GENEVA // Uganda could be the next country hit by alarming malnutrition rates because of the drought which has already sparked famine in southern Somalia and hunger in Kenya, Ethiopia and Djibouti, the United Nations warned yesterday.
Pockets of food insecurity have already been detected in drought-hit northern areas of Uganda, east Africa's third largest economy, the UN's Food and Agriculture Organisation (FAO) said.
"Uganda may be the next country hit with these same sort of alarming malnutrition and drought conditions," the FAO's Sandra Aviles told a news briefing.
An estimated 815,000 people in drought-prone northern Uganda, mainly in the Karamoja region, currently face moderate food insecurity, corresponding to phase two on a UN scale where five means famine, she said.
Prices for maize, Uganda's main crop, went up by 67 per cent between June and July due to a delay in the harvest and the effect of greater demand from neighbouring Kenya and southern Sudan, according to Shukri Ahmed, a senior economist at the FAO.
"Maize prices are currently almost four times their level of the previous year. That price rise will be an added burden," he said. "Another factor is the high fuel prices."
But rainfall in the rainy season of September-October is forecast to be average to above average for most of Uganda, he said.
Famine has been declared in two regions of southern Somalia but may soon engulf as many as six more regions of the lawless nation, the UN humanitarian chief said on Monday.
Some 12.4 million people in Kenya, Ethiopia, Somalia and Djibouti are already in dire need of help due to the worst drought in 60 years, the UN under-secretary-general and emergency relief coordinator Valerie Amos said in New York.
The UN appealed to air carriers on Tuesday to provide free or heavily discounted cargo space to transport food to starving children in the region.
"There are more than 2.3 million acutely malnourished children in the Horn of Africa. More than half a million will die if they do not get help within weeks," Marixie Mercado of the UN Children's Fund (Unicef) said.
Tens of thousands of Somalis have already died from starvation or diseases caused by it, half of them children under age five, the United Nations says.
Unicef has 5,000 tonnes of therapeutic and supplementary food supplies stored in France, Belgium and Italy, enough to feed 300,000 malnourished children for a month. The agency needs to bring 400 tonnes of supplies to its regional hub in Nairobi each week by air, a costly operation, until it can set up a food pipeline by sea in about six weeks.
With therapeutic feeding, a malnourished child can fully recover in four to six weeks, Ms Mercado said.
British Airways, Lufthansa, UPS and Virgin have offered to transport between 15 and 50 tonnes a week for a limited period, she said. Cargolux, Europe's largest all-cargo airline, has offered to bring 107 tonnes from Luxembourg to Nairobi, she added.
* Reuters
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”