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2023 | OriginalPaper | Buchkapitel

2. ESG in Africa: Relevance and Applicability

verfasst von : Karamo NM Sonko, Mariama Sonko

Erschienen in: Demystifying Environmental, Social and Governance (ESG)

Verlag: Springer International Publishing

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Abstract

This chapter lays out the case and argues for the relevance of ESG in Africa. However, it points out that norms of international practices and conventions applied in the developed countries must not be expected overnight in Africa. This includes attention to ESG, which (as stressed and proven in this book) is a new phenomenon, about which there is little knowledge at the moment. Nevertheless, the knowledge is growing and ESG can play a very important role in tackling the continent’s environmental, economic, and social challenges and, thus, enhance economic growth and benefit the private sector/businesses, communities and others in both the short and long runs. It draws attention to the possibilities that ESG offers for public–private partnerships for the national good, including the good of the businesses themselves, in Africa.

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Fußnoten
1
In fact, we maintain throughout this book that sustainability is for all, even individuals. This book is written with the world in mind and Africa at hand.
 
2
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3
For conceptual origins see Ben Purvis, Yong Mao and Darren Robinson (2019). For the triple bottom line approach see, for instance Andrew W. Savitz and Karl Weber, The Triple Bottom Line (revised and updated), Jossey-Bass 2013; John Elkington, Cannibals with Forks: The Triple Bottom Line of the 21st Century Business. New Society Publishers, 1998.
 
4
Maximiliano E. Korstanje, “Global Warming and Tourism: Chronicles of Apocalypse?” Worldwide Hospitality and Tourism, Themes, Vol. 4, No. 4 (2012): 332–335; for a critical analysis of the literature see Dale S. Rothman, and Duane Chapman, “A Critical Analysis of Climate Change Policy Research,” in Global Climate Change. The Economic Costs of Mitigation and Adaptation, ed. James C. White, William Wagner, and Carole N. Beal. Springer Link, 1991. https://​link.​springer.​com/​chapter/​10.​1007/​978-94-011-2914-5_​17.
 
5
The revisions started in 2020. For more information, see for instance, African Development Bank (AfDB), Roadmap and Work programme: Africa NDC Hub, AfDB, Abidjan 2018a; African Development Bank (AfDB), Report: African Nationally Determined Contributions (NDCs), Abidjan 2018b.
 
6
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8
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9
WMO, State of the Climate in Africa 2019. Geneva: WMO, 2020, Fig. 2, p. 6.
 
10
The State of the Climate in Africa, 2019 and 2020 reports, World Meteorological Organization (WMO), Geneva 2019 and 2020.
 
11
UN Migration Agency, “Climate Change Drives Displacement of Thousands of Vulnerable People in Somalia,” January 4, 2021, accessible at https://​medium.​com/​@UNmigration/​climate-change-drives-displacement-of-thousands-of-vulnerable-people-in-somalia-166171bb52c3, last visited September 18, 2022.
 
12
The State of the Climate in Africa 2019 report, World Meteorological Organization (WMO); FAO, “State of Food Insecurity in the World In Brief,” 2014, https://​www.​fao.​org/​3/​i4037e/​i4037e.​pdf, July 15, 2022; FAO et al., The State of Food Security and Nutrition in the World. Safeguarding Against Economic Slowdowns and Downturns. FAO, 2019 and 2021.
 
13
UN Climate Change, Climate Change Is an Increasing Threat to Africa. Bonn, Germany: UNCC, October 27, 2020. Also see Dimitiri Defrance et al., “Impact of Climate Change in West Africa on Cereal Production Per Capita in 2050,” Sustainability, Vol. 12 (2020): 7585, https://​doi.​org/​10.​3390/​su12187585.
 
14
The consumption of rice and wheat have expanded in Sub-Africa in per capita terms. In West Africa, for instance, it is now more than 60 kilogrammes per capita annually, on average, and more than the global average. Getachew Nigatu, James Hansen, Nathan Childs, and Ralph Seeley, “Sub-Saharan Africa Is Projected To Be the Leader in Global Rice Imports,” in USDA Agricultural Projections to 2026, ed. Erik O'Donoghue, and James Hansen, USDA Agricultural Projections to 2026. OCE, February 2017. Wheat consumption, as shown by imports, surged by 68% from 2007 to 2019; Michael King, “Wheat Consumption Rising in Africa,” World.Grain.com, https://​www.​world-grain.​com/​articles/​11655-wheat-consumption-rising-in-africa, July 15, 2022.
 
15
The State of the Climate in Africa 2019 report, World Meteorological Organization (WMO).
 
16
Haider A. Khan, and Karamo Sonko, “A Further Extension of Adjustment Models,’ in Economic Justice in Africa: Adjustment and Sustainable Development in Africa, ed. George W. Shepherd, and Karamo Sonko. Westport, CT: Praeger Publishers Inc., 1994.
 
17
In line with Norgaard’s observation with regard to sustainable development in economics, Fig. 2.1 shows that there are multiple efficient shows multiple solutions depending on the initial state of the distribution of rights or entitlements. For example, R. B. Norgaard, “Sustainability and the Economics of Assuming Assets for Future Generations,” World Bank Staff Working Papers, No. WPS832, 1992.
 
18
The approach is developed by Khan and Parvin (1984).
 
19
In an axiomatic approach to inequality comparisons, Fields and Fei introduce the three axioms in Gary S. Fields, and John C. H. Fei, “On Inequality Comparisons”, Econometrica, Vol. 46, No. 2 (March, 1978).
 
20
For mathematical convenience we use Rn. It should be noted that income can be expressed by integers through the smallest monetary unit available (e.g. counting by pennies). Accordingly, the rational numbers will suffice for normalization of income. For cardinal analysis, Fields and Fei include irrational numbers in X and exclude negative numbers, relative to us.
 
21
Debreu (1959) defines a reordering as a relation that is reflexive and transitive. Fields and Fei do not include reflexivity.
 
22
A. K. Sen, On Economic Inequality. Oxford: Clarendon Press, 1973, calls this expressively the axiom of anonymity.
 
23
Dalton terms Axiom 2 the “Principle of Transfers.” H. Dalton, “The Measurement of the Inequality of Incomes,” The Economic Journal, Vol. 30 (September 1920): 348–351.
 
24
The axiom of scale irrelevance is not as reasonable as the other two axioms. If material well-being is the ultimate object of inquiry, then the absolute level of income cannot be ignored. However, if the axiom relates to units of measurement, then this objection does not arise.
 
25
The three axioms are not sufficient for inequality comparisons in all cases. Some comparisons are ambiguous. See pp. 308 and 312–313 of Gary S. Fields, and John C. H. Fei, “On Inequality Comparisons,” Econometrica, Vol. 46, No. 10 (March 1978): 303–316.
 
26
Khan and Parvin, “Environment, Externalities and Income.”
 
27
Note that at this stage not all opportunity costs (e.g. earning loss due to illness) are included and all public goods are excluded.
 
28
It is known that families living in inner-city slums are subjected to a proportionally greater amount of negative externalities like crime, pollution, and noise.
 
29
It is possible to construct an increasing \({h}_{i}\) that could not violate our propositions, but that is not necessary.
 
30
See, for example, Daniel Hammermesh, and Albert Rees, Economics of Work and Pay. New York: Harper & Row, 1984, p. 285.
 
31
The case of the Sen Index (1974), for instance, has been discussed in Khan and Parvin, “Environment, Externalities and Income,” unpublished paper, University of Denver, 1990.
 
32
See H. A. Khan, “Japanese Foreign Aid,” Journal fur Entwicklungs Politik (1994).
 
33
Mckinsey Global Institute, “COVID-19 and Gender Equity: Countering the Regressive Effects,” July 15, 2020; Mckinsey Global Institute, “Women in the Workplace 2021,” September 27, 2021.
 
34
For Instance, in 2015, 36 IFC-supported financial intermediaries in Sub-Saharan Africa provided gender-disaggregated data which showed that the non-performing loans of the women borrowers were lower than the NPLs or those of the men. Saulo Teodoro Ferreira, Sub-Saharan Africa: IFC Financing to Micro, Small and Medium Enterprises. Washington, DC: IFC, n.d., p. 2, https://​www.​smefinanceforum.​org/​sites/​default/​files/​IFC_​Factsheets_​SSA.​pdf, March 28, 2022.
 
36
The definition of the youth is not standard. Although always defined according to the age, the age bracket or the lower and upper limits for what is defined as the youth may be different according to the author or organization. The most official definition is that by the UN “those persons between the ages of 15 and 24 years,” endorsed by the UN General Assembly in resolution 36/28 of 1981. See UN, Global Issues. Youth. https://​www.​un.​org/​en/​global-issues/​youth#:​~:​text=​Today%2C%20​there%20​are%20​1.​2%20​billion,cent%2C%20​to%20​nearly%20​1.​3%20​billion.
 
37
Camilla Rocca, and Ines Schultes, “Africa’s Youth: Action Needed Now to Support the Continent’s Greatest Asset,” Mo Ibrahim Foundation, available at https://​mo.​ibrahim.​foundation/​sites/​default/​files/​2020-08/​international-youth-day-research-brief.​pdf08/​international-youth-day-research-brief.​pdf, last visited 12 December 2021.
 
38
Rocca and Schultes (ibid.).
 
39
World Bank, Global Economic Prospects. Washington, DC: World Bank, June 2020.
 
40
42 African countries have free primary school education (UNESCO and BBC World Service, “Can Africa Afford Free Education?” January 27, 2016) (updated on: February 2, 2022). http://​uis.​unesco.​org/​sites/​default/​files/​documents/​universal-primary-education-in-africa-the-teacher-challenge-en.​pdf.
 
41
World Bank. Poverty and Shared Prosperity 2020: Reversals of Fortune. Washington, DC: World Bank. https://​doi.​org/​10.​1596/​978-1-4648-1602-4.
 
42
World Bank, Rural Population (% of Total Population)—Sub-Saharan Africa 2020. World Development Indicators. https://​data.​worldbank.​org/​indicator/​SP.​RUR.​TOTL.​ZS?​locations=​ZG, last visited March 20, 2022.
 
43
World Bank (ibid.); and World Bank, Global Economic Prospects, June 2020. Washington, DC: World Bank, 2020.
 
44
ILO, World Social Protection Report 2017–2019. Geneva: ILO, 2017, p. 194; also quoted in Suwun Rita Beri, “Extending Social Security Coverage to the Informal Workers in Cameroon,” Socialprotection.org, July 2, 2018.
 
45
ILO, “Social protection in Africa,” https://​www.​ilo.​org/​africa/​areas-of-work/​social-protection/​lang--en/​index.​htm, last visited March 29, 2022.
 
46
ILO, Social Protection for Older Persons: Key Policy Trends and Statistics. Geneva, 2014.
 
47
International Labour Organization (ILO), “More than 60% of the World’s Employed Population are in the Informal Economy,” Newsroom, April 30, 2018, https://​www.​ilo.​org/​global/​about-the-ilo/​newsroom/​news/​WCMS_​627189/​lang--en/​index.​htm, last visited March 24, 2022.
 
48
AUDA-NEPAD African union development agency, Mobilising $1 for the Realisation of $5 towards the benefit of Member States’ Project Implementation. Resource Mobilisation Strategy 2021–2024 to Support Africa’s Development. Johannesburg: African Union Development Agency—NEPAD, n.d.; NEPAD, “Launch of 100,000 SME’s for 1 Million Jobs by 2021 Campaign,” Africa Renewal, September 20, 2019; UNIDO, “Report on the Third Industrial Development Decade for Africa (IDDA III) Report by the Director General,” March 18, 2021.
 
49
U.S. Mission to the African Union, “USAID, DFC and AUDA-NEPAD Collaborate on the ‘100,000 MSMEs’ Initiative,” June 21, 2021, https://​www.​usau.​usmission.​gov/​msmes-initiative-062121/​, April 4, 2022.
 
50
ANA, “SME: BADEA launches Africa MSMEs Global Coalition,” November 8, 2022, https://​www.​africanewsagency​.​fr/​sme-badea-launches-africa-msmes-global-coalition/​?​lang=​en.
 
51
Sidi O. Tah, “Promoting Micro, Small and Medium Enterprises (MSMEs) in Africa: A Holistic Approach Is a Must!” https://​www.​theafricareport.​com/​a-message-from/​badea/​arab-bank-for-economic-development-in-africa/​promoting-micro-small-and-medium-enterprises/​, last visited March 26, 2022.
 
52
Mariama Sonko, “ESG: Relevance and Applicability in Africa,” Webinar for Senior Staff of the Arab Bank for the Economic Development of Africa (BADEA), July 10, 2021.
 
53
Independent Evaluation Group, Financing Micro, Small, and Medium Enterprises An Independent Evaluation of IFC’s Experience with Financial Intermediaries in Frontier Countries. Washington, DC: IFC, 2008.
 
54
Ferreira (ibid.).
 
55
See Daniel F. Runde, Conor M. Savoy, and Janina Staguhn, “Supporting Small and Medium Enterprises in Sub-Saharan Africa through Blended Finance,” CSIS Briefs, July 7, 2021, https://​www.​csis.​org/​analysis/​supporting-small-and-medium-enterprises-sub-saharan-africa-through-blended-finance#:​~:​text=​In%20​the%20​developing%20​world%2C%20​SMEs,important%20​driver%20​of%20​economic%20​growth, last visited March 25, 2022.
 
56
Data collected and analysed from the beginning of August to the end of October 2022, through questionnaires distributed and completed on the spot by survey assistants to 207 Gambian companies; 41% of the entire registered membership of the Gambia Chamber of Commerce and Industry (GCCI), which statistically represents about 95% level of confidence with 5% margin of error. The survey team was led by Abdoulie D. Bah, Executive Director, African Youth Entrepreneurship Academy (The Gambia).
 
57
The World Bank, Poverty and Inequality Platform, https://​pip.​worldbank.​org/​home; Max Roser, and Esteban Ortiz-Ospina, “Global Extreme Poverty” (2013). Published online at OurWorldInData.org. Retrieved from https://​ourworldindata.​org/​extreme-poverty [Online Resource].
 
59
In an analysis, of the energy transition in Africa the International Renewal Energy Agency (IRENA) and the African Development Bank (AfDB) found that an integrated policy framework for the transition could attract a wave of sustainable energy investments to the continent which can in turn boost economic output by 6.4% (Renewable Energy Market Analysis: Africa and its Regions. Abu Dhabi: IRENA, 2022).
 
Metadaten
Titel
ESG in Africa: Relevance and Applicability
verfasst von
Karamo NM Sonko
Mariama Sonko
Copyright-Jahr
2023
DOI
https://doi.org/10.1007/978-3-031-35867-8_2