When Donald Trump opened Trump Tower in 1983, it marked a seminal moment in American retail, as six stories of glitzy shops like Harry Winston and Cartier beckoned luxury buyers who strode past a live pianist and a 60-foot indoor waterfall.
“We got the highest rents ever, anywhere,” says former Trump Organization executive Barbara Res, standing in the pink atrium four decades after she helped build it.
Times have changed. Gazing around, almost all the tenants are now gone. The hollowing-out began years ago, but it has only gotten worse since Trump entered politics. Nike abandoned its attached flagship store earlier this year, and Ivanka Trump’s accessories business closed up shop as well.
What’s left is basically nothing but Gucci, Starbucks and The Donald, wall-to-wall. Trump Bar sits atop Trump Grille, next to Trump Café, the Trump Store and Trump’s Ice Cream. It is unlikely Trump pays himself rent for any of them. “Things are all different now,” Res says.
That difference includes profits. Net operating income dropped 27% between 2014, the year before Trump announced his run for president, and 2017, his first year in the White House.
When the real estate mogul descended the escalator to launch his campaign, in this very building, no one could have predicted the chain of events that would lead to this point. Even among those who gave his moon-shot presidential bid a chance of success, the assumption was that Trump would dump his assets before taking office.
By refusing to divest, Trump raised an unprecedented question: How would the most divisive presidency in modern American history affect a company built on the president’s persona? Forbes has been working to answer that question since the moment Trump got elected, interviewing nearly 200 colleagues, partners and industry observers.
While the experiment continues to unfold, in real time, the early results are in. Much as he’s trying—and he’s definitely trying—Donald Trump is not getting richer off the presidency. Just the opposite. His net worth, by our calculation, has dropped from $4.5 billion in 2015 to $3.1 billion the last two years, knocking the president 138 spots lower on the Forbes 400.
Three factors are at play. Much of that decline is due to deeper reporting, which revealed, for example, that the president had been lying about the size of his penthouse. Some of it is due to larger market forces. Trump owns commercial space at a time when e-commerce is decimating brick-and-mortar retail, shaving more than $100 million off his fortune—and no amount of bully-pulpit Amazon-bashing will change that.
But the third factor comes from how Trump the president affects Trump the brand. Those familiar with him saw his 2016 run as a surreal marketing strategy, and Trump has said as much, telling Fortune way back in 2000, “It’s very possible that I could be the first presidential candidate to run and make money on it.”
Since his unexpected ascent to the White House, Trump has tried to leverage the trappings of the presidency to benefit his commercial projects, from visits to his golf courses to hosting summits at Mar-a-Lago to launching a new hotel-licensing business aimed at his voters. (The Trump Organization denies the licensing business has to do with politics.)
“My father made a tremendous sacrifice when he left a company that he spent his entire life building to go into politics,” counters Eric Trump, who now comanages the Trump Organization on behalf of the president, in a statement to Forbes.
“Everything he does is for the good of the American people—he has zero involvement in the Trump Organization and quite frankly to suggest otherwise is outrageous.” (Eric Trump himself, however, told Forbes shortly after the inauguration that he would provide the president bottom-line updates “probably quarterly.”)
Either way, Trump’s mixture of politics and business has proved to be a net loser for him so far. In further polarizing the country, he has also further polarized his business—to the tune of an estimated $200 million hit against his net worth. Understanding how that has happened offers a fresh window into the state of Trump Inc.—and Trump’s America.
In May 2016, a dozen or so golf course appraisers settled in at Trump National Doral, the president’s 643-room Miami mega-resort, for a few days of seminars and golf. At the time, Trump was steamrolling through the Republican primaries while bashing Mexicans, Muslims and even the pope. So it was no surprise when, inside his resort, the conversation turned to how the tumult was affecting Trump’s golf businesses.
A top Doral executive, of all people, was willing to provide an answer. According to three witnesses, he told the room of appraisers that business at the resort—whose revenues were as big as Trump’s ten other U.S. golf courses combined—was suffering because of the campaign.
Historically, Doral had drawn much of its clientele from the Northeast, where Trump was and is especially unpopular. “At the time there was a lot of talk about comments that Trump had made,” says Jeff Dugas, who attended the event. “Nobody was extremely surprised.”
Big names like Nascar and the PGA Tour also pulled business from the club. After Trump won the election, Doral lost 100,000 booked room nights, according to someone who knows the resort’s business. While revenues for the Miami luxury hotel market jumped 4% overall in 2017 according to the data analytics firm STR, Doral’s revenues fell by an estimated 16%.
And that was before a deranged gunman wandered into the lobby earlier this year, draped an American flag over the front desk and began shooting at the chandeliers before he was apprehended by police.
Overall, revenue at the president’s U.S. golf properties fell by an estimated 9% in 2017. It goes beyond politics—guests now endure metal detectors and bomb-sniffing dogs. “It’s not a country club experience,” a source familiar with Trump’s golf business says. “It was captivating at first, but it has become tiresome.” Not even the chance to rub shoulders with a sitting president can overcome this problem: Revenues appear to be down at the three courses Trump visits most often.
A similar scenario has played out in Trump’s traditional wheelhouse: luxury residential real estate. The president still holds roughly 500 condos, co-ops and mansions, all with their own complications, in terms of both hassles and branding. He has 37 units worth an estimated $215 million in midtown Manhattan.
Prices for condos in Trump Tower have fallen every year since 2015, when Trump declared his candidacy, and are an estimated 33% below their highs. Similar trends are playing out a few blocks away at Trump Parc East, where prices are down 23%, and at Trump Park Avenue, where they have dropped 19%.
In Chicago, values of Trump condos have crept downward, the opposite direction of the overall market. “People bought into the building based on the brand being synonymous with luxury,” says Cyndy Salgado, a real estate broker who once worked for the Trump Organization, selling condos in the Chicago tower.
“Now many people feel that the brand represents divisiveness, embarrassment and questionable morals.” All told, the shift in perception has erased an estimated $50 million from the value of his residential units in Chicago and New York.
On the Caribbean island of St. Martin, Mario Molinari, a real estate agent, recalls trying to show a Chinese billionaire a villa a few months ago. The seller, he says, was Donald Trump, who was offering 11 bedrooms, an outdoor bar and a private tennis court for $16.9 million.
But when they got to the gate, the president’s property manager told them they needed background checks to go inside, which typically take a couple of days to process. “It’s too small for me,” the billionaire responded, miffed. More than a year after the place went on the market, Trump still hasn’t sold it.
Such weakness seems to have infected the Trump brand across the board. After multiple bankruptcies, Trump adroitly turned his business toward real estate management and licensing, slapping his name on other people’s buildings, ties, steaks and even a urine test—allowing him to make money while others take all the financial risk.
But partners at three Trump-branded hotels (Toronto, Panama, New York City’s SoHo) have taken the president’s name off their projects, which helps explain why politics has dragged that segment of the Trump hotel empire down about $30 million, by Forbes’ estimates. Meanwhile, many of his licensing customers, including Macy’s and the mattress-maker Serta, fled in the early days of his abrasive campaign—and the president’s company doesn’t seem to have landed a single new deal since.
In 2015, Forbes valued Trump’s product-licensing operation at $23 million. It’s now down to a mere $3 million. “He’s so polarizing that people are afraid to do business with him,” says Jeff Lotman, who runs the licensing company Global Icons. “He has significantly tarnished the brand.”
Headaches in the luxury market could, in theory, be offset by Trump’s newfound popularity with the larger, less affluent MAGA set. Four months after their father took office, Eric and Donald Trump Jr. announced a new business venture to bring lower-priced Trump brands to hotels in Middle America.
Filings released months later indicate that the majority owner of this venture is none other than the president himself, with a 77% stake, positioning Trump to profit from his political stardom.
But not much has come of it. The Trumps signed deals to brand four hotels in Mississippi, but those agreements generated only $27,000 last year. They told reporters there were as many as 35 other deals in the works—none of them have panned out so far.
Trump’s business has some bright spots. A few blocks from the White House, at the Trump International Hotel, Trump fans hobnob with cable news stars and Cabinet secretaries. The place turned a $2 million profit in the first four months of 2017, far exceeding the Trump Organization’s expectations. A chunk of that money comes from various GOP organizations, which have pumped more than $1.3 million into the hotel since it opened in fall 2016, according to Federal Election Commission data.
Despite what seems a violation of the Constitution’s emoluments clause, designed to keep presidents free from foreign financial interest, the governments of other nations are welcome too. Everyone from Kuwaiti officials to the prime minister of Malaysia has reportedly spent money there. And lobbyists working for Saudi Arabia disclosed that they ran up a $270,000 tab in just six months.
In terms of condo sales, Trump sold one in New York to a woman named Angela Chen, just a month after he took office. Chen paid $15.9 million, $1.8 million more than her downstairs neighbor shelled out for a similar apartment a year earlier.
The deal sparked conflict-of-interest concerns because Chen is apparently the head of a business called Global Alliance Associates, which claims to use its network with the “highest levels of government officials” to help companies expand into China.
Presidential provenance is also proving lucrative. After Trump made Mar-a-Lago world famous, the club is said to have doubled its initiation fee to $200,000. Fallout from the president’s response to the deadly white-supremacist rally in Charlottesville reportedly prompted roughly 20 organizations to yank events from the club, likely costing Trump over $1 million in revenue. Nevertheless, Forbes estimates, Mar-a-Lago is now worth $160 million—$10 million more than it was before it became the winter White House.
The same goes for the president’s penthouse in Trump Tower. Although declining prices in the building have likely hurt its value, the 11,000-square-foot apartment became a historic landmark the moment Trump won the presidency. Forbes figures the election could have added $10 million to any potential deal.
This phenomenon also extends to the value of Trump’s Boeing 757, which became a backdrop for his campaign rallies. Some plane brokers think it could be worth double the roughly $20 million it would fetch if anyone else owned it (Forbes estimates a more conservative $6 million presidential premium). Eric Roth, who customized the interior of the plane for Trump, says, “What’s a baseball worth? About $3. What about if Babe Ruth signed it? It’s not $3 anymore.”
Some of the presidential profiteering appears more direct: On the day he assumed office, Trump took the unusual step of immediately launching his reelection campaign.
Donor money kept flowing, and Trump’s companies have kept charging rent to the campaign. The result: America’s first billionaire president has turned more than $900,000 of donations into revenue for himself, without putting up a dime.
As long as he’s president—and refuses to divest his business holdings—Donald Trump will be able to boost his fortune in ways no other businessman can. Three days before Christmas last year, Trump sat in the Oval Office to sign the most significant tax reform legislation in decades. “This is something I’m very proud of,” he said, clutching a black marker. “Great for our country, great for the American people.”
Great as well for Donald Trump. The president famously refused to release his tax returns, but the new bill clearly benefits him. A Forbes analysis shows that Trump could save about 10% on business income. Based on Trump’s 2005 tax return, which leaked shortly after the real estate mogul took office, that could mean as much as $11 million annually.
Other policies, which went into effect with far less fanfare, may also bolster his fortune. Take tariffs. Higher steel and aluminum prices make it more expensive for developers to build. For someone like Trump, who owns buildings but hasn’t done much construction recently, that raises the barrier to entry for competitors.
His immigration policies, which appear to be raising the cost of construction labor, could have a similar effect. Those two factors are “very favorable to a guy who owns hard assets,” says Dave Rodgers, a real estate analyst at financial firm Baird.
And while Trump promised not to do any new foreign deals while in office, cutting off a source of growth, opportunities will be waiting once his presidency ends. In the former Soviet republics of Georgia and Kazakhstan, Trump’s ex-business partners felt empowered to move ahead with potential projects, making it clear they are prepared to pay him down the road.
“The tower will be ready for the Trump mark,” the president’s former partner in Georgia told Forbes last year, “if the Trump mark is ready to come back to the tower.” And Trump has not forgotten about his business: He asked about the Georgia project in a meeting with the country’s prime minister last year, according to the partners.
For now, though, Trump’s presidency remains a net loser for him, which seems ironic. In not divesting, he set himself up so that his actions, and those of people who engage with his businesses, present perpetual conflicts of interest—or the appearance of them.
Meanwhile, if he’d liquidated, paid capital gains tax on his entire fortune and created a blind trust to invest it all in the booming stock market, Trump would be $500 million richer than he is today—without the headaches.
A Tale Of Two Presidents And One Phone Call To Freedom
A month before South Africa’s elections, one of the country’s leading political figures exposed a number of his former comrades for corruption with evidence to the Zondo Commission on State Capture. It was box office material, yet just another eventful period in the turbulent life of Robert McBride – guerrilla fighter, policeman and death row prisoner.
Robert McBride has one of those faces full of character that looks like it has endured life as much as lived it. A glance through his tough years of struggle yields a list of reasons why: five years on death row to screams and tears of the condemned; scores of beatings over decades; shooting his way out of hospital; years of the shadowy and violent life of an underground guerrilla fighter.
McBride was born in Wentworth, just outside Durban, in 1963, and grew up amid racist insults and violence. It swiftly politicised him and he was taken into the military wing of the African National Congress where he carried out sabotage with explosives.
Even by the standards of the desperate days of the gun in South Africa, McBride’s political activity is remarkable. In 1986, McBride fought his way out of an intensive care ward in a bizarre rescue of his childhood friend and fellow fighter Gordon Webster. It happened at Edendale Hospital in Durban where Webster lay, with tubes in his body, under police guard.
McBride posed as a doctor, with an AK47 hidden in his white coat; his father, Derrick, was dressed as a priest with a Makarov pistol under his cassock. The Truth and Reconciliation Commission heard, in 1999, that hospital staff cheered them on and held back an armed policeman as the McBrides shot their way out, pushing the wounded Webster to freedom on a trolley.
Thirty-three-years on, McBride went into battle again for his beliefs, this time with words and documents, against a more insidious and formidable foe than armed police – corruption. He gave evidence before the Zondo Commission, in Johannesburg, springing from his days as head of IPID, the independent police investigators.
He spent more than four days on the stand – longer than most cricket matches last these days. He told of missing police evidence, claims of sinister moves to remove corruption busters and the misappropriation of money, under a cloak of secrecy, by the crime intelligence agencies.
“People don’t like me because of my anti-corruption stance, their dislike of me I wear as a badge of honour. Those who dislike me for other reasons, it is a free country and you are entitled to your likes and dislikes. I have no problem with you. But wherever I am, I will do my work and will always be against corruption. I understand how corruption affects the ordinary man and means there is so much less to go around,” he says.
To give a little more context, McBride’s erstwhile job went with unpopularity. The head of IPID is a post that politicians, plus probably more than a few disgruntled policemen, wanted him out of. They ended his contract and he assures me he is going to court to get his job back. His stance may give clues as to why some wanted to see the back of him.
“I have spoken loudly every time I have seen something wrong and raised unpopular issues. Some of the issues we picked up early on was police involvement in cash-in-transit robberies… The looting of police funds, the corruption, the wastage and the leverage, we then began to understand it; the leverage that some policeman have over politicians… Any criminal syndicate that is operating requires police to help them otherwise they will be found out in the normal course of events,” says McBride, the month before the hearing.
“Rogue activity by certain elements in the prosecuting authority, the willingness to prosecute people for non-criminal acts and unwillingness to prosecute when there is a pile of evidence…We will also speak about the abuse of state funds, the abuse of power by the police by negating investigations. Most of our evidence is backed up by court papers, evidence and affidavits,” he says.
Many activists who saw the nasty, ugly, side of the struggle often are the first to come down, hard, when they feel freedoms they fought for are being abused. You could argue McBride, an intelligent thinker, is very much one of them.
You could also argue that McBride has been cut adrift by many former comrades and demonized as the Magoo’s Bar bomber – the 1986 car bomb on the Durban beachfront that killed three and wounded scores. Others, on both sides of the South African struggle, who issued orders, or did worse, are undisturbed and anonymous by their swimming pools. Any regrets? I ask.
“It’s like asking me ‘do I regret living in a free and democratic country’, the answer can’t be yes… We would have preferred that things went differently. If you are in an armed struggle, you are the cause of hurt to other people and as a political activist, as a revolutionary you can defend that and justify it.
“But as a human being, you know that when it concerns other people, it is not the right thing to do to cause the hurt of other people. I have expressed myself as a human being on this, not because I was trying to elicit any sympathy or anything; I have never asked for redemption, I have never asked for forgiveness. Those who know me know what I am about and those who understand the circumstances in the early 1980s when we became active; those who are old enough to remember that was what the circumstances were.”
Those circumstances recede further into the darkness of memory of democratic South Africa every year, yet, in the minds of those who suffered, it stays pin sharp. McBride spent five years on death row, in Pretoria, after being sentenced to the gallows for the Durban bombings.
He reckons the prison hanged more than 300 prisoners in this time. Through the cell door, he heard the condemned screaming and crying as warders dragged the condemned along the passages to their fate. The hanging warders used to bring back the bloody hoods from the gallows and force the next batch of condemned men to wash them.
In May 1990, the sun shone as hope visited death row in Pretoria. The prison management summoned McBride and a group of fellow condemned activists, to the main office at the maximum security prison. Each were given green prison jackets – the garb of special occasions. Warders drove them, in a van, to a distant part of the prison and all feared they were either going to be executed or allowed to escape and shot in the back.
“We were told not to talk and then we were put in this big room with a steel of security around the room and after about 45 minutes the former president (Mandela) walked in and it was the most beautiful sight on earth; the greatest feeling ever and when he walks in, he says: ‘Ah, Robert! How are you!’ As if he knew me forever. It was the most important meeting I had in my life. It was like a God-like environment. He gave us a rundown of negotiations and what can be expected and that we must not worry, we must be patient and sit tight, he knows all of our backgrounds and will do his utmost to get us released and we will never be forgotten.”
It took more than two more years, in the shadow of the noose… until a fateful Friday. September 25, 1992. McBride will never forget the date.
“Round about half past four in the afternoon, I got a call to come to the office, I didn’t know what it was about, and when I came there, the head of the prison said: ‘You have a phone call’. It was my first phone call in prison. On the other end of the line was comrade Cyril Ramaphosa and he says: ‘Hi chief’. I keep quiet and then he says: ‘Monday’. I say: ‘What’s happening Monday chief?’ He keeps quiet, then he says: ‘You are going home!’ There was a bit of a smile you could feel in his voice,” says McBride with a huge smile on his face.
Long after Mandela had completed his long walk to freedom for his country, McBride was to yet again hear the click of a prison key and feel the pain from a warder’s boot.
It was the summer of 1998 and in Maputo, the sea was warm and the prawns were hot. The police in Mozambique picked up McBride, then a high-ranking official in foreign affairs, on alleged gun running charges that appeared to be trumped up to us journalists. We scoured the streets of the capital, for weeks, in search of witnesses.
McBride argued that he was on an undercover operation for the National Intelligence Agency trying to uncover gun runners who were flooding neighbouring South Africa with illegal weapons and fuelling crime; a counter that eventually set him free.
Despite this, McBride spent six months in the capital’s notorious, grim, Machava maximum security prison, where he told me violence was meted out.
I covered that story for many months and came within a split ace of interviewing McBride in his cell. We spent hours plying the Portuguese-speaking warders with beer and the story, through an interpreter, that we were friends visiting from South Africa and we just wanted to say hello. We told them our friend was a big man in South Africa.
“He is a small man now,” smiled back one of the warders icily.
We convinced the guards and as they moved towards the prison doors, keys in hand, our cover was blown. One of the not too bright colleagues from our TV station strolled into the prison waving his press card.
“Hello Chris!” says he. The none-too-pleased prison guards threw us out.
I had to wait more than 20 years for my interview with McBride.
A phrase I always remembered from those many hot, crazy, days in Maputo was a quote we got from the late presidential spokesperson Ronnie Mamoepa when McBride went behind bars yet again.
“He is a tough guy who can look after himself,” said Mamoepa.
The Zondo Commission and scores of corrupt policemen last month found out how tough.
‘Difficult To Bring Wholesale Change’
Ahead of the May elections in South Africa, the country’s Minister of Public Service & Administration, Ayanda Dlodlo, gives her take on simplifying government processes and ensuring public services are available for all on digital platforms.
What do you have on the cards for this year?
It’s a very short year because we are going to elections, but the major plan for me now is finalizing the Public Administration Management Act regulations; so that we can fully implement on that piece of legislation. The second one that is important for me is a fully functional government employee housing scheme. If I can do that by the time we go to elections, I will be very happy. It is not an election thing, it’s just that we all do not know where we are going to be after the elections, so I am pushing hard to ensure that even when I do leave, that is what I would have done and completed as a minister in my time.
What are some of the opportunities that lie within a digitized government?
We have many processes in government that if digitized could be much simpler. The dissemination of information, for instance. If we vigorously work towards fully implementing on our vision of a government portal where citizens can access any information on government that they need on a single portal — that is a digitized government that would have been able to provide people easy access to information. For instance, we launched the Z83 Application Form, the e-recruitment strategy and it’s much cheaper if they use the internet to apply for jobs online. There are quite a few things we are looking at as government to ensure services are brought to our people on digital platforms so that they can access them even easier.
What are some of the developments with the enrolment scheme and how is it affecting employment rates in South Africa?
We have a large youth contingent that is unemployed but, more so, those that have graduated return home to the rural areas with a university qualification but can’t access any employment opportunities… You could be the only one in your family who has ever gone to university… What does that say to people around you?… So we are doing away with the two years’ experience for certain categories of jobs. But also… we will put in place training programs, mentorship and clear programs to monitor and evaluate the growth of that individual and the job they will be occupying.
What are some of the developments regarding the public sector wage bill?
We are seeing an increase in the wage bill because of the agreement that is in place. But we are trying to ensure that we do not go beyond what we had agreed upon with labor. But, what we have done in the process is that we have introduced regulation six of the Public Service Act where we are allowing people, between the ages of 55 and 59, from April 1 to the end of September, to exit the system without incurring any penalties. The reason we are doing this is because we want to bring young people into government but, over and above that, we are trying to deal with the runaway wage bill.
With the upcoming elections, where do you see the public sentiment laying?
I see the African National Congress (ANC) at the very least getting 62%. Because if you go by what your polling says, it changes from week to week and that is dependent on what is topical in that week or on that day.
How important will these elections be in shaping the country’s future?
To me, they will be very important because it is the 25th year of democracy… With all its (the ANC) flaws, with all its inadequacies, we have to change the face of our country.
It is difficult to bring wholesale change, in a 25-year period, to a system that has been in existence for more than 400 years. It will take much longer than that. And as society progresses and goal posts change, it will become difficult. But for any government that is going to come, they will never be able to do what we have done in the last 25 years.
Southern African Countries Won’t Manage Disasters Unless They Work Together
Cyclone Idai, which recently devastated Mozambique, Zimbabwe and Malawi, was one of the worst natural disasters to hit the southern African region. It killed at least a thousand people and caused damages estimated at US$2 billion.
The response from the Southern African Development Community (SADC) member states, civil society, the private sector and individuals in the region points to the need for a collective, regional approach to addressing natural disasters – rather than individual countries working alone.
Idai also showed, once again, just how unprepared SADC is to respond to major natural disasters. It doesn’t seem to have learnt much from earlier ones.
In 2015, floods and torrential rains associated with the tropical storm Chedza, and Cyclone Bansai left about 260 people dead and 360,000 homeless in Madagascar, Malawi, Mozambique and Zimbabwe.
About a year earlier, flash floods killed, displaced and left thousands homeless in Zimbabwe. However, the storm that remains most vivid in many people’s minds is the one that hit Mozambique 19 years ago in 2000, killing 700 people and leaving two million homeless.
Disasters of this kind know no boundaries. That’s why they require thinking beyond the narrow view that individual governments should respond to crises alone.
Responses to Idai
The first regional response to Idai came from the South African National Defence Force and South African disaster relief NGO, Gift of the Givers. These responses followed a request by the Mozambican government.
The United Nations responded with aid operations in the affected countries a few days later. Other SADC countries, NGOs, the private sector and ordinary citizens also donated to the relief efforts.
For its part, however, SADC’s voice was conspicuously absent for at least a week after the devastation. Ordinarily, it should have led relief operations.
It was disconcerting to see UN Secretary General António Guterres appeal for help and outline a plan to respond to the disaster at a Security Council stakeout, while SADC remained missing in action.
SADC has a dedicated Disaster Risk Reduction Unit. It coordinates regional preparedness and responses to trans-boundary disasters and hazards. But, as South Africa’s Foreign Affairs Minister Lindiwe Sisulu said, the regional body was completely unprepared for the disaster.
Of SADC’s 16-member states only Angola, Botswana, Tanzania, Zambia and South Africa contributed to the relief efforts. This reflects the prevailing preference for a bilateral approach to regional challenges within the SADC.
At the heart of this are narrow nationalistic interests and a preoccupation with sovereignty. The member states are unwilling to surrender control over policies to be administered by the regional body for the collective good.
But, natural disasters like Idai doesn’t respect national boundaries. Their very regional scope requires solutions that integrate domestic actions into a regional governance framework to address them effectively.
When SADC eventually responded, it pledged US$500,000 for relief efforts towards a disaster that cost over US$2 billion in damages to infrastructure alone.
Instead of acting individually, SADC countries need to work together to pool resources and mobilise disaster relief efforts and resources to be more effective. This could be done through the SADC Secretariat.
Funds for immediate humanitarian assistance and the rebuilding of infrastructure should be held in a preexisting, dedicated facility, like a regional disaster risk fund.
This would provide southern Africa with risk financing for climate-related and other disasters. Funds that are often donated by SADC member states, private sector, NGOs, and ordinary citizens for relief efforts can also be pooled and placed in the permanent regional mechanism.
But, there are challenges.
The major challenge to establishing a sub-regional disaster fund probably lies outside SADC, and even Africa. The idea might not sit well with some governments. For example, an attempt to create an Asian Monetary Fund after the 1997/98 Asian financial crisis failed because the US strongly opposed it, and China didn’t support it.
But, SADC could work with global financial institutions to surmount this challenge. The World Bank, for example, already runs disaster risk programmes. SADC could approach it for support and partnership in making the facility a reality.
Cushion against harm
Cyclone Idai has once again shown that natural disasters are capable of wreaking havoc across southern Africa. It’s also shown that affected countries are too poor to respond to the devastation of their infrastructure and the accompanying humanitarian disaster.
It is thus necessary for countries in the region to work together to devise sound contingency plans, including a permanent regional disaster fund, to help cushion them against the effects of natural disasters.
-Chris Changwe Nshimbi; Director & Research Fellow, University of Pretoria
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