Africa's Week In Brief
Week of 10 - 14 April, 2023
Dear Africa Brief,
TL;DR:
The IMF released its April World Economic Outlook for 2023 (entitled “A Rocky Road”) — emerging economies will perform better than their rich counterparts, but persistent inflation and energy security challenges remain real
China and the US trade barbs over debt financing, especially on debt restructuring talks in Zambia and Ghana
The UN has launched a concerted fundraising effort to meet the unfolding humanitarian disaster in Africa’s Horn
SpaceX partners with the Kenya Space Agency to launch the country’s first orbital satellite
What I am listening to: ‘Make the world’s money go ‘round: a bunged-up IMF” by The Economist Intelligence with an analysis of the IMF’s future in a multipolar world where it is not the only big time lender.
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w/o 10 April - 14 April 2023
Graphic of the Week
*Credit: International Monetary Fund
In Context: the International Monetary Fund (IMF), tasked with ensuring short term macroeconomic stability, forecasts “A Rocky Recovery” for the world’s economy. Global growth is projected to slow to 2.8% this year, from 3.4% in 2022, the worst global growth profile since 2001. For emerging markets and developing economies, economic prospects are on average stronger than advanced economies, however, these prospects vary more widely across regions. Growth on the continent is expected to be 3.9% in 2023 and to rise to 4.2% in 2024. The big issues for emerging and less developed economies are; inflation, food and fuel insecurity, and high debt levels/debt distress.
Business & Economics in Africa
Following on from the graphic of the week, the IMF warns that African nations are particularly vulnerable to debt distress. Going into debt is often a precondition for economic development and growth. Governments borrow money to build infrastructure, roads, schools, power stations, ports, and rail.
IMF Chief Economist Pierre-Olivier Gourinchas warned that “a number of countries are facing very difficult and severe situations, especially when it comes to sovereign debt.” Debt Justice for their part finds that emerging and developing countries are paying some of the highest levels of interest in the last 25 years.
Treasury Secretary Yellen is pushing for an urgent resolution to those requests by Zambia and Ghana for restructuring of their sovereign debts. This involves pressing China to either forgive debt (in whole or in part) or to enter into debt restructuring; “We will continue to press China” Yellen said this week (Voice of America).
*Credit: Financial Times
Meanwhile, Tunisia’s President Kais Saied has rejected the IMFs bailout terms. Last October, Tunisia reached an agreement with the IMF for a $1.9 billion bailout (Reuters). In more positive news for the Fund, progress is being made in talks with Ethiopia about the financial institution’s support for the country’s economic reform program (Reuters).
Moving away from macroeconomic topics, Foreign Policy reports that Africa’s private school sector is booming, a consequence of a young population and a demand for tertiary education abroad. Notably, China offers more scholarships to African nationals than institutions in the West. Between 2003 and 2018, the number of African students in China rose from fewer than 2,000 to more than 80,000 (Study International).
Tourist travel to Africa is on the rebound. Last year, 45 million tourists visited the continent, more than double the roughly 20 million who arrived during 2020 and 2021. Where South Africa, Botswana, Tanzania, and Kenya are big draws for their wildlife; Ghana’s capital, Accra, and Senegal’s Dakar are the continent’s art hubs.
China in Africa
The South China Morning Post reports that Washington is playing catch-up on the continent, with Chinese companies dominating processing and refining of the commodities. In the same week, Chinese Foreign Ministry Spokesman Wang Wenbin smacked back at Sec. Yellen’s remarks about China’s financing of indebted nations saying; "we urge the U.S. side to earnestly shoulder its responsibilities and make greater efforts to promote the substantive participation of multilateral financial institutions and commercial creditors in addressing Africa's debt issue" (Africa News).
The Financial Times reports that despite China being an official bilateral lender, it does a good chunk of its lending through state banks and other institutions, and it does so on commercial or quasi commercial terms. What is more, China is not a member of the Paris Club and therefore chooses not to play by the West's rules on when to and by how much it adjusts its debt financing.
Climate in Africa
Devex is reporting that the World Bank’s likely incoming president, Ajay Banga, has rejected the notion that fighting climate change and poverty is a binary choice, calling for a holistic approach that prioritizes jobs but also promotes good health and a better environment. Banga is saying all the right things but fighting poverty and climate change are not easy to overcome in the single let alone in the composite. His remarks will also irk the developing world who have long called for a just energy transition.
Banga’s remarks come in the same week as the World Bank approved a $150 million grant to support Chad’s long-term flood risk reduction efforts and urban planning.
Democracy in Africa
Starting Monday next week (17 April), Former South African President Jacob Zuma’s corruption trial resumes.
Since last Thursday, thousands of people in Ethiopia’s Amhara region have been protesting against a government plan to integrate regional armies into the police or national army. The Amhara special forces fought with the federal army during the two-year civil war in the neighboring region. Amhara leaders have accused Ethiopian Prime Minister Abiy Ahmed’s government of planning to return recaptured territory to Tigray and of ignoring atrocities against residents in Oromia, where the Amhara are a minority group (Reuters).
Health in Africa
Remember all those billions of dollars donated during the height of the pandemic? Well this week, Tanzania’s audit report revealed that up to $1.6 billion of the country’s COVID-19 socioeconomic recovery and response plan has been mismanaged with chucks of overseas aid not fully accounted for (Quartz).
The West African nation of Ghana is the first to approve an Oxford University developed malaria vaccine called R21, while other African countries (including Burkina Faso) as well as the World Health Organization review final trial data of the drug before rolling it out (BBC). Malaria kills some 620,000 people a year — most of them children in Africa.
Europe in Africa
Nations in the Sahel continue their fallout with Western diplomats, last week it was France in Burkina Faso, this week Chad ordered the German ambassador to leave the country (Reuters).
Peace and Security in Africa
The UN has called for some $2.6 billion to fund humanitarian aid for 7.6 million people in Somalia. The country along with its neighbors in the Horn of Africa is suffering from acute famine and drought. U.N. Sec Gen, António Guterres, urged the global community to commit more aid for Somalia as the humanitarian response plan for the country is only 15% funded.
Meanwhile another UN aid agency, the UNHCR, warns about the continued crises faced by people displaced by conflicts across Africa’s Sahel and the Horn, with the transfer of Somali refugees to a new settlement underway.
*Credit: Peace Research Institute Report (2020)
Not too far from Somalia and in Ethiopia, Catholic Relief Services confirms that two aid workers died in Ethiopia’s Amhara region amid ongoing civil unrest following the government’s decision to dissolve the security forces of its federal states (AP News).
Tech and Society in Africa
SpaceX announced that it will launch Kenya’s first operational satellite into orbit this week. The mission is aimed at providing agricultural data to support food security. The satellite was developed by engineers from the Kenya Space Agency.
US in Africa
The US security establishment is reeling from a massive leak of classified security documents. These documents show an acute concern for African states falling into the “Sino-Russian” sphere of influence (CNN).
Warmly,
Joshua