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Small Businesses In Africa Will Be On The Frontline Of Climate Change

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Climate change is going to have huge consequences all over the world, especially in Africa. Harvests will be affected, threatening agricultural outputs. This could hurt farmers and lead to greater food insecurity.

But there hasn’t been much discussion about what effects climate change will have in other areas – like in the continent’s small and medium business sector. This is a worrying oversight.

Our research, conducted in Zambia and Botswana, revealed that businesses activities faced major disruptions during the 2015/2016 El Niño event. This was a result of drought-related water supply disruption in Botswana’s capital Gaborone, and disruption to hydroelectricity supplies in Zambia’s capital Lusaka.

El Niño is one of the key drivers of variations in global climate conditions between different years. It recurs every two to seven years and it’s typically associated with reduced rainfall and drought conditions in southern Africa.

Reflecting this trend, the 2015/2016 El Niño was one of the strongest on record. It brought widespread drought conditions and heat waves to the region.

By impacting urban water and hydroelectricity supplies, this had major consequences for business activities in Gaborone and Lusaka, as our research shows. These cities’ experiences should serve as a warning for others across the continent, and systems should be put in place to protect particularly small businesses from the worst realities of a changing climate.

Under pressure

In Botswana, as lake levels in the Gaborone Dam dropped to historical lows, businesses in Gaborone experienced decreased water pressure. In some cases businesses were completely cut off from piped water supply.

Lack of water for food preparation, butchery, irrigation, laundry, cleaning and sanitation had dire consequences for businesses such as hotels and guesthouses, restaurants, food businesses and other service industries. Hairdressers and car washing enterprises, for instance, came to a standstill as they struggled to provide services to customers or to maintain hygiene standards.

In Zambia’s capital Lusaka, where hydropower accounts for 94% of the country’s electricity generation capacity, low lake levels in Lake Kariba contributed to unprecedented electricity blackouts, often lasting for eight hours at a time.

In Lusaka, activities reliant on electricity such as manufacturing, processing and communications were interrupted as equipment was immobilised. Assets were lost because they couldn’t be reliably heated or refrigerated. In both cities, supply chains were disrupted.

A video explaining the authors’ findings.

Infrastructure issues

Towards the end of 2016, as El Niño drew to a close, more than half of the 135 micro, small and medium enterprises we surveyed in Gaborone and Lusaka told us their profits would be lower than previous years. Almost a third believed that their business was at risk of closing down. Business owners said disruptions to water supply and power outages, in Gaborone and Lusaka respectively, were the greatest obstacles to them doing business.

The two cities’ experiences, alongside the widely reported “Day Zero” water situation in Cape Town, South Africa, should sound a warning for businesses elsewhere on the continent. Water shortages in Cape Town began during the El Niño, but extended into 2018 as drought conditions persisted.

Climate change events like droughts are only going to get worse – and urban centres where many small, medium and micro enterprises thrive will be in the eye of the storm. The 2015/2016 El Niño highlighted that even fairly moderate changes in rainfall can have major consequences for businesses in African cities.

More people are moving to cities, setting up businesses and connecting, often for the first time, to water and electricity grids. This increases demand and places pressure on existing water and energy infrastructure.

At the same time, a complex set of factors has limited the development of new infrastructure and the effective management of existing resources. This means cities are struggling to keep up with the increased demand.

These factors, which include under-investment in infrastructure, policy uncertainty, governance challenges and poor municipal service provision, exacerbated the effect of drought in Botswana, Zambia and South Africa.

Preparing for a new reality

So what can be done to address these realities?

First, action is needed across sub-Saharan Africa to increase understanding of the vulnerabilities in existing water, energy and urban infrastructure – alongside the effects of increasing urbanisation and a changing climate.

And, second, small and medium sized businesses, which are key drivers of economic growth across sub-Saharan Africa and provide many people with a livelihood, need more support from governments and policy makers to help them cope with disruption.

This should include better access to information about the timing and severity of anticipated disruption to water and electricity supplies, as well as support to invest in coping strategies such as alternative sources of energy.

  • Declan Conway: Professorial Research Fellow, London School of Economics and Political Science
  • Patrick Curran, a policy analyst at the Grantham Research Institute on Climate Change and the Environment, also contributed to this article.

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Quarantine Reflections: How Businesses Must Lead From The Heart Now

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Bisila Bokoko, born in the Equatorial Guinea, raised in Spain and now resident in New York as a businesswoman, communications consultant and motivational speaker, is a global citizen like no other.

Straddling these regions for her wine and sports retail businesses and a library project she is spearheading in Senegal, Bokoko has been on self-quarantine for the last four weeks in her Manhattan apartment, after a recent work trip to Spain.

Here, she sheds light on the Covid-19 crisis that she says has made her more reflective of how she needs to rethink her businesses. “It is an extremely confusing and challenging time with such a huge impact on everything,” she says. “Life is never going to be the same again.”

The coronavirus outbreak has changed the way we eat, shop and consume, she adds, with the most dramatic change happening in retail, because of changing values and new priorities.

“The center is going to be the human being, and the wellbeing of the human,” says Bokoko. “And this will not be from an individual perspective, but in relation to each other. We have to be a more collaborative economy, because how we are, will affect everyone else. As leadership, we now need to lead from the heart.”

In this FORBES AFRICA interview, Bokoko speaks to Managing Editor Renuka Methil, also about how the current crisis will throw up new opportunities for local African art and the fashion business.     

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New York On Lockdown

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As I walk through Brooklyn Bridge Park, gazing at the magnificent Manhattan skyline on the East River, at first glance it looks as crowded as it usually does. However, if you look closer, it’s not your typical mixture of tourists with their cacophony of foreign languages, photographers with tripods, or teenagers on skateboards. The park is filled with lone joggers, parents in yoga pants pushing double strollers and carefully guarding kids on scooters. No one plays volleyball in the sand by the river. No one picnics in the barbecue area. Everyone keeps a friendly and polite distance, some people wear face masks. And yet, it doesn’t really look like social distancing, or the lockdown that it is–ordered by the mayor and the governor of New York in an effort to contain the spread of the Coronavirus.   

That peaceful picture of joggers and children playing shouldn’t fool anyone. The five boroughs of New York City – Brooklyn, Queens, Manhattan, Staten Island and the Bronx  — are hit hard by the rapidly spreading Coronavirus. With the death toll rising – 678 patients had died in overcrowded New York City hospitals by March 28, and the number of cases in New York state has surpassed 53,000; the five boroughs of New York have become the epicenter of the pandemic. 

The healthcare system is overwhelmed. I spoke with four medical professionals in the city and they all confirm the disturbing reality that is in the news. The hospitals don’t have enough protective gear, single use masks have been reused, hospitals do not have enough beds and ventilators. Medical personnel intubate patients non-stop, assisting them with breathing. The city hospitals have set up makeshift tents to triage COVID-19 patients as well as to act as morgues. The government’s delayed response to the virus’s spread is costing many, many lives. 

One thing that is striking about New Yorkers – my home of seventeen years – is how people come together and support each other. After the terrorist attack on September 11, 2001; during the power outage in 2003, when the entire city went dark for hours; and after the devastating hurricane Sandy in 2012. 

On the day when Donald Trump was elected president in 2016, New Yorkers, predominantly liberal democrats, were especially sensitive with each other, calmly sharing their sadness and expressing worry for the future of their country. Today, when schools, non-essential stores, bars and restaurants are closed, and many people are isolating and trying to follow social distancing guidelines, members of communities come together to help each other: buying food for older neighbors, helping with disinfecting door knobs and elevator buttons. Mental health professionals volunteer their services to the anxious and scared. At grocery stores and pharmacies only a few people are allowed in at a time, people are waiting outside, standing about two meters apart, and the doormen pour out hand sanitizer into people’s palms. 

Besides solidarity and respect, there is also fear and anxiety. Service and food industry workers are out of work, facing months of hardships. According to the New York State Labor department, during the first days of the lockdown, in some parts of the state, there was a 1,000% increase in unemployment claims as 1.7 million people called to file for benefits. Well over a million children from financially strained families relied on school lunches, and those are now provided at meal sites. But that also means the disparity in incomes in New York has been underscored by the Covid 19 impact, and the inequality between the haves and have-nots will continue to be exposed.

Forbes headquarters in New Jersey has been working remotely since the first week of March. We quickly re-organized: the entire company of 400 people has migrated into a virtual workplace, with a highly mobilized virtual newsroom. Besides holding daily meetings and video calls, our teams get together for virtual hangouts to keep each other’s spirits up. 

The city authorities were slow to respond to the Covid-19 spread. For weeks, when it was clear the crisis was imminent, eight million New Yorkers commuted in crowded subways, went to crowded restaurants and bars, and also traveled to and from crowded international airports, breathing in each other’s air. 

In the absence of the pandemic team, fired by Trump in 2018, the federal government’s response was slow to respond to the disaster. The Trump administration failed to prevent this crisis underestimating the danger of Covid-19: “We have it totally under control,” he said in January, when the virus was already spreading. “It’s one person coming in from China, and we have it under control.” The government failed to test people in a timely manner. In New York,  Mayor Bill De Blasio and the governor Andew Cuomo stepped in and tried to help the hospitals secure supplies and additional testing stations. They are still trying.

Meanwhile, the city is contemplating closing parks and other public places. Maybe even prohibiting people from leaving their homes, or perhaps prohibiting them from leaving New York itself. For the next few weeks, the Big Apple will stay confined indoors. Stay home, don’t spread, save lives.

Katya Soldak, Forbes Staff, Business

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Here’s How Much It Could Cost If We Stop Social Distancing

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Topline: This week, President Trump floated the idea of easing up on social distancing measures on the theory that the damage caused by shutting down the economy might be greater than the cost of letting the virus run its course—some models suggest, however, that reopening the economy too soon could be exponentially more expensive.

  • If the United States were to abandon aggressive social distancing measures after 14 days, more than 125 million people will contract the virus, some 7 million could be hospitalized, and 1.9 million people will die (accounting for other factors like infectiousness and hospitalization rates), according to a model built by the New York Times
  • If social distancing goes on for two months, the model predicts that 14 million will contract the virus, with fewer than 100,000 deaths.
  • There’s no debate that the broader economy is going to suffer even at the current rate of spread. Morgan Stanley is predicting a 30% drop in GDP next quarter. U.S. GDP is currently $21.43 trillion. A drop of 30% would mean a value-loss of more than $6.4 trillion (for context, the economic relief bill signed by President Trump this afternoon is worth about $2 trillion). 
  • If the outbreak worsens due to relaxed social distancing measures, it’s not unreasonable to anticipate even greater economic losses.
  • Economists can calculate the average value of one life saved using a model called the value of a statistical life. It’s a fuzzy metric used by some government agencies that is based on how much a person is willing to pay to reduce the risk of death. Right now, that figure hovers around $10 million.
  • “If we could prevent a million deaths, at the usual way we value [them] of around $10 million each, that’s $10 trillion, which is half of GDP,” says James Hammitt, a professor of economics in Harvard’s health policy department. 
  • University of Chicago economists have arrived at a similar conclusion: they’ve found that under “moderate” social distancing measures, 1.7 million lives and at least $7.9 trillion could be saved. 

Big number: The average cost of a hospital stay for a mild case of pneumonia is $9,763, according to Peterson-KFF analysis (pneumonia is commonly associated with COVID-19, the disease caused by the coronavirus). The median total cost balloons to $88,114 for the most severe cases that require more than four days of ventilator support. Seven million hospitalizations for patients with mild cases would cost more than $68 billion. If 17% of those patients required ventilator support, as was the case in one Chinese study, the cost of hospitalizations alone could add up to a staggering $161 billion, and that’s before the cost of other health complications related to the virus is accounted for. 

Crucial quote: “Anything that slows the rate of the virus is the best thing you can do for the economy, even if by conventional measures it’s bad for the economy,” University of Chicago economist Austan Goolsbee told the New York Times

Key background: In some ways, all of this discourse is more than a century old. A new paper released yesterday found that during the1918 flu pandemic—the closest historical analogue for the current coronavirus outbreak—cities that intervened earlier and more aggressively to slow the spread of the virus through social distancing and isolation of cases suffered no greater economic damage than those that didn’t. “On the contrary,” the authors write, “cities that intervened earlier and more aggressively experience a relative increase in real economic activity after the pandemic.” Seattle, Oakland, Omaha, and Los Angeles, for instance, implemented stronger containment measures than Pittsburgh, Nashville, and Philadelphia and all saw a much larger surge in job growth after the crisis was over in 1920. 

Tangent: Texas Lieutenant Governor Dan Patrick suggested earlier this week that grandparents might be willing to die to preserve the economy for their grandchildren. “No one reached out to me and said, ‘as a senior citizen, are you willing to take a chance on your survival in exchange for keeping the America that all America loves for your children and grandchildren?’” he said. “And if that’s the exchange, I’m all in.” His and Trump’s comments sparked a backlash among progressives on social media on Tuesday, when the hashtag #NotDying4WallStreet trended on Twitter as users voiced their fears of the pandemic, and of the government’s response to it. “I’ll let Wall Street flat line before my grandma does,” wrote one Twitter user. 

Sarah Hansen, Forbes Staff

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