Categories
Agribusiness & Manufacturing

OCP joins experts to discuss agriculture at EU-Africa Business Forum

Panellists at a forum on agriculture at the fourth European Union-Africa Business Summit, held in Marakech, Morocco, emphasised the immense potential that Africa has in agriculture.

Africa is said to hold most of the 600 million hectares of arable land left in the world, including 65 percent of the untapped arable. This, they said, makes Africa critical to the future of food production in the world. With 60 percent of Africa’s population reliant on agriculture for income and livelihood, the continent’s own future is also intricately bound to the success of agriculture.

On the panel were Phil Hogan, former European Union commissioner for agriculture, Ilyas El Fali, currently advisor to the chairman of OCP Group, one of the largest producers of fertilizer in the world and Professor Daniel Nahon of the Aix-Marseille University. Also included were Samira Rafaela, member of the European Parliament, Godfred Bahiigwa, director of the agriculture department of the African Union and Willi Schulz Greve, head of unit at the European Commission Directorate General for Agriculture and Rural Development.

The theme for the discussion was “Agriculture and Agribusiness: A stronger agriculture for a fairer rural development”.

Cooperation between EU and Africa is essential

Samira Rafaela pointed out that agriculture is essential to the future of cooperation between the EU and Africa and called for closer engagement to build sustainable food systems on both continents that address the challenges of nutrition and food security. She said the EU’s farm to fork strategy, in line with its green aspirations, was important but stressed that it was equally important that in enforcing its standards, it does not have the unintended consequence of excluding African farm products.

She called for a cooperative approach, where the EU contributes to the development of farming in Africa, while still respecting local methods that have been honed by generation and shown to work. “We must ask how we can incorporate some of these methods that work into the mix of agricultural production and international trade,” she said. 

EU has an interest in mobilising investment for Africa

Phil Hogan noted that a lot of the inputs for manufacturing in the EU come from African agriculture, which makes it very important to the economic bloc. The EU is the largest trading partner for Africa in terms of agriculture and it was in the EU’s interests to help mobilise investment to boost agriculture and agro-processing in Africa, which would help create jobs.

He said the private sector was essential to the task of mobilising partnerships for, among others, providing the physical and digital infrastructure that would boost African farming.

“We always relied on government to government engagement to make the actions. This is insufficient. We also need business to business, people to people engagements and that is what we are trying to foster,” he disclosed.

He also cautioned that it was not the EU’s place to impose policies or tell African governments what to do. Policies and projects must originate from African governments while the EU supports with technical and financial resources.

AfCFTA will make food more available   

Godfred Bahiigwa observed that one of the key issues faced by African farmer was the high rate of post-harvest losses, which is estimated to be between 15 to 30 percent of annual produce. He was excited by the prospects of the Africa Continental Free Trade Agreement, which would break down trade barriers between African states.

He said the projected boost to intra-African trade would make food more available, reduce costs while improving incomes for local farmers. He said it was important to focus on not just the availability of food, but also on the quality of nutrition and food safety. He said efforts to fortify staple and traditional food crops on the continent will help achieve this end.

The AU, he said, is taking actions across the entire food production spectrum, from production to post harvest management, trade and boosting consumption of safe, nutritious food.

Agriculture can create jobs

Willie Schulz Greve said agriculture has the potential to create jobs and called for more investment in African agriculture with a view to producing more safe and nutritious food. This would help Africa meet the United Nations’ Sustainable Development Goals and the AU’s own ambitions for its Agenda 2063.

He said the right political and economic systems are necessary to attract the sort of investment that African agriculture needs. The continent also needs to devise multi-annual programmes that integrate sustainability and digital tools. He suggested that agri-food platforms that facilitate governments and private sector interactions will help achieve these goals. He also proposed vocational training, exchange, research and innovation programmes to address some of the challenges that African farming faces. 

Professor Daniel Nahon noted that agriculture has more severe impacts on the environment than manufacturing and called for more sustainable farming in response to this threat. “We can therefore solve it through science and innovation. Likewise, the problem of energy consumption can be solved by using renewable energy because the sun, wind, tides and geothermal energy are inexhaustible resources,” he stressed.

Sustainability must be embedded in Africa’s green revolution

Ilyas El Fali observed that while the global population is estimated to increase to 10 billion by 2050, arable land is projected to reduce by 24 percent within the same period. This increases the need for sustainable use of land and farming practices that preserve soil health.

He pointed to specific interventions that OCP is making in Africa to make this possible, including Agriboost, which is supporting farmers with training, inputs and marketing of their produce.

He said that sustainability must be embedded in the African green revolution and that OCP was positioned to partner with African farmers, governments and institutions to comprehensively address challenges that the sector faces.

Categories
Economy

The international group Avisa Partners announces the acquisition of 35°Nord, the communications agency specializing in Africa

Avisa Partners, an economic intelligence, international relations and cybersecurity company, and 35°Nord, a communications and influence agency specializing in Africa, have announced a capital merger.

Since its creation in 2010, Avisa Partners has relied on a group of partners and high-level consultants, strong organic growth and numerous acquisitions to accelerate its international development, with an expected turnover of nearly 45 million euros in 2021. Avisa Partners has 27 partners and 180 consultants and engineers in Paris, Washington, Brussels, London and Geneva.

Founded in 2012, 35°Nord provides around fifty African and international clients a global offer: media, digital and public affairs. With around thirty employees in Paris and on the continent, including four partners (Romain Grandjean, Adrien Loriller, Philippe Perdrix and Quentin Ruffat), 35°Nord has become a benchmark agency with a turnover that will exceed 5 million euros in 2021.

Avisa Partners is already present on the continent, notably with the organization of the Dakar International Forum on Peace and Security in Africa, which will host this year five African Heads of State, the President of the African Union Commission, the President of the European Council and the French Minister of the Armed Forces, on December 6 and 7, 2021. The group is thus strengthening its African expertise to support its public and private clients facing issues of reputation, communications or development on this continent. For its part, 35°Nord achieves its own complementarity, integrating new professions into its offer to position Africa and its decision-makers at the heart of international issues.

“We are very happy to welcome 35°Nord, a trusted partner with whom we have worked for many years. Africa is a continent where our clients seek to develop and diversify their activities, because it offers exceptional opportunities, provided we have the knowledge of these markets. This further strengthens our capacity for international projection, already rich, after the integration of the Observatory of Arab Countries, the opening of offices on the American continent and the launch in 2015 of our China Desk, quickly extended to all of Asia,” declares Matthieu Creux, President of Avisa Partners.

“This merger will allow us to enrich our offer to our customers with new professions, by offering them both study and analysis capacities as well as influence or investigation, while maintaining our comparative advantage over issues linked to the African continent and in our historic businesses,” explain the founders of 35°Nord, Romain Grandjean and Philippe Perdrix.

Samuel Richer (ROOM Avocats) and François Paillier (Transactions & Compagnie) advised 35°Nord. Amaury Nardone (Axipiter) supported Avisa Partners. The acquisition of 35°Nord is the ninth in less than six years for Avisa Partners, as it becomes the leading French group in Europe in economic intelligence and strategic affairs.

About Avisa Partners

Avisa Partners is a French business intelligence group, based in Paris, with offices in the United States in Washington and Miami, and in Europe, in Brussels, London and Geneva. Its teams are made up of nearly 200 consultants or engineers, led by around thirty associates. Avisa Partners supports nearly 500 clients per year on cybersecurity and risk management issues, or on subjects requiring skills in public affairs, strategic communication or international relations. The group also hosts several ecosystem events, such as the International Cybersecurity Forum or the Dakar Forum.

Contact: [email protected]

About 35°Nord

Founded in 2012, 35°Nord has become the benchmark agency for communication strategy and influence specializing in Africa. The agency supports its clients in building their advocacy, strengthening their reputation and promoting their interests with public decision-makers and private actors. 35°Nord offers solid African expertise and offers the best international standards in its businesses: media and public opinion, digital strategy and public affairs.

Contact: [email protected]

Categories
Finance & Services

Watch: Africa Investment Forum postponed due to Omicron

Three days before the event, the African Development Bank (AfDB) has postponed the 2021 Africa Investment Forum as delegates prepare to travel to Abidjan.

This marks the second year running that the vital investment forum has been disrupted due to the coronavirus, with last year’s event cancelled.

A buffet of deals worth $110 billion to help economies on the continent rise to their feet after a bitter recession will have to wait, President Akinwumi Adesina told reporters in Abidjan, at a pre-event press conference on Monday.

“It’s very important that we put the lives of people first. We have to be sensitive and we have to be responsible,” he said.

“Several billion dollars of investment projects were scheduled for investment board rooms with project sponsors and investors at this edition of the Africa Investment Forum. Unfortunately, with rising global travel restrictions due to the Covid-19 Omicron variant, and heightened concerns for health and safety, it is necessary, regrettably, to postpone the event. The health and safety of everyone comes first.”

No indication was given as to when the conference would be held.

Press briefing with African Development Bank President Akinwumi Adesina announcing postponement of Africa Investment Forum 2021

The heavily mutated Omicron variant was first detected in South Africa on Nov. 25, withe first cases identified in neighbouring Botswana and later cases reported in Tshwane, the municipality in which Pretoria is located. The new variant is likely to spread internationally and poses a very high risk of surging infection rates that could have ‘severe consequences’ in some places, meaning the world must prepare, the World Health Organization said on Monday.

Three days of sessions were intended to mobilise investment and explore policy environments in Africa’s burgeoning telecoms sector, manufacturing, energy and climate change, health and infrastructure to help buoy African economies reshaped by the lingering pandemic.

“A special focus should be given to infrastructure projects that will do most to promote job creation and stimulate value chains, strengthen social sectors such as health and education and support climate resilient growth,” Alain Ebobissé, the CEO of one of the event’s founding partners, Africa50, says.

Africa50 CEO Alain Ebobissé says infrastructure investment will be a key driver of post-pandemic economic recovery on the continent.

As economies on the continent struggle to their feet amid new variants and adapt industrialisation plans to meet global carbon emission reduction targets, they need infrastructure investment more than ever, says AIF’s senior director Chinelo Anohu.

“This combined with the urgent need to make further progress to help hundreds of millions of people across Africa get access to basic provisions means high levels of international investment is needed every year – and it also makes for unprecedented opportunity. That is why the AIF’s 2021 Market Days event is so important – we must deliver these upgrades to supply chains, create new jobs and put Africa’s economies onto new and stable footings.”

With activity on Africa’s capital markets tanking over the past two years, one panel was scheduled to look at why and explore ways of jump-starting interest in stock exchanges as an effective tool for raising finance.

With Covid also dealing a major blow to foreign direct investment (FDI) in Africa, which was down 16% in 2020 from $44bn in 2019, another panel was meant to give perspectives on where growth is headed as FDI picks up to pre-pandemic levels in 2022.

Market Days

One of the forum’s flagship events, Market Days, which was also cancelled last year due to Covid-19, was meant to set up the stall for a pipeline of projects that are ripe for investment.

One such project is for a $96m specialist hospital in West Africa offering 250 beds and world-class healthcare. Another is for the construction of a $45m WHO-approved vaccine production plant in East Africa, designed to produce three vaccines, including one for Covid-19.

Before the announced postponement, a preview of agribusiness deals worth nearly $400m outlined projects in the agriculture sector, including one which requires $345m in capital for the construction and operation of a food market that will serve about 15 million people in Africa’s largest food exchange zone.

At Market Days 2019 in Johannesburg, fifty-seven deals worth around $68bn were discussed, including a strategic liquefied natural gas development project in Mozambique that was Africa’s largest single foreign direct investment. AIF 2020 did not take place due to Covid-19.

This year’s Africa Investment Forum was meant to showcase118 deals in its pipeline from all eight founding members.

Boom and gloom

Despite the urgent need to rustle up greater inflows of private capital into African business and investment, the continent’s biggest challenge is not raising finance, Ghana’s President Nana Akufo-Addo said in a recorded address ahead of the event.

“Our biggest challenge is not a scarcity of financing, but overcoming a global economic system that has not allocated sufficient long-term resources to support Africa’s economic transformation.

“Now more than ever, it has become urgent to take the necessary steps to transition us towards becoming a resilient continent. We must exploit collectively our productive capabilities, build the capacity of our regional development banks, and develop country focussed development banks for infrastructure financing.

“This is a time for all of us to rise to the occasion. See you in Abidjan.”

Categories
Trade & Investment

What did FOCAC 2021 deliver for Africa?

China will provide another 1bn doses of Covid-19 vaccine to Africa, announced President Xi Jinping of China in a live video address to the opening ceremony of the Forum on China-African Cooperation (FOCAC) in Dakar on 29 November.

Other key announcements by the president included a pledge to boost Chinese imports of African products, Chinese participation in African poverty reduction programmes, a green development programme, a capacity building programme and a digital innovation programme, which we examine in detail below.

What does FOCAC 2021 tell us about China-Africa relations?

The eighth edition of FOCAC took place in Dakar, Senegal, from 29-30 November 2021 under the theme “Deepen China-Africa Partnership and Promote Sustainable Development to Build a China-Africa Community with a Shared Future in the New Era”.

“Twenty years ago,” said President Macky Sall of Senegal in his welcoming address to delegates, “China and Africa, determined to reinforce and take their historic relations to a higher level, established FOCAC as a new framework for formal and mutually beneficial partnership.”

“Since then, we have moved forward hand in hand, pragmatically and effectively, as evidenced by the intensification of our trade, investments and the many achievements under our various action plans.”

Senegalese President Macky Sall delivers his speech during the China-Africa Cooperation (FOCAC) meeting in Dakar, Senegal, on November 29, 2021. (Photo: SEYLLOU / AFP)

The forum adopted four key resolutions: The Dakar Action Plan (2022-2024); the China-Africa Cooperation Vision 2035; the Sino-African Declaration on Climate Change; and the Declaration of the Eighth Ministerial Conference of FOCAC.

Presenting the four key resolutions to the public at the beginning of November, Senegal’s foreign minister, Aïssata Tall Sall, declared: “FOCAC is our common good. Its success will bring prosperity to current and future generations of Africans and Chinese.”

Unlike the 2018 edition in Beijing, the event took place at ministerial level rather than summit level, but according to commentators this does not indicate any diminishing of relations between China and Africa – we examine the evolution of the forum since its inception below.

President Xi’s speech contained a number of financial commitments. The Financial Times reported that “amid growing debt concerns” Beijing had lowered its commitment to Africa from $60bn in 2018 to $40bn but that President Xi had “emphasised his commitment to what he called a “win-win” relationship”.

The newspaper quoted Chidi Odinkalu, senior manager for Africa at the Open Society Foundations, as saying that the reduced financial pledge showed that Beijing no longer had to try so hard in Africa and that some African governments relied too heavily on loans from China.

“The volume of credit that some of them have binged on makes them dependent beyond any sensible notion of sovereignty,” he said.

However, in a press conference in Nairobi on 4 December, China’s ambassador to Kenya, Zhou Pingjian, countered arguments that Beijing had cut its financing to Africa.

Referring to the commitments outlined by President Xi in a nine point programme announced at the forum (see below), he said:

“This is roughly in excess of $40bn. And that is before you factor in the pledge to supply 1bn vaccines which takes a lot of money. Particularly, the donations will take another $10bn plus.”

He said that not all of China’s commitments had been ascribed a monetary value but that “financial support from China to Africa will only increase. It will never reduce.”

He also stressed that the commitments had been made after lengthy discussions between China and Africa’s representatives and that.

“In the new arrangement,” he said, “the basic principle of China is to meet Africa’s most pressing needs. We settle on all these programmes after enormous consultations. We listen a lot to our partners in Africa.”

Hannah Ryder, CEO of China-based development NGO Development Reimagined, pointed out that China’s commitment to 10 development projects could raise the sum to over $60m.

In a recent article for African Business, Ryder also argues against the notion that China isrealising how “risky” is to provide finance to African and other developing countries.

“Debt distress analysis – by design – can exaggerate perceptions of African risk,” she says. “Fortunately for African countries in need of both concessional and commercial loans, Chinese stakeholders do not primarily use these ratings to determine their financial decisions. As I have said before in these columns, it is crucial to focus on the quality of what African governments use loans for.

“If loans are used for infrastructure that enables citizens to raise their productivity and create new business markets or models – infrastructure such as rail, industrial energy or internet cables – rather than recurrent expenditure, and interest rates are kept low, China and others can expect to get their loans back.”

Were China’s financial pledges more or less than those made in 2018? “Overall, difficult to say,” say Development Reimagined.

Nine programmes to strengthen China-Africa cooperation

In his speech, President Xi said that in the run-up to FOCAC, the Chinese and African sides had jointly prepared the China-Africa Cooperation Vision 2035. Under its first three-year plan, he said, China will work closely with African countries to implement nine programmes. Highlights of the programmes include:

1. The medical and health programme: Delivery of 1bn doses of Covid-19 vaccine

To help Africa reach its target of vaccinating 60% of the African population by 2022, China will deliver a further 1bn doses of Covid-19 vaccine to Africa. This will come in the form of 600m doses as donation and 400m doses to be provided through joint production by Chinese companies and African countries.

“A billion doses of vaccine is a big pledge,” Carlos Oya, an expert on China-Africa relations at Soas, University of London, told the Financial Times. “If they pull that off that would make the rest of the world look awful.”

In addition, China will undertake 10 medical and health projects for African countries, and send 1,500 medical personnel and public health experts to Africa.

2. The poverty reduction and agricultural development programme

Measures will include China undertaking 10 poverty reduction and agricultural projects for Africa, and sending 500 agricultural experts to the continent.

3. The trade promotion programme

China will aim to reach $300bn in total imports from Africa in the next three years. Measures will include opening “green lanes” (prioritisation of the inspection of foodstuffs and agricultural goods) for African agricultural exports to China and further increasing the scope of products enjoying zero-tariff treatment for the least developed countries that have diplomatic relations with China (which means all African countries apart from Eswatini).

China will provide $10bn of trade financing to support African exports.

China will undertake 10 connectivity projects for Africa, form an expert group on economic cooperation with the secretariat of the African Continental Free Trade Area (AfCFTA), and give continued support to the development of the AfCFTA.

4. The investment promotion programme – allocation of SDRs

China will encourage its businesses to invest at least $10bn in Africa in the next three years, and will establish a platform for China-Africa private investment promotion.

China will undertake 10 industrialisation and employment promotion projects for Africa, provide credit facilities of $10bn to African financial institutions, support the development of African SMEs on a priority basis, and establish a China-Africa cross-border RMB centre.

China will exempt African LDCs from debt incurred in the form of interest-free Chinese government loans due by the end of 2021.

President Xi also indicated that China is ready to channel to African countries $10bn from its share of the IMF’s new allocation of Special Drawing Rights (SDRs).

SDRs, often referred to as “paper gold”, provide central banks access to dollars through the IMF, giving them foreign exchange liquidity. The IMF created $650bn of SDRs in August to help stimulate recovery from the Covid-19 pandemic.

The SDRs were allocated to countries in proportion to the size of their economies, which meant very few went to Africa. However, a summit on refinancing African economies held in Paris in May had called on richer countries to reallocate $100bn of their SDRs to African countries.

“The 33bn special drawing rights allocated to Africa are insufficient given the immensity of Africa’s needs for its economic recovery,” said Félix Tshisekedi addressing the UN General Assembly in his capacity as chair of the African Union in September.

“This is why the UN and its member states must support the objective of the Paris Summit of reaching 100bn SDR for Africa.”

$10bn represents 25% of China’s SDR allocation, a bigger proportion than the 20% pledged by France, Italy and the UK, or the 18.6% pledged by the US.

“China has ‘trumped’ western countries by pledging to redirect a quarter of its IMF pandemic recovery boost to African countries – more than any other nation,” comments Chloé Farand writing on Climate Home News.

5. The digital innovation programme

China will undertake 10 digital economy projects for Africa, set up centres for China-Africa cooperation on satellite remote-sensing, and support the development of joint laboratories, partner institutes, and scientific and technological innovation cooperation bases.

Online shopping festivals promoting African products and a campaign to market 100 African stores and 1,000 African products on e-commerce platforms are promised.

6. The green development programme

China will undertake 10 green development, environmental protection and climate action projects for Africa, support the development of the “Great Green Wall”, and build centres of excellence on low-carbon development and climate change adaptation in Africa.

7. The capacity building programme

Projects will include the building or upgrading of 10 schools in Africa, invite 10,000 high-level Africans to training programmes and promote vocational training.

8. The cultural and people-to-people exchange programme

Chinese tourism in African countries will be promoted and facilitated.

9. The peace and security programme

President Xi said that China will undertake 10 peace and security projects for Africa. It will continue to deliver military assistance to the AU, support African countries’ efforts to independently maintain regional security and fight terrorism, and conduct joint peace-keeping exercises. 

Ramaphosa praises progress but calls for reduction of trade deficit

“Since its inception, FOCAC has been an engine for progress,” said President Ramapahosa in his address to the opening ceremony by video link.

He praised FOCAC as a “beacon of hope” and a “valuable platform for dialogue… and for amplifying Africa’s voice on the world stage.” He also drew attention to the gains it had brought in terms of trade and investment and the cooperation it had fostered in fields from higher education to medical care and transportation.

But he also emphasised the need to reduce the trade deficit between China and Africa.

“Over the next three years we will be implementing the Dakar Action Plan,” he said. “This will require that we recalibrate the Sino-Africa relationship with a greater emphasis on promoting sustainable development for the benefit of all.

He also called on China “to increase infrastructure investment in Africa, especially in key sectors such as port, rail, energy and water, and to continue to support human capital development and technology transfer.”

What is FOCAC?

FOCAC is a triennial high-level forum between China and all of the states of Africa, with the exception of Eswatini, which continues to recognise Taiwan.

Modelled on Japan’s Tokyo International Conference on African Development (TICAD), it provides an organising mechanism for Chinese foreign policy toward Africa. 

The US Department of Defence’s Africa Center for Strategic Studies describes FOCAC as “a process rather than a series of summits”, as it has spawned a vast number of consultation meetings, policy forums and specialist organs, as described in detail on the FOCAC website.

The Africa Center for Strategic Studies also draws attention to its focus on training and capacity building, with more than 100,000 training slots allotted to African Union member states triennially.

China's President Xi Jinping applauding as he attends the Forum On China-Africa Cooperation - Round Table Conference at the Great Hall of the People in Beijing on September 4, 2018.
China’s President Xi Jinping applauds delegates at FOCAC 2018 in the Great Hall of the People, Beijing. (Photo: Lintao Zhang / POOL / AFP)

FOCAC has frequently played host to eye-catching Chinese policy announcements and financial commitments. The forum is alternately hosted in Beijing and major African capitals.

Three of the eight editions held so far have included summits attended by the incumbent Chinese president and many of his counterparts across the continent. According to Quartz Africa, twice as many African leaders chose to attend the 2018 summit in Beijing than the UN General Assembly two weeks later.

The 2021 forum took place at ministerial rather than summit level. China was represented by its foreign minister, Wang Yi, rather than President Xi Jinping. However, as Lauren A. Johnston of Adelaide University has pointed out, this does not indicate a downgrading of FOCAC: “Although Mr. Xi will only speak to the Forum from China’s capital Beijing via video-link, China-Africa ties are compounding apace.”

The 2021 forum looked to build on the increasingly close economic relations that have been forged between China and Africa over the last 20 years.

According to the China-Africa Research Institute at Johns Hopkins University, the value of China-Africa trade in 2019 was $192bn, up from $185bn in 2018. In 2019, the largest exporter to China from Africa was Angola, followed by South Africa and the Republic of Congo. In 2019, Nigeria was the largest buyer of Chinese goods, followed by South Africa and Egypt.

On 17 November, Chinese vice commerce minister Qian Keming reported that trade between China and Africa had risen 38.2% year on year to $185.2bn in the January-September 2021 period, a record level.

China is also Africa’s biggest source of foreign direct investment – investment surged from $75m in 2003 to $2.7bn in 2019. Chinese FDI flows to Africa have exceeded those from the US since 2014.

China’s direct investment in Africa hit $2.59bn in the first nine months of 2021, up 9.9% year on year, reported Qian Keming.

Between 2013 and 2018, 45% of China’s foreign aid went to Africa. The number of Chinese workers in Africa by the end of 2019 was 182,745, according to official Chinese sources.

Chinese and Ivorian engineers work on the construction of a container terminal in Abidjan.
Chinese and Ivorian technicians at work on the construction site of a new container terminal at the port of Abidjan, Côte d’Ivoire. (Photo: ISSOUF SANOGO / AFP)

How has FOCAC impacted the financial relationship between China and Africa?

The first official FOCAC was held in Beijing in 2006, following two major ministerial conferences in Beijing and Addis Ababa in 2000 and 2003.

Between 2000 and 2019, Chinese financiers signed 1,141 loan commitments worth $153bn with African governments and their state-owned enterprises, estimates the China-Africa Research Institute at Johns Hopkins University.

In 2000, Chinese investment in Africa was at 2% of US levels, while by 2020 it had reached 55%, according to the US Department of Defense’s Africa Center for Strategic Studies.

In 2015, China unveiled its largest commitment of the conference series, a $60bn package of aid, subsidised lending, and state-backed investment, a commitment repeated in 2018.

Chinese financial support has proved crucial to African countries over the last two decades. Loans from government and state-owned banks have enabled the construction of major infrastructure projects across the continent, including highways, ports, airports and government buildings.

But much of that support has been relatively opaque. According to a research paper released in late September by the China Africa Research Institute, Zambia’s outstanding external debt to Chinese financiers is approximately $6.6bn, almost double the $3.4bn revealed by the previous Zambian government.

The estimates do not include substantial arrears to Chinese contractors for unpaid projects, part of an estimated domestic arrears pile amounting to $2bn.

Future trajectories of China-Africa relations

The report FOCAC at 21: Future Trajectories of China-Africa Relations published in October by the China Foresight project at the London School of Economics brings together a number of international experts to examine emerging trends likely to shape China-Africa relations in coming years.

  • Stephen Paduano, executive director of the LSE Economic Diplomacy Commission, says that the crux of China’s foreign economic policy since the death of Mao has been running trade surpluses. It is far from certain that China can pull back from its overseas spending spree, as a decline in overseas capital flows would create a decline in China’s trade surplus that could be politically unpalatable.
  • Mzukisi Qobo, head of Wits School of Governance at the University of the Witwatersrand in South Africa, highlights three crucial areas in China-Africa relations:
    (1) cooperation on trade, using the African Continental Free Trade Area as a basis for broadening agreement;
    (2) digital technology, where China is likely to “aim to draw Africa to its digital orbit on the back of technology cooperation and possibly development assistance that is tied to the use of Chinese technology”;
    (3) supporting Africa’s economic recovery through ramped up development assistance and sectoral cooperation, encompassing both agriculture and industrial sectors.

The report also contains articles by experts examining China’s security engagement with Africa, its digital infrastructure in Africa, educational exchanges, collaboration on space technology and China-Africa health cooperation and vaccine diplomacy.

In the China Africa Project‘s FOCAC 8: The Economic Agenda, Stephen Paduano and Mzukisi Qobo join Eric Olander and Cobus van Staden to discuss key economic issues in the China-Africa relationship.

Additional research and reporting by Charles Dietz.

Categories
Trade & Investment

IATF 2021: Building Bridges for a Successful AfCFTA

With over 10,000 registered participants from 59 countries, the Intra-African Trade Fair (IATF) in Durban was the biggest pan-African business event to take place since the pandemic began. 

The seven-day fair was organised by the African Export-Import Bank (Afreximbank) in collaboration with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat under the theme “Building Bridges for a Successful AfCFTA”.

It hosted over a thousand exhibitors in the Durban Exhibition Centre while the accompanying four-day conference in the city’s International Conference Centre brought together business leaders, senior officials and seven sitting heads of state.

On the final day of the trade fair on 21 November, Kanayo Awani, managing director of Afreximbank’s Intra African Trade Initiative, reported that deals worth $36bn had been signed during the event and that others had still not been completed. 

She said that 1,161 exhibitors, including 838 companies from 59 countries of which 46 came from Africa, had showcased their goods and services in a massively successful event.

Building bridges for a successful AfCFTA

The AfCFTA was the central theme of the conference. With 54 African countries signed up, the free trade area, which began trading in January 2021 at the height of the pandemic, is the largest trading bloc to have been launched since the formation of the World Trade Organisation. African leaders are optimistic that it will be able to help unlock the continent’s economic potential. 

South African President Cyril Ramaphosa opened the event on 15 November, declaring to delegates that “this trade fair is about building bridges. It is about connecting countries. It is about connecting people as well. Now Africa is taking concrete steps to write its own economic success story and this Intra-African Trade Fair is part of that story. Africa is opening up new fields of opportunity.”

In his address, President Muhammadu Buhari of Nigeria said “the African Continental Free Trade Area must make the effort to ensure that Africa must be a marketplace where no country is left behind, we must ensure that we create jobs and enhance revenues for all parties.”

The conference featured a series of panels across different sectors, including agriculture, automotives, e-commerce, logistics, politics, technology and tourism.

Obasanjo calls for creation of “Made-in-Africa” brand

On the third day of the IATF former Nigerian President Olusegun Obasanjo made a clarion call for the creation of an emblematic Made-in-Africa brand that will promote intra-African trade and boost the international export of African products.

Obasanjo told the audience that having such a brand would instil a sense of pride in each African country.

Former President Obasanjo of Nigeria at IATF 2021.
Former Nigerian President Olusegun Obasanjo speaking at IATF 2021. (Photo: IATF)

He said that the AfCFTA was working to remove the divisions that were brought about by colonialism, where Africa had been divided into regions based on the languages of the colonisers. According to him, the shared vision of IATF 2021 participants and traders is what will bring the AfCFTA to life.

“I have been impressed by the interaction of people at the IATF. People are working together, and this creates the environment in which miracles can happen,” he declared.

Talking tourism

With strict lockdowns and travel restrictions in place throughout the last two years, the tourism industry has gone through a period of unprecedented turmoil, and airlines came under significant financial pressure due to a drop-off in tourist numbers.

The “Think Tourism” panel on Thursday 18 November looked at ways to boost intra-African tourism given the reticence of many tourists to travel to parts of the continent because of low vaccination rates.

Abderahmane Berthe, secretary general of the African Airlines Association (AFRAA) pointed out that there were 18.1m tourists travelling in Africa in 2020, a 74.2% drop compared to 2019. The 18.1m tourists generated $14bn of receipts and represent 4.5% of the global number of tourists, according to the UN World Tourism Organisation.

Cuthbert Ncube, chairman of the African Tourism Board, urged African tourism boards and governments to work together to help tourism to recover from the pandemic. 

“We need to start breaking the barriers that had separated us,” he said.

A strong domestic recovery in Africa would compensate for the drop in international demand, he added. The panellists said that the most successful tourism markets globally – such as the US, UK, Europe and Germany – have very strong domestic tourism industries, and this needed to be strengthened in Africa.

“We say Africa is open to business, but still it is a nightmare to travel from one member state to another. Integration between African states could enable our tourism sector to operate in a better way,” Ncube said.

Ethiopian Airlines emerged strong from the pandemic but is now encountering problems due to the country’s civil war. (Photo: Philip Pilosian / Shutterstock)

The panellists then spoke about the future of airlines in Africa. One of the sector’s major casualties during the pandemic was already troubled South African Airways (SAA), which filed for bankruptcy and was privatised this year. 

Africa’s “golden star” airline Ethiopian Airlines, which had emerged strong from the pandemic, is the latest carrier on the continent to run into trouble, with the country in civil war. Due to the instability, Addis Ababa, a major airline hub, will now be treated with caution by many tourists, the panel warned.

Talking tech

The conference also saw leading players in the technology sector discuss ways to increase investment into African technology companies, as well as the growth trajectory for different areas of the industry, including in fintech, health tech and mobile.

Angela Wamola, acting head of sub-Saharan Africa, GSMA, began the “Think Tech” session with a presentation on mobile connectivity in Africa. GSMA represents the interests of over 750 operators with nearly 400 companies in the broader mobile ecosystem worldwide.

Wamola emphasised that mobile money will be at the heart of the sub-Saharan economy in the future and said that 1.2bn people have currently registered mobile money accounts across Africa.

“The message is Africa is running the show when it comes to mobile money and therefore the lens we need to look at it is: mobile money is Africa’s greatest and key asset to lead for the digital economy,” Wamola said.

Wamola noted that in sub-Saharan Africa, 120m people will start using mobile money between 2020 and 2025, with almost a third from Nigeria and Ethiopia, driven by uptake among young people.

Fabian Whate, head of South African-based tech investment company Naspers Foundry, observed that at least 60% of venture capital investment in Africa is in the fintech sector. “This year we saw $4bn of venture investment [in Africa] that compares to an African economy of around $2 trillion. So really, we’re just beginning to scratch the surface.”

“As time moves on, we’re going to see further and further development across a broader array of sectors. As those sectors develop further and further, you’re going to see further capital come into them,” he added.

Precious Lunga, founder and CEO of Baobab Circle, a health tech startup using AI and automation to remotely support people with chronic health conditions, said the conversation has shifted around health tech since the onset of the pandemic. 

“When we had the conversation four years ago, people didn’t understand why health tech would be relevant across the African continent, because everyone was looking at tech investment through the fintech lens. Since then, that’s definitely changed.”

Tanya van Lill, CEO of SAVCA (the Southern African Venture Capital and Private Equity Association), said she was optimistic about more venture capital funding coming into Africa. 

In South Africa, the venture capital industry is only 3% of the size of private equity and private equity in South Africa started in the mid-1980s. So if we’re already seeing $4bn invested on the continent, and it’s still a growing, nascent industry, just think what we can see in 20 years if it also has the opportunity to grow like private equity has.”

Van Lill said she has seen more investment in health tech, as well as an increase in e-commerce and commercial last-door delivery, as during the pandemic people would rather order online than go to the shops. She is also seeing a rise in edutech investment.

Final thoughts

In the closing plenary of the conference on 18 November, Acha Leke, Africa chairman at McKinsey, noted that Africa did not fare as badly from the Covid-19 pandemic from an economic perspective as previously feared, despite low vaccination rates compared to the rest of the world.

“The good news is that we didn’t lose 150m jobs as projected, we lost about 30m. So generally, we were not as affected as we feared by the crisis which makes it more exciting on one hand for investors to come and continue to invest in these markets.”

But he warned that Africa is in the midst of its third Covid-19 wave and vaccinations have been slow. The slow economic recovery has been compounded by Africa’s GDP slowing down even before the crisis.

However, he was upbeat about significant investments made in Africa’s health sector and prospects for the future: “25% of all the vaccines in the world are administered in Africa, but Africa produces only 1% of the vaccines. Again, it’s a massive opportunity,” he said.

Leke was joined on the final panel by a string of politicians, executives and senior UN officials, including South African trade minister Ebrahim Patel, former Botswana trade minister Bogolo Joy Kenewendo and Ibrahima Diong, UN assistant secretary general and director general of African Risk Capacity.

There were many talking points from the week, butAbdou Diop, managing director at Mazars, an international audit, tax and advisory firm in Morocco, provided a good summary of what Africa needs to do to prosper: 

“Africa is really full of resources, the continent is very young, it’s innovating, creating, investing.

“We need to educate, to industrialise, to gain food security, to bring energy to the countries, and all these put together will bring jobs. Also, we need to make sure this African free trade happens – because sometimes we have some countries that sign today and other days they close their borders.”

Following the conference, two days were devoted to Africa’s creative industries in a programme organised by the Creative Africa Nexus (CANEX).

Africa’s creative industry can create millions of jobs

The Creative Africa Nexus (CANEX), a programme put in place by Afreximbank to support Africa’s creative and cultural industries, ran for two days after the end of the conference.

Designed specifically for African creatives including digital innovators and experts, fashion, film, and music actors looking for ways to monetise their content across the digital landscape, the forum is a space to share, discuss and create solutions that will encourage creatives to find innovative ways to use existing technology to increase their remuneration and thrive in their careers.

It brought together the leading lights of Africa’s creative sector through substantial exhibition space, business to business/government meeting opportunities and a comprehensive programme of conversations, panels discussions, live performances, installations and screenings. 

Benedict Oramah, president and chairman of the Board of Directors of Afreximbank said that the young men and women in the creative sector have turned it into tradable services with a global reach, appeal and impact.

Benedict Oramah, president and chairman of the Board of Directors of Afreximbank, speaks at CANEX. (Photo: IATF)

“At Afreximbank,” he said, “we fully understand the power of the creative industry to catalyse intra-African trade, create millions of jobs for the continent’s young population, and promote the emergence of national and regional value chains. We also know the power of creatives to catalyse industrial development because this is a bankable industry.”

About $128m of the $500m facility set aside as seed capital by Afreximbank towards CANEX has already been invested in the form of loans to artists and facilitation of initiatives aimed at activating the nexus.

The third edition of IATF will take place in Abidjan, Côte d’Ivoire, in 2023.

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Finance & Services

Unlimited market size for service-providers helping banks to digitise, Skaleet Chairman says

Banks across Africa and the rest of the world are facing a period of immense change where failure to digitise and adopt new ways of thinking will eventually lead to a loss of customers and relevance.

For many banks, rapid technological innovation leading to a shakeup of the banking industry has forced otherwise hesitant brick and mortar lenders to fundamentally reevaluate how they do business.

With one of the least developed banking industries in the world, Africa sits at the forefront of this tension between innovation and inertia.

“The disruption that banks are facing is extremely scary for them,” says Yves Eonnet, chairman and cofounder of Skaleet, a Paris-based company that provides core banking services to financial institutions in Africa and Europe.

“But it is a disruption that every bank in the world will have to face”.

Yves Eonnet
Yves Eonnet, chairman and co-founder of Skaleet, formerly known as TagPay.

Huge potential

Formerly known as TagPay, Skaleet helps banks to digitise by offering them core banking solutions and key services like payments platforms.

By adopting Skaleet’s digital wallets, which connect with a limitless number of payments channels and external utility providers, banks can offer an innovate service to their customers and monetise the revenue stream.

In theory, the size of the market is unlimited – relative only to the number of banks, Eonnet says.

Skaleet is currently working with 22 financial institutions in West and Central Africa, and it is looking at the Maghreb and East Africa as key areas of growth.

But the relative infancy of the sector makes it hard to quantify the true potential of the industry.

“You have to see our business as an emerging business so there is no market size,” he says.

“You cannot measure it. Every bank should be interested in looking at our technology or the technology of our competitors, but this is really early stages. We are still in the early adopter or visionary stages”.

Limits to market size

That said, the current limits to the market include hesitancy and readiness around adopting new technology – though this will change as the services are more widely understood and adopted.

Eonnet says that some banks in Africa appreciate the need to digitise while other banks try to resist the change and continue with business as normal.

“The problem we are facing today is the fact that historically banks didn’t have to change. They didn’t adapt to the evolution of technology and consumer demand” he says.

“But now they are facing threats from telecom operators and they will have to change otherwise they will lose part of their value chain. Still some banks run away from the problem rather than address it.”

The chairman says that there is no way of predicting which banks are ready to embrace change and which banks aren’t, but leadership and executive vision is key.

He adds that a large part of his workload involves explaining to banks the need and benefit of adopting digital services.

A successful partnership with one bank in a country will usually lead to a windfall of projects where more and more financial institutions become interested in Skaleet’s services.

Another limit to the market size is that some banks will prefer to create their own technology, rather than buy the software from a sub-contractor.

Eonnet says that this may end up being more costly and less secure than if the banks used a trusted third party to develop the technology.

“If they develop their own platform, I believe they are more exposed to hacking than otherwise,” he says.

“The risk is never net zero but we are experts in the field and we have infrastructure that is pretty impressive”.

Many banks also think that the costs of incorporating external software is much higher than the reality, Eonnet adds.

Despite the nascent state of Africa’s banking industry, Skaleet’s cofounder says that there is no difference between the length of time taken to agree contracts with African banks compared to European banks.

“I have customers in Europe who only sign after three years of negotiations and others after three weeks and it is the same in Africa,” he says.

“The market is moving fast and you have this situation where people don’t know what is typical. People who are aware of what is going on will be able to decide quicker and people who are learning will take a longer time”.

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Trade & Investment

Diplomacy can still avert Ethiopian disaster

The disastrous civil war in Ethiopia continues to escalate with startling rapidity.

A conflict once confined to the Tigray region has now become a national conflagration with immense regional implications, as rebel forces of the Tigray People’s Liberation Front (TPLF) continue their march on the capital in a bid to oust prime minister Abiy Ahmed.

The international community has belatedly woken up to the seriousness of the conflict, a year into a brutal war marked by ethnic massacres, starvation, and tens of thousands of deaths. On 24 November, the UK urged its citizens to “leave Ethiopia now”, warning that it is “likely to become much more difficult to leave Ethiopia in the coming days”.

In a sign of the government’s increasing desperation, Abiy Ahmed vowed on 23 November that he will lead his country’s army on the battlefront, the latest in a series of aggressive messages from a once-fêted leader who continues to dial up the rhetoric even as the war draws closer to his capital.

The prime minister’s intransigence in the face of a worsening situation has appalled former well-wishers in the international community, who have attempted in vain to prevent the slide to all-out war.

Reuters has shared footage from Ethiopia’s state-affiliated Fana Broadcasting reporting that prime minister Abiy Ahmed was on the frontline with the army fighting Tigrayan forces.

In early November, Ethiopia was one of three African countries to be suspended from the United States’ African Growth and Opportunity Act (AGOA) due to what President Joe Biden said were “gross violations of internationally recognised human rights.” 

The US has also sanctioned individuals from opposing sides involved in the war. On the morning of 23 November, it was reported that Ethiopia had expelled four of the Republic of Ireland’s six diplomats in the country due to positions Ireland has articulated on the crisis.

Increasingly isolated, Abiy Ahmed will never again enjoy the reputation that saw him awarded the Nobel Peace Prize in 2019 after making peace with Ethiopia’s bitter foe Eritrea. Yet it is not too late to learn from the lessons of the prize and prevent Ethiopia from slipping further into the abyss.

Risk of total ruin

US envoy Jeffrey Feltman warned that “nascent progress” on a ceasefire risks being outpaced by an alarming increase in military operations. With hundreds of thousands already menaced by famine, a further widening of military operations risks total ruination for the civilian population.

The TPLF and the government – both of whom were insisting in late November that they were close to victory – should realise that attempting to impose a military solution on Ethiopia’s delicate patchwork of ethnic groups is unlikely to work. 

Instead, both sides must return to the negotiating table. The African Union, led by its negotiator, former Nigerian President Olusegun Obasanjo, and the US, represented by Feltman, are working hard to combine their diplomatic efforts and guide the parties back to the table. It might be the last chance for Ethiopia to avoid calamity. 

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Finance & Services Trade & Investment

Huge potential to boost Arab-Africa trade

When Mansa Musa, the 14th century ruler of the Mali Empire, made a pilgrimage to Mecca in 1324 he brought with him so much gold that he devalued the price of the precious metal by up to 25%.

Stopping in Cairo along the way, the ruler of the West African kingdom, who is thought to have been one of the richest men that ever lived, is said to have impacted the local economy for the next 12 years due to lavish spending and gift-giving in the ancient city.

Musa’s piligrimage is just one example of the cultural, religious and economic ties that have existed between the Arab and African worlds for centuries.

From Sokoto in northern Nigeria to Zanzibar on the coast of Tanzania, it could be argued that the Arab world has had the longest and most sustained influence on the African continent.

These ties have translated into tangible economic and trade links in the modern day.

In general terms, Arab countries, specifically in the Middle East, import precious metals and foodstuffs from Africa while exporting pharmaceuticals, machinery and plastics.

A range of public development entities and private Arab companies work across Africa. One of the most well-known is the Dubai-based logistics company, DP World, which is set to invest more than $1bn in three African countries: Senegal, Egypt and Somaliland.

But relative to the long history of trade and cooperation, the size of Arab-African trade today remains small.

“With total Arab-Africa trade at around $80bn we have a long way to go to catch the opportunities that abound,” says Benedict Oramah, president of the African Export-Import Bank (Afreximbank) at the Second Arab-Africa Trade Forum in Cairo in October.

Catching opportunities

One of the largest opportunities in Africa for Arab investors is light manufacturing, with an estimated $80bn worth of potential on the continent.

“The Arab world can take advantage of the relatively cheaper capital and labour costs in Africa either for the domestic market or for exports,” says Oramah.

The creation of the African Continental Free Trade Area (AfCFTA), which boasts a combined GDP of $3.4trn, should act as catalyst to encourage Arab companies to manufacture goods that can be sold across the continent.

In 2019, Afreximbank and the International Islamic Trade Finance Corporation (ITFC) launched a $500m facility to fund key sectors and strengthen export value chains to increase trade. The ITFC identified agriculture and SMEs as two key sectors in Africa that could step up links with the Arab world through increased investment.

The trade finance body, along with its partners, launched the Arab-Africa Trade Bridges (AATB) in 2017 to boost trade between the two regions. The AATB provides a platform that can be used by Arab and African businesses to discover and unlock opportunities in both regions.

Since then, over 1,000 financial stakeholders have taken part in the initiative and the platform has led to more than $150m worth of transactions.

Problems abound

However, despite a range of initiatives and opportunities there are several bottlenecks which must first be overcome to effectively boost economic cooperation between the two regions.

One of the biggest problems cited by Arab and African traders is the lack of available information on opportunities in different countries. The ITFC says there is a lack of “information on market opportunities, company profiles and trade laws and regulations”.

To solve this problem, the Arab Bank for Economic Development in Africa (BADEA), which hosted the latest Arab-Africa Trade Forum, created the Arab-African Trade Platform to act as a portal for information. The Khartoum-based development bank hopes that investors will use the platform to discover business opportunities in Africa that may have otherwise been hard to discover.

Another problem is the lack of adequate infrastructure and finance to export products seamlessly between the two regions. Elmuiz Osman, new business development manager at the Dal Group, Sudan’s largest conglomerate, says that African countries are missing a host of opportunities due to the challenges associated with exporting.

For example, Saudi Arabia imports 450,000 tonnes of bananas each year at a total value of $600m. Sudan, which is just across the Red Sea, produces quality bananas but exports none of them to Saudi Arabia, Osman says.

He blames the failure on “logistical issues” and the fact that Sudanese goods struggle to meet international standards. This is a common problem for African goods as it limits the range of available export markets.

Sudan, one of the world’s top producers of peanuts, exports the commodity to more than 30 countries but not to a single Gulf country due to aflatoxin issues, Osman adds.

In 2020, ITFC, Afreximbank and the African Organisation for Standardisation launched an initiative, under the umbrella of the AATB, to harmonise standards for pharmaceutical and medical devices in Africa.

It is also hoped that the AfCFTA will bring greater standardisation of more products across Africa as regulators work to harmonise import-requirements, which should help the continent attract foreign investment.

Zul-Kifl Salami, senior advisor to the president of Benin, says that the standards issue boils down to “what Africa is offering”. To attract Arab investors, Africa must increase the quality of its goods and services, he says.

Randa Filfili, CEO of Senegal-based Zena Exotic Fruits, says that Africa can make global-standard products but foreign buyers will often overlook the opportunities because the goods were made in Africa.

“We have proved that we can make products of quality that are well-made, natural and good for health,” she says.

Success stories

Saudi Arabia-based Jamjoon Pharma is one example of an Arab company that has taken full advantage of the African market. The multi-billion drug producer and exporter sells pharmaceuticals in more than 30 countries, with most of the sales being made in Africa.

To expand operations on the continent, Hesham Elsayed, director of international markets, says that Jamjoon Pharma will soon build factories in both Algeria and Egypt. The company plans to extend operations to 12 markets, all of them in Africa. South Africa, Angola and Chad are first on the list.

However, one of the major problems while working across so many markets is hard currency issues and repatriating funds to Saudi Arabia, Elsayed says. One development to help overcome the issue is the creation of Africa’s continent-wide payment system and its potential merger with the Arab equivalent.

The African Union, in partnership with Afreximbank, has created the Pan-African Payments and Settlement System (PAPSS) to reduce costs and speed up payments for intra-African transactions.

This system will be linked to Buna, the cross-border and multi-currency payment system owned by the Arab Monetary Fund, which will allow Arab and African entities to easily move funds around both regions.

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Trade & Investment

Leave Ethiopia now, UK government tells citizens

The UK government has advised its citizens to leave Ethiopia immediately as the government’s war with rebels from the Tigray region draws closer to Addis Ababa, warning that it is “likely to become much more difficult to leave Ethiopia in the coming days”.

“The conflict has potential to escalate and spread quickly and with little warning. The FCDO [Foreign, Commonwealth and Development Office] advises against all travel to Ethiopia, except Addis Ababa Bole International Airport, because of the risk of the conflict spreading to new areas without prior warning,” says the UK government’s official Ethiopia travel advice page.

In recent weeks, rebel forces from the Tigray People’s Liberation Front (TPLF) and its allies have made advances towards Addis Ababa in a bid to remove the government of prime minister Abiy Ahmed after a bloody conflict marked by ethnic massacres, starvation and the deaths of tens of thousands. 

On 23 November, Ahmed vowed that he will lead his country’s army on the battlefront, the latest in a series of aggressive messages from the once-feted Nobel Peace Prize-winning leader.

“Leave Ethiopia now”

In light of recent events, the UK has advised its citizens to leave on commercial flights given “good commercial options to most destinations from Addis Ababa Bole International Airport.”

“You should leave Ethiopia now while commercial options are still available. It is likely to become much more difficult to leave Ethiopia in the coming days. Consular support is severely limited across Ethiopia. In the event of deterioration in the political or security situation, the British Embassy may be limited in the assistance that it can provide. Do not rely on the FCDO being able to evacuate you in an emergency.”

The UK government’s message is the latest blow to Ethiopia’s diplomatic standing. In recent weeks, Ethiopia’s international relations have deteriorated as the war has further escalated with no sign of a diplomatic solution.

On the morning of 23 November, it was reported that Ethiopia had expelled four of the Republic of Ireland’s six diplomats in the country due to positions Ireland has articulated on the crisis.

In early November, Ethiopia was one of three African countries to be suspended from the United States’ African Growth and Opportunity Act (AGOA) due to what President Joe Biden said were “gross violations of internationally recognized human rights”.

UK Minister for Africa Vicky Ford said: “The conflict in Ethiopia is deteriorating quickly. In the coming days we may see the fighting move closer to Addis Ababa, which could severely limit options for British Nationals to leave Ethiopia.

“I am urging all British Nationals – whatever their circumstance – to leave immediately, while commercial flights are readily available and Addis Ababa Bole International Airport remains open. Interest free loans are available to help British Nationals to return to the UK who may otherwise struggle to afford flights.

“Those who choose not to leave now should make preparations to shelter in a place of safety over the coming weeks. We cannot guarantee there will be options to leave Ethiopia in the future.”

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Trade & Investment

Review – China and Africa: The New Era by Daniel Large

In his new book, China and Africa: The New Era, academic Daniel Large provides a comprehensive and up-to-date guide to contemporary China-Africa relations, demonstrating how politics defines the “new era” of China–Africa, from foreign policy to security, debt and development.

Relations between the partners have been evolving from a narrow, extractive agenda to a wide-ranging engagement in which China increasingly matters to the continent as substantial political partner.

Large, an associate professor at Central European University, argues that the relations are increasingly being shaped by the vision of Chinese president Xi Jinping. 

“China’s New Era is the era of Xi Jinping,” he writes. “Since taking power as General Secretary of the CCP in November 2012, and becoming state president in March 2013, Xi Jinping has presided over a transformation in China’s domestic and global affairs.”

Rather than keeping relations to strictly economic issues, Large says that “Xi Jinping has sought to redefine China’s Africa relations in his terms, including incorporating Africa more overtly into the CCP’s vision for China’s future centrality in world affairs.”

China’s African state allies are important in China’s foreign policy and global multilateral role at the United Nations, giving Beijing a reliable voting bloc of support on controversial diplomatic issues, even as the New Era has seen more explicit promotion of the CCP’s “China model” and a more aggressive assertion of its worldview.

“China’s relations with Africa have seen a transformation, having widened, deepened and diversified, since 2006 [the date of the first Forum on China-Africa Co-operation or FOCAC] and are becoming dominated by issues like industrialisation or security. Africa is part of China’s global rise, now proceeding in the context of open strategic competition with the US,” argues Large.

“Overall, politics has become far more important, in the context of economic challenges, changing global politics and higher stakes.”

The importance of security

That political alliance has also led to an increasing closeness between the partners on security issues. As China seeks to protect its more established interests and Chinese citizens on the continent, security has become an expansive area of engagement.

Xi Jinping termed security a major “pillar” of China–Africa relations in 2015. The challenges Chinese actors have faced have necessitated and enabled a more proactive military role in Africa that, as UN peacekeeping exemplifies, serves China’s multilateral goals as a self-declared responsible power contributing to global peace and security.

The security relationship works both ways. African nations have also backed some of China’s most controversial domestic policies, including repressive measures towards the majority-Muslim Uyghur community in Xinjiang, northwest China, 1m of whom are thought to be locked up in secret “re-education camps”.

In 2019, Africa’s political support for China’s Xinjiang policies was spelled out in a letter signed by 16 African states including Muslim powers Algeria, Egypt, Sudan and Somalia, which was sent to the UN’s Human Rights Commission. Beijing praised the “objectivity and fairness” of the letter, lauding it as “a strong response to a few Western countries’ groundless accusations against China”.

African nations have also supported Beijing’s policy towards Hong Kong. After the introduction of a repressive security law, 25 African countries signed a statement supporting China at the UN Human Rights Council. Three important African democracies, Nigeria, South Africa and Kenya, expressed no public sentiment in support of the law but neither did they openly criticise it. 

But while Africa’s political elites may be in lockstep with Beijing on such issues, the response has been quite different in African civil society.

“The impact on civil society views in Africa of China was shaping up to be quite different, in view of the enormity of the security law in overriding partial democratic freedoms and rights in Hong Kong,” says Large. African opinion towards China is therefore not as unified as often assumed.

Political influence

Still, while China continues to back Africa economically, it seems likely to continue wielding massive political influence. Between 2000 and 2019, SAIS-CARI estimated Chinese financiers signed 1,141 loan commitments worth $153bn with African governments and their state-owned enterprises.

China is Africa’s biggest source of foreign direct investment – investment surged from $75m in 2003 to $2.7bn in 2019. Chinese FDI flows to Africa have exceeded those from the US since 2014.

Approaches to economic development have became based on an industrialisation-led “structural transformation” agenda, with China pledging and delivering billions to infrastructure projects across the continent.

Here too there are likely to be future tensions. China’s expanding role as a holder of African debt will increasingly shape relations in the months ahead as African economies brought low by the Covid-19 pandemic seek loan deferrals and cancellations from Beijing and its network of policy banks. 

Given the vital importance of debt renegotiation and forgiveness, Chinese financial support at this year’s FOCAC is not expected to rival previous years, where announcements totalled up to $60bn in total.

The era of easy Chinese money in Africa looks to be coming to a close, especially given domestic worries about the health of the Chinese economy following recent financial scandals. 

Even so, while the future of China-Africa ties may increasingly be geared towards politics, it can be argued that China’s economic engagement with Africa, in the form of investments, loans and patronage, has already borne substantial dividends. Such is the realpolitik of the current world order.

Until the West can compete with China’s economic pledges on the continent, their political influence is likely to remain secondary to the expansive vision of Xi Jinping.