2022. Statistics South Africa. 2022. Measuring Food Security in South Africa: Applying the Food Insecurity Experience Scale. Van Berkum, S., Dengerink, J. and Ruben, R. 2018. The food systems approach: sustainable solutions for a sufficient supply of healthy food, (No. 2018-064). Wageningen Economic Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JANUARY 2024 by Dr Aderonke Ajiboro Abstract One of the topical issues in the socio-political re-organisation of Africa in the 20th century is development, and most recently, sustainable development. Oftentimes, this issue is discussed against the backdrop of the unnerving consequences of the colonial, postcolonial and neocolonial periods in the history of Africa. But why should any society engage in a conscious effort towards development? What will such an effort entail? And why does the attainment of development become needful, especially in Africa? These are some of the questions that are addressed in this paper. The paper aligns with Kwame Gyekye’s functionalist conception of development and tries to examine some recent objections to it. This paper affirms that development is a necessity in any human society, not just as a psychological and historical phenomenon but also as an economic prerogative of any African society in the 21st century. It also gives a critical assessment of the conception of development as exhibited in some African countries. What is Development? The above question is a generic one. As Kwame Gyekye puts it, the concept of development is a ‘multifaceted’ one. It is a deeply philosophical one such as ‘what is knowledge?’, ‘what is truth?’ or ‘what is value?’ (Gyekye, 1988: 14). In which case, there is a need to conceive the term ‘development’ in a wholistic and universally acceptable way, for it to be understood and exemplified in an objective manner. Hence, the question can also be asked, what are the general defining exemplifications of a society that has development or is developed? For Gyekye, there is the constant desire of governments to attain what is called development. This desire in the African situation was also very intense in the wake of the call for independence of African states as well as Third World countries. It is pertinent to note that the appellation of ‘Third World’ stems from the Age of Enlightenment and Industrialisation, where inventions and discoveries of new means and methods of addressing human societal challenges were made in the West. Any society that lacked such indices as those that produced development in the West were summarily classified as not exhibiting the features of development, or basically, as underdeveloped. For Gyekye, “the choice of effective approaches to development is what most people in Africa and other Third World countries are talking about; it is the goal of every government in the Third World … since development has been identified with economic growth” (Gyekye, 1988: 15). Economic growth is a species of development. There are political, social, moral, business, academic development and so on, which are all parts of the genus development, though they may not have a logical relation to development as a whole. The human society is a dynamic one. The flow of thought and deeds in the human society are influenced and bound by circumstances that are beyond individual preferences. Therefore, the ability to attain a uniform or unified standard of a conception of development wellbeing may be difficult. This poses a problem for the conception of development in the society. A collective definitive approach to a particular cause may not be achievable, although the aggregation of common views may be an index for taking a particular view. This, therefore, puts man as the responsible agent for any action that is to be carried out in the society. As Awolowo puts it, “man is the sole creative purpose of the universe” (Awolowo, 1976: 53). In other words, whatever conception or indication of development that is to be evident in any society is ultimately dependent on the organisation of the human fabric that establishes it. This is closely linked with Gyekye’s conception of development. One major point is how his conception of development puts man at the initiating and receptive stages of development. This closely aligns with Nyerere’s idea of freedom and development; in the Arusha Declaration, Nyerere affirms that all proposals made by all socio-political ideologies directed at development should be geared towards the attainment of wellbeing of the people (of Tanzania) (Nyerere, 1968). This implies that whatever purpose development is to serve, it must be to the desirable state of existence for the people. It is therefore appreciable that Gyekye conceives of development in the functionalist way. For him, “to be developed is to have the capability to perform the functions appropriate to the object, such as society or institution, said to be developed. The nature and purpose of the object will determine its specific function. Thus, the functions of the human mind are related to its nature and purpose and would therefore not be the same as those of a political institution, for instance. The functions of the various objects that are said to be developed thus do differ. This is what is intended by my use of the word ‘appropriate’ in the definition just formulated” (Gyekye, 1988: 17). Gyekye opposes an economistic conception of development because it is lopsided and inadequate. It is a view of development that is conceived in terms of the production and increase of the material capacity of the society, such as food production, construction of buildings and roads, good and improved healthcare and so on. There is the tendency to misapply Gyekye’s notion of development to these material outputs as functions that are derivatives of a society experiencing development. However, Gyekye notes that these (material) economic entities are tools to indicate that more fundamental processes of development may not be immediately accessible to a particular society or its critics. A little bit of economic history lends support to this view. Akin Mabogunje notes that there was a buoyant economic landscape in Nigeria before it was tampered with in the late 19th and early 20th centuries by the colonial powers: “The important point to be made here is that a system of towns and cities had developed in Nigeria before the 19th century in response to social, political, and economic forces operating in the country over a long time. Trade was paramount to their existence, and it was trade limited not so much by the distance to be covered as by the amount of goods and services that could be effectively carried over that distance during given intervals of time. In other words, people did cover considerable distances in pursuit of their trade. But since the means of carriage was usually by head porterage or donkeys, the amount that could be moved at any one time was limited. Similarly, since the traders had to trek, the distance that they could cover on one trip to market was circumscribed. In consequence there emerged specialised centres of trading, holding at specific intervals to allow for the time required to move around. Much of this trade was for internal consumption, and only a limited portion of it found its way outside of the country, either to North Africa or through the coastal centres to Europe and the Americas” (Mabogunje, 1965). In the above, Mabogunje paints a picture of a Nigerian society that tried to address its socio-economic challenges given the means available to them. The question of “appropriateness” to the challenge may be raised and not immediately answered, bearing in mind that trade exports may not have been one of the desirable goals in the centuries in question. Also, with the trade economy described above, one could see that there are limitations arising from the influence of Europe – even as an avenue for export – on the economic development of Nigeria, and the decisions of the traders and modes of trading were germane to the trend that the economy will follow. Obviously, the limitations should dispel any notion of trying to create an equating of development per se and economic development on any level. This is not to say that development in the objective sense does not have limitations. In a later work, Aderanti Adepoju (1976) also wrote on an index of development expressed in environmental development. For him, the socio-economic development that is experienced in Nigeria is of a slow pace because of the non-attentiveness of socio-political organisation to the rural areas in embarking on developmental projects and lack of adequate statistics. All these species of development can be regarded as a measure of development in the society. A measure of development, hence, is not synonymous with development itself. In fact, the measure of a thing is external to that thing; it is only an applied entity on what is being measured. If this is granted, Gyekye’s functionalist account may be seen as problematic, because the functions that are meant to be derived from acts produced from development may also be argued as being manifestations of development. However, it is pertinent to note that as much as the functions that Gyekye portrays are not in such a way that it is distinguishable from it. At least a manifestation of an act establishes the occurrence of that act, if it is not the act itself. Furthermore, Ani raises three objections to Gyekye’s conception of development and argues that the conception can be questioned: The first objection is that the ultimate goal of development is economic development. The second is that development is a process that is continuous. The third is that no society can be described as developed if development is a continuous process (Ani, 2017). It is apt to note that Gyekye’s functionalist conception of development is integrative, as Ani concedes. By no means did Gyekye divest economic development or growth from the functionalist conception. The view he emphasises is that economic development does not, in any way, describe the general or objective view that development, as a concept, should be understood. The other two objections raised by Ani are shaky. Continuity and the status of being ‘developed’ does not deny the strength of Gyekye’s argument. Although Gyekye implies that development conceived in the functionalist/behavioural/evolutionary model of the insect is a non-continuous process, it does not expressly suggest that the process is terminal. A state of equilibrium can be attained where a nation can be termed as ‘developed’. The continuous creation of goals, needs and existential challenges of the society, as Ani rightly notes, will always be present. However, this does not imply that the state of being ‘developed’ puts a stop to it. Of what nature then is development? The core idea of development arose as a means of tackling the ever-present challenges of the society and that is why the products of development go beyond a particular sector or problem of the society. It should be aimed at solving or addressing even the predictable or unforeseen one; hence, it is more of an ideological thinking put into practice. This is evident in Nyerere’s view of development as freedom. For Nyerere, freedom is, in a way, a product of development and development arises out of the exercise of total freedom of people in the society. For him, “freedom and development are completely linked together as are chicken and eggs! Without chickens, you get no eggs; and without eggs you soon have no chickens. Similarly. Without freedom you get no development and without development you very soon lose your freedom” (Nyerere, 1973: 25). Although to a large extent the reference that Nyerere makes to development can be seen to be in terms of social and economic development, he is also of the view that these are mere indices to how development should be evident in the society. “For the truth is that development is development of the people. Roads, building, increases of crop output, and other things of this nature, are not development; they are only tools of development. A new road extends a man’s freedom only if he travels upon it. An increase in the number of school buildings is development only if those buildings can be and are being used to develop the minds and the understandings of people … Development which is not development of people … is irrelevant to the kind of future which is created” (Nyerere, 1973: 26). Hence, the nature of development for Nyerere is man-centred; if any proposal for development is not geared towards the freedom and development of the people in the society, that proposal fails as a development strategy. Just as for Gyekye that development cannot be divested of human creative ability (Gyekye, 1988: 43), for Nyerere, development cannot be divested of freedom. A society where freedom is not evident, even if all economic and material resources are available, will not count as a developed society. This suggests that the human intellect, and the ideologies it creates, is central to the kinds of development strategy it proposes and ultimately carries out. Thus, the nature of development is to be seen by its means of conception not necessarily by the means of manifestation and then the impact it has on the creative intellect of the people in the society. The Need for Development in Society In every human society there is the evolution of life and history, existential challenges that spur people on to think about their survival and sustenance. This, in itself, is an issue that attracts deep thought.  It is not clear if there is any human society without a goal of common sustenance at any point in time in the history of societies. The goal and/or the means of attaining the goal may be inadequate or unjust but there, at least, will be a propelling act to arrive at an end. Thus, development in every society is a need just as individuals have needs to satisfy; it is a need that arises out of the creative ability of the people to reflect on their mode of interactive existence and provide solutions to challenging situations. For Gyekye, “development is a directed and purposive activity; it also implies the need for, or the existence of, a human subject as the agent to undertake the developing activity. The reason is that what may be regarded as the trappings or symbols of development such as high industrial output … do not occur fortuitously: they are thought out, deliberated upon, planned and produced by human beings. And this means that, undoubtedly development is a creative act, essentially involving, as it must, the activity of the human intellect” (Gyekye, 1988: 43). The above view is also implied in J.C. Chukwuokolo’s examination of the concept of development. For him, “the developmental stance of any group of people is a product of their perception of the ultimate reality” (Chukwuokolo, 2012). Development therefore has an essential link to the human nature. To be developed or not to be is directly dependent on the people. Ani, however, makes a far-reaching statement by claiming that the African society had no inclination towards development until the modern era (Ani, 2017). Mabogunje’s view, as noted in the last section, shows that the economic history and trade development history established the idea that long before the modern era, the people living in Nigeria have always sought out means to address challenges in their existential conditions (Mabogunje, 1965). The African situation is a particularly interesting one as regards the developmental history of societies. Unlike in the West where Marx tried to fashion out the history of society based on the Communalism to Communism model, Africa traces her history from a traditional/indigenous era to postcolonial/neocolonial era. This goes a long way in affecting the thought patterns of people in the African society. As earlier noted, any development proposal in a society cannot be made outside of the ideological thinking of the people of that society. So, it is by the predominating idea in the society that a development strategy is put into practice. “Any people that see the ultimate reality in terms of idea will over-emphasise aspects of the society that promote idealism. So also is any society that lay much emphasis on matter as the ultimate reality. Such a society will tend to develop material aspects of society at the expense of the other dimensions of reality” (Chukwuokolo, 2012). If this is granted, at least one implication can be deduced from this: No external society has the moral or existential right to dictate or prescribe to another society what the focus of development in its society should be. This is because the lived experience of a people determines their existential needs. Whichever way the nature of their development occurs is dependent on their creative ability to understand and produce their wellbeing out of their perception of reality. Such a society that achieves the goal of development by this means cannot be denied the status. A point that arises out of this implication is that the indices for development in societies may differ, where society A has economic indices for its mark of development, society B may have moral or education indices. Underlying this, and most fundamental, is that the unbound creative ability of the people in the society should be geared towards producing a state of general wellbeing for the people such that is expressive in the development strategies in socio-political organisation. Development as a Moral Goal in Africa Gyekye indicates that development is a moral goal that should be taken seriously in any society (Gyekye, 1988: 42). The ability of the socio-political institution to function satisfactorily in the provision of basic existential needs of its citizens is a moral burden for any political institution. The history of societies in Africa, as earlier noted, is often characterised by the influence of the colonisers and their prescriptions of socio-political and economic organisation after the Africans were left to ‘self-rule’. It is not surprising therefore that the majority of the development proposals that African countries make either individually as a nation or as a continent are not in any way addressing fundamental issues of existence in the continent. The term ‘underdeveloped’ or ‘developing’ is still used to describe the majority of the countries on the continent. This is so, because the human creative impact is bounded by forces internal and external to its society. It is often noted by a lot of African scholars that the development of a society starts with an ideological thinking, where the boundless thoughts of man are given freedom to explore the numerous possibilities of addressing his/her existential challenges. Gyekye affirms that, “ideas are the products of individuals, that is, individual intellects. For this reason, the creative activity, if it is to succeed, requires that free rein be given to the exercise by individual human beings of their initiative, capacity and ingenuity. But the seminal ideas of individuals in the context of societal development, require the participation of others in order to bring them to concrete realisation” (Gyekye, 1988: 43). Political institutions in Africa in postcolonial times have often made their agenda attractive by putting forward the idea of development of the society. A lot of strategies and partnerships are made all in the bid to achieve the development goals. But they seem to be less bothered about the lived experience of the masses; people whose demography make the society or community whatever name it is called. There is a lack of participatory governance as Nyerere proposed, which is a hallmark of personal and societal freedom that foster development. The rush for the ‘exhibition’ of material infrastructures that are of little or no impact on the development of the people robs them of their creative intellect to approach their existential needs with enthusiasm. Amartya Sen is of the view that, “what would be most damaging would be the neglect … of centrally relevant concerns because of a lack of interest in the freedoms of the people involved. An adequately broad view of development is (should be) sought in order to focus the evaluative scrutiny on things that really matter and in particular avoid the neglect of crucially important subjects” (Sen, 1999: 33-34). One interesting point to note is that the result of the agitation for self-rule by Africans in the colonial times did not produce freedom of Africans. In recent times, African leaders have exhibited the acts of dominance that deprive citizens of their freedom, and which ultimately lead to a hindrance of development. A good political institution, as the existential needs of the masses will require, needs to be aware of the compelling needs of the people and equip the people for participation in their development for the wholistic wellbeing of the society. Political officeholders exhibit their freedom to the detriment of other citizens, which is an untoward act. Individual freedom should be geared towards a social commitment and “development should be a process of expanding the real freedoms that people enjoy” (Sen, 1999: 3). Conclusion Human nature is averse to immobility, of thought or physical action. It is regarded as an abnormality for an individual to be in a state of inertia such as matter. Humans should be allowed to exhibit the activity of their intellect in society even where there may be need for caution and moderation. Even when development is conceived in terms of growth in the biological sense, it is more appreciable to say that an organism has developed rather than say it has merely grown. Many of the societies that are regarded as developed today can be seen to employ strategies that allow for the participation of the individual in the policies of the socio-political institutions. There is an understanding of the creative intellect of the human mind to proffer solutions to existential needs on the individual and societal scale. Most of the proposals to gear Africa towards being developed point at education and leadership as the two main points. The liberation of the human mind is priceless when it is allowed to explore the gifts of nature of societal growth. The framing and understanding of political ideologies are better applied when individuals can, of their own thinking, evaluate and conceive the impact of those ideologies as individuals in a society. There will be no ‘parade’ of the material things as the hub of development for the populace. Africa has for so long treated development as an external conferment by the developed countries. Political leaders have yet to understand that importation of gadgets and machines will not solve the development problem of Africa if the people are not involved in governance and are not listened to. Most African countries are in a dilemma of feasting on the development of other societies and living in an existential state that is, if not against human nature, not geared toward human flourishing. Given the political climate, which is full of anomalies but unfortunately celebrated by those who need intellectual liberation, the development in Africa must be an end that is desired, not just for the economic interest but also that it is morally sought after as a good. References Adepoju, A. 1976. Migration and Development in Nigeria, Manpower and Unemployment Research, 9(2): 65-76 Ani, E.I. 2017. Three Objections to Gyekye’s Functionalist Conception of Development, African Studies Quarterly, 17(1): 2 Awolowo, O. 1976. The Problems of Africa: The Need for Ideological Reappraisal. London: Macmillan Chukwuokolo, J.C. 2012. Evaluating the Philosophical Foundations of Development Theories, Open Journal of Philosophy, 2(4): 224 Gyekye, K. 1988. Development: A Brief Philosophical Analysis, In The Unexamined Life: Philosophy and the African Experience (expanded edition). Ghana: Sankofa Publishing Legon Mabogunje, A.L. 1965. Urbanization in Nigeria: A Constraint on Economic Development, Economic Development and Cultural Change, 13(4): 413-438 Nyerere, J. 1968. The Purpose is Man, In Ujamaa: Essays on Socialism. London: Oxford University Press Nyerere, J. 1973. Freedom and Development. London: Oxford University Press Sen, A. 1999. Development as freedom. Oxford: Oxford University Press - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2024 Print ISSN: 2960-1541 Online ISSN: 2960-155X Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JANUARY 2024 by Prof William Gumede Abstract Special Economic Zones (SEZs) in South Africa have not fully lived up to their potential – as has been the case in many African countries – to create jobs, beneficiate raw materials, develop new industries, and transfer skills and technology from foreign companies. This paper looks at the global impact of SEZs and the critical factors that lead to either their success or failure. The paper finds that the location of SEZs is no longer a comparative advantage, meaning SEZs will have to be internationally competitive. Their success and competitiveness pivots on SEZs being a well-thought-out part of a national development, growth, and industrial plan. There must be a business case for SEZs – they cannot be established based on political, ideological, and interest-group considerations. They must be governed competently, honestly, and according to consistently implemented laws. They must also operate in ways that safeguard the environment and human rights, especially of the local communities. SEZs must resolve Africa’s industrialisation and technology challenges, by linking African products to global value chains, producing export industries, and securing new technology and skills. Unless SEZs can help African countries accomplish all these important tasks, there is really no business case to establish them. Introduction Special economic zones (SEZs) can still play a critical role in developing new industries, beneficiating raw materials, and diversifying South Africa’s exports. That is, if they are linked to the overall national development strategy, done in full partnership with business, and freed from the public sector’s governance problems – such as incompetence, corruption, and inefficiency – which have stymied SEZs up to now. SEZs, which are also termed export processing zones, free trade zones and free ports, are geographically demarcated areas which governments dedicate to specific industrial development by giving fiscal incentives, regulatory exemptions, and public infrastructure support (Aggarwal, 2008; Asian Development Bank, 2007; Cirera & Lakshman, 2014; Farole & Akinci, 2011; Fruman & Zeng, 2015). It is a key policy tool many high-growth economies in Asia have used to build manufacturing, export capacity, and lift economic growth (IFC, 2016; ILO, 1988; Ishida, 2009; Jayanthakumaran, 2003). The South African government has adopted as a policy objective the establishment of regional industrial zones – Special Economic Zones and Industrial Parks (IPs) – and corridors (Gumede, 2022a; Gumede, 2022b). The SEZs and IPs are recognised amongst the tools that are catalytic economic drivers in regional economy ecosystems. They drive continuous attraction, promotion and retention of direct domestic and foreign investment to achieve transformative industrialisation and sustainable economic growth in South Africa, especially in underperforming regions (Jayanthakumaran, 2003; Johansson & Nilsson, 1997; Cirera & Lakshman, 2014; Litwack & Qian, 1998; Rhee et al, 1990; Rodrik, 2004; Zeng, 2017; UNCTAD, 2019; UN ESCAP, 2019; UNIDO, 2015). The first industrial SEZ was established in 1959 in Shannon, Ireland. The country established the Shannon Free Airport Development Company, a development agency, to establish an industrial free zone, to generate alternative sources of traffic, business and tourism at the Shannon airport and adjacent area. Investors were given special tax concessions, simplified custom operations, and cheap investment attractions. The area was transformed into an air training base, maintenance and repair centre, and a tourist attraction. Global impact of SEZs According to the International Labour Organisation (ILO), by 2007, SEZs accounted for US$851 billion-worth of exports – which is around 41% of global exports – and for 68 million direct jobs created (ILO, 1988). Clustering infrastructure, industries, and public goods in one specific region, means that a country can leverage scale to build a critical mass of related, complementary, and synergetic value chain components that need similar skills, technologies, and market links. This forms an ecosystem that boosts economic development, attracts investment, and fosters an environment for innovation. Companies share resources, costs, and infrastructure. The overriding idea is to concentrate limited public funds, resources, and infrastructure on developing or establishing new industries with the help of private sector investment, skills, and technology. Importantly, as Douglas Zhihua Zeng (2017) argues, SEZs “should only be used to address market failures or binding constraints that cannot be addressed through other options. If the constraints can be addressed through countrywide reforms, sector-wide incentives, or universal approaches, then zones might not be necessary”. If successful, SEZs could provide positive spillovers to the rest of the economy. These spillovers can be direct or indirect. The direct impacts are rising economic growth, new manufacturing industries, and beneficiation (Jayanthakumaran, 2003; Johansson & Nilsson, 1997; Cirera & Lakshman, 2014; Litwack & Qian, 1998; Rhee et al, 1990; Rodrik, 2004; Zeng, 2017; UNCTAD, 2019; UN ESCAP, 2019; UNIDO, 2015). It boosts employment, increases local and foreign exchange income. It brings new technology, innovation and skills, and diversifies the economy. It increases the productivity, efficiency and competitiveness of local companies, the productivity of local labour, and the income of local citizens. Figure 1: The growth of SEZs around the world since 1975 (UNCTAD, 2019 SEZs Report) Why do countries establish SEZs SEZs are established because governments lack the skills, resources, and capacity to introduce nationwide reforms to establish conducive environments for investment attraction, industrial upgrading, and infrastructure development. Furthermore, as Douglas Zhihua Zeng argues, governments also established SEZs because they lack the capacity to tackle vested interests, capture, and political opposition to country industrialisation reforms, and then implement it on a smaller, more protected and ring-fenced scale, through SEZs. If a country lacks effective state capacity, public services, and infrastructure such as power, water and transport, SEZs – located in a smaller geographical area – could offer an opportunity to use the limited state capacity, public services and infrastructure to potentially great impact, which could catalyse other parts of the economy. However, if investments can be attracted, industrialisation fostered and technology, knowledge and skills acquired through normal policy avenues, incentives, and state-business partnerships, SEZs are not necessary. SEZs must only be established if constraints such as government corruption, incompetency and red tape cannot be addressed speedily in the broader economy, and SEZs then are established as smaller protective zones where these governance failures are absent. A critical part of the success of SEZs is that they need to be part of the overall national industrial strategy of a country – they must be exempt from the inefficiencies, corruption and mismanagement normally associated with developing country governments and must respond to real market demands (Warr, 1989; Watson, 2001; White, 2011; Wolman, 2014; Zeng, 2017). Some of the purposes of SEZs are to create new industries that do not exist at the time, beneficiate raw materials and so create new value-add industries, attract foreign investment when it is difficult to do so under normal circumstances, and to develop an export economy. SEZs can also be specifically established to transfer new technology, knowledge, and skills that the country lacks, but are critical to industrialisation. The SEZ is almost an incubator, where experimenting, manufacturing, innovation, and learning can happen behind protective barriers – and the final product then exported to global markets. SEZs have been crucial in skills, technology and knowledge transfer and industrial upgrading from basic to value added industries in South Korea, Taiwan, and Singapore. Dubai created a successful Dubai Internet City SEZ, which attracted the world’s largest technology companies, such as Microsoft, Oracle, and IBM. Dubai also created universities as special economic zones, bringing in foreign universities, teachers, and technology to accelerate skills transfer, technology upgrading and innovation (Khaleej Times, 2019). Africa, Morocco, and Nigeria set up SEZs to penetrate the European Union market (Bräutigam & Tang, 2010; Farole, 2011; Fruman & Zeng 2015). Rwanda set up SEZs to manufacture new products for exports. Within three years, 3% of Rwanda’s workforce were employed in its new SEZ. Mauritius set up SEZs to produce processed sugar for export. Such was the Mauritian success, that when the sugar industry was at its peak, the country dominated 50% of the EU market for processed brown sugar (Bräutigam & Tang, 2010; Serlet, 2022). The SEZs must be a zone of competent management, corruption-free, devoid of public sector red tape, and effectively integrated within local and global markets. SEZs must have a specific industrialisation purpose and must not become a collection of subsidised warehouses that create jobs artificially at great cost, as has been the case in many failed SEZs in Africa and South Africa. Many researchers worry that SEZs may only develop certain parts of a country, creating “enclaves”, and the impact will not be transferred to the wider economy. The rise of SEZs Taiwan in 1966, Singapore in 1969, and South Korea in 1970 were amongst the first to create SEZs (Asian Development Bank, 2007). Both Singapore and South Korea established SEZs to use their cheap and available labour, to foster labour-intensive, export manufacturing industries and attract foreign investment – based on giving investors incentives for setting up these industries (Lall, 2000). Singapore established SEZs to build a transhipment trade hub, removing goods and service taxes on products. By the 1970s Singapore created specialised SEZs, particularly to build the petroleum refinery-related industry (Koh, 2006). Singapore has established more than 400 companies trading in petroleum and related products since it established its first SEZ in 1969. For another, the creation of the petroleum refinery-related industry has spurred associated and related petroleum business, including professional services, research and development, and marketing and sales. After the Asian financial crisis, these East Asian states changed the focus of their SEZs, as economic circumstances changed, to industrial upgrading, productivity increases and innovation (UNCTAD, 2019; UN ESCAP, 2019; UNIDO, 2015). They moved their SEZs from low-skilled, low-cost labour to value added activities and technology – these economies now had developed high-skilled workforces, for high-skilled labour. For example, these countries introduced technology, biotechnology, science, and software SEZs. China successfully used SEZs as zones of experimenting to develop the market system, while building new industries the country did not have and learning new technologies it lacked. China launched its “Open Door” reforms in 1978 to introduce market reforms in selected regions, in what former Chinese leader Deng Xiaoping called “crossing the river by touching the stones” (Shen & Xu, 2011; Sklair, 1991). The Chinese SEZs were zones where the usual government red tape, corruption and ideology were set aside, focusing on securing foreign investment by giving incentives, attracting new technology and knowledge. The Chinese SEZs built new industries, created new jobs and new export industries (Shen & Xu, 2011; Sklair, 1991). It fostered positive spillovers to the economy – new knowledge, new technology, and new management techniques were transferred to other parts of the economy, which lifted economic growth, development, and the country’s competitiveness (Shen & Xu, 2011; Sklair, 1991). It is estimated that SEZs have contributed to 22% of China’s GDP, 41% of the country’s foreign direct investment, and 60% of its exports. China’s technology commercialisation rate is around 10%. However, in SEZs the technology commercialisation rate is around 60%. SEZs in Africa There are an estimated 237 SEZs in Africa, found in 38 countries (Farole, 2011; Fruman & Zeng, 2015). Mauritius introduced Africa’s most successful SEZs. In 1970, the country established its first SEZ to manufacture textiles and garments, food and beverages, and batteries for export. In the Mauritius export processing zone, companies are free to locate anywhere on the island. Mauritius’ 1970 Export Processing Act broke from the typical post-colonial African import substitution strategy to one of an export-led industrialisation strategy. Mauritius was more successful than many African countries in that it focused on export-led growth, and the SEZ was part of its export-led industrialisation strategy, not a standalone policy like in many African countries where SEZs have had pedestrian results (Bräutigam & Tang, 2010). Mauritius allowed duty-free imports of inputs meant to be used to make products for export. The country gave tax holidays to exporters. Exporters were given reduced rates on power, water and building materials – charging rates similar to international competitors. Domestic companies who were exporters received credit from banks at lower interest rates. The Mauritian government was careful to push labour-intensive production, to soak low-skilled unemployment. Cheaper credit was calibrated in such a way that companies did not shirk labour-intensive for capital-intensive production, because of the cheaper capital available. Mauritius’ priority was to get manufacturing going in the country – whether it was foreign owned or not – transferring knowledge, technology, and skills, and so, fostering positive spillovers to the rest of the economy. Mauritius placed no restrictions on foreign ownership of manufacturing companies – unlike many countries in post-colonial Africa. The country has been governed more pragmatically than almost all African countries, by spending more attention on building and maintaining reliable infrastructure. Mauritius, governed for most of its postcolonial history by coalitions, has been Africa’s most stable country – it has managed its public finances prudently and is amongst the least corrupt – which is an immediate attraction for investors (Gumede, 2022a). The country also prioritised making its public service competent. The SEZs were governed competently, honestly, and pragmatically. By 1988, employment in Mauritius’ SEZs was 85% of total manufacturing employment and 31% of total country employment. By the late 1980s, value add produced in SEZs made up 12% of GDP. More recently, Ghana, Ivory Coast, and Nigeria were successful in processing cocoa through SEZs, by partnering with Western companies to co-produce chocolate, the value-add of cocoa, for export, rather than exporting raw, unprocessed cocoa (Gumede, 2022a; Gumede, 2022b). The value-add chocolate creates more jobs, and earns more money, than the raw commodity cocoa. Morocco and Nigeria have also recently established successful SEZs in partnership with foreign investors to penetrate the European Union market. Rwanda has successfully established SEZs in partnership with industrial country companies to manufacture new products for exports. SEZs in South Africa: The Tshwane Automotive SEZ The ANC government has adopted the policy of SEZs as one of its pillar strategies to lift growth, boost investment, and increase job creation (Majola, 2023). The South African SEZ programme started with the Industrial Development Zone policy review in 2007 by the Department of Trade, Industry and Competition (the dtic). The SEZ Act stipulates that SEZs should have a feasibility study and business case. Most of South Africa’s SEZs are state operated. There are 11 designated SEZs, with nine fully operational. They have attracted 167 operational investors, with total private investment of R21,9 billion, and created almost 20 000 operational jobs. The SEZs include Saldanha Bay in the Western Cape, Dube Trade Port and Richards Bay in KwaZulu-Natal, East London and Coega in the Eastern Cape, Maluti-A-Phofung in the Free State, Musina Makhado in Limpopo, and Tshwane Automotive in Gauteng. The Tshwane Automotive SEZ launched in South Africa in 2019 appears to offer the prospect of being a model SEZ. It secured and was driven by a private sector anchor, Ford Motor Company. The company invested over R15 billion to produce the next generation of Ford Rangers. Ford, the national and provincial governments, and the City of Tshwane are co-governing the SEZ in a public-private partnership. Ford is represented on the management board of the entity, which includes representatives of the dtic, Gauteng Department of Economic Development, and the City of Tshwane. Staff from the Eastern Cape SEZ, Coega, were deployed to assist in the establishment of the Tshwane Automotive SEZ. This is one of the rare occasions where all spheres of government are involved in a governing partnership with the private sector. The Tshwane Automotive SEZ was co-designed from the start with Ford and has been given clean audits since its inception. The government has spent R2 billion on the project, with material inputs for the production aimed at 45%. The SEZ will, in cooperation with Transnet, develop a rail-to-port corridor for vehicle and components exports – which will include Tshwane and Gqeberha, in the Eastern Cape – the completion of which is a critical component that will determine the success of the SEZ. Figure 2: Special Economic Zones in South Africa Critical success factors for SEZs Before a country establishes SEZs it must put together a national industrialisation, economic growth, or long-term development plan (Aggarwal, 2008; IFC, 2016; ILO, 1988; Ishida, 2009; Jayanthakumaran, 2003). Such a plan must be based on an analysis of the state of the country’s economy, its development needs, and its human capital. There must be an assessment of the comparative advantages – the resources – the country has, what it can do with domestic resources, capital, and skills, and what will need to be built with outside help. Related to this, there must be a comprehensive analysis of the country’s comparative position in the global economy, trade, and supply chains. A central pillar of any country’s industrialisation, growth and long-term development strategy is how to build local production capacity (Aggarwal, 2008; IFC, 2016; ILO, 1988; Ishida, 2009; Jayanthakumaran, 2003). Establishing SEZs, for example, could be a mechanism to build local production capacity through attracting foreign investors to the SEZs and then getting them to upgrade local production capacity, by partnering, transferring technology, skills and knowledge, and sourcing inputs from local firms. There must be clear reasons for the establishment of SEZs, including how they fit into the national industrialisation, development, or long-term country economic growth plan (Gumede, 2022a; Gumede, 2022b). For example, if the intention is to attract foreign direct investment – which the country cannot do through traditional methods – the objective of attracting investment through the SEZs must be integrated into the country’s economic growth plan. There must be a business case for SEZs (Zeng, 2017), meaning there needs to be a global demand and a market for the products manufactured in the SEZs. SEZs must be embedded in the comparative advantage of the country. They cannot be established based on political, ideological, and interest-group considerations. It is crucial that SEZs form part of a country’s national long-term development or industrialisation plan, rather than operating as standalone job creation exercises. Once the business case for SEZs has been made, there must be an assessment of the implications of establishing them for existing businesses, institutions, and policies. After this, SEZ laws, policies, and supporting and governing institutions will have to be created. Well-thought out, pragmatic and credible laws, regulations, and institutional frameworks are crucial to govern SEZs. Governments must implement these consistently, honestly, and competently to foster investor, market, and society confidence that SEZs are not simply going to be another avenue for corruption, self-enrichment, and failure (Gumede 2022a; Gumede 2022b). The business environment must be conducive, efficient, and friendly. The costs of doing business – registration, logistics and customs – should be conducive to companies setting up. The public infrastructure – power, rail, and water – for SEZs must be working, reliable, and cost effective. Poor, unreliable or lack of infrastructure is a significant factor increasing the costs of doing business, global pricing competitiveness of products manufactured and of labour utilisation. Sound infrastructure is a vital competitive advantage for investors to set up shop in an SEZ – without it, it makes no sense. SEZs must also be linked to the supply chains of local industry (Jayanthakumaran, 2003; Johansson & Nilsson, 1997; Cirera & Lakshman, 2014; Litwack & Qian, 1998; Rhee et al, 1990; Rodrik, 2004; Zeng, 2017; UNCTAD, 2019; UN ESCAP, 2019; UNIDO, 2015). Local firms must provide the inputs, material, and services to the companies in the SEZs. If local firms do not have the capacity to do so, it will be crucial for governments to also provide them with assistance, incentives, and rebates to enable them to link into the supply chains of the SEZ firms. Doing this considerably maximises the positive spillover effect of SEZs. South Korea, Taiwan, and Singapore, for example, provide tax rebates, technical assistance, and infrastructure subsidies for local companies to their SEZs, to foster backwards linkages between SEZ companies and local ones. In addition, there must be a clear strategy of how local firms will be linked to the supply chains of the global firms in the SEZs (UNCTAD, 2019; UN ESCAP, 2019; UNIDO, 2015). Many global firms buy more than half of their inputs from other firms and outsource their manufacturing to other smaller firms. In such cases they only retain design, marketing, and research and development functions. It is important that, as part of the industrialisation strategy, a country encourages global firms attracted to the SEZs to source their inputs locally. And if local companies do not have the capacity to produce inputs for global companies, the SEZ strategy must outline how the capacity of local firms could be built up with the support of foreign investors. This would usually involve incentives being given to foreign players to build the capacity of local suppliers through transferring skills, technology, and providing financial support, where necessary. Governments must actively intervene to overcome market failures in the value chains linking local suppliers to that of international investors (Jayanthakumaran, 2003). For example, local suppliers may not know about the opportunities available to produce inputs for international companies. At the same time, the international companies may not know of the existence of local companies with the capacity to provide inputs for their products. In some cases, the inputs of local companies may be of too poor a standard or too costly for global firms. Government SEZ policy must then provide tools to help local firms to produce quality inputs at affordable prices for global investors. Also, in many cases developing country hosts of SEZs employ predominantly unskilled citizens because educational institutions are weak, ineffective, and under-resourced. The SEZs can be a catalyst to establish new training institutions, research, and development centres, and to upgrade existing ones. There must be clear monitoring, evaluation, and assessment mechanisms to ensure that SEZs are on track to meet their stated objectives (Gumede 2022a; Gumede 2022b). There must be benchmarking of SEZs against comparable successful ones elsewhere, and mechanisms need to be in place to intervene if they are in danger of veering off course. Those managing SEZs must be held accountable for delivering on the stated objectives of the entities. China, for example, in 1996 issued an official administrative decree for the compulsory regular evaluation of SEZ performance: SEZs that are poorly managed, not meeting their development targets, and growing too slowly lose their SEZ status. Chinese SEZs are evaluated based on several performance indicators, including knowledge creation and technological innovation – which are measured based on how much the education level of employees has been uplifted – R&D expenditure, the number of R&D institutions and technology innovation incubators established. Another performance indicator is the level of industrial upgrading and how structural optimisation capabilities have been boosted, which are measured by the number of new high-tech companies created, the number of services firms established, the number of intellectual property registrations, and the number of listed companies attracted to the SEZ. The SEZ performance in China is also measured based on how local companies developed in the SEZs penetrate international markets and fare in global competition, by the ratio of their employees who have received education abroad, and the number of intellectual property registrations lodged abroad (Asian Development Bank, 2007). The Chinese SEZ performance is also measured in relation to companies’ sustainable development capacity increases, by way of looking at the number of employees with master’s and doctoral degrees, the increases in taxable revenues, the growth rate of the companies, and the amount of new investment undertaken. SEZs could be fully government or business owned or could be public-private arrangements. In developing countries, the SEZs that have been fully government owned have mostly failed – as all the governance failures of the public sector, such as corruption, incompetence and red tape are also repeated in the SEZs, making them unviable. Public-private arrangements, in which the private sector co-govern and co-manage, have generally been the most successful. An effective, competent, and pragmatic management structure is crucial in managing an SEZ, and sound operational management skills are vital to its success. Many SEZs in African countries and in South Africa fail from the same lack of implementation and execution management capacity found in their public sectors – especially if the same incompetent public sector managers are operating the SEZs. It is also important that the SEZs’ good infrastructure development is from time to time transplanted to the wider region in which they are situated. This means that the infrastructure built for the SEZs must be part of an integrated public infrastructure development programme, whereby the SEZs’ public infrastructure investment would be the anchor of broader infrastructure expansion. Another point is that SEZs are often giant industrial structures that could damage the environment significantly. Therefore, the construction and management of SEZs must be done in such a way that it protects the environment, which many first generation SEZs neglected. Many are now trying to clawback environmental destruction in the wake of mass industrialisation that took place without taking the environment into account. It is very important that SEZ investors be required to report on environmental, sustainability and governance (ESG) performance. Many of the first generation SEZs’ construction also rarely consulted with local communities, civil society, and interest groups. It is essential that new SEZs do not repeat this mistake. If a site chosen to construct the SEZ involves uprooting local communities, acquiring their land and property, the process must be done in consultation with them, fairly and compassionately. Consultations of local communities, civil groups and interest groups are also essential in identifying the local comparative advantages and to link the SEZ investor activities with local input, material, and services – and so, crucial to maximising the positive spillover effect of the SEZs. Why SEZs have failed in many African countries Some SEZs in African countries have failed for the same reasons that development has failed in these countries (Farole, 2011; Fruman & Zeng, 2015). These reasons include SEZs not being integrated as part of a national growth, industrialisation, or long-term development strategy. SEZs are often set up for ad hoc policy objectives, such as only job creation or only attracting foreign investment. In Africa, only Mauritius, Rwanda, and Morocco made SEZs part of their national development strategies. In many African countries, SEZs are often set up for ideological, patronage, and corrupt reasons – and without making a business case. In many cases African governments established SEZs without having anchor private sector investors, with the exception of Mauritius, who was successful with its SEZs in developing a processed sugar export industry because the government partnered with European processing companies. African SEZs have not prioritised linking industries to global value chains (Jayanthakumaran, 2003). They also have not prioritised using SEZs to develop new industries for export. Neither have African countries used SEZs to add value to the primary commodities they export, or to upgrade their countries’ skills, industrial and technology bases. Projects are often not decided based on a business case, but rather on which company gives the largest kickback. A case in point, the CEO of South Africa’s Dube Port SEZ was suspended because of alleged corruption. Many African and South African SEZs are not internationally competitive – and are economically non-viable. To add insult to injury, the public sector governance failures – such as incompetence, corruption, and inefficiency – that often undermine development, delivery and efficiency in South Africa and African countries, are often replicated in SEZs. These problems have stymied SEZs and continue to do so. The legal, regulatory, and institutional structures of SEZs are often lacking or poorly defined – open to different interpretations or not consistently implemented. Furthermore, in some cases, although national governments decree SEZs, they in many instances do not give them the financial, infrastructure or political support they need. New governments, whether national or provincial, often withdraw support for SEZs established by their predecessors. Furthermore, SEZs in African countries often take a long time to put legal, regulatory, and institutional structures in place – and sometimes even longer to operationalise. Incentives are regularly either uncompetitive or overgenerous, undermining local industry outside the SEZs. Business procedures are slowed down by red tape, and special customs and tax are incoherently applied. Governments often do not have an adequate understanding of the requirements of businesses they want to invest in the SEZs. Many African and South African SEZs start without any anchor business investor, which means that the state is the anchor or biggest investor. In South Africa, the most successful SEZ is the Tshwane SEZ, which started with an anchor investor, the Ford company. Public infrastructure in African and South African SEZs is often as bad as in other parts of South Africa, with the supply of power, water, rail, roads, ports, and internet frequently not consistent. This makes it unproductive for investors to set up in SEZs – as the cost of infrastructure is a determining factor. In South Africa, and in many African countries, the governance management structures of SEZs are in many instances run solely by the state – and the corruption, incompetence, and mismanagement that is found there is oftentimes replicated in the SEZs. One of the reasons for the success of the Tshwane SEZ has been the partnership between the government and the private sector, where both co-govern the management structure. Many African and South African SEZs are not linked to their domestic economies, but operate largely as enclaves, disconnected from the national economy and local businesses (Litwack & Qian, 1998). Investors in SEZs are also insufficiently linked to local suppliers. And there are for the most part no special efforts to strengthen the capacity of local suppliers who may not have the capacity to deliver inputs to foreign companies in the SEZs. For another, SEZs also often do not integrate primary, secondary, and tertiary industries into the investor supply chain. Unlike in China, Singapore, or Taiwan, African and South African SEZs regularly do not integrate the boosting of research and development into the industrial value chains of companies in the SEZs (Zeng, 2017). The technical learning, knowledge transfer, and industrial upgrading is therefore not as effective as it has been in many Chinese, South Korean, or Singaporean SEZs. This means that the positive spillover effects of SEZs are absent or minimised. Many African and South African SEZs have faced opposition because they were constructed on sites where local residents had to be forced off their land, moved out of their homes, and their ancestral and historical sites disturbed. This has led to local communities often being hostile to SEZs in their areas. For example, communities opposed the construction of the Makhado, in Limpopo, and Dube Port, in KwaZulu-Natal, SEZs over allegations that their land rights had been trampled on. It is therefore crucial that land, property, and historically sensitive site disputes with local communities over the location of SEZs are resolved in a participatory manner. More importantly, SEZs must not be located on sites where it involves displacing communities, expropriating their property, and desecrating their historical sites. SEZs: Policy lessons for South Africa There has to be a solid business case for creating an SEZ. However, many of South Africa’s SEZs have been established without a credible business case. In 2001, the government established the Coega Industrial Development Zone in Gqeberha to create an integrated steel producing hub. The steel hub was not based on a business case that looked at global demand over the coming years. Not surprisingly, the government struggled to attract initial anchor business investors. The business case for the Musina Makhado SEZ in Limpopo is also not clear. The Musina Makhado SEZ is supposed to be an energy metallurgical cluster centred around a coal cluster, which consists of 20 interdependent industrial plants, including ferrochrome, ferromanganese, stainless steel, high manganese steel and vanadium steel, thermal, coking, coal washery and lime, and cement plants. The Limpopo provincial government said 11 memorandums of understanding have been signed with the Chinese government for investment of around US$1.1 billion. The government said 70% of what would be produced will be exported to China. But there is a real danger that the Musina Makhado SEZ may not align to global demand, so crucial to the success of any SEZ. In September 2021, China’s President Xi Jinping (Volcovici, Brunnstrom & Nichols, 2021) told the United Nations General Assembly that China will not build any new coal-fired power projects overseas, in support of increasing its green and low-carbon energy footprint in developing countries – which raised questions around building a coal cluster SEZ in Limpopo based on exports to China. The South African government often takes a long time to put legal, regulatory, and institutional structures in place for SEZs – and sometimes even longer to operationalise. When finally in operation, business procedures are slowed down by red tape, and special customs and tax are incoherently applied. In comparison, the Hamriyah Free Zone in Sharjah, in the United Arab Emirates could grant a license to establish a business within 24 hours of submitting all the required documents. The problem is that South African national, provincial or city governments often do not have an adequate understanding of the requirements of businesses they want to invest in the SEZ. The government services provided for SEZs are also frequently not tailored for the investors they want to attract. Then Trade and Industry Minister Rob Davies announced the formation of the Musina Makhado SEZ in 2017. However, the project has yet to get off the ground. In March 2021, the Limpopo Economic Development and Tourism Department temporarily stopped the project, saying its environmental impact assessment was “insufficient”. The project was also deemed not to have widely consulted with local communities, traditional authorities, and farmers. Countries face heavy competition for foreign investment, which can go anywhere in the world. This means countries cannot afford to give the same or a lesser value proposition to competitor countries. Despite this, incentives to attract private sector investors in South Africa are often uncompetitive. South Africa’s special economic zone tax incentive was introduced into the Income Tax Act, but it is overly bureaucratic compared to other countries’ SEZ tax incentives – for example, to qualify, the Minister of Trade and Industry and Minister of Finance must approve. Qualified companies can get a reduced corporate tax rate of 15% instead of the current 28% rate (SARS, 2018). Furthermore, companies could get an accelerated depreciation allowance of 10% on cost of any new and unused buildings or improvement owned by the qualifying company (SARS, 2018). Morocco, in comparison, has seven Special Economic Zones, with no corporate taxes for the first five years and significantly reduced rates thereafter (Böhmer, 2011). In Morocco, companies have exemption from building and equipment tax for the first 15 years, and goods entering or leaving the SEZ are not subject to laws on foreign exchange. Companies are also exempted from dividends and share taxes when paid to non-residents and a low tax rate of 7.5% if they are paid to locals. Morocco has built a successful aeronautics industry through attracting global aeronautics players to manufacture for export in the country – with the export industry now accounting for US$2 billion in export revenues. It is critical that SEZ industries are linked to the local enterprises – through market opportunities, access to finance, technology, and training (Rifaoui, 2021). Morocco has focused on building full industry ecosystems in the SEZs, using the SEZs to develop an export manufacturing sector in very specific areas. The country has, importantly, ensured that all the firms in the SEZs are industrially interconnected, linked to local players, and the products linked to global supply chains. In South Africa, Coega, after a slow start, has increasingly fostered linkages with local SMMEs. During the 2015-2020 period, there was a 35% SMME procurement participation rate (Coega, 2020). The Hamriyah Free Zone in Sharjah, in the United Arab Emirates, incorporates fiscal incentives, which include complete exemption from taxes, customs and commercial levies; and financial incentives, which include low rents and subsidised energy (Böhmer, 2011). Many global firms want infrastructure incentives to invest in SEZs (Rodríguez-Pose et al, 2022). South Africa not only generally does not offer generous infrastructure incentives, but the country’s infrastructure – power, rail, and ports – is also deteriorating, which is actually a disincentive to attract investors for local SEZs. The success so far of the Tshwane SEZ is instructive for other SEZs in South Africa. The Tshwane Automotive SEZ launched in 2019 was initiated by government securing a private sector anchor investor first – the Ford Motor Company – rather than government being the anchor investor. The Tshwane SEZ is co-governed in a genuine public-private partnership. Most SEZs in South Africa have been state-led and started without a private sector anchor investor. In the Tshwane SEZ, Ford, the national and provincial governments, and the City of Tshwane have been co-governing the SEZ in a public-private partnership from the start. Ford is represented on the management board of the entity, which includes representatives of the dtic, Gauteng Department of Economic Development, and the City of Tshwane. The SEZ has been given clean audits since its inception, and the government has spent R2 billion on the project. In South Africa, SEZs have not been integrated into a long-term development plan, industrialisation, or growth plan. Such a plan must be based on an analysis of the state of the country’s economy, its development needs, and its human capital. Related to this, there has to be a comprehensive analysis of the country’s comparative position in the global economy, trade, and supply chains. In fact, most of the SEZs in South Africa have been set up for ad hoc policy objectives, either by national or provincial governments, such as only job creation or only attracting foreign investment. Many of South Africa’s SEZs operate largely as enclaves, disconnected from the national economy and local businesses. Investors in SEZs are insufficiently linked to local suppliers. There are often no special efforts to strengthen the capacity of local suppliers who may not have the capacity to deliver inputs to foreign companies in the SEZs. For another, SEZs also often do not integrate primary, secondary, and tertiary industries into the investor supply chain. SEZs have also not been able to effectively upgrade South Africa’s skills, industrial and technology bases. Unlike in China, Singapore, or Taiwan, African SEZs also often do not integrate the boosting of research and development into the industrial value chains of companies in the SEZs. The technical learning, knowledge transfer and industrial upgrading in South African SEZs has therefore not been as effective as it has been in many Chinese, South Korean or Singaporean SEZs. This means that the positive spillover effects of SEZs are absent. The problem for South Africa is that SEZs have not delivered the volume of export manufacturing, value add production or employment as expected. Neva Makgetla writes that national government transfers to SEZs amounted to R1.1 billion in 2020-2021, from R600 million in 2013-2014, and after a peak of R1.7 billion in 2017-2018. However, Makgetla rightly says that these figures excluded provincial transfers, which for example in the Eastern Cape ran up to R500 million a year (Makgetla, 2021). According to the dtic figures, in 2021, Coega accounted for half of the private investment to SEZs, the East London IDZ accounted for 20% and the Dube Trade Port for 10% (dtic, 2021; Makgetla, 2021). Over the 2013 to 2019 period, manufacturing employment dropped by 3.7% and valued added manufacturing only rose 0.7% (Makgetla, 2021). Many of South Africa’s SEZs have frequently faced opposition because they were constructed on sites where local residents were forced off their land; or they were constructed without being sensitive to the environment (Buthelezi, 2022). This has often caused the SEZs to face community, court, and civil society challenges – making it difficult for them to get off the ground. There really needs to be greater consultation and involvement of local communities and environmental safeguards when sites for SEZs are identified. Conclusion The location of SEZs is no longer a comparative advantage, which means that SEZs will have to be internationally competitive. SEZs can only be successful and competitive if they are a well-thought-out part of a national development, growth, and industrial plan. There must be a business case for SEZs, based on the country’s comparative advantages, and they must be internationally and locally competitive. They have to be governed competently, honestly, and according to consistently implemented laws. SEZs have to be closely monitored, benchmarked, and have clear goals. They must be held accountable for their performance, and if they fail, they may have to in some cases be reduced as SEZs. They must also operate in ways that safeguard the environment, use green technology, and uphold human rights. SEZs must resolve Africa’s industrialisation challenges, including the inability since colonialism and apartheid to link African products to global value chains. In addition, Africa has not only struggled to add value to its primary commodities, but has also struggled to build manufacturing, diversify product offerings, and produce export industries. Africa has been unable to secure new technology, knowledge, and skills. The reality is that unless SEZs can help African countries accomplish all these important tasks, there is no business case to establish them. 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