Safaricom Ethiopia eyes new Sh46bn loan from IFC

The International Finance Corporation (IFC) is set to lend Safaricom Ethiopia an additional Sh46 billion ($350 million) to support its expansion of telecommunications and mobile money services in the country.

In latest disclosures, the global private sector financier has revealed plans to top up the debt ($157.4 million) and equity investment ($100 million for a 7.25 percent stake) it already injected into the telco last year.

If approved, this will bring IFC and its partners’ total financing to Safaricom Ethiopia –which is majority owned by Kenya’s Safaricom Plc– to Sh80 billion ($607.4 million).

“IFC’s further proposed loan of up to $350 million will support STEP (Safaricom Telecommunications Ethiopia Private Limited Company) with the ongoing expansion of its telecommunication network and mobile money services and enhance the competitiveness of the local telecommunications market,” the lender said in the disclosures.

The financier says it is ready to lend between $150 million and $200 million, noting that the rest of the balance will be sourced from development finance institutions and other lenders.

IFC had last year committed a total of Sh34 billion in debt and equity investments in the Ethiopian subsidiary of Safaricom, which is owned by the Global Partnerships for Ethiopia (GPE), a consortium of international investors in which Safaricom Kenya has a majority stake of 51.7 percent.

IFC said the initial investments “have had satisfactory environmental and social (E&S) performance,” based on the assessment done by the lender’s team, paving the way for the extra investment that’s now been proposed.

The multilateral lender expects that its expanded investments in the telco will further boost its ability to increase competitiveness in the mobile connectivity industry in Ethiopia, in addition to increasing access to quality phone networks in the country.

Safaricom Ethiopia is the first private-sector-led mobile operator in the country, after entering the industry in 2021 when the Addis government liberalised the telecommunications sector.

Since starting operations in the country in late 2022, the subsidiary is yet to break even, and has been weighing down its parent company’s profits for the last two financial years due to startup losses that are estimated to have peaked in the year ended March 2024.

In the review period, the Ethiopian subsidiary made a net loss of Sh42.66 billion ($323 million), weighing down the telco’s profits even as the Kenyan arm posted a 13.7 percent increase in profits to hit Sh84.7 billion.

Besides Safaricom, other shareholders of the Ethiopian business include Japanese trading company Sumitomo Corporation (25.2 percent), British International Investments (10.1 percent), and Safaricom’s parent firm Vodacom (5.75 percent).

Safaricom Ethiopia is also eyeing a potential $150 million (Sh19.6 billion) local currency-denominated debt from the Ethiopian Stock Exchange once it goes live in the third quarter of this year, highlighting the capital-intensive nature of the business.

In November 2022, when Safaricom first reported results from the Ethiopian subsidiary, the chief financial officer Dilip Pal said they estimated the subsidiary could break even from 2026.

 “We don’t expect significant profit in the beginning, but over time we expect the Ethiopian subsidiary to become a big driver of this company’s profits and the future of this business,” added Peter Ndegwa, Safaricom’s CEO.

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Bank holiday weekend: Sun or rain?

Bank holiday weekend: Sun or rain?BBC Weather Watchers / Peter and Leah
  • 23 May 2024

The rain has been relentless again at times this week.

Believe it or not, at the start of the week we were looking at May rainfall statistics pretty much at or below the monthly average for many parts of the UK. It was also the warmest first half of May on record.

Wednesday’s rain changed all that . As a deep area of low pressure trundled north-westwards across the UK, once again the rain gauges filled and roads and rivers flooded.

Some spots, including Rhyl in Denbighshire, Keswick and Carlisle in Cumbria and Loftus in North Yorkshire recorded over a month’s worth of rain in less than 24 hours.

All this, of course, follows on from the never-ending stream of soggy headlines detailing the wetter than average spring, a dull and wet April, and the second wettest six-month period on record for England between October and March.

A barbecue bank holiday or a weekend washout?

It will probably be a bit of both. No two days or places will look the same weather-wise and weather apps may struggle to pin down the showers towards the latter part of the weekend.

The good news is the ground will have had a chance to dry out on Thursday and Friday as the weather system responsible for Wednesday’s deluge fizzles away. This will also bring welcome cheer, of course, to anyone hitting the roads.

Saturday looks more reliably dry with warm sunny spells, although it could turn cloudy and drizzly later in the day for south-west England, western Wales and Northern Ireland as a new weather front approaches.

A rainbow over a field with sunshine and raindrops

BBC Weather Watchers / alpaca lady

Thundery showers

With low pressure close by, we are expecting some thundery showers to spark off on Sunday and bank holiday Monday.

These showers could pop up almost anywhere, and with light winds and extra energy from daytime heating they could be torrential and slow-moving.

If you get a shower you will certainly know about it and are likely to spot the cloud building in advance. It’s a game of chance.

For many of us it will stay dry and sunny and you could be be completely oblivious to torrential downpours happening just a mile or so away. In the best of the sunshine, temperatures will once again climb a little above the average for the time of year.

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Further ahead: Late spring warmth

Meteorological spring continues for another week and it looks as if temperatures will climb a little further after Monday.

The general outlook is that we will keep a south-westerly wind and that it will become warmer but stay changeable. There is still some uncertainty which areas of the UK will see prolonged wet weather, if any.

Currently the first half of June, which marks the beginning of meteorological summer, looks warmer and drier in the south, more changeable and windy in the north.

While the Met Office predicts that wetter weather will be a feature of our changing climate in the UK, summers will actually get drier overall – with more heatwaves and droughts – but when rain does come it will be heavier, 20% more intense than it was in 1990.

The most violent downpours – more than 30mm of rain in an hour – are expected to occur twice as often as they used to.

This means the increased risk of flooding, with ground becoming saturated by persistent winter rainfall and drainage systems overwhelmed by summer deluges.

For the latest forecast – rain or shine – check BBC Weather online or our app.

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Africa: As East Africa Grows, Southern Africa Is Being Left Behind

Why is Southern Africa’s economic growth the worst of all Africa’s regions, while East Africa is number one?

With an economic growth rate exceeding its population growth, Africa should be achieving economic development advances – but that is not the case. Poverty remains widespread, and there are huge differences in performance between the continent’s five regions. This is influenced by geographic location, structures of individual economies, commodity dependence, regional political dynamics, and resilience to global shocks.

In the African Development Bank’s African Economic Outlook 2023, East and Southern Africa’s economic growth rates stand out (see graph). Over the 2021-25 period, Southern Africa is the continent’s worst regional performer, while East Africa is number one. In fact, projected growth rates indicate that East Africa will accelerate while Southern Africa will continue to underperform

How do these two regions compare? Of the 13 countries in Southern Africa, 69% are middle-income economies. In contrast, only 38% of East Africa’s 13 nations hold middle-income status, with most still classified as low-income. The general notion that low-income countries tend to grow faster than middle-income countries could favour East African economies in their growth trajectory. But that is not enough to fully explain the two regions’ varied performance.

The broad structures of the two regional economies differ. Ten East African countries are non-resource-intensive economies, versus seven in Southern Africa. Both regions have one oil-exporting country – South Sudan in East Africa and Angola in Southern Africa.

Southern Africa dominates with five economies rich in non-oil resources, while East Africa has only two. The fact that East African countries are less exposed to global commodity booms and busts in their economic structure may benefit the region. This is evidenced by the 2023 Macroeconomic Performance and Outlook report, which indicates that from 2021-24, non-resource-intensive economies tended to grow faster than the other categories.

Southern Africa contributes 22% to Africa’s gross domestic product (GDP), while East Africa’s contribution rose from 14% in 2018 to 17% in 2022. A 2023 Euromonitor article reported that East Africa’s contribution to continental GDP is projected to account for as much as 29% by 2040. This projected growth in the region’s GDP depends on a continued high-growth path in this part of Africa.

Apart from the influence of the global economy, shocks and geopolitical events, regional dynamics and neighbouring countries’ performance have strong knock-on effects. In the case of Southern Africa, South Africa and Angola together account for 75% of the region’s output. In East Africa, four economies – Ethiopia, Kenya, Tanzania and Uganda – account for around 84% of the region’s output (see map diagrams).

Even though all the economies are exposed to global geopolitical shocks and continued global uncertainties, East African countries tend to be more resilient than those in Southern Africa in terms of growth.

Underperformance in Southern Africa could predominantly be attributed to the stagnation of South Africa’s economy and its impact on the region. The numerous political, structural, and macroeconomic challenges in South Africa and other countries in the region affect physical and social infrastructure. This reduces productivity and constrains domestic demand.

Botswana and Mauritius have above average long-term growth performances, with higher growth expectations for Mozambique and Zambia. Despite this, Southern Africa’s economic growth is expected to be insufficient to carry the region forward significantly. Moreover, Southern Africa is plagued by high external debt burdens, poverty, inequality, and especially youth unemployment.

In contrast, East Africa’s robust economic performance is driven by the strong showing of seven of the region’s 13 countries. Rwanda, Ethiopia, Uganda, Tanzania, Djibouti, Kenya and Seychelles are the highest performers, with average growth rates of over 5%. Rwanda was one of the key sustainable growth success stories with a growth rate exceeding 7% on average annually. These impressive results benefit the rest of East Africa despite Somalia and Sudan’s political instability.

Several key policy decisions drive economic growth in East Africa: the Look East Policy of embracing China, investment in road and communications infrastructure, support for agriculture, and prioritising connectivity and trade within the region.

Mega infrastructure projects cover roads, ports, airports, railways, dams, bridges, hydropower projects and crude oil pipelines. Examples include Kenya’s 592km Standard Gauge Railway, a train line between Addis Ababa and Djibouti, Uganda’s Karuma Hydropower Project, Tanzania’s newly planned Bagamoyo Port, the Bugesera International Airport Expressway in Rwanda, and South Sudan’s Juba International Airport.

The region is now reaping the benefits of these infrastructure projects, even though financial arrangements with China remain complex.

A large part of East Africa’s growth is driven by the service sector. Government spending and strategic investments have supported in-country connectivity and intraregional trade. With a rising middle class, regional demand for banking, insurance and healthcare is also increasing. East Africa is known for its agricultural exports, and the modernisation of agricultural production was a crucial part of government spending. Djibouti, for example, improved its transport infrastructure to become an interregional logistics and trade hub.

Although Southern and East Africa are exposed to the effects of climate change, skills shortages and unemployment, continued growth and development in the two will depend on internal and regional growth dynamics.

While East Africa is on a positive, sustainable growth path, Southern Africa is stagnating. Growth and development in these two regions will depend on the extent to which the economies can individually and collectively navigate their growth trajectories. Southern Africa should focus on political and policy certainty, macroeconomic stability and enhanced regional cooperation to address its lagging growth.

This article was first published in the ISS’ African Futures and Innovation blog, Africa Tomorrow.

Elsabé Loots, Professor of Economics, Faculty of Economic and Management Sciences, University of Pretoria

Source: allafrica.com

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Tanzania sugar factory blast kills 11, injures two others

By THE CITIZEN

A Kenyan is among those killed in an accident at the Mtibwa sugar factory in Tanzania’s eastern Morogoro region.

The incident occurred after an electrical fault in the heating system, officials from the Fire and Rescue Brigade (FRB) and local police have confirmed.

“We have confirmed that one Kenyan, one Indian and one Brazilian died in the incident which happened in the early hours of May 23 at 1:30 am,” SACP Morogoro Regional Police Commander Alex Mkama told journalists in Morogoro.

He said all the bodies had been preserved in the mortuary at the factory’s hospital.

SACP Mkama said the dead were all electrical and mechanical engineers who were in the control room making final adjustments before the start of the day’s production shift.

“Two injured people have been admitted to Bwagala Mission Hospital in Turiani Ward,” said SACP Mkama.

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Earlier on Thursday, Morogoro Regional Fire and Rescue Commander Shaban Marugujo told Mwananchi newspaper that a team from the FRB was immediately dispatched to the scene of the accident to carry out rescue and evacuation exercises.

He said preliminary investigations indicated that an explosion occurred when the technical team was preparing machinery to start sugar production.

“We will release an official report once the investigation is complete,” he said.

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Tanzania: Tanganyika and Zanzibar – Tanzania’s 60-Year-Old Union May Need a Restructure

On 26 April 2024, Tanzania celebrated 60 years of the union between Tanganyika and Zanzibar. The union, which created the present-day United Republic of Tanzania, stands out among the longest lasting political arrangements of its kind in Africa, and has shaped the country’s construction of national identity. Nicodemus Minde, who has researched Tanzania’s politics, unpacks the union’s dynamics.

What’s unique about the Tanganyika-Zanzibar union?

The union between Tanganyika and Zanzibar is not the only attempt at political unification in Africa. Previous ones include the Ethiopia-Eritrea Federation (1952-1962); the Ghana-Guinea-Mali Union (Union of African States) (1958-1963); and Senegambia Confederation (1982-1989). Those have been wound up, but the Tanganyika-Zanzibar union has remained intact.

Unification attempts in post-independence Africa have been fraught with challenges. In some cases, nationalist movements wanted to annex territory. In others, countries have split into two, such as Ethiopia-Eritrea (1993) and Sudan-South Sudan (2011).

There are still many active separatist and nationalist movements across the continent.

For six decades, the Union of Tanganyika and Zanzibar has withstood challenges. It has been celebrated as a success of the pan-African vision of a united Africa.

But there are murmurs and disquiet over the nature, structure and the future of the union.

What led to the union?

On 26 April 1964, two independent states, the Republic of Tanganyika and the People’s Republic of Zanzibar, merged to form the United Republic of Tanzania. Tanganyika had gained independence from Britain on 9 December 1961 with Julius Nyerere as its prime minister.

Zanzibar, also a former British colony, had become an independent constitutional monarchy under Sultan Jamshid bin Abdulla on 10 December 1963. The African majority led a revolution against Arab control on 12 January 1964, establishing a new government led by Abeid Karume.

The formalisation of the union was agreed in the Articles of the Union, which outlined 11 areas of cooperation between the two regions. These were the constitution, foreign relations, defence, police, emergency powers, citizenship and immigration, external trade, public service, tax related matters and harbours and civil aviation.

The union was conceived in the midst of debates on pan-Africanism and the politics of the Cold War. After the Zanzibar revolution of January 1964, western powers such as the US and Britain labelled Zanzibar as Africa’s Cuba. This was in reference to Cuba’s proxy role in the rivalry between the US and the Soviet Union.

Nyerere also saw Zanzibar as a security threat and once remarked that if his wish could be granted, Zanzibar would be towed further into the Indian Ocean. There were however socio-cultural and economic ties binding the people of Zanzibar and Tanganyika that justified the union formation.

The union is credited with construction of Tanzania’s national identity. It has enhanced the social, economic and cultural interactions between residents of Zanzibar and the mainland. The constitution requires the sharing of the president and vice-president positions between the mainland and Zanzibar. Tanzania’s current president, Samia Suluhu Hassan, is from Zanzibar. The ruling party, CCM, has often supported the current union format, which favours its continued stay in power. The party’s fear is that democratising the union could result to an opposition win.

Zanzibar is one of the world’s top tourist destinations, and as a result, both Zanzibar and mainland Tanzania have reaped substantial economic benefits from tourism.

Has the union eased tension between the regions?

There are always tensions between the two entities. Between 2011 and 2013 Zanzibari nationalism was at its peak. Sections were calling for secession. They were dissatisfied with the structure of the union and waning sovereignty, especially the mainland’s influence on economic and political affairs in Zanzibar. This cooled down with the elevation of Samia to the presidency.

The ruling party has often ignored calls to deal with the union’s squabbles. Lately, there has been clamour to bring back the government of Tanganyika. The opposition is questioning Samia’s two main decisions that affect mainland Tanzania. The first is the eviction of Maasai people from their ancestral land of Ngorongoro and the second is the decision by the government to enter an agreement with the Dubai based DP World for the management of the Dar es Salaam port. The president being from Zanzibar, the opposition has accused her of auctioning mainland land. These claims highlight the fragility of the union, which the opposition cites as grounds for demanding a new constitution.

From some of the published opinions and several interviews that I have had with political leaders, it appears many Tanzanians feel the union should be reformed to reflect contemporary realities.

A 2014 report by the Constitution Review Commission, set up to collect views and propose a new constitution, outlined emerging political and economic grievances from both entities. For example, many mainlanders see Zanzibar as a distinct entity, with its own president, national symbols like a flag and anthem, and a semi-autonomous government. On the other hand, Zanzibaris have criticised the lack of transparency in union finances and the absence of clear procedures for managing the union. These issues have still not been addressed.

What’s ailing the union?

One of the major issues that has bedevilled the union has been its structure. It is a two-government system consisting of the Revolutionary Government of Zanzibar and the United Republic of Tanzania. Both governments are led by the ruling party, CCM, which has guarded the union as a sacrosanct entity that defines Tanzanian nationhood.

In 1993, a section of mainland legislators known as the Group of 55 (G55) pushed for a return of the government of Tanganyika. They wanted a three-tier government: one for each region and a union government.

A presidential commission had, in 1991, recommended a similar structure. Two other commissions also recommended a three-tier government.

What needs to be done?

For the union to continue to exist, recommendations made by different commissions on its nature and structure should be implemented. The proposal for a three-tier government format with executive control in the two entities and a union president would go a long way in easing the union tensions. These recommendations were after all made from popular opinions from both sides of the union.

Alternatively, the union question should be subjected to a popular referendum. Referendums have been done in South Sudan, Catalonia, Quebec and elsewhere to determine people’s views on independence.

Nicodemus Minde, Researcher, United States International University

Source: allafrica.com

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Zanzibar Maritime Authority confirms sinking of ship flying Tanzanian flag

The Zanzibar Maritime Authority (ZMA) director general Sheikha Mohamed told The Citizen on Wednesday, May 22, that the authority received an official notice on Tuesday, May 21, 2024, from the Romania Maritime Rescue Coordination Centre (MRCC) concerning the tragedyContinue Reading

Fleeing the drought: Young pastoralists forced to migrate due to climate change

Arusha|Manyara. “We had five cows and 10 goats. When the drought worsened, all the cows died and only five goats remained,” said Helena Leiyan, a mother of four children who has been abandoned by her husband since 2021.

Helena, who lives in the village of Terrat in Simanjiro District, Manyara Region, says that as the drought worsened, her husband sold the remaining goats and disappeared.

She added: “Life became harder after he vanished. Before he fled he was working as a labourer on people’s farms and doing other activities, but it wasn’t enough. He had to leave without even saying goodbye.”

“We don’t know if he’s alive or dead, and he never tried to contact us,” added Ms Helena, who is the mother of four sons aged nine, 11, 16, and 17.

Ms Helena says her husband, named Leiyan Nelukendo, left five years ago, in 2019. Since he left, she says she continued to struggle with her children until 2023 when things became difficult, and she decided to seek help from her husband’s relatives, where she currently lives.

“We were two wives; my co-wife and her two children went back to their home after my husband left. I stayed until last year when I came here, and they welcomed me,” she added.

Ms Helena and her children, two of whom were in school at the time, even though it was Saturday because they had exams coming up, were living with Leiyani’s brother named Isaya Nelukendo.

“We’re grateful to have a place to stay, but I also need to have my own farm or livestock. My husband didn’t have these, but if I can get them, I’ll ease the burden of where I’m currently living,” she explained.

We spoke with Isaya Nelukendo, who said: “We’re not sure where he (Leiyan) is; I once heard he’s in Mirerani. This is his family (Helena and her children), so it’s mine too, and I have a responsibility to help them.”

When asked about providing land or livestock to the mother, Mr Nelukendo said he would have done so if he had them, but what they have is not enough.

He added: “We’ll eat what we have according to God’s plan. And they’ll stay here until they can stand on their own.” Men leaving their families is not uncommon in those areas, as this issue also introduced me to a middle-aged mother. She introduces herself as Naitapuaki Lukas in the village of Oloswaki.

Ms Naitapuaki, living with her elderly husband, says: “We had two sons. As they grew up, they left, and we don’t know where they are.”

She believes her sons are in the city. “I don’t know if they’re in Mirerani or Dar es Salaam. They haven’t been in touch with us at all since they left.”

She, along with six other women, agreed, saying it is not just their village; many men have left neighboring villages as well.

Despite this situation, there are men who, despite the hardships, have persevered and engaged in other activities. Here, I met Noah Lukas in the village of Oloswaki, who is engaged in irrigation farming and animal husbandry.

“Animal husbandry has become difficult due to the decrease in grazing land. Although I have a few goats, my main focus is on farming. We’re grateful the government brought water close by. I sell vegetables and can support my family,” said Mr Lukas.

Maasai in the city

In other urban areas such as Dar es Salaam and Zanzibar, there are Maasai people who are known for small businesses, security jobs, and some engage in hairdressing.

In Mwenge area, Dar es Salaam, I met Naranda Saling’o, who runs a small business selling wallets, belts, nail clippers, and fabrics around the neighbourhood. Despite having lived in Dar es Salaam for over seven years since leaving his home, Engarenaibor, in Longido, Arusha, he admits to having lost contact with his relatives due to lack of communication.

“I don’t have a phone,” said the young man, who claims his life hasn’t changed much because the money he earns isn’t enough to sustain himself, including finding a place to sleep.

“When night falls, I’ll sleep anywhere. Even clothes, this is the only one I have, I wash them and wait for them to dry so I can wear them. I shower in rivers and waterways that I consider clean,” he says.

At the age of 25, he has no plans to start a family because he does not have a place to accommodate a partner, and he cannot afford his daily needs. “I have no money, family needs money, I don’t have any. Besides, where would she sleep” he says.

For his part, Mr Joseph Nendukai works as a security guard in one of the buildings in Sinza. He is cheerful and says he came to Dar es Salaam in 2017 to seek a livelihood. “I had 20 cows and 50 goats, but they died, leaving only three calves and 10 goats. There was no grazing land, and some got sick,” said the young man from the Nanja village in Monduli District.

Mr Nendukai says he left his wife and two children back home, under the care of his brother’s homestead, and he communicates with them, helps them, and visits at least once a year or every two years. He added: “Our communities have been greatly affected by drought; many animals died, which is why many of us left home to seek a livelihood to support our families.”

How village leaders receive and resolve cases of climate mobility

The phenomenon of men leaving and abandoning their families is not uncommon in these areas, although leaders say it is not on a large scale.

The chairman of Terrat village, Kone Medukenya, says that the main activities of the villagers in the village are farming and animal husbandry, acknowledging that farming has become more prevalent recently due to the harsh conditions for large-scale animal husbandry.

He says that drought has greatly affected the availability of pasture and the well-being of many households.

“There are many cases we handle related to family disputes caused by the hardship of life, people are struggling to find food and their livestock are dying… some have left and abandoned their families, although not on a large scale.”

The cultural leader of the Maasai tribe, known as Laigwanani Lesira Samburi says there are many cases of people leaving, especially the youth.

“People are fleeing households, especially the youth. You know, life has changed a lot. Despite the presence of drought these days, the lifestyle systems have greatly affected the youth,” he said, pointing out the presence of communication devices and lack of morals among educated youth.

Mr Samburi said many educated youth who are fortunate enough to study often leave and forget where they come from.

“I tell the youth not to forget where they come from; this is their home,” he said.

Regarding men fleeing their households and families due to the hardship of life, the Laigwanani said: “The village committee, in collaboration with close relatives of the husband, discuss the issue, and those without livestock are given a small amount to start with so they can continue to stay with their families.”

Climate change mobility and what expert says

Statistics from the Internal Displacement Monitoring Centre (IDMC) showed that by 2020 severe weather conditions caused over 24 million people to be displaced from their homes, while International Organization for Migration (IOM) estimated that by 2050, the effects of climate change – if significant changes are not made now – will result in millions more people being displaced.

Meanwhile, the Groundswell network predicts that over 216 million people will be displaced, with three out of five being from the African continent. Lecturer at the Center for Climate Change Studies at the University of Dar es Salaam, Professor Pius Yanda, stated that in areas affected by drought, floods, or lacking in animal grazing pastures, people are forced to migrate to other areas.

Professor Yanda emphasised the importance of ensuring that the environments to which people migrate are equipped with infrastructure to support them, thereby preventing conflicts in the areas they move to.

“Projects like BBT ‘Building a Better Tomorrow’ provide significant support, but they need to be expanded to reach more areas. Infrastructure for irrigation and research to support sustainable agriculture are crucial,” he said.

Dr Wessam El Beih from Internal Displacement Monitoring Centre (IDMC) stated that some policies that can protect people at higher risk of displacement involve enhancing resilience and adaptation within rural communities. This can be achieved by facilitating access to basic services, livelihood opportunities, and measures to mitigate the impacts of disasters such as floods and droughts.

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