Remarks by Akinwumi A. Adesina, President of the African Development Bank, at the G7 Summit, May 26-27, 2017, Taormina, Italy
May 30, 2017 | 0 Comments
Your Excellencies, I wish to thank Prime Minister Gentiloni for inviting me to participate at this G7 Summit. It sends a major message: the G7 takes Africa seriously and sees the African Development Bank as a strategic partner. Let me thank you all in the G7 for your strong support for the African Development Bank.
The new spring in our step for Africa’s development comes from the Bank’s High 5 priorities: Light up and power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the quality of life for the people of Africa. These High 5s will help to achieve 90% of the Sustainable Development Goals for Africa and 90% of Agenda 2063.
Africa needs innovation. This is crucial for access to energy, because 645 million Africans do not have access to electricity. Africa cannot develop in the dark. Africa needs an energy revolution.
That is why the Bank is investing $12 billion over the next five years in the energy sector as well as to leverage up to $50 billion, to address this challenge. We are investing in unlocking Africa’s renewable energy potential, especially innovations on solar power. Our goal is to connect 130 million households to grids and 75 million households to off-grid solar systems within ten years. To light up and power Africa is the biggest deal of the century.
Even insects migrate from where it is dark to where there is light. No wonder Africa’s youth – our assets – take huge risks migrating to Europe, looking for a better life. The future of Africa’s youth does not lie in migration to Europe; it should not be at the bottom of the Mediterranean; it lies in a prosperous Africa. We must create greater economic opportunities for our youth right at home in Africa.
That’s why the African Development Bank has launched the Jobs for Youth in Africa initiative, with the goal of creating 25 million jobs within 10 years, with a focus on agriculture and ICT. We are investing in skills development in computer sciences, technology, engineering and mathematics to prepare the youths for the jobs of the future.
But we must also avoid what I call the “triangle of disaster” – that deadly combination of extreme rural poverty, high youth unemployment and environmental climate degradation. Where these factors are found, they provide rich recruitment zones for terrorists.
We must turn rural areas from zones of economic misery to zones of economic prosperity. This requires new agricultural innovations and transforming agriculture into a sector for creating wealth. We must make agriculture a really cool choice for young people. The future millionaires and billionaires of Africa will come initially from agriculture.
Africa is leading globally today on mobile banking, taking advantage of rapid growth in the use of mobile phones (and President Kenyatta explained this brilliantly this morning). Innovations in digital finance will be critical to reaching the unbanked – especially women. No bird can fly with one wing. Africa will develop faster when it achieves equality for women.
That’s why the Bank launched the Affirmative Finance Action for Women in Africa (AFAWA) to help leverage $3 billion for women in Africa. Women are bankable, after all 97% of them pay back their loans. (Don’t ask me what the corresponding figure is for men.)
But we also need innovation in our perspectives. I want you to please see Africa differently – not just as a place for economic development, but as an investment growth frontier.
So, let’s talk business: Africa will have the same population as India and China today, taken together, by 2050. Consumer spending in Africa is projected to reach $1.4 trillion in the next three years and business-to-business spending to reach $3.5 trillion in the next eight years. And Africa is reforming, making itself open for business: it accounted for 30% of global business and regulatory reforms in 2016.
The G7 should look at Africa as a huge investment opportunity.
To help unlock massive private investments in Africa, the African Development Bank together with our partners will be launching the Africa Investment Forum next year. This will be a totally transactional forum that will be all about making deals happen and fast-tracking investments in Africa by pension, sovereign wealth, insurance funds and other institutional investors. It will provide the platform for the success of the Compact with Africa being developed through Chancellor Merkel’s excellent leadership.
So, Africa’s huge investment opportunities and innovations beckon you – from agriculture and agribusiness, to energy, health, ICT, infrastructure and financial services. And the African Development Bank will be there to help advance private-sector investments from G7 countries in Africa.
Together with the G7, let’s innovate. Let’s give Africa a High 5.
Thank you very much.
What Macron heralds for Africa
May 28, 2017 | 0 Comments
By Yoletta Nyange*
A former banker and economy minister, President Emmanuel Macron is now at the head of En Marche, a manifesto turned into a political start-up, launched barely a year ago. En Marche promotes a technocratic perspective and is marketed by a handful of French brains of African descent moulded into the country’s elite universities.
For many, Macron’s recurring contradictory statements suggest a desire to appeal to everyone, while hiding his true colours and concealing the obvious – that he has no policy for Africa.
Beyond the spellbinding eloquence that coined slogans such as “France needs Africa to build its future,” or “I will act with transparency in Africa, away from conniving networks,” Macron’s vision for Africa is reduced to the thinness of “supporting local small and medium entrepreneurship.”
Macron must have missed the memo, for “African SMEs need an integrated banking system rather than a French president who has not secured the Senate control” argued Mamadou Diallo, the political analyst and member of the West African think-tank WATHI. For Diallo “The Macron campaign’s loudest feat was in using the colonial question and the crime against humanity committed in Algeria”, only for it to be reduced to a storm in a teacup. “The colonial debate appeal to voters of the African diaspora for it gives them an emotional acknowledgment in lieu of a real economic recognition. A father of four in Kinshasa couldn’t care less about a moral recognition of colonialism. He wants to know how to pay for his children school fees,” further clarifies the Guinean analyst.
There is a palpable fear that Macron’s presidency is a continuation of Hollande’s, who had voted for him during the first round. Using the historical representations of colonialism and slavery has undeniably set Macron apart from other candidates. However, his lauded anti-colonial statement quickly tempered by “but one has to assume its positive elements” brought Gaddafi’s ghost back in the conversation.
Africans have not forgotten the savage pulverisation that former French president Sarkozy inflicted upon the Libyan people. How can it be omitted that Macron has inherited from the horrific Mali military invasion? Did Africa really need France’s intervention if it meant that the mediator would become a party to the conflict? En Marche only reaffirmed France’s militaristic endorsement of European, EU and NATO’s interference to protect their interests, all of which can only signal more wahala for the African continent.
Macron’s key job is to redress French prosperity by facilitating the movement of entrepreneurs and researchers, in other words, the movement of capital, a large percentage of it originating from Africa and through a wheeler-dealer diplomacy that in Macron’s own words is also “erratic”.
With Africa’s trade balance growing eastwards and inwards, how would a former banker restore France’s relations with Africa at a time when a viral grassroots campaign for the abolition of the CFA (French African Colony) money is raging in fourteen countries? After all, why do 22-year-old graduates on the Quai d’Orsay payroll staff presidential entourages of the CFA countries afflicted by brain drain and youth unemployment? Surely Macron would concede that liberating fourteen countries from the bondage of pumping France’s economy up would appear to be a sensible step towards fair reparations for the crime against humanity that colonialism is. The trouble is that pegged to the French treasury, the abolition of the CFA currency would in a blink bring Molière’s country on its knees.
As for En Marche’s views on integration and immigration, put it simply, they are two sides of the same coin, that of racism and exclusion which carry significant economic costs. For a country in dire need to repopulate to keep the state apparel afloat, France holds a distorted discourse by single-handedly targeting its populations of Afro-descendents. France’s migrant population accounts for a mere ten percent of the population, a third of which is made of international students integrated into the relatively lifeless economy. Why else would 2.5 million of French citizen not racially profiled choose to live outside of France?
Actually, integration and immigration are coded words for Europe’s all time greatest fear dating back to eight centuries of an Afro-Moorish rule: Islam with its political, cultural and security translation. Again, in the European conflicted representation, Islam is no longer located in the Arab-Muslim heart but in the Arab-Turkish-Persian world. But most of the illegal migrants into Europe do not originate from the Syrian conflict or the Afghan convulsions, but from supra-Saharan or sub-Saharan African countries not at war and with a sizeable Muslim population.
“What we’re seeing across Europe is that domestic politicians – whether in Germany, France, or even Greece – are increasingly asking the EU to do their dirty work” cautions Loren Landau, the Chair of the African Centre for Migration and Society at the University of the Witwatersrand.
Hence Macron’s a continuation of Europe’s forked tongue discourse. “It allows them to show that politicians are doing something about stopping Africans from coming, without themselves being implicated in the nefarious deals the EU is promoting” added Landau.
It is high time Africa cures her post-colonial syndrome and stops giving a disproportionate importance to the French political game, according to the Cameroonian political scientist Achille Mbembe.
All things considered, could it be agreed that France’s views on Africa are of no interest to Africans? Africa matters more to France’s seventy million than the other way around, if only because Africa hosts two hundred million French speakers, or a fifth of its billion population.
* Source IOL .Yoletta Nyange is a Visiting Scholar at the African Centre for Migration and Society of the University of the Witwatersrand
Citi bank wins Lifetime Achievement Award at this year’s African Banker Awards
May 28, 2017 | 0 Comments
No one country dominated the awards this year. The President of AfreximBank, Dr Benedict Oramah won Banker of the Year. His bank has grown considerably in the past year, whilst other metrics, such as income to cost ratio were very competitive.
Nigerian bank, GT Bank beat off competition from five shortlisted nominees to win the coveted ‘African Bank of the Year Award’. GT Bank posted a 37% in profits in 2016, despite difficult trading conditions in its main market Nigeria.
The ‘Lifetime Achievement Award’ was presented to an institution for the first time, as opposed to an individual. This is recognition to the outstanding contribution to African banking that Citi as an organisation has done since it has started operating in Africa and in shaping some of Africa’s leading bankers, many of who have led the growing number of African financial institutions across the continent.
Waheed A. Olagunju, the acting CEO and Managing Director of Bank of Industry was honoured with this year’s African Banker Icon award, which recognizes a banking career that spans over two decades.
Senegal’s Amadou Ba won the Finance Minister of the year award. He has managed to successfully steer the Senegalese economy which is today one of the best performing ones in Africa. Only last week, Senegal issued a Eurobond that was seven times oversubscribed. The ‘African Central Bank Governor of the Year’ accolade was awarded to Mauritius’ Rameswurlall Basant Roi. Mauritius today is one of Africa’s leading financial capitals and this is largely the work of the Governor. Its financial services sector is one of the strongest in Africa and it has thriving capital markets.
Commenting on the ceremony, Omar Ben Yedder, Publisher of African Banker, commented on the breadth of winners as well as the important banks and financial institutions have in driving growth and development: “This year’s entries in the financial inclusion and innovation categories were particularly encouraging. Financial inclusion is possibly the single most important priority so that we can mobilise funds and make this capital to work effectively. Banks are at the centre at this and rising to the challenge.”
This is the first time the African Banker Awards take place in India, more precisely in Ahmedabad, the capital of the state of Gujarat. As a shareholder in the African Development Bank, the Indian government offered to host this year’s Annual Meetings aiming to strengthen its long-standing relationship with Africa.
THE 2017 AFRICAN BANKER AWARD WINNERS
Banker of the Year
Dr Benedict Okey Oramah, President, Afrexim Bank
Bank of the Year
GT Bank Group
Minister of Finance of the Year
Amadou Ba (Senegal)
Central Bank Governor of the Year
Rameswurlall Basant Roi (Mauritius)
Best Retail Bank
Equity Bank (Kenya)
Investment Bank of the Year
Rand Merchant Bank (South Africa)
Award for Financial Inclusion
Caisse Centrale de Garantie (Morocco)
Groupe Crédit Agricole (Morocco)
Deal of the Year – Equity
OGP sale to Helios (Argentil)
Deal of the Year – Debt
Helios Towers, $600m debut High Yield Offering (Standard Bank)
AFC and Harith Asset Merger (Africa Finance Corporation)
Waheed A. Olagunju, Bank of Industry
Lifetime Achievement Award
Best Regional Bank in North Africa
Best Regional Bank in West Africa
Best Regional Bank in Central Africa
Trust Merchant Bank
Best Regional Bank in East Africa
Best Regional Bank in Southern Africa
Mauritius Commercial Bank
African Banker is a quarterly magazine dedicated to banking and finance in Africa. It taps into the growing demand for information about Africa’s banking and financial world, a sector that is consolidating rapidly and reshaping the economy of the continent.
David Oyelowo Demands The Horrors Of Human Trafficking In Africa ‘Must Change’
May 28, 2017 | 0 Comments
He tells HuffPost he’s on a mission to eradicate human trafficking on the continent and around the world.
David Oyelowo is serious about inspiring positive change in the world.
The actor will be honored on June 4 by the Diamond Empowerment Fund, a nonprofit co-founded by Russell Simmons, with the Diamonds Do Good International Vanguard Award. The award, which will be given to Oyelowo during the organization’s annual awards gala in Las Vegas, recognizes his achievements in the arts and in the educational empowerment of vulnerable girls in Nigeria.
Oyelowo told HuffPost that he prefers projects that showcase Africa’s overlooked history, such as “United Kingdom,” which highlighted Botswana’s role as a leading diamond-producing nation. In that film, Oyelowo plays Botswana’s first president, Sir Seretse Khama.
“My passion is really behind any African story that highlights the transcendent beauty and just the amazing quality of Africa and its people,” Oyelowo told HuffPost. “So whether it’s in ‘United Kingdom’ or whether it’s in ‘Queen of Katwe’ or other projects that I’m at the inception stages with, that’s what I’m fundamentally interested in and it just so happens that Botswana’s success story is tied into diamonds.”
The actor, who was born in England to Nigerian parents, adds that in addition to highlighting Africa’s abundant culture on the silver screen, he also wants to change the negative perception of Nigeria ― specifically as it pertains to the marginalization of women.
“One of the stories that isn’t a success story of course is surrounding the Chibok girls and what’s going on with Boko Haram, and what’s going on with the marginalization of women generally, not just in Nigeria, but on the African continent and around the world,” he said. “So for me, it’s about highlighting the great story, but also trying to change the narrative around the negative, because those are things that can and must change.”
“Going beyond the borders of Nigeria, human trafficking, modern-day slavery, sex trafficking, these are really disgusting things that are going on in society,” he said. “A lot of them are dealing with girls being pulled out of Africa. It’s happening within the continent itself. Even here in Los Angeles ― the San Fernando Valley, where I live ― it’s one of the worst hubs for human trafficking in the country.”
“So it’s on our doorstep, and it’s international. And if you’re a father of children, really it’s a thing that young people are being subjected to by those who prey upon them,” the actor continued. “It’s unthinkable to think about what’s going on out there. So anything and everything I can do, and my colleagues can do, to eradicate this is what I’m interested in.”
Sometimes with Hollywood specifically, we tend to rush after the buzzy, glamorous, attention-seeking initiatives and it’s not sustainable.”David Oyelowo
As many as 17,500 people are trafficked into the country every year, according to estimates from the U.S. Department of Health and Human Services, with an estimated 21 million people trafficked around the globe.
And, according to the United Nations, sexual exploitation is the most common form of human trafficking in the world, and women and girls make up the largest proportion of victims.
Oyelowo is committed to reducing these startling statistics, regardless of public recognition.
“I think that’s one of the problems with our society in general. And sometimes with Hollywood specifically, we tend to rush after the buzzy, glamorous, attention-seeking initiatives and it’s not sustainable,” he argued. “Anything that is for instant gratification for yourself will not last. This is a problem in terms of what’s going on in Nigeria, and specifically the marginalization of women.”
“If you’re looking in Hollywood, it’s not as egregious and injustice as sex trafficking and human trafficking but, when you look at sexism within the film industry, we have these moments when everyone pays it attention and then people forget,” he said.
Rather than participating in an occasional initiative for instant gratification, Oyelowo encourages more of his peers in entertainment to commit themselves to humanitarian movements in order to see real change.
“I’m a big believer in not focusing in on the big moment, but on the movement,” he said. “The movement is something that has to be perpetual. Once I attach myself to something I try to focus on it and not let go until the job is done, regardless if the cameras are on or not.”
“I think if more of us do that, the more will actually get done,” he added.
This is Why Africa Matters to the United States
May 27, 2017 | 0 Comments
By Rachel Ansley*
The cuts to foreign aid proposed in US President Donald Trump’s new budget, if passed, would drastically diminish US influence in Africa, threaten US security interests, and make way for countries like China to fill the void, according to a former White House official.
We can’t be ceding this space to China and to other players to have them deepen their economic ties and their political ties and have the US really lose out,” said Grant Harris, who served as special assistant to the president and senior director for African affairs at the White House from 2011 to 2015.
Trump’s new federal budget would put an end to important US engagement on the continent, engagement which, according to Harris, is vital for US national security.
This is the premise of his recently published Atlantic Council report: Why Africa Matters to US National Security. “Far too many people think that Africa is of secondary importance to US interests, where, in reality, it’s really important to US national security,” Harris said in a Facebook Live discussion with Karen Attiah, the global opinions editor with the Washington Post, at the Atlantic Council on May 25.
Why does stability in Africa matter for security in the United States? Karen Attiah from the Washington Post discusses why Africa is important to US national security interests with Grant Harris, former special assistant to the president and senior director for African affairs at the White House. To learn more, read Harris’ new report: http://bit.ly/2qnK3oJ
Posted by Atlantic Council on Thursday, May 25, 2017
In order to stem the spread of transnational threats, from terrorism to pandemics, Africa must become stable, said Harris. However, achieving stability requires that the United States remain actively engaged, providing not only humanitarian assistance, but also promoting economic growth. “The budget cutbacks would hurt all of that,” he said.
Attiah noted that in the “new US political climate – it’s not just Africa—there’s a real sense that the US may be retreating from its role as a global leader.” This turn inward has opened the door for other nations, such as China, to strengthen their foothold in Africa.
“The US holds itself to different standards, and it should,” said Harris. He insisted that principled engagement bolsters not only US influence, but strengthens relationships with African partners, who are becoming increasingly significant voices on the world stage. African votes make up more than a quarter of the votes in the United Nations, therefore, “we need African partners to advance [US] priorities,” said Harris.
Africa is vital not only to US national security interests, but to the United States’ European allies as well, Harris claimed, citing the migration crisis as a major concern.
Harris said that while his report stresses Africa’s importance to US national security, “even if you’re skeptical of what I’m saying, you’ve got to believe that European allies are important to national security.” Consequently, he said, while Europe seeks to promote stability in Africa in order to stem migration, the United States should engage as well, if not for its own interests, to promote the interest of its allies. “If the US retrenches and we pull back on our assistance… then we’re going to be part of the problem,” according to Harris.
Previous US administrations have promoted deep bipartisan engagement in Africa. Harris called for the Trump administration to follow suit, emphasizing the importance of a much-overlooked, but increasingly important part of the world.
*Allafrica.Rachel Ansley is an editorial assistant at the Atlantic Council.
Africa is Not Poor, We Are Stealing Its Wealth
May 27, 2017 | 0 Comments
By Nick Dearden*
Africa is poor, but we can try to help its people.
It’s a simple statement, repeated through a thousand images, newspaper stories and charity appeals each year, so that it takes on the weight of truth. When we read it, we reinforce assumptions and stories about Africa that we’ve heard throughout our lives. We reconfirm our image of Africa.
Try something different. Africa is rich, but we steal its wealth.
That’s the essence of a report (pdf) from several campaign groups released today. Based on a set of new figures, it finds that sub-Saharan Africa is a net creditor to the rest of the world to the tune of more than $41bn. Sure, there’s money going in: around $161bn a year in the form of loans, remittances (those working outside Africa and sending money back home), and aid.
But there’s also $203bn leaving the continent. Some of this is direct, such as $68bn in mainly dodged taxes. Essentially multinational corporations “steal” much of this – legally – by pretending they are really generating their wealth in tax havens. These so-called “illicit financial flows” amount to around 6.1 per cent of the continent’s entire gross domestic product (GDP) – or three times what Africa receives in aid.
Then there’s the $30bn that these corporations “repatriate” – profits they make in Africa but send back to their home country, or elsewhere, to enjoy their wealth. The City of London is awash with profits extracted from the land and labour of Africa.
There are also more indirect means by which we pull wealth out of Africa. Today’s report estimates that $29bn a year is being stolen from Africa in illegal logging, fishing and trade in wildlife. $36bn is owed to Africa as a result of the damage that climate change will cause to their societies and economies as they are unable to use fossil fuels to develop in the way that Europe did. Our climate crisis was not caused by Africa, but Africans will feel the effect more than most others. Needless to say, the funds are not currently forthcoming.
In fact, even this assessment is enormously generous, because it assumes that all of the wealth flowing into Africa is benefitting the people of that continent. But loans to governments and the private sector (at more than $50bn) can turn into unpayable and odious debt.
So what is the answer? Western governments would like to be seen as generous beneficiaries, doing what they can to “help those unable to help themselves”. But the first task is to stop perpetuating the harm they are doing. Governments need to stop forcing African governments to open up their economy to privatisation, and their markets to unfair competition.
If African countries are to benefit from foreign investment, they must be allowed to – even helped to – legally regulate that investment and the corporations that often bring it. And they might want to think about not putting their faith in the extractives sector. With few exceptions, countries with abundant mineral wealth experience poorer democracy, weaker economic growth, and worse development. To prevent tax dodging, governments must stop prevaricating on action to address tax havens. No country should tolerate companies with subsidiaries based in tax havens operating in their country.
Aid is tiny, and the very least it can do, if spent well, is to return some of Africa’s looted wealth. We should see it both as a form of reparations and redistribution, just as the tax system allows us to redistribute wealth from the richest to the poorest within individual societies. The same should be expected from the global “society”.
To even begin to embark on such an ambitious programme, we must change the way we talk and think about Africa. It’s not about making people feel guilty, but correctly diagnosing a problem in order to provide a solution. We are not, currently, “helping” Africa. Africa is rich. Let’s stop making it poorer.
*Allafrica/Al Jazeera.Nick Dearden is the director of UK campaigning organisation Global Justice Now. He was previously the director of Jubilee Debt Campaign.
Ethiopian Airlines opens new air route to south west China
May 24, 2017 | 0 Comments
Operated by Ethiopian Airlines, it will depart from Chengdu every Tuesday, Thursday and Saturday with a travel time of 9.5 hours.
It is the second direct air route from Chengdu to Africa, also the 100th international and regional air route to operate at Chengdu airport.
Ethiopian Airlines has direct air routes to Beijing, Shanghai, Guangzhou and Hong Kong.
The airline now serves 13 airports in Asia on 100 weekly flights.
U.S. Economic Policy Toward Africa: The Path to More Collaboration
May 24, 2017 | 0 Comments
By Eliot Pence*
President Trump has made it clear that he plans to put an unorthodox mark on foreign policy. While recent executive orders demonstrate that his approach will be characterized by challenging the status quo in many regions, from Mexico to China to Russia, one region remains still largely unknown: Africa. But challenging the status quo on Africa poses some problems — first and foremost will be defining what that status quo is.
U.S. interests in Africa have shifted over the past several decades, from supporting humanitarian missions and security training to human and social development. Recently, a more commercially oriented set of interests urged successive administrations to consider Africa’s strategic value to U.S. investors and companies. What has emerged is an expansive foreign policy that has at different times in different places tended to focus on three issues: security, governance, and economic development. The reality is that most of the time, the United States has had the interest to commit fully to only two of those priority areas. This tendency has sent African partners conflicting signals: enforcing elections in some places, but not elsewhere; encouraging trade and investment, but imposing burdensome and inoperable regulations. Given these realities, the bar for success in Africa is quite low for the Trump administration.
Because U.S. Africa policy has tended to shift over time and has lacked a clear overarching strategic vision, a better approach for the Trump administration in Africa might be to articulate a limited set of principles that clarifies and solidifies a more sustainable framework that is better suited to address fundamental drivers of Africa’s future rather than getting bogged down in contested theories of development and fraught disputes over values. These principles should include prioritizing key countries and rationalizing resources, creating an “Investment-First” policy in Africa, and more clearly communicating our interests and values. In practice, streamlining in this way would inevitably upset disparate interest groups, an established “development set” with strong views, and even stronger backers in Congress.
Prioritize and Rationalize
After fifteen years of converging economic growth in Africa, where virtually all countries saw significant economic growth, Africa has entered an era of divergence, where the development paths of each country and each region differ markedly. To be sure, Africa’s countries have always had different development paths. But the end of the most recent commodity super cycle and the Ebola crisis revealed the extent to which each country had truly transformed their economies in the past decade, and which were simply riding a commodity or consumer wave.
Given this shift, the Trump administration should consider designing its foreign policy in Africa around the fact that it is dealing with a disparate group of countries each at different stages of development and each of different strategic importance for the United States. It should revisit the “One Africa” model of engagement, and re-emphasize the need for engagement with the continent that is more finely tuned to, and reflective of, individual country capacities, historical ties, and sustainable potential. This more granular approach will allow the U.S. government to more adequately align its resources and bureaucracy for the “next Africa.” Prioritizing regional hegemons — such as Nigeria, Ethiopia, and Morocco — commercial corridors, and major metropoles would be a good place to start. One area that the Trump administration could revisit immediately is the Millennium Challenge Corporation’s (MCC) partnering mandate. Allowing sub-national entities, like Lagos State in Nigeria — a state larger than most African countries — to apply for MCC funding will undoubtedly do more to advance U.S. strategic interests than awarding Cabo Verde, a country the size of one small Lagos neighborhood, with a third MCC compact.
An “Investment-First” Africa Policy
The shift from aid to trade is well underway. The U.S. Agency for International Development (USAID) is already including more entrepreneurship-focused programs into its activities as a way to create a strong foundation for further development. Moreover, many donor governments are focused on finding new methods for incorporating private-sector models into their development programs, such as USAID’s Global Development Lab. The Trump administration should reinforce this shift. But it would do well to shift it completely out of the Beltway. Too often making aid more private sector friendly has simply meant transferring funds into private contractors who tend to fly in and out and often at costs that far exceed their nonprofit peers. As The Economist notes, “CEOs at private development contractors on average earn in excess of $500,000 — more than twice as much as non-profit bosses.”
Instead of bolstering a private sector development lobby with ersatz aid contracts, policymakers should focus their efforts on promoting the next great shift — the one that will take U.S.–Africa commercial relations from trade to investment. Fostering investment creates cross-border linkages that go beyond obvious, high-level government and political ties. It opens new paths for growth that are mutually beneficial to both host country and home country nationals and corporations by reinforcing existing markets and opening new ones, providing ways to create diversified portfolios to mitigate risks (and reap rewards), and creating foreign and domestic jobs, among other things.
U.S. policymakers already have tools to promote the jump from trade to investment. The most useful among them is the Overseas Private Investment Corporation (OPIC). The agency’s utility and necessity have been the subject of argument among politicians, particularly at times of governmental transition. Instead of rehashing the argument, it is time to put the debate to rest: there are few other agencies that can help efficiently allocate limited resources while at the same time encouraging investment abroad. OPIC is a profit-making agency that funds its own operations at marginal cost to taxpayers, and it has consistently added money to government coffers since its creation in the 1970s while being required to have no negative effects the U.S. economy.
Other policies can help engender a shift toward investment if they are reworked slightly. The African Growth and Opportunities Act (AGOA) has enjoyed bi-partisan support as the premiere U.S.–Africa trade policy since it was enacted in 2000. But since AGOA passed, a lot has changed: in 2000, only five countries counted China as their largest trading partner; today, more than 100 countries do, and many of those countries are in Africa. While AGOA helped (and continues to help) propel the shift from aid to trade with Africa by providing duty and quota-free access to the U.S. market, it offers no functional support to U.S. companies and investors adjusting to a new competitive paradigm on the continent. A post-AGOA agenda should be bilateral and investment-focused. Above all, it should be more attuned to the new commercial opportunities and partners, like China, that the continent has.
Part of reworking a post-AGOA framework, should involve taking a comprehensive view of U.S. foreign investment policy and identifying which policies influence which investors where. The Foreign Account Tax Compliance Act (FATCA) is among the least understood, but potentially most consequential for at least one class of U.S. investor — the African diaspora. FATCA’s goals are important — ensuring that Americans with financial assets located in foreign jurisdictions pay their fair share of taxes at home — but the law results in overly onerous burdens for members of the African diaspora with U.S. citizenship wishing to do business and invest abroad. FATCA is complicated and requires enormous amounts of resources to ensure compliance. For Americans from the African diaspora wanting to invest in their country of origin, investments and bank accounts larger than $40,000 have to be reported and audited. Because of the reporting requirements, many African banks have refused to do business with the U.S.-based diaspora, which makes investing in African start-ups and entrepreneurs harder. As a result, many of the diaspora end up operating outside of the formal investment channels, choosing instead to funnel funds through other means. Pulling back FATCA requirements for Africa-interested investors will facilitate more private flows of capital to the continent and go a long way to heading off any criticism the Trump administration may get from cuts laid out in the draft budget to other development programs.
A final way for the Trump administration to encourage the shift from trade to investment is to encourage the development of Africa’s capital markets. Apart from South Africa, African capital markets are relatively undeveloped — no individual sub-Saharan countries have stock exchanges with market capitalizations over $30 billion, and, with very few exceptions, African sovereign debt ratings are not investment grade. As U.S. retirement funds see yields shrink globally,creating new, diversified securities could help American pensioners get better return on their 401K investments.
In this vein, the Trump administration could explore helping develop the continent’s bond market. The liquidity, depth, and scope of the bond market has evolved so much that specific sub-sectors have begun to accommodate the specific desires of investor groups — from Samurai Bonds and Dragon Bonds to Yankee Bonds. Despite the variety of bond issuers tapping the markets for all types of projects, Africa’s bond markets remain on the margins of the industry. Getting more credit agencies to rate sovereigns, or having them rate specific projects — perhaps in infrastructure — would go a long way to improving the issuance of marketable bonds. Even more important is the provision of credit support or enhancements that could secure investment grade ratings of specific projects. While the U.S. government may balk at doing this directly, the multiplier benefits of it doing so could catalyze more investment than all of USAID’s development programs combined. The Trump administration can also address the lack of capital market expertise in Africa by enhancing and supporting the work of the National Association for Securities Professionals (NASP) which is pioneering a knowledge-exchange program linking U.S. consultants and pension funds with African policymakers and firms. Doing so could not only help grow better capital markets in Africa — which can indirectly help to strengthen U.S.–Africa commercial ties — it could also provide ways for U.S. investors to more easily become directly involved on the continent.
Clearly Communicating Interests and Values
U.S. foreign policy can sometimes seem at conflict with itself to the casual observer. Nowhere more conspicuous is that conflict than in Africa, where accusations of hypocrisy often prevent the United States from playing a key role as intermediary and trusted partner. Mixed messages on democracy promotion or governance, particularly the former, can confuse or undermine other efforts, sometimes in completely different parts of the continent. The passing of 1502 of Dodd Frank, or the conflict minerals act, as it is known colloquially, is one such policy. Well intended by its promoters, 1502 sought to reduce violence in the DRC and “Great Lakes region” by compelling companies sourcing minerals from the region to diligence their suppliers more thoroughly so as to redirect their payments away from suppliers that may have been supporting militia. Instead, in addition to being held up in part in the DC circuit court, the act has precipitated a rapid divestment by global companies and led, according to one UNU-WIDER study, to an increase in child mortality around the various “artisanal” mine sites because of the subsequent decline in economic activity.
The tendency of the U.S. government to advocate for issues where there is no consensus within the government itself has undermined U.S. influence on the continent. The importance of increasing investment — helping U.S. companies succeed and improving African livelihoods — is an issue on which most people agree. While there may be different opinions on how best to promote and regulate investment, having an issue that is both of strategic importance to the United States and easy to rally around for foreign counterparts is key to developing relationships that will allow the United States to become a trusted partner. Similarly, as the U.S. government looks to modernize its approach to development assistance, it might more fully consider purely outcome-oriented programs — such as cash transfer programs — that do not prescribe to countries how to go about achieving certain things, but rather grant the resources with which to achieve them. For the United States to be a trusted partner, it also needs to clearly indicate to others that the United States trusts them: it is a two-way street.
Another area where the Trump administration can immediately disentangle U.S. interests and values is in how it deals with transparency and corruption on the continent. Countries that are victims of corruption should be given the civil penalties and disgorgement proceeds associated with any corrupt activities, rather than simply having these resources withheld indefinitely, as has been the case with looted money from Nigeria. Keeping it in the U.S. Treasury achieves nothing and engenders feelings of resentment. Finding ways to return this money while strengthening commercial ties can help to send a message that the United States wants to work together to advance mutual interests. Proceeds from corruption-related prosecutions and disgorgements could be split equally and placed in an escrow account with the U.S. Trade and Development Agency (USTDA) and investment-promotion councils in each country having oversight so it is clear that money is not being returned directly to the original perpetrators.
Few things can be as challenging as crafting a policy that anticipates the future. This task is especially challenging when that policy is focused on a continent with 54 countries, each at different stages of development and which, taken together, are changing more quickly than any collectively in history — on any measure: from demography, urbanization, development, to political trajectory. It is why the U.S. Africa policy has been hard to classify. It remains, to this day, a mix of legacy presidential initiatives and institutions, an occasionally overt, but mostly covert, security enigma and an only infrequently interesting investment destination for multinationals. But herein lies the opportunity. This scattered history offers the Trump administration an opportunity to make its mark by promoting a focused foreign policy that doesn’t tackle the entire continent, but cultivates key partner countries — like Nigeria, Morocco, and Ethiopia; that accelerates the U.S. transition out of aid and into investment; and, perhaps more than anything else, more clearly communicates our interests and values where, when, and to whom they matter most.
Ethiopia’s Tedros wins WHO race, first African to get top job
May 23, 2017 | 0 Comments
Tedros Adhanom Ghebreyesus, a former health minister and foreign minister, received more than half the votes in the third round.
Ethiopia’s Tedros wins on third ballot
* Offers more geographical representation of WHO jobs
By Stephanie Nebehay and Tom Miles*
GENEVA, May 23 (Reuters) – Ethiopia’s Tedros Adhanom Ghebreyesus won the race to be the next head of the World Health Organisation (WHO) on Tuesday, becoming the first African to lead the United Nations agency.
The former health minister and foreign minister received more than half the votes in the first round and eventually won a decisive third-round election to beat Britain’s David Nabarro to the job.
“It’s a victory day for Ethiopia and for Africa,” Ethiopia’s ambassador to the U.N. in Geneva Negash Kebret Botora told Reuters before Tedros, as he is widely known, was to take the floor at the WHO’s annual ministerial assembly.
Six candidates had stood to take the helm at the WHO, which is tasked with combating outbreaks and chronic diseases.
The job has never before been earned through a competitive election and health officials from all over the globe thronged the assembly hall in the U.N.’s Geneva headquarters where voting took place behind closed doors.
Tedros will begin his five-year term after Margaret Chan, a former Hong Kong health director, steps down after 10 years on June 30. Chan leaves a mixed legacy, after WHO’s slow response to West Africa’s Ebola epidemic in 2013-2016, which killed 11,300 people.
In a last pitch before voting began, Tedros had appealed to ministers by promising to represent their interests and to ensure more countries got top jobs at the Geneva-based WHO.
“I will listen to you. I was one of you. I was in your shoes and I can understand you better,” Tedros told the ministers. “I know what it takes to strengthen the frontlines of healthcare and innovate around the constraints.”
Tedros was widely seen as having the support of about 50 African votes, but questions about his role in restricting human rights and Ethiopia’s cover-up of a cholera outbreak surfaced late in the race, threatening to tarnish his appeal.
Nabarro, a WHO insider who has worked for 40 years in international public health, had pitched himself as a “global candidate”.
Chan, in a speech on Monday, urged ministers to tackle inequalities as a “guiding ethical principle”.
“Scientific evidence is the bedrock of policy. Protect it. No one knows whether evidence will retain its persuasive power in what many now describe as a post-truth world,” she said.
Africa’s growth seen benefiting from rebound in commodity prices: report
May 23, 2017 | 0 Comments
Africa will see a lift-off in economic growth this year and next on the back of a rebound in global commodity prices, an annual report predicted on Monday.
The African Economic Outlook, co-authored by the African Development Bank, the OECD and the United Nations Development Programme, expects the continent’s economy to grow by 3.4 percent in 2017 and 4.3 percent in 2018, up from an estimated 2.2 percent last year.
The report was released as the African Development Bank began its annual meeting, this year being hosted by India in the capital of Prime Minister Narendra Modi’s home state of Gujarat.
Modi invited African leaders to a summit in 2015 and has sought to promote ‘south-south’ economic ties with a continent that has a large Indian diaspora but has seen far larger inward investment from China.
The report said that a decline in commodity prices starting in mid-2014 had a devastating impact on several commodity-exporting African economies. Nigeria, for example, which has the biggest share in Africa’s GDP, slipped into recession.
Africa has been worryingly dependent on commodities to power economic growth. The fall in raw materials prices inflicted a significant shock on sub-Saharan Africa as fuels, ore and metals account for more than 60 percent of the region’s exports.
However, commodities have staged a comeback since late last year, buoyed by an improvement in the world economic outlook together with the return of risk appetite among global investors.
If the rise in commodity prices is sustained, the report said, it would trim the continent’s current account deficit to 5 percent of GDP this year from 6.5 percent in 2016.
Africa is expected to witness a marginal improvement in external inflows that are estimated to inch up to $179.7 billion in 2017 from $177.7 billion a year ago.
The report urged the countries in the region to diversify their exports to reduce their exposure to commodity-price shocks and take measures to boost trade within Africa.
*Reuters.(Reporting by Rajesh Kumar Singh; Editing by Douglas Busvine)
How Trump’s Uncertainty on Africa Could be China’s Gain
May 23, 2017 | 0 Comments
By Conor Gaffey*
China is set to benefit from a possible pulling back of investment by U.S. companies in Africa under the Trump administration, according to a report.
The number of Chinese-funded projects increased by more than 100 percent in 2016 compared to the previous year, according to the Africa Attractiveness survey released on Wednesday by EY, formerly Ernst & Young.
By contrast, the number of American foreign direct investment (FDI) projects in Africa fell by 5.2 percent in 2016, although the United States remains the leading overall investor in Africa. Chinese projects also created more than 38,000 jobs in Africa, more than three times as many as American investments.
Since coming to office, President Donald Trump has had little to say about U.S. policy on Africa under his administration. The Trump administration is yet to appoint a head of the African Affairs bureau in the State Department and has made only a handful of calls to African leaders, though the U.S. president did receive Egyptian leader Abdel Fattah el-Sissi at the White House in April.
Trump Sissi meeting President Trump meets Egyptian President Abdel Fattah el-Sisi in the Oval Office of the White House in Washington, on April 3. Trump’s meeting with Sisi was his first with an African leader since becoming president in January. Kevin Lamarque/reuters
While the EY report measures private investment in Africa, as opposed to government-to-government investment or aid, any changes in U.S.-Africa policy may have an impact on business relations. The African Growth and Opportunity Act (AGOA), which was instituted in 2000 and allows tariff-free access for certain goods from African countries into the U.S., is one example of where policy and business could collide. Trump has not commented directly on the AGOA, but his favoring of bilateral trade deals over multi-party agreements would suggest a preference for individually-negotiated deals that benefited the United States, not just Africa.
Michael Lalor, the head of EY’s Africa Business Center, says that while he does not foresee a marked decrease in U.S. investment in Africa in the short term, significant policy changes could impact on the likelihood of U.S. businesses starting new investments on the continent.
“A strength of U.S.-led investment in Africa has been the connectedness of investment. Business and government and development agencies aren’t acting in isolation,” says Lalor, citing the Power Africa program—an initiative launched by President Barack Obama in 2013 to bring 30,000 megawatts of electricity to sub-Saharan Africa—as an example.
“It helps to have government and business on the same page…The danger is that this might be a more fragmented approach to investment, versus the approach from other countries—China is a good example—where it is quite an integrated approach,” says Lalor. “It might just blunt the competitive advantage of the U.S. in Africa.”
While the rate of investment slowed, the U.S. continued to be the leading inward investor in Africa, accounting for 13.5 percent of total FDI projects on the continent. The main target for investment by American companies was South Africa, where 28 of the 91 U.S.-sourced FDI projects were based. South Africa has long been a hub of international investment in Africa: It is the continent’s biggest and most industrialized economy. Behind it, U.S. companies also invested heavily in North Africa, particularly Morocco (14 projects) and Egypt (13 projects).
“Counting the sheer number of projects is a rather questionable measure of FDI when compared to actual capital invested. By the latter, the United States remains Africa’s most important partner,” says J. Peter Pham, director of the Africa Center at U.S. think tank the Atlantic Council.
Kenya China flag A Kenyan dock worker waves a Chinese flag during a farewell ceremony for a Chinese naval ship before it leaves the Kenyan port city of Mombasa for Tanzania on October 18, 2010. The number of Chinese investment projects in Africa increased by more than 100 percent in 2016, according to a report. JEAN CURRAN/AFP/Getty
Pham also says that the business acumen possessed by Trump and members of his administration means that “commercial diplomacy” will likely take a more central role under Trump, benefitting both U.S. firms and Africa.
Morocco is an example of where this could be true, Pham says. The EY report ranked the North African country as the most attractive destination for international investors in 2017, based on six factors including economic resilience, market size and ease of doing business. Morocco is the only African country—and one of only 20 countries in total—to have a free trade agreement with the United States, which entered into force in 2006. The deal has contributed to a massive increase in U.S.-Morocco trade, from $35 million in 2005 to $844.2 million in 2016. “American firms are especially well-positioned to triangulate in their business with Africa through Morocco,” says Pham.
China has been involved in Africa for at least 60 years and is the continent’s single largest trade partner. As well as trade and FDI, the Chinese government and state-run entities have undertaken enormous infrastructure projects in Africa—such as a $4 billion, 450-mile railway linking the Ethiopian capital Addis Ababa with the port of Djibouti, launched in October 2016—in exchange for privileged access to Africa’s huge marketplace of people and resources and increased international status.
Beijing has also been a huge contributor of development assistance to African countries. At a 2015 China-Africa summit in Johannesburg, South Africa, Chinese President Xi Jinping pledged $60 billion in assistance, including grants, loans and aid to the continent.
In his budget proposal released in March, President Trump proposed cutting the budget of the State Department and foreign aid by 28 percent, as well as eliminating various government agencies, including the African Development Foundation, which promotes development by investing in African enterprises.
While aid and investment are two different things, U.S. companies are likely to follow the administration’s lead in drawing back from Africa, says Stephen Chan, professor of world politics at SOAS University of London. “Investors will take aid cutbacks as a political signal and one that will lead to possible insecurity in the country concerned. So investors will be more cautious and I expect a decline in the volume of investment,” says Chan.
Such a pullback could mean strategic losses in U.S. influence in Africa and leave further space for China to capitalize, says Chan. “For China, the benefits are upstream in a future where a growing Chinese economy will have grown to need African resources and paybacks from FDI and aid commitments made now,” says Chan. “The Chinese, as ever, are playing a long game. President Trump, at the moment, is playing no game at all in Africa.”
CCA President and CEO Visits Ghana, Nigeria on West Africa Tour
May 23, 2017 | 0 Comments
Washington, DC – May 16, 2017: Corporate Council on Africa (CCA) President and CEO, Ms. Florizelle Liser met with H.E. Prof. Yemi Osinbajo, the Acting President, Federal Republic of Nigeria and other high level government officials and business leaders on her first official trip to West Africa as part of the ongoing effort to promote trade, investment and business engagement between the United States and Africa.
CCA, a Washington D.C. based organization, is the leading U.S. business association focused solely on connecting business interests between the United States and Africa. On this inaugural visit to West Africa as CCA’s CEO, Ms. Liser visited Ghana and Nigeria.
Ms. Liser kicked off her trip on Tuesday in Accra, Ghana, where she met with the Honorable Alan Kyerematen, Minister of Trade and Industry. There was a vibrant discussion on efforts to enhance Ghana’s export of value added products to the U.S. under the African Growth and Opportunities Act (AGOA), to incentivize manufacturing and job creation in key sectors, and to make the reforms needed to attract investment to Ghana. She also met with Ambassador Robert Jackson, U.S. Ambassador to Ghana, and Mr. Yoofi Grant, CEO Ghana Investment Promotion Center (GIPC) who shared that there would be a large delegation of Ghanaian businesses participating in CCA’s U.S.-Africa Business Summit on June 13-16, 2017 in Washington, D.C.
In Nigeria, Ms. Liser met with H.E Prof. Yemi Osinbajo, the Acting President, Federal Republic of Nigeria; H.E. Geoffrey Onyeama, Honorable Minister for Foreign Affairs; Dr. Okechukwu E. Enelamah, Honorable Minister for Industry, Trade And Investment; Dr. Emmanuel Ibe Kachikwu, Minister of State for Petroleum; Mrs. Yewande Sadiku, CEO, Nigerian Investment Promotion Commission (NIPC); Mr. Olusegun Awolowo, Executive Director and CEO, Nigerian Export Promotion Council (NEPC) as well as the U.S Ambassador to Nigeria.
Acting President Osinbajo congratulated Ms. Liser on her new role and spoke about potential areas for collaboration with CCA. He emphasized the importance of driving trade and investment between both countries. He also spoke about diversifying Nigerian exports to the United States and taking greater advantage of AGOA market access beyond oil, the importance of Nigeria being positioned in global supply chains, reforms around the ease of doing business, and the progress being made in the Niger Delta.
At the Ministry of Foreign Affairs, Minister Onyeama spoke about his plan to drive economic diplomacy and leverage Nigeria’s 114 foreign offices to drive FDI into Nigeria. “At the last [United National General Assembly] UNGA, we were in touch with CCA and we were very impressed with the enthusiasm of U.S. businesses to engage with Nigeria,” said Minister Onyeama.
Dr. Okechukwu Enelamah, Minister of Industry, Trade and Investment, commended Ms. Liser and CCA for their work supporting Nigeria’s efforts to create an enabling business environment in Nigeria and promote U.S.-Nigeria business partnerships. “Many years ago, when we were starting the Africa Capital Alliance,” said Minister Enelamah, “CCA played an important role when there was a strain in the relationship between U.S. and Nigeria, thus ensuring lots of businesses were kept alive.” Nigeria recently approved the establishment of the Nigeria Office for Trade Negotiation. One of the functions of the office is to drive proactive negotiation in the areas of trade and investment. The Ministry will be the focal ministry in trade negotiations while the other ministry-members of the presidential economic team will support.
At the meeting with Dr. Emmanuel Ibe Kachikwu, Minister of State for Petroleum, Ms. Liser commended his efforts on “7-big wins” in the oil sector and stressed the importance of Africa to the U.S. especially in the oil and gas sectors. The Minister discussed plans for modular refineries. The modular refineries model being introduced will be tailor-made to the Niger Delta and the ministry would support investors looking to navigate the complex business environment. The Ministry also asked for CCA and its members’ support in streamlining and standardizing technology in the oil and gas sector in Nigeria. “We look to CCA when we have something strategic to do with the governments of Africa and promoting greater U.S. FDI into Africa. We are in a trying period and we are looking at whatever investments that come into Nigeria” said the Hon. Minister.
Ms. Liser also had individual meetings with CCA members Mr. Aliko Dangote of Dangote Industries Limited and Mr. Jim Ovia of Zenith Bank, both of whom sit on CCA’s Board of Directors. On Friday, Ms. Liser was hosted to a special dinner by Mr. Aliko Dangote, which was attended by Mr. Ovia and a dozen leading Nigerian private sector stakeholders to discuss ways to promote greater U.S.-Nigeria investment and business partnerships, and more broadly, to raise the continent’s profile as an important U.S. partner for global business. They also discussed CCA’s upcoming U.S.-Africa Business Summit in June in Washington, D.C. as an important opportunity to showcase that partnership.
CCA has 30 member companies in Ghana and Nigeria – indigenous and multinationals – including leading businesses like Dangote Industries Limited, Microsoft, Zenith Bank, ExxonMobil, Procter & Gamble, Adepetun Caxton-Martins Agbor & Segun (ACAS-LAW), Caterpillar and Afro Tourism. About 15 percent of CCA member companies are African, and Nigerian firms make up almost 50 percent of that number. CCA has a satellite office in Abuja, which is led by Mr. Ekenem Isichei, Director for West Africa.
About Corporate Council on Africa (CCA)
Corporate Council on Africa is the leading U.S business association focused solely on connecting business interests between the United States and Africa. CCA uniquely represents a broad cross section of member companies from small and medium size businesses to multinationals as well as U.S and African firms. Learn more at www.corporatecouncilonafrica.com. For more information contact Michaela Ehimika
email@example.com .Tel 202-263-3531