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The business case for greater integration in Africa
July 20, 2012 | 0 Comments

By Denis Worrall*

The case for investing in Africa has never been easy, and it is not an easy case now. But the fact is that there is a much better understanding of Africa’s diversity and Africa’s circumstances. It is not just seen as one homogenous continent.

There are after all 54 independent countries in Africa and all of them are different, all of them aspire for recognition, all of them want to attract foreign investment, foreign tourists and foreign business. And one further observation. Whereas ten years ago South Africa was the gateway to Africa, with Johannesburg as the equivalent of “the big apple” that New York is to the US, that has changed. Nairobi, Lagos, and Abidjan are as important as Johannesburg in coming into Africa.

Africa’s overall expected growth this year at 5.5% is obviously very impressive compared to the sickly European economy and even the US. The main reasons for Africa’s growth is that it is a source of natural resources and that the price and demand for natural resources has been strongly driven by China and other major developing countries’ phenomenal growth.

The second reason is the quality of Africa’s macro-economic management – which has improved dramatically, as has the quality of economic leadership in African governments. And another explanation for this sustained growth has been that debt levels have been low in Africa.

But for all these reasons, there is no doubt that perceptions of Africa have changed, and with those perceptions is an increasing investment and business appetite. To quote Donald Gips, US ambassador to South Africa: “This rising prosperity in Africa will open new markets for American goods and create jobs in both regions. More and more people understand that the 21st century will be the African century.”

While a strong case can be made for Africa’s changing perceptions in the world and its enhanced economic performance, the fact is that one critical need in Africa is for greater regional integration. In fact Ernst & Young in their excellent Africa report for 2012 Reaching Out concluded that the single biggest priority as far as Africa is concerned over the next decade should be the acceleration of the regional integration process. It goes on to say that: “Simply put, if this process does not intensify, Africa will remain structurally marginalised in the global economy and African countries will struggle to attract a greater share of foreign investment.”

African integration is needed for some obvious reasons:

  • To foster inter-African regional trade and manufacturing.
  • To encourage infrastructural projects of scale between different countries.
  • To facilitate investment of scale across borders; and
  • Generally to project a more inviting image to the world and to international investors.

In building regionalism it is not a case of starting from scratch. A regional integration process has been on the agenda for many years. The 1991 Abuja Treaty divided the continent into five regional areas. North Africa, West Africa, Southern Africa, East Africa and Central Africa. This was in preparation for establishing the combined African Economic Community (AEC) in six phases over thirty-four years. The ultimate result ambitiously envisaged would be an economic union with a common currency, full mobility of factors of production and free trade among all countries on the continent. Achieving something like the EU was obviously very ambitious; and while some progress has been made in creating regional blocs, much more needs to be done.

Incidentally, the most advanced regional economic community is the East African Community, which includes Kenya, Tanzania and Uganda, with Burundi and Rwanda joining in 2007 to complete its current membership of five countries. The East African Community has established its own customs union, a common market, and according to reports good progress has been made towards implementing the free movement of labour, capital goods and services. This therefore is a market of close to 150 million people, with a combined GDP approaching US$100 billion and an economic growth rate in excess of 6% over the past decades.

The East African Community therefore sets a standard that challenges other regions in Africa. But much more can be done with bilateral agreements between different countries. In this way, the foreign investor interest in Africa will significantly increase.

* .Source Denis Worrall is the chairman of Omega Investment Research. He can be contacted at: denisw@omegainvest.c

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Zuma warns on Africa’s trade ties to China
July 20, 2012 | 0 Comments

By Leslie Hook*

BEIJING — South African President Jacob Zuma warned Thursday that the unbalanced nature of Africa’s burgeoning trade ties with China is “unsustainable” in the long term.

The South African leader was addressing the China-Africa Forum in Beijing just after China’s president pledged $20 billion in loans to Africa, doubling the amount Beijing agreed to give the continent three years ago at the same forum.



“Africa’s commitment to China’s development has been demonstrated by supply of raw materials, other products and technology transfer,” Zuma said. “This trade pattern is unsustainable in the long term. Africa’s past economic experience with Europe dictates a need to be cautious when entering into partnerships with other economies.”

Zuma appeared to be referring to the concerns of some African nations about the unbalanced nature of the trade relationship. Two-way trade between China and Africa hit $166 billion last year, with a trade surplus in Africa’s favor due to exports of raw materials such as crude oil and copper. China is a major exporter of cheap manufactured goods to Africa, such as electronics and clothes.

Critics have accused China of taking a neo-colonialist approach to the continent and of exploiting Africa’s natural resources. Many African nations want China to import more than just resources.

China sees Africa as a strategic ally and has pushed for expanded African roles at the United Nations, while encouraging Chinese infrastructure and resources companies to invest in the continent.

China’s investment in Africa — estimated at $15 billion over the past decade — is growing rapidly, and Chinese companies are building infrastructure across the continent, from dams and airports to mines and wind farms. On Wednesday, Nigeria announced the signing of a $1.5 billion railroad project to be built by the state-owned China Civil Engineering Construction Corp.

While he hinted at potential long-term trade issues, Zuma spent much of his speech, which was made in the presence of Hu Jintao, China’s president, praising China’s “steadfast” commitment to Africa. That commitment, he said, “has already been demonstrated with concrete and tangible results particularly in terms of human resources development, debt relief and investment.”

The two nations have close ties, and South Africa joined the “BRIC” group of developing countries — Brazil, Russia, India and China — last year. South Africa has also attracted significant Chinese investment as it seeks to market itself as the gateway to other African countries.

China introduced several measures this week to help rebalance trade ties, including zero tariffs for an expanded range of African products. Beijing also pledged to hold more trade expos to display African merchandise.

Although Chinese companies have invested heavily in Africa, they have not always had a smooth experience. One of the low points came in 2010 when a Chinese mining boss in Zambia shot nearly a dozen local miners during a riot.

Chinese companies have also been caught up in the recent maelstrom of political changes in North Africa, with more than $4 billion worth of projects suspended in Libya after the fall of Moammar Gaddafi and the kidnapping of 29 Chinese workers in Sudan earlier this year.

The triennial China-Africa Forum hosts heads of state and ministers from more than 40 African countries and is a “pageant of China-Africa friendship and unity,” as one Chinese state-run paper put it.

In addition to the $20 billion loan commitment over the next three years, China also vowed to focus on cooperation in agriculture, infrastructure, cultural exchanges and more scholarships for African students to study in China. Chinese scholars say China’s aid to Africa is not mercenary, but instead motivated by historic ties.

“China regained its seat in the United Nations with the help of African countries,” said Zhang Haibin, an Africa expert at the Shanghai Institute for African Studies. “We cannot forget our old friends.”

That certainly seemed to be the case on Thursday, judging from the pomp and ceremony on display at the Great Hall of the People in Beijing. The normally stoic Hu was effusive in his welcoming speech to the forum Thursday morning.

“Forever we will be the good friends, partners and brothers of Africa,” he said. “We deeply thank the men and women of Africa for their support of China in its development.”

*Financial Times

Gwen Chen in Beijing and Andrew England in Johannesburg contributed to this report.

*Source Washington Post


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US Senate panel okays renewal of Africa clothing trade benefit
July 19, 2012 | 0 Comments

WASHINGTON (Reuters) – The U.S. Senate Finance Committee voted on Wednesday to renew an expiring trade benefit that has helped create hundreds of thousands of jobs in the African clothing industry over the past industry.

“A timely extension of this provision will help stem the tide of job losses in Africa and it will ensure that U.S. retailers will have the certainty they need to help their businesses succeed and grow,” Committee Chairman Max Baucus, a Montana Democrat, said.

The landmark African Growth and Opportunity Act (AGOA), first passed by Congress in 2000, allows eligible countries in sub-Saharan Africa to ship thousands of goods to the United States without paying import duties.

A provision that expires September 30 waives duties on clothing from most AGOA countries, even if the yarn or fabric is made in another country such as China, South Korea or Vietnam.

President Barack Obama’s administration had hoped to win renewal of the provision ahead of an annual forum with AGOA beneficiary countries in June.

U.S. Trade Representative Ron Kirk said at that event the delay was already hurting African producers because clothing importers place their orders months in advance. He promised Obama would sign a bill as soon as it reached his desk.

Supporters hope Congress will pass the bill before the month-long August recess.


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China doubles loans to Africa to $20 billion
July 19, 2012 | 0 Comments

President Hu Jintao said Thursday China would offer $20 billion in new loans to Africa, as he delivered a speech to a Beijing forum on co-operation with the resource-rich continent.

The pledge — double the amount Beijing agreed to lend to Africa at the last forum in 2009 — underscores China’s growing links with African nations as it looks to secure key commodities to feed its economic growth.

Hu said the loans would focus on supporting infrastructure, manufacturing and the development of small businesses in Africa, although he did not specify what time period they would cover.

China's President Hu Jintao (C), South Africa's President Jacob Zuma (center L), Benin's President Thomas Boni Yayi (center R), United Nations Secretary-General Ban Ki-moon (2nd row C) and other African countries' leaders arrive for the opening ceremony of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) at the Great Hall of the People in Beijing, July 19, 2012.  Image by: JASON LEE / REUTERS

China's President Hu Jintao (C), South Africa's President Jacob Zuma (center L), Benin's President Thomas Boni Yayi (center R), United Nations Secretary-General Ban Ki-moon (2nd row C) and other African countries' leaders arrive for the opening ceremony of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) at the Great Hall of the People in Beijing, July 19, 2012. Image by: JASON LEE / REUTERS

China and Africa’s destinies are closely linked, Chinese and African friendship is deeply rooted in the hearts of the people on both sides,” he said, delivering an opening address to an audience of African leaders.

Beijing’s involvement in Africa dates back 60 years, when Chinese workers arrived to lay railway tracks and roads.

But there has been a surge in investment in the past 15 years and China is now Africa’s largest trading partner.

Trade between the Asian powerhouse and the continent hit a record $166.3 billion last year, from less than $20 billion a decade earlier and up 83 percent on 2009, according to government data.

Once seen as strictly interested in extracting raw resources and investing in infrastructure, China has interests on the continent that are increasingly shifting to investing in institutions and governments, experts say.


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China Aims to Rewrite Perceptions on Africa Investment
July 19, 2012 | 0 Comments

Beijing is eager to rewrite negative perceptions of its growing ties with Africa at a summit this week, citing expanding private investment and a push to shift low-end manufacturing to the continent long seen as a commodities and energy cache for China.

Chinese State-owned firms in Africa face criticism for using imported labour to build government-financed projects like roads and hospitals, while pumping out resources and leaving little for local economies, an image Beijing wants to change at the Forum on China-Africa Cooperation beginning on Thursday.

“As China’s economy transitions, shifting labour intensive industry to regions outside of China offers production opportunities,” Zhong Jianhua, China’s special envoy to Africa, told Reuters this week.

“African countries should seize this opportunity,” he added. “They can step into a track that China has taken in the past to develop their own industry.”

Chinese President Hu Jintao will speak at the summit’s opening day and is expected to announce a new set of loans for the continent. At the last meeting held three years ago, China pledged $10-billion.


China’s economic trade with Africa reached $166.3-billion in 2011, according to Chinese statistics. In the past decade, African exports to China rose to $93.2-billion from $5.6-billion.

Industrial and Commercial Bank of China, for example, the world’s most valuable lender, has invested more than $7-billion in various projects across the continent.

The China Non-Ferrous Metals Mining Corporation, however, became the maligned face of Chinese investment during a bitter election campaign last year in Zambia, where it owns several lucrative copper deposits.

Along with the state-run firms, a growing number of smaller private Chinese businesses are looking to frontier markets like Africa to sell consumer goods and join in on promising growth prospects.

“A lot of African growth is no longer just commodity growth. It is growth in telecoms, services, and consumer products,” said Diana Layfield, Standard Chartered Bank’s CEO for Africa.

An official with Africa’s multilateral lender however said concern remains that countries will just shovel resources out and not look to diversify.

“They [African nations] are thinking about the immediate resources that could get them billions” of dollars, said Anthony Nyong, manager of the compliance and safeguard division at the African Development Bank. “We need to gradually work at building the capacities of African countries to see how they can negotiate good deals and know what is important for them.”

China has also found it difficult to navigate tricky political and conflict problems in Africa, particularly as the main oil investor in both Sudan and South Sudan.


China still faces a struggle to encourage companies to invest and shift production to Africa even if labour costs are lower. Smaller firms in particular are overwhelmed by the world’s second largest continent with more than 50 UN member states that have diverse languages, cultures and income levels.

“The idea that it will happen quickly, except in selected circumstances, is probably far-fetched,” said Layfield, with Standard Chartered, adding that one factor accelerating some trade now is a sharp drop in container transport costs following the 2008 financial crisis.

Jeremy Stevens, a Beijing-based China economist at Standard Bank, said even if Chinese firms move to Africa they face competition from other low-cost producers such as India, Bangladesh, Vietnam, Mexico and Turkey – and inland China.

“It is more costly to make something in Africa because of bottlenecks in infrastructure, human capital and access to finance, which have been exacerbated by poor governance and mismanagement,” he said.

*Source Reuters

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Chinese, African Leaders Gather in Beijing for Talks
July 18, 2012 | 0 Comments

As Chinese and African leaders gather in Beijing to discuss increased trade and economic cooperation, China’s commerce minister is praising his country’s growing influence across the African continent.



Chen Deming’s editorial in the state-run China Daily newspaper said China-Africa trade grew to a record $166 billion in 2011. Chinese investment in Africa reached $14.7 billion by the end of last year, up 60 percent from two years ago.

In recent years, China has pour billions of investment dollars into Africa and rapidly expanded trade ties and influence across the resource-rich continent.

In recent years, resource-starved China has poured billions of dollars into resource-rich African countries in an attempt to expand its trade ties and influence across the continent.

Some in Africa are concerned that China’s willingness to provide economic investments with no strings attached to countries with poor civil rights records is jeopardizing the realization of free and open societies.

Charges of “neo-colonialism”

China’s growing economic involvement in Africa includes oil drilling and road projects in insecure areas often considered too dangerous to operate in by Western companies.

Talk to Zambians on the street, and they tend to paint the Chinese as opportunists who exploit Zambian resources and workers, while considering themselves above the law.

The disaffection is easy to understand. Traditional, family-run businesses like textiles and chicken farming, have been decimated by the influx of Chinese.

By importing cheap labor and goods from China, the migrants undercut local entrepreneurs causing thousands of job losses.

Bernard Lusale is financial services coordinator with Zambian Micro-bankers Trust, a government-funded agency that supports small local businesses and traders. “In nearly every town we are able to find Chinese – anywhere they can find business. Their prices [are] minimal as compared to this poor Zambian who has accessed a loan at a great cost and as a result [has] to struggle to raise the re-payment,” he said.

The employment practices in Chinese businesses are also feeding local opposition.

An incident last November at a Chinese-owned coal mine in Collum, in the south of the country, represents a low point in Sino-Zambian relations.

Upset by roof collapses and the withholding of salaries, the miners staged a spontaneous but non-violent protest. Instead of negotiating with their staff, Chinese managers fired on them with shotguns.

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EU sets up mission to help Sahel nations combat crime, terrorism
July 17, 2012 | 0 Comments

By Slobodan Lekic, The Associated Press July 16, 2012

BRUSSELS – The European Union is establishing a new mission to help train security forces in the Sahel region of sub-Saharan Africa to combat terrorist and criminal networks and prevent the area from becoming a lawless launch pad for terror attacks, the bloc said Monday.

The mission’s activities would initially be focused on Niger, an arid nation bordering Libya, and the situation in the Sahel region as a whole will be closely monitored with further action possible, particularly in Mauritania and Mali, the EU said in a statement.

The new mission, which will consist of 50 international and 30 local staffers, is part of a new EU strategy aimed at preventing Islamist militants from seizing control of vast swathes of desert. Such safe havens would allow them to mount terror attacks against North African nations such as Algeria or Morocco, or even against Europe itself.

Large quantities of arms and ammunition — including heavy weapons and artillery — stolen by rebels during last year’s civil war in Libya were smuggled into Niger and other Sahel nations. Much of this arsenal is believed to have ended up in the hands of insurgent bands or criminal and smuggling networks.

“Increased terrorist activity and the consequences of the conflict in Libya have dramatically heightened insecurity in the Sahel,” EU foreign policy chief Catherine Ashton said.

The most serious situation is in northern Mali, where heavily armed extremist Islamists with links to al-Qaida have wrested control over a territory the size of France and proclaimed an Islamic state.

The U.N. refugee agency says some 300,000 people have already fled violence in Mali, and that another 140,000 Malians are expected to leave their homes amid ongoing unrest. In a sign that eerily reminded the international community of the Taliban’s destruction of famous ancient Buddha statues in Afghanistan in the 1990s, the Islamists in Mali have started to destroy Muslim shrines and historical sites, including some in Timbuktu which are part of a UNESCO World Heritage Site.
*Courtesy of Associated Press


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Algerian ship makes historic visit to United States
July 17, 2012 | 0 Comments

Written by defenceWeb/USN*

The Algerian Navy ship ANS Soummam (937) has arrived in New York City for a five-day port visit, marking the first time an Algerian Navy ship has ever visited the United States.

Soummam transited the Atlantic Ocean as part of a training program for officer trainees from the Algerian Naval High School. She was greeted on arrival by Algeria’s

The Algerian navy ship (ANS) Soummam (937) sails past the Statue of Liberty in New York Harbor, marking the first time an Algerian navy ship has visited the United States.

The Algerian navy ship (ANS) Soummam (937) sails past the Statue of Liberty in New York Harbor, marking the first time an Algerian navy ship has visited the United States.

ambassador to the United States, Algeria’s defence attaché, the Consul General of Algeria in New York, members of the Algerian diplomatic corps, and U.S. military and civilian authorities.

“I was very moved when I saw the ship in the port of New York,” said Abdallah Baali, Algerian Ambassador to the United States. “It is truly a historic moment for us in New York and certainly for the crew and officers of the ship who came to the prestigious city of New York.”

This call is part of the “Summer 2012” training programme, during which officer-trainees will receive practical on-the-ground training.

The visit by Soummam displays the increasing cooperation between the United States and Algerian navies. Earlier this year, Algeria hosted the combined maritime operations centre in Oran during Exercise Phoenix Express.

“The great thing about a country’s navy is that a naval ship can be used for multiple purposes,” said Captain Andy Lennon, the lead coordinator for the visit assigned to U.S. 6th Fleet headquarters. “It can be used in war and equally it can be used for diplomacy.”

While the training mission is designed to instruct students on navigating the world’s oceans, the port visit is also part of their training. According to Baali, a cultural and sports programme was developed to give the officer-trainees an opportunity to conduct exchanges with the U.S. Navy in order to better acquaint themselves with one of the world’s largest navies and learn about its different services.

The cultural programme for the Algerian sailors included tours to various sites throughout the city, such as the United Nations, the Bronx Zoo and the 9/11 Memorial.

“We have all been very excited to visit New York,” said Algerian Captain Mamia Mouzaoi. “It is a great opportunity to visit America, and the people have been very welcoming.”

Showing their appreciation for the hospitality, Soummam also hosted a reception aboard the ship, allowing for greater interaction between the crew, U.S. Navy, and government officials.

“We are happy to have the Algerians here,” said Terrence Holliday, New York City’s Mayor’s Office of Veterans Affairs commissioner. “New York is a great city with a warm heart and a lot to see, we appreciate everything they bring here to make this city richer.”

Throughout their visit, local U.S. Navy sailors from Navy Operation Support Center New York City and Naval Weapons Station Earle New Jersey have been readily available to show the Soummam crew around the city.

“We have U.S. Navy sailors travelling with them to all of the sites throughout the visit,” said Lennon. “It allows us more opportunities to engage on a personal level, hopefully giving both nation’s sailors a richer experience.

ANS Soummam was built in China and commissioned in 2006.

Algeria is in the process of expanding its navy in recent years as it faces problems such as smuggling, illegal migration and indigenous terrorism. These threats mainly affect Algeria’s harbours and maritime communication routes and ships passing through the Straits of Gibraltar. Consequently, the Algerian Navy maintains a well-trained and well-equipped fleet to provide security to more than 1000 km of coastline.

In May it emerged that Algeria had signed a contract with China Shipbuilding Trading Company for three light frigates, after ordering two Meko A-200N frigates from Germany’s ThyssenKrupp Marine Systems.

The three light frigates will be built either at Guangzhou or the Shanghai Huangpu Shipyard. The vessels will displace around 2 800 tons fully loaded, and will be powered by MTU diesel engines.

On March 26 this year Algeria’s ministry of defence signed a contract with ThyssenKrupp Marine Systems (TKMS) for two Meko A-200 frigates with an option for two more, after a year of negotiations.

TKMS will supply two Meko A-200 frigates and six AgustaWestland Super Lynx helicopters under the €2 175 520 000 contract. According to Russia’s Periscope magazine, the ships will be armed with RBS 15 Mk III anti-ship missiles, Umkhonto IR surface-to-air missiles, Oto Melara and Rheinmetall guns and MU 90 torpedoes. The helicopters will be equipped with Mokopa air-to-ground missiles.

In the middle of last year it was announced that Algeria had signed a deal with Russia’s United Shipbuilding Corporation and state arms exporter Rosoboronexport for two new Tiger class corvettes. The Tiger corvette (Project 20382) is an export model of the Project 20380 Steregushchy class, which is the Russian Navy’s newest corvette class.

The vessel can be equipped with a variety of weaponry, including 100 or 76.2 mm guns, 14.5 mm machine guns, 533 mm torpedoes and a variety of surface-to-air and surface-to-surface missiles (e.g. P-800 Oniks, Uran-E or Yakhont). In addition, the vessels have capacity for a helicopter.

According to the IISS’s The Military Balance 2012, Algeria’s surface fleet comprises of three 1970s-era Koni class antisubmarine frigates, six corvettes, 22 patrol and coastal combat vessels, three amphibious vessels and three logistics and support ships.

In June 2006 Rosoboronexport signed a contract with the Algerian Navy for the construction of two Project 636 Improved Kilo class submarines under a roughly US$400 million contract.

Construction of the first submarine started in 2006 and the second began in 2007. They were handed over to the Algerian Navy in March and September 2010 where they joined two Project 877EKM Kilo diesel electric submarines, which Algeria received in 1987-1988.

Russia is presently upgrading a Nanuchka II class corvette and a Koni II class frigate for the Algerian Navy and will hand them over in July. Algeria and the Severnaya Verf shipyard signed a contract in 2007 for the overhaul of three warships of each class. Russia delivered the first pair, consisting of a Project 1234E Nanuchka II class corvette (Rais Hamidou) and a Project 1159T Koni II class frigate (Mourad Rais), to Algeria in February 2011.


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Standard Bank (Johannesburg), Africa to Gear up for More Meaningful Engagement With China
July 17, 2012 | 0 Comments

press release

African nations must use the Forum on China-Africa Cooperation (FOCAC) to complement the continent’s regional institutions and policy agenda, and partnership with China should aim to boost Africa’s overall capacity, competitiveness and trade in a way that supports African development, according to a report released today, co-authored by Standard Bank economists Jeremy Stevens and Simon Freemantle, as the fifth FOCAC summit in Beijing, China, commences on 19 July 2012.

Jeremy Stevens, Standard Bank Group’s Beijing-based economist, says that the summit comes at a time when China is distracted by domestic economic challenges and political matters. Meanwhile Africa is now even more reliant on China, in particular Chinese demand for African commodity exports, but even sentiment towards emerging markets.

“The domestic environment in China is very different from any time previously – the economic growth rate has gone down whereas its volatility has gone up, the levers of growth have changed, the risk of a hard landing has increased, and the policy scope for Beijing to support the economy is more limited. Worryingly, the instability coming from mature economies has made matters worse.” Mr Stevens says.

“A changed China demands different Africa. China is looking at Africa in a new way, and is preparing to demand more meaningful engagement from Africa. Africa must respond with a multilateral agenda.”

China has increased its market access by widening the range of products exempt from tariffs entering the Mainland, but Africa needs to look at how partnership with China can further link its economies to global supply chains. Stevens argues that African leadership needs to take a practical approach focusing on carefully chosen subsectors, which can leverage the global value chain.

Given that China has been successful in delivering its commitments made at FOCAC, he adds that African delegates should alter the benchmarks for success, elevating job creation and economic diversification. Indeed, rising labour costs and currency appreciation in China alone will not push manufacturing jobs to Africa.

Mr Stevens says that special economic zones (SEZs) – in Algeria, Egypt, Ethiopia, Mauritius, Nigeria, and Zambia – have been successful gateways for Chinese entrepreneurs and products. The SEZs should act as the central point for African SME development, and linking these nodes to the rest of their respective regions should be priorities.

“Africa is deeply relevant to China’s next phase of development, and its coping strategy during the tough global economic and financial climate. Africa economic trajectory is relatively stable, and the structural drivers of economic expansion are well entrenched. Importantly, the continent is open to Chinese investment, thereby supporting the ‘going out’ of Chinese SOES.

“The continent is a fertile soil for renminbi internationalisation, with CNY36bn in trade done in renminbi already during 2011. Chinese and African interests also converge in sustainable energy solutions. And Africa should do itself a favour to refute the “land grab” ideology and partner with China in food security,” says Mr Stevens.

“FOCAC is the multilateral institutional apparatus framing China-Africa engagements. FOCAC matters as it propels Sino-Africa collaboration in a testing time. Ties have continued to mature, develop and – all things considered – flourish since 2009. FOCAC has helped give China-Africa ties continuity, kept them relevant and anchored them in trying such trying times. This week’s meeting in Beijing must continue that momentum.”


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Africa: U.S. Military Steps Up ‘Sustained Engagement’ With Africa
July 17, 2012 | 0 Comments




A stepped-up role for the American military, which has been the subject of widespread discussion and debate since the establishment of the U.S. Africa Command (Africom) in 2008, has been getting more U.S. press attention in recent weeks.

“The U.S. military is expanding its secret intelligence operations across Africa,” the Washington Post’s Craig Whitlock reported last month in the first of a series of ground-breaking articles. Whitlock described “a network of small air bases to spy on terrorist hideouts from the fringes of the Sahara to jungle terrain along the equator, according to documents and people involved in the project.” Some State Department officials have “reservations about the militarisation of U.S. foreign policy on the continent,” Craig reported, fearing the “potential for creating a popular backlash.”

“Keep your eye on Africa” journalist Nick Turse writes in an investigative examination called America’s Shadow Wars in Africa posted this week on the blog  and cross-posted on Huffington Post. “The U.S. military is going to make news there for years to come.”

A  43-page report last year by the Congressional Research Service concluded that Africom’s rising profile and large budget could lead Congress to “exert its oversight authority to monitor the command’s operations to ensure that they support, rather than guide, U.S. political, economic, and social objectives for the continent.”

The Africom commander, Gen. Carter F. Ham, describes the command’s reach in much more modest terms. The United States is not planning “a large, permanent military presence in the continent of Africa,” he said in a lengthy presentation on June 26 to a two-week seminar for senior African security-sector experts. Instead, he said, there is and will continue to be a “small, temporary presence of U.S. military personnel” in various parts of Africa, as needed to meet contingencies.

Also last month in an AllAfrica interview with Reed Kramer, Ambassador Anthony Holmes, the deputy Africom commander for civilian-military activities, outlined what he describes as a ‘concerted’ American effort to strengthen the capacity of African militaries to handle their own security, using a ‘by, with and through’ approach’. Excerpts:

There is a perception that the U.S. military is playing an increasingly larger role in Africa. Is that the case?

There has been a small but steady and fairly consistent increase in the U.S. military’s engagement in Africa since the command was formalized on the first of October 2008. It’s taken time to organize things, put in place the infrastructure and personnel. But also with the withdrawal from Iraq – and now the beginning of the end in Afghanistan – there are more people and resources available and we have a better sense of how we want to employ those resources in Africa to pursue U.S. security interests through strengthening African capacity to provide for their own security over time.

Is the principal mission to combat terrorism?

There is virtually no direct fighting of terrorists. Due to the unfortunate realities in Africa, there is concerted effort to work with African militaries and governments to enable them to confront terrorists and terrorism and to allow us to protect U.S. national security interest through expanding the capacity of African militaries to deal with their own terrorism problems directly themselves.

By and large our approach is what we call ‘by, with and through’ – developing partnerships for extended periods of time to develop the capacity in African militaries to deal with the problems themselves, so we don’t have to do it. Fundamentally, the underlying credo of the Africa command is that it’s in our direct national security interests to develop the capacity for Africans to provide for their own security on a sustainable basis.

And that’s done through a combination of approaches?

Well, it’s done through what we call ‘sustained engagement,’ and this is a very long-term undertaking. There really are no short cuts. It requires political will. It requires resources, and, first and foremost, it requires time. This can’t be done overnight. Essentially what we are doing is building institutions at the national level, at the sub-regional level and at the continental level.

So we work with the African Union, we work with the regional economic commissions to develop their peace and security architecture and to promote the cooperation of African countries among themselves. There are virtually no security issues in Africa that are conducive to solutions by one country alone. They almost always require regional approaches.

Terrorism is not limited to one country; terrorists move around. The underlying problems that generate terrorism are problems that extend beyond any border, and we try to foster communication and interdependency and joint approaches by African countries themselves.

One example would be the efforts aimed at Uganda’s rebel movement, the Lord’s Resistance Army, and its leader Joseph Kony?

That’s an example. A better example would the African Union Mission in Somalia (Amisom), involving Uganda, Burundi and now Djibouti and Kenya and Sierra Leone – underwritten by the United States and the United Kingdom and the European Union under a UN Security Council mandate.

It’s truly an international effort, but the African nations – particularly those five – are bearing the brunt of the burden and paying a pretty steep price for doing that as well. This is not ‘peacekeeping without cost’. Burundi and Uganda have lost hundreds of peacekeepers in this effort. That shows that they take it very seriously — and it’s hardly known in the United States.

What is the Africom role in Amison?

Africom forms part of a broader U.S. government effort to train and equip these nations to go into Somalia and survive, to defend the transitional government, which we hope will become a federal government – without the “transitional” moniker later this summer – so that they can work to develop the government institutions necessary to run a modern society that has the confidence of its people, that is legitimate, that is democratically elected, and can go about the long term effort to provide for the better standard of living, a better life for the Somali people.

What about Africom in Northwest Africa?

That’s a problem area that has gotten significantly worse during my three years at Africom. Three years ago, the problem was largely limited to several hundred Al Qaeda in the Islamic Maghreb (AQIM) terrorists in isolated in the north of Mali. Then they happened upon a fairly effective business model of kidnap-for-ransom and so became very well financed. They have used that finance to sink their roots into indigenous societies in the Sahel.

More recently, two events have made this a far more dangerous problem than it had been previously. The first is AQIM and its very concerted efforts to influence Boko Haram, an organic indigenous Islamic organization in northern Nigeria that has adopted many of AQIM’s tactics – bombings and attacks on civilians – to make them a very serious and dangerous threat to the Nigerian government.

Second is the fallout from the fall of Qaddafi in Libya and the return to northern Mali, in particular, of many Tuareg who had been employed in the Libyan military and by the Libyan government. They have returned to northern Mali extremely well-armed over the course of the past year.

This has contributed to a revival of historical grievances against the government of Mali and led to a splitting up of the country, which precipitated a coup by the Mali military in the capital Bamako.

You now have a fractured country and a situation in the North in which Al Qaeda in the Islamic Maghreb is able to operate very freely and openly. This gives the group a chance to seriously recruit and grow, to sink deeper roots and to operate more freely. It’s more dangerous to us but also to the Africans themselves.

Is there a risk that increased U.S. military presence in Africa could worsen rather than improve the security situation?

Al Shabaab in Somalia and AQIM in northern Mali have been plotting against the United States, against Americans and more broadly against Western interests. That’s not new. And the situation in those countries is dangerous not only to American but also Western interests. At the same time, we have interests identical to those of the nations of the region.

We are in Africa to protect American interests. That is why the American taxpayer pays for the U.S. Africa Command. After considerable analysis and study, we have concluded that the best way for us to protect American security interests in Africa is to assist the Africans in developing the capacity to provide for their own security.

*Culled from

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July 14, 2012 | 0 Comments

By André Thomashausen*, UNISA 13/7/12

At a recent public occasion at the University of the Witwatersrand, China’s new Ambassador to South Africa, Mr Tian Xuejun, announced that the fifth FOCAC Ministerial Conference in Beijing on 19 and 20 July will mark the commencement of a “new type of strategic partnership” between China and Africa.

With undertones from a long past Maoist era, Ambassador Tian Xuejin echoed the currently fashionable hostility of his government against the free media, stating that “people … with … Cold War mentality … have disturbed the sound and stable development momentum of China- Africa cooperation.” He explained: “Some western politicians and media also tend to make irresponsible remarks on China-Africa relations, attempting to mess up with our cooperation.”

The honeymoon of the much praised Chinese – African friendship is over. The steel wheels of Chinese locomotives in Namibia have cracked under their first load, and cannot be repaired. Angola, as a result, preferred to recondition its rusted 1960ies locomotives from General Electrics. And the Angolan government is openly worried about an official figure of just over

270.000 Chinese workers in that country. Chinese companies do not hire locals.

The light delivery vans imported under the name of Chana are referred to by their users as the “rolling coffins”.  Their archaic 1950ies design turns them in death-traps, in case of an even minor accident. African farmers and artisans no longer buy tools, batteries or tyres imported from China. The quality of the products shipped to the African markets is simply too bad.

In Mozambique, the government had to intervene to stop a spreading practice of Chinese supervisors to use long and painful whips in their communication with African construction workers. In Zambia, relations became strained, after Chinese mine managers shot Zambian workers in a labour dispute.

In South Africa, a total of 60 bilateral agreements with China prevent us from protecting our ferrochrome steel industry by introducing an export tax on our ferrochrome ore which feeds Chinese steel mills. Dozens of these fairly new mills turn South African ore into high value steel. They operate with capital and labour costs that are a mere 20% of our local South African input costs.

The promise by Ambassador Tian Xuejin that the “new type of strategic partnership” would finally create jobs and stimulate manufacturing in Africa is difficult to understand. The highest paid skilled workers in private sector Chinese factories earn 340 Euros (3.400 Rand) per month, on the basis of an eleven hour working day, with 5 days leave per year. How could any Chinese assembly or manufacturing in South Africa be competitive, where our skilled workers will earn at least 4 times the Chinese wage, working 8 hours a day, under what we consider minimally human working conditions?

No doubt, and as I argued 2 years ago in my piece entitled “China is filling the gap left by Nepad’s failure”, Chinese African Cooperation has achieved an all-important leap in the rebuilding of essential infrastructures throughout Africa. China’s direct investment in public works in Africa is impressive. Most new railways, roads, airports, convention centres, parliament and government buildings, hospitals and countless schools are the tangible and foundational results of Chinese credit lines, serviced with African raw materials, to pay Chinese state owned construction companies.

33 bi-lateral Chinese – African investment treaties have laid a solid foundation for future trade and industrial co-operation. Most recently, China’s Sinopec has outbid KBR from the USA for the building of South Africa’s first mega refinery in Coega, to nearly double our current refining capacity.

However, enforcing legitimate local content policies in our cooperation with Chinese industries will become the principal challenge. China’s latest five year plan places great emphasis on advancing a more scientific and rational, rather than ideological or merely pragmatic approach to leadership and the making of decisions. A rational and long term vision of economic cooperation with Africa must begin to promote sustainable development on this continent.

Sustainable development in Africa cannot be achieved by continuing to push for an exchange of raw materials against sub-standard industrial products as a means to support the ailing state owned Chinese industries, effectively subsidizing them with the proceeds from the discounting of African minerals. Africa has no interest in being treated like China was treated by Russia in the 1950ies.

The scientific reformulation of Chinese-African Cooperation must integrate a strategy for the growth of manufacturing and beneficiation in Africa. Only by investing in African employment, will China be able to develop the future markets for its products. Just like Toyota eventually had to accept to build its cars in the USA, so will GWM, or Suntech, for instance, be wise to consider manufacturing in Africa.

A rational policy formulation will seek consultation and inputs from many sources of knowledge. This is why Chinese scientific and academic cooperation with Africa should grow into a 2way process. Offering African students bursaries to study in China, and supporting Chinese language tuition in Africa, is a paternalistic type of friendship. Chinese-African friendship will be able to benefit in many ways, if the Chinese decision making process would listen to and understand the concerns and voices Out of Africa.

*Prof.  Dr. Thomashausen is manager of the Centre of Foreign and Comparative Law at Unisa

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AGOA and the Emerging African Market
July 13, 2012 | 0 Comments

By Witney Schneidman *

When President Clinton signed the African Growth and Opportunity Act into law in 2000, he ushered in a new era of relations between the U.S. and the countries of Sub-Saharan Africa.

As a result of AGOA, the U.S. engagement on the continent is no longer solely predicated on a donor-recipient relationship, but increasingly one of mutual benefit and gain. Under AGOA, the U.S. became the first country to use trade as a stimulus for economic development and in doing so laid the groundwork for genuine win-win partnerships.

Twelve years later, AGOA continues to be the cornerstone of U.S.-African relations. Forty countries in Sub-Saharan Africa are eligible for AGOA benefits, and 6 of these countries are among the world’s 10 fastest growing economies.

Between 2000 and 2011, AGOA exports from Africa to the U.S. have increased over 500 percent to $53.8 billion. This has resulted in the creation of more than an estimated 300,000 new jobs in Africa, and another 1.5 million indirect jobs that, together, benefit approximately 10 million people. This non-reciprocal trade initiative has contributed to improved political and economic governance in Africa while also being one of the most cost-effective development initiatives the U.S. has undertaken.

At the same time, both the U.S. and African governments have to redouble their efforts to ensure that AGOA’s potential is being fully utilized. While the number of countries exporting non-energy products to the U.S. has doubled over the last ten years, only about 10 percent of AGOA’s 6400 product lines are being utilized.

AGOA is set to expire in 2015 but Secretary of State Hillary Clinton and U.S. Trade Representative Ron Kirk have committed the Obama Administration to a “seamless extension” of the legislation. Most immediately, Congress needs to extend the third country fabric provision, now scheduled to expire on September 30, which enables apparel to enter the US on a cost-competitive basis.

Legislative certainty is one reason that AGOA should be extended for 10 years, until 2025. Not only would this provide the groundwork for a deeper commercial relationship with African nations but it would help American companies become more competitive in the region. In fact, it is beginning to happen. U.S. exports to Africa were up 20 percent between 2010 and 2011 to $21.2 billion. According to the U.S. Department of Commerce, this has supported or created more than 100,000 jobs in the U.S.

With the emergence of Africa’s middle class, similar in size to that of India’s, there is a new commercial vibrancy across the continent, as noted recently by the McKinsey

Graphs taken from: The African Growth and Opportunity Act: Looking Back, Looking Forward. Witney Schneidman, with Zenia A. Lewis, and the Africa Growth Initiative at Brookings.

Graphs taken from: The African Growth and Opportunity Act: Looking Back, Looking Forward. Witney Schneidman, with Zenia A. Lewis, and the Africa Growth Initiative at Brookings.

Global Institute. India, Brazil, Turkey and, of course, China have intensified their commercial relationships with many countries on the continent, providing Africa with a proliferation of commercial partners. At the same time, the Obama Administration’s push to double exports under the National Export Initiative suggests that the African market will increase in importance to the U.S.

AGOA, therefore, is a critical building block for deeper trade and investment ties between the U.S. and Africa. The challenge for all stakeholders is to move forward expeditiously not only to deepen the commercial ties but to do so in a way that generates sustainable and mutual benefits.

* Witney Schneidman is a nonresident fellow at the Africa Growth Initiative at the Brookings Institution and president of Schneidman & Associates International. He also served as Deputy Assistant Secretary of State for African affairs in the Clinton Administration.Article culled from

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