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N° 114 • JANUARY-FEBRUARY-MARCH 2021

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AFRICA IN

2021

WHO WILL BE THE WINNERS AND LOSERS OF THE POST-COVID ERA?

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EDITORIAL

THE LIFE AHEAD

Prospects that the record-breaking vaccine development and distribution plans will start to counter the political and economic devastation of the pandemic will open 2021 with a blast of hope and goodwill. It will be short-lived unless there are credible efforts to launch a new social contract. This would have to be both a national and an international project, buoyed by the hundreds of millions of voices calling for radical reforms to the global system, its inequities and its march towards environmental apocalypse. The latest report by UN Secretary General António Guterres captures the shape of the emergency and why the 2020 pandemic is a by-product of the climate crisis. Carbon emissions that can be traced to the richest 1% of the world are more than double those produced by the poorest 50% of the world. The pandemic cut greenhouse gases when factories and airlines paused their operations. But that will count for little if emissions bounce back in 2021. Financial innovations could help Africa’s most indebted states mitigate climate threats and the pandemic’s economic damage. International financial institutions should develop green bonds and debt-for-climate swaps, encouraging finance houses and hedge funds to take responsibility for what Guterres calls the “broken state of the planet”. Carbon

taxes are another tool to rescue the environment. Such taxes could penalise the biggest sources of carbon emissions and provide climate credits for the mostly low-carbon economies in Africa. This could build on the flawed system of carbon trading. Africa’s successful response to the pandemic also could be a launch pad for a wider remaking of the political order and a counter to the blind alley of authoritarian populism. With the leadership of the World Health Organisation’s Matshidiso Moeti in Brazzaville and the Africa Centres for Disease Control’s John Nkengasong in Addis Ababa, Africa’s health professionals went on alert to fight a pandemic whose epicentres were in Europe, the US and Asia. It was their determination, and a seriousness among political leaders, that resulted in Africa, helped by climate and demography, registering just 3.5% of Covid-19 deaths in 2020 with its 17% of the world’s population. Hopes of a new social contract in Africa, with higher investments in education and health and a determined push towards digital and green technologies, will require a spirit of political inclusion. A decade of economic crises have pensioned off neo-liberalism. With more open economic thinking, African governments can start to redefine relations between the state and companies with a wave of investment in education, boosting access to technology and reliable infrastructure. For most governments, the urgent priority is a great leap in agricultural production, but they should not lose sight of those African musical, literary and cinematic talents taking their place on the world stage, alongside the new generation of tech pioneers who are attracting the attention of Wall Street and Shanghai investors. As this year’s protests have shown, radical political change will be necessary here, too, to strengthen these pillars of the continent’s future.

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

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03 EDITORIAL 06 MAILBAG 08 COFFEE WITH THE AFRICA REPORT / Tundu Lissu 10 YEAR IN IMAGES 18 OPINION / Carlos Lopes 22 INTERVIEW / Wamkele Mene 26 QUIZ

27 WHAT TO WATCH IN 2021 Keep your eye on the game-changers in the year ahead: elections, debt, security hotspots, energy, culture, diplomacy and climate change.

90 EAST AFRICA FOCUS 67 INVESTOR INSIGHT Finland, Spain and Turkey are forging trade, aid and security links with the continent.

81 MINING DOSSIER Electric vehicles spell a bright future for cobalt and lithium, and Canada goes for gold.

FEATURES 44 INTERVIEW / Robert Kyagulanyi Exclusive interview with oppositionist Bobi Wine as he strives to give Ugandan youth a voice in January’s elections, despite state-sponsored intimidation.

52 WIDE ANGLE / Post-Covid winners and losers Having acted decisively to save lives when Covid-19 hit the continent, African countries now face the economic fallout from the global pandemic. Alongside rising debt and growing authoritarianism, 2021 will present opportunities to woo investors for economies and businesses that can adapt and be nimble.

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THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

Its infrastructure and innovation make East Africa one of the world’s fastest-growing regions. As Ethiopia opens up, Kenya is creating links with DRC and China gets a taste for Rwandan coffee.

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COUNTRY PROFILES The Africa Report’s experts analyse the political and economic state of play in the 54 countries of the continent.

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OIL-FIRED PROGRESS

Everyone has been waiting for the passing of the Petroleum Industry Bill. This is the bill that is on the lips of every Nigerian, whether he knows anything about petroleum or not, and it is the most popular in the country. Oil represents the live wire of our state and remains one of the most important pieces of legislation that the country needs. The passage of this very important piece of legislation will give room for meaningful progress to be made in the oil and gas industries in particular, and in Nigeria in general. Abdullahi Mahmud Gaya, Member of the House of Representatives, Nigeria

THE LESSONS OF #ENDSARS

Pockets of violence have greeted the earlier, peaceful #EndSARS protests which rocked several major cities across Nigeria. The fact remains that sustained injustice is a precursor

ABIY IS JUSTIFIED

When TPLF troops made an orchestrated attack with the intention of seizing the military and toppling the government (as they have done before), they committed treason and a terrorist act [see TAR online edition: ‘Tigray crisis in Ethiopia’]. By the way, there have been two attempts to mediate between the two groups and both times it was a call from the government, which TPLF declined, and this is before the TPLF troops made the attack. So I would say what PM Abiy is doing is very justified and appropriate. This is not a war in Tigray but rather a military operation against the treason and committing of terrorist acts by the TPLF group. [The aim is] to restore the rule of law, which Abiy should have done in other regions, prior to this. Amanuel T. Zewdie

for agitations, which often turn violent. Mr. President should, in his wisdom, address the nation at this trying time and seek ways to calm frayed nerves. If possible, he should convene an emergency conference of strategic stakeholders like civil society organisations, youth groups, clergy, labour leaders and representatives of the government. [Many people] are agitated, following

the rising cost of food and essential commodities. It behoves on the leaders to act fast to save the degenerating situation from aggravating. The protesting youth should also know that a breakdown of law will be detrimental to the country as it would affect everyone should things get out of hand. Nigeria is ours to build. Caution should be the watchword. Jacob Onjewu Dickson, Journalist, Kaduna, Nigeria

WHO WANTS WAR?

Let’s face it, leaders of the Tigray region wanted war. They’ve been spoiling for war from the very moment they left the alliance with Abiy Ahmed. I only feel sorry for the soldiers that have died and will still die from this conflict, and the civilian casualties too. If I were a leader, I don’t see myself acting any different from Abiy. Michael Ekwe-Enugu

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THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

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COFFEE WITH THE AFRICA REPORT

TUNDU

LISSU

DOUGHTY DEFENDER The Africa Report talks with the leader of Tanzania’s opposition. Undeterred by an assassination attempt and other intimidation tactics, he says that his fight is not over By PATRICK SMITH Multiple death threats, arrests by security officers brandishing pistols, and a late-night race to the airport with a diplomatic escort – opposition leader Tundu Lissu’s experience of Tanzania’s general elections on 28 October differed a tad from the verdict of the East African Community’s observer mission. It concluded that all political parties were able to campaign freely and ‘the election process was conducted in a credible manner’. Now staying in the Flemish hinter­ land of Belgium, Lissu agreed to have a virtual coffee with The Africa Report. A considered yet battle-hardened campaigner, Lissu is a difficult politician for journalists. Where is the Achilles’ heel? You might conclude that Lissu’s flaw is that he is too much of a gentleman for the blood sport of 21st-century politics. He is firmly in the tradition of Tanzania’s activists: its hosting of freedom fighters for the overthrow of apartheid, its army’s ousting of

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Uganda’s Idi Amin Dada and the lengthy ideological debates at the University of Dar es Salaam. So, back in November, what had led to that dash for the airport? It was just days after Tanzania’s electoral commission had announced that President John Pombe Magufuli had won a second term with 84% of the vote, the biggest margin since the advent of multiparty politics in 1995. Known as ‘The Bulldozer’ to supporters and opponents alike, Magufuli had lived up to the billing. The ruling Chama Cha Mapinduzi party was dominating the arena, as

‘Of our 80,000 polling agents, 57,900 were completely prevented from entering’

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

in the era of one-party rule under founding president Julius Nyerere. The reality, according to Lissu, is that the election was a gigantic fraud, from which opposition candidates were violently or bureaucratically excluded while state security packed the ballot boxes with pre-marked ballots for Magufuli before voting. Many opposition politicians alleged high-level vote stealing but, as presidential candidate for the main opposition party, Chama cha Demokrasia na Maendeleo, Lissu attracted extra attention. Most of all, his call for mass protests against election fraud riled the security services. “I received death threats, some were sent to my wife in these WhatsApp chat groups. She received the message from a particular group which said that the boss has ordered that the intelligence apparatus deal with Mr Lissu and they should not make a mistake this time.” The “mistake” the message was referring to was when a group of unidentified men shot Lundu 16 times in his parliamentary constituency car park on 7 September 2017. He was airlifted out to Kenya and then to Germany, where he spent more than a year recuperating. He still suffers sharp pain in his legs but is determined to stay in the struggle. Magufuli duly condemned the attack on Lissu, but the perpetrators have never been found. This year, opposition politicians faced an onslaught from state security that peaked around election time. Lissu takes up the story after the threats: “So I decided to run for dear life. I spent a night with friends and it became clear that actually they were closing in on me. So as not to put my friends in danger, I decided to flee to the German embassy.” Amid prophecies of calamity, Lissu had returned to Tanzania in July to launch his election campaign. He was zapping around the country, addressing rallies and town hall meetings, while party colleagues organised agents to attend each of the country’s 80,000 polling stations. Then came the shock.

‘Nyerere is our secular saint and it is overdue for him to be taken from that pedestal’

has suffered for nearly 60 years is an imperial presidency. The presidency is literally above the law.” That set the stage for today’s politics, says Lissu in a nod to the incumbent. “It’s very easy to point an accusing finger at Magufuli, but let’s be fair to the man. He has not changed a single provision of the constitution and those powers were created by Mwalimu Julius Kambarage Nyerere.” Beyond their public duelling, has Lissu ever had a heart-to-heart conversation with Magufuli? “I spent five years in parliament with him. And I can tell you the man doesn’t have any skin for criticism. They say a thin skin, Magufuli doesn’t have any skin whatsoever. He takes any criticism very personally. He did that as a member of parliament, as a cabinet minister and now that he is president we have seen what he is.” A rapprochement is not on the cards, at least as long as Magufuli is president. How quickly Lissu returns to the fray in Tanzania is another question. There is no sign of this doughty lawyer hanging up his election campaign baseball cap. Nor will he go easy on Magufuli. “During those first days of his presidency, when everyone was falling over to praise this new Messiah, I said the nation should be mourning, preparing for terrible days ahead. And that’s why perhaps I was shot, because I never let up on him.” R TAR C PAU FO

Oddly, none of this appears in the official observer mission reports, but Lissu talks about three meetings with the African Union mission headed by Nigeria’s former president Goodluck Jonathan. “The AU observers informed me and my colleagues that they had witnessed terrible things. In one case they went to a polling station before it opened and the ballot boxes were already overflowing with ballots.” The AU is yet to release its official report. Instead, to Lissu’s surprise, AU chairman Cyril Ramaphosa was one of the first leaders to congratulate Magufuli. For all that, and his party losing all but two of its seats in parliament, “a luta continua”, insists Lissu. He traces his political roots back to the intense debates of

the 1970s. “I’m a child of Ujamaa, of Mwalimu Nyerere’s socialism. What it meant to me personally was to see our village destroyed in 1974 by the government […]. Three quarters of the rural population of Tanzania had their lives turned upside down in the course of three years.” After reading law at Britain’s University of Warwick, Lissu returned to Tanzania on a political mission. He sees a straight line between the topdown edicts of Ujamaa and Tanzania today. “Nyerere is our secular saint and it is overdue for him to be taken from that pedestal. What this country

JEAN-MAR

“On election day, we realised what Magufuli had been planning with his returning officers. All over the country, the polling stations were taken over by the military and anti-riot police. Of our 80,000 polling agents, 57,900 polling agents were completely prevented from getting into polling stations.”

114 / JANUARY-FEBRUARY-MARCH 2021

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ADRIA FRUITOS FOR TAR

OPINION

THE YEAR OF RECKONING VINCENT FOURNIER/JA

CARLOS LOPES High representative of the Commission of the African Union, and author, with George Kararach, of Structural Change in Africa (Routledge, London 2019)

What we have to realise is that the Covid-19 pandemic tells us three stories that are all related to the mega-trends affecting the world. The first is the demographic megatrend. If you look at a map of the coronavirus infection rates and the mortality rates associated with the pandemic, you realise they reproduce exactly the map of the ageing of the population around the world. So, the younger the population, the

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fewer infections. Africa obviously has benefited from its lower median average age, and the parts of Africa that have been most affected are actually the ones that have demographics that are slightly different from the rest. So, certainly South Africa, and also North Africa. It tells us the story that countries may be rich, may be well-endowed, may have a lot of resources, may have the absolute first-class infrastructure

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

in terms of health services, but they will be affected in the future more and more by developments that are going to take into account the composition of their population – being much more dependent on social protection and more dependent on the interventions by the public sector to sustain the increase in expenditure in the health-related type of difficulties and challenges. The global workforce is going to be affected by the characteristics of the future health challenges that it will have to face. On the other hand, Africa – with the youngest population in the world and an average age of 19 – is going to have a completely different entry point into dealing with the future, which is going to be much more based on how do you deal with such a workforce and how that workforce will require levels of mobility that will have helped sustain the population elsewhere. Then you have the second megatrend, which is climate related. For Africa, 2020 is going to be a

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OPINION

year to be remembered, not just because of Covid-19 but also because of two locust invasions in the Horn of Africa, a fourth year of drought in parts of Southern Africa, floods – in parts of the continent that have never experienced them before, and in parts where they have been prevalent, like Mozambique, two times in the same year. Then you have the incredible environmental stress in the Sahel that is associated with some of the conflicts there. So climate change is affecting Africa deeply. Combined with the other dimensions of a pandemic, it is quite devastating: that is because of food security dimensions and because the water and other characteristics are related to how you deal with disease and sanitation. We have seen it, for instance, in all the slums in Africa, where the lack of water and space impeded effective social-distancing measures. But you also have the dimension that pandemics like this are likely to be recurrent, precisely because we are encroaching into the environment reserves that used to keep us at a distance from a certain type of virology. In the future, we are not going to have that luxury of distance because of the way we are dealing with the planet. The third mega-trend is technology. It demonstrated a complete reversal of our notion of risk. Until now, risk was associated with probability – low probability, low risk. From now on, it’s going to be low probability, very high risk. This is going to change the mindset and the way we deal with value chains. Technology will have to respond in a completely different way to what we have been accustomed to. We have all the technological means to do so, but we were not prepared to see the world that way. And we are going to be making a calculation about geographies that we didn’t make before – we can’t

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concentrate too much production in one corner of the globe because that creates dependency that is going to increase the risk. We are going to be able to do lots of things by air that we have not envisaged before because we are going to undertake the largest ever operation of logistics worldwide with the COVAX Facility, a global risk-sharing mechanism for pooled procurement and equitable distribution of coronavirus vaccines. We will have to re-equip ourselves to deal with a completely new set of rules regarding logistics. Infrastructure and technology will have to respond to that. And then the other side of technological change is the digitalisation of our interactions. It comes in different shapes and forms: from the way we are dealing with education, from service provision to distance conferencing. You now have some innovative ways of doing tourism by using virtual reality. We are going to really remember this pandemic as a moment where the three mega-trends converged to alert us to a different world. And I think this is going to affect Africa as much as any other part of the world. We are going to have a 2021,

We’ll remember this pandemic as a moment where three megatrends converged

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

in Africa specifically, that is going to be worse than 2020. That is because we were living with some cushioning of different sorts during 2020, with the hope that the global economy on its own was going to take off on a V-shape recovery. That didn’t happen and Africa is going to be trailing in terms of access to financing. The situation is going to become much worse in 2021 because we will have exhausted our cushioning, such as foreign reserves. But these are short-term concerns for 2021. If you look at the global economy, you realise that investors have been riding on two opportunities: the opportunity of digitalisation and the opportunity of logistics. So, any big corporations, any big tech companies that are in these two territories, they are having a party. And with them some of the stock exchanges are rallying around these types of stocks. But this is not going to last and, even if it did, we have so much capital that is not finding a way of being productive. There is too much money that doesn’t have anywhere to go. Demand is depressed, economies are not taking off and there is just so much that you can put into the two areas of digitalisation and logistics where there is growth without creating a bubble. And the risks are becoming too large. As the evaluation of risk is changing, after a couple of months, this rallying around logistics and digitalisation is going to fade considerably. When it does, where is all this money going to? The interest rates in Europe are going to be close to zero, which also means that the profitability of certain types of business is quite compromised, unless there is growth. And growth is not picking up. So the best places to invest that offer a much brighter future are the emerging markets. Africa is going to become very attractive in the long run, just not in 2021.

INTERVIEW

WAMKELE

AFRICANUNION/TWITTER

MENE NE

‘It’s going to be difficult but we’ve got to do it’ The AfCFTA secretary general talks to The Africa Report about the continental trade bloc’s January launch, forging value chains and diplomatic challenges ahead By XOLISA PHILLIP in Johannesburg When Africa’s much-vaunted free trade area launches on 1 January, there will be big fanfare and even bigger pressure mounting for South Africa’s Wamkele Mene to make it a success. Building up the continent’s interconnections and market of more than 1 billion people is being touted

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as a means to fight poverty, bring development and reduce the continent’s dependence on fickle foreign markets. Mene, elected secretary general of the African Continental Free Trade Area (AfCFTA) in February 2020, tells The Africa Report: “I don’t want anybody to be under the illusion this is going to be easy. It’s going to be difficult, but we’ve got to do it.”

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

Africa’s overreliance on exporting primary commodities is detrimental to its economic development and undermines its ambition for greater integration. As Mene puts it, this “keeps Africa trapped in [a] colonial model of economic trajectory”. But, in dealing with trade and economy ministers from all over the continent, he says he sees a lot of goodwill. “Everybody wants [to see] Africa industrialising. Everybody wants to see a digital economy on the continent. Everybody wants to see the continent leapfrogging into the Fourth Industrial Revolution,” Mene says. This will take reducing barriers to trade and eliminating non-tariff barriers and barriers to intra-Africa investment. All of that requires economic actors on the continent to take a holistic view of the trade ecosystem. Mene explains: “We have to reconfigure

INTERVIEW

Africa’s supply chain. We have to reconfigure and relook at how we establish value chains […] in a way that [makes us] more self-sufficient as a continent.” During his nomination, Mene got a taste of the diplomatic skills required to make a continental institution work and the role of competing national interests. Nigeria is one of the most reluctant countries to take part in the AfCFTA; President Muhammadu Buhari has closed the country’s western borders to encourage more domestic rice production and fight smuggling. Abuja rejected an expert panel’s report that Mene, with years of working on trade for the South African government, was the most qualified for the job. And this led to a vote in which Mene won a two-thirds majority. “When we talk about trade creating opportunities for people – and when we talk about trade as an instrument for development – that’s what I’ve seen,” he says, recalling his experiences growing up in the township of KwaNobuhle. The settlement is on the outskirts of Uitenhage in Eastern Cape, a place well-known as the home of a Volkswagen vehicle assembly plant. Mene has personal experience of how trade deals can affect a smalltown community.

A new world view

“When Volkswagen started exporting to the US under the African Growth and Opportunity Act, there were almost 1,000 people who were taken from my township to go to Germany to train for the production of the new vehicles. I saw how trade can transform people’s lives. People came back with new skills. People came back with a new world view. People came back and they were able to be part of a global value chain – not just a regional value chain,” says Mene. Trade has been Mene’s professional domain for most of his adult working life. The exception is the three or so years he spent working at a law firm.

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MADE FOR TRADE 2010 Appointed as South Africa’s deputy ambassador to the World Trade Organisation (WTO) February 2013 Served as chairman of the committee on international trade in financial services at the WTO August 2015 Named director of international trade and investment law at South Africa’s department for trade and industry March 2016 Promoted to chief director for African economic relations February 2020 Elected as first secretary general of the AfCFTA Secretariat, situated in Accra, Ghana

Mene cut his teeth at the department of trade and industry in South Africa and the World Trade Organisation (WTO) in Geneva, Switzerland, where he represented his country and performed ambassadorial duties. “I’ve been in trade law, trade policy, [and] trade negotiations for a long time. I would say that [having spent] time at the WTO – about six years – I now know what works and what doesn’t work for an international trade organisation,” he tells The Africa Report. “That preparation is valuable because we are trying to establish a new international organisation secretariat for trade. If you come into this without the benefit of having been part of an international trade secretariat, it may be difficult,” he says.

In South Africa with the AGOA, ‘I saw how trade can transform people’s lives’

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The AfCFTA secretariat is modelled on the WTO in terms of its functions and its mandate. That leaves the responsibility for implementation to the member countries. The secretariat’s mandate is to help member states implement the agreement and respect their obligations. In addition, it provides technical advice and help in capacity building.

Rules of origin

“I was South Africa’s lead [AfCFTA] negotiator for a long time. I come […] with the benefit of knowing what would be acceptable to member countries and what would not be acceptable,” he adds. In addition to his trade expertise, Mene speaks three languages: isiXhosa, English and French. He speaks the latter “only after midnight, when I feel more relaxed”. That relaxation and the French language will come in handy in negotiations that will almost certainly take much longer than policymakers expect. The WTO is still negotiating the Doha Development Round, and that has taken more than 20 years, he points out. “It is still not concluded. […] Every trade agreement I’ve ever worked on is never concluded on time,” Mene says. There are ongoing negotiations about the implementation phase of the AfCFTA agreement. Although there is a lot of outstanding work, “we are at about 80% concluded on rules of origin”. Those rules are critical because they determine how much of a final good will have to be ‘Made in Africa’ in order to benefit from the AfCFTA. Countries with infant industrials do not want a neighbour to be able to import a Chinese T-shirt and sew a stripe on it to call it African. But supply chains are not yet set up to deliver Beninese cotton to the textile factories of Lesotho or Mauritius. So there are more late nights and s’il vous plaîts on the horizon to get over this finish line and to plot out workable measures for each stage of the AfCFTA’s growth and development.

Quiz 20 questions for 2020

name that loosely translates as ‘one who does not take advice’?

Think you have had your finger on the pulse of African news? The first five people to answer all the questions correctly will receive a year’s subscription to our digital edition. Please e-mail your answers to: quiz@theafricareport.com by 1 February 2021.

14

How many African presidents changed the constitution to allow for a third term in 2020?

15

And who are they? (Extra points for naming their countries)

1

Which Tanzanian music star was jailed for a social media post?

16

Which rapper has diversified his business interests to cover cryptocurrency and the construction of a futuristic African city?

2

Which singer from the Democratic Republic of Congo was arrested for a song called ‘Ingratitude’?

3

17

4

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Name the head of an anticorruption agency who was suspended in 2020 pending an investigation into alleged corrupt practices.

Ferraris, a Bentley, a Merc and a mansion in Johannesburg were part of the ‘loot’ in what South African graft scandal?

The AU’s African Peer Review Mechanism is alleged to have ‘lost’ a $1m donation from which country, according to whistleblowers?

PSG’s forward Kylian Mbappé drives the ball in a Champions League match

6

Africa’s first Covid-19 case was recorded in which country?

7

Which African Union member state is the only one not to have signed the AfCFTA treaty?

8

Who was criticised for tweeting a picture of Robert Mugabe on Africa Day?

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J.E.E/SIPA

5

Which airline continued to fly to China when all others on the continent stopped during the Covid crisis?

Name an African country that announced in 2020 that it would allow the cultivation of marijuana for medicinal purposes.

9

11

10

12

Which African country began its sponsorship of the Paris Saint-Germain football team, having already sponsored Arsenal? A September tweet suggested this Nigerian business leader's strategy is ‘Let Aliko [Dangote] use his head to break the coconut, then we follow.’ Who did it refer to?

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

The ‘miracle’ Covid-19 cure promoted by Madagascar’s President Andry Rajoelina is based on which genus of plant? Once filled, what is the water capacity of the reservoir for the Grand Ethiopian Renaissance Dam?

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Which president changed his name by adding a childhood

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Whose tweets on the US election parodied Western reporting on Africa: ‘Polls are set to open in 48 hours across the US as the authoritarian regime of Donald Trump attempts to consolidate its hold over the troubled, oil-rich, nuclear-armed, North American nation’ – helping many to laugh through the aftermath of the 4 November vote?

20

Which ‘giant of African music’ died of the coronavirus in March?

WHAT TO WATCH IN

As the dust settles on the pandemic, 2021 will start to show what strengths and weaknesses are exposed in geopolitics, trade, infrastructure and technology. While a new regime enters the White House, millions of Africans will go to the polls: alongside the many incumbents on the ballots there are also oppositionist reformers. Debt and security are high on the agenda, and Africa may sway the debate on climate change. THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

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and his entire political career, push him towards institution-building. There are plenty of relationships to rebuild: those affected by visa bans and restrictions would be a great start. Especially with direct flights between the US and Nigeria finally due to resume in 2021.

Not your parents’ international system It has been tempting to count the international order out. With nationalism the de facto route to political power for so many of the world’s powerhouse economies, many view multilateral organisations with suspicion. The World Trade Organisation? The tip of the spear in the conspiracy to steal US jobs. The World Health Organisation? A pawn in a sinister game by a former Microsoft executive to track the general public via microchips injected under the pretext of a ‘vaccine’. Why not just track people using mobile phones like everyone else? The WHO quickly became a punching bag in the US-China breakdown. And US President Trump has put sticks into the wheels of the WTO, blocking the election of Nigeria’s talented former finance minister Ngozi Okonjo-Iweala as director-general. Trump also tried to block the reelection of Akinwumi Adesina as head of the African Development Bank. Trump legitimated the more wildeyed theories about multilateral institutions – run by ‘globalists’ in the lingo of Trumpworld. In the ‘America First’ vision of former Trump adviser Steve Bannon, the ‘globalists’ are a sinister cabal stealing national sovereignty. Bannon is now charged with multiple counts of conspiracy and fraud. The European Union has been a famous bogeyman for the British

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Eurosceptics, who have a wonderfully out-of-touch relationship with history. Historian Michael Howard, on hearing a Conservative member of parliament vaunt the ability of the UK to be able stand alone and be the saviour of Europe, wrote to the letters page of The Daily Telegraph, saying ‘The last time Britain fought a war on its own was the American war of Independence. We lost.’ And if the UK won the Second World War it was as part of the coalition that shaped the current international architecture – Bretton Woods, the UN Security Council and related agencies. Now, it will be sitting on the outside as the next great liberal alliance is constructed. It took a global pandemic and subsequent shutdown to restore liberal ideas to the ascendency. If it wasn’t for the virus, two critical events may not have happened. The first is Joe Biden’s November presidential election win in the US. Biden’s first cabinet picks,

The US-EU rapprochement will ring alarm gongs in China

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

The second is the decision by Angela Merkel to allow common debt-raising by the EU. This seemingly arcane decision is actually a fundamental act of union – debt union – between the 27 members of that great experiment in multilateralism. The union will now pool debt obligations worth $750bn to fund the post-Covid recovery. The pandemic response has expanded the role of governments across the globe, perhaps making it easier for them to talk to each other. For some this is Europe’s ‘Hamilton moment’, referring to the drive by Alexander Hamilton to get 13 states to mutualise their debts in 1790, a key pivot in the creation of the US. Anyone who has spent any time in Brussels with Dutch prime minister Mark Rutte doubts that we will see a United States of Europe soon, but the direction of travel is important. Important, too, is the hand held out across the Atlantic Ocean between Brussels and the incoming White House administration. The EU has called on the US to seize this ‘once-in-a-generation’ opportunity to strike a partnership to work on the biggest challenges facing the planet. To climate change, taxing multinationals and global security threats should be added the governance of space – China having successfully landed a probe on the moon. After the years of drift, could this signal a genuine attempt to put together a new world order? The US-EU rapprochement will ring alarm gongs with the power-brokers in Beijing, especially as the Brussels document talked about joining forces with the US to meet the ‘strategic challenge’ posed by China. Biden also

ADRIA FRUITOS FOR TAR

said in November he won’t immediately remove tariffs placed on China by Trump. Those who thought the Biden-Brussels love-in would dispel fears of, for example, a ‘splinternet’, may be in for a surprise. For Africa, the choice is already made, and it will be Beijing; while the United Kingdom might be able to afford to rip out phone networks and start over without Huawei, try proposing that to a country where the choice is between phone calls and hospitals or roads. South Africa’s President Cyril Ramaphosa calls the US “clearly jealous” over the advances Chinese phone companies have made on the continent (see page 34). It matters, too, for those who think that an IMF where China has a real seat at the table with appropriate voting rights is a good thing. How much easier to conduct debt negotiations with African countries when Chinese lenders are part of a broader architecture? Would we see the dramatic default of Zambia if that was the case? The rise of China and India highlight the weaknesses of the

Can the AfCFTA avoid the same concentrations of power?

old world order, so what will it take to get a new round of reform at the global centres of institutional power? Thus far, the ‘alternative World Bank’ set up by India, China and other BRICS countries has been quietly expanding, with new membership set to open for the $50bn-strong institution. And for those still fighting the ‘new Cold War’ – with China in the role of the Soviets – eyes should be opened to the alternative power blocs emerging all around the world; from the Japan-India alliances in the Indian Ocean, to the Gulf duo of Saudi Arabia and the UAE. The defenders of multilateralism should perhaps reflect on how

we arrived at this national populist moment in the first place. As James Mwangi, CEO of Kenya’s Equity Bank, reflects in the pages of The Africa Report (TAR113), while the hyperglobalisation of the 1990s – embodied by the 1995 creation of the WTO “helped the world enjoy economies of scale, it concentrated power too much”. As Africa charges into its own mini-WTO, the African Continental Free Trade Area, the same issues of multilateralism versus nationalism are rearing their heads. The deal is set to launch in January 2021 after being delayed by the coronavirus. And policymakers are wondering if they can get everyone on the same page. Will Nigeria follow through on its reluctant signing up? The government has already given its big cement magnates – Aliko Dangote and Abdul Samad Rabiu – a special licence to get through the big protectionist wall that President Muhammadu Buhari threw up around the economy. In this case, too, the direction of travel is important, and there are no guarantees that it will be a bump-free continental ride.

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WHAT TO WATCH IN 2021

Change tack or stay the course?

Elections for new presidents and prime ministers give populations a chance to think about where their countries are heading. The Covid-19 crisis is weakening economies across the continent, setting the scene for some hotly contested polls in 2021.

Benin President Patrice Talon had promised to run for a single term but may try to go for a second, having used up his first in weakening and dividing the opposition. After the opposition boycott of the legislative vote in April 2019 and electoral reforms that favour Talon and his allies, the April 2021 vote is likely to be a tense one. The other main candidates from the 2016 elections, Lionel Zinsou and Sébastien Ajavon, say that they are the victims of trumped up legal cases that prevent them from running. With the playing field tilted in his favour, if Talon does run again he is unlikely to face heavyweight challengers. He embarked on a big national tour in November, suggesting that his ambitions to reshape the country have not been quenched.

Cabo Verde Social welfare programmes and the country’s reliance on tourism are set to be hot topics in the country’s election of a new parliament and prime minister, which are expected to be held by March 2021. Prime Minister Ulisses Correia e Silva of the leftleaning Movimento para a Democracia will face off against Janira Hopffer Almada of the Partido Africano da Independência de Cabo Verde, who wants to be the country’s first female

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prime minister. The Covid-19 crisis hit the poorest families harder and also highlighted the archipelago’s overdependence on tourism.

Chad Chad’s President Idriss Déby Itno is among the long-serving African presidents who use the power of incumbency to ensure their political longevity. Despite high debts, an oilprice crisis and insecurity surrounding its borders, Déby is likely to win the 11 April polls because the opposition is not united and has not been able to show that it provides a viable alternative to the strongman. With the headquarters of France’s Opération Barkhane in N’Djamena, Déby is seen by the West as an important ally in the fight against insecurity in the Sahel.

Djibouti Ismaïl Omar Guelleh, in power since 1999, has said he will groom a successor when the time is right. Now does not appear to be that time. In the 2016 polls Guelleh’s top opponent took 7.3% of the vote and 2021 is not likely to be much different. The opposition cannot agree on whether to compete in the April poll or boycott it. Some in the Union pour le Salut National coalition are calling for protests, and, while there is anger about high youth unemployment, there is little space for freedom of expression in the country.

Ethiopia With the war launched against the northern region of Tigray in November, Ethiopia’s electoral calendar is now in doubt. Prime Minister Abiy Ahmed delayed the August 2020 polls until

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

Zambia’s Edgar Lungu (top, Ethiopia’s Abiy Ahmed (right) and Gambia’s Adama Barrow face tough elections in 2021

TIKSA NEGERI/REUTERS

TIM ROOKE/REX/SHUTTERSTOCK/SIPA

Elections

May or June 2021 due to the coronavirus outbreak. Tigray held its own vote and said the Abiy government was illegitimate. As a sign of his reformist intentions, Abiy appointed oppositionist Birtukan Mideksa as electoral commission chief. Elections are critical for Abiy’s legitimacy and for his plans for the country, which include implementing more democratic reforms. But the Tigray conflict and tensions elsewhere in Ethiopia show that the country’s ethnic-federalist constitution will be at the heart of political debates well beyond the next vote.

Gambia Gambia’s transition since dictator Yahya Jammeh was voted out of office in 2016 has not been a smooth one. President Adama Barrow won a shock victory, promising to stay in office for just three years in order to sweep away the armature of dictatorship and set the country on a new path. He is intending to stay his full term and will run again on 4 December 2021 under the National People’s Party,

one of President Mohamed ‘Farmaajo’ Abdullahi Mohamed’s goals when he took office in 2017. Farmaajo is running for re-election, promising to continue to fight Al-Shabaab and build up the state’s capacity. He will face rivals like Abshir Aden Ferro, a Franco-Somali businessman. Ferro says Somalia’s current indirect system of elections is rife with vote buying. Civil society groups warned in late 2020 that the government might miss the February target. Two former presidents are also in the running.

JASON FLORIO/REDUX-REA

Uganda

which he formed in 2019. He tried to get parliament to approve a new constitution in October, but his own supporters and some of Jammeh’s voted against it. Barrow’s main opponent will be Ousainou Darboe of the United Democratic Party, which backed Barrow back in 2017. There are likely to be intense alliance negotiations ahead of the vote.

Republic of Congo The election date is set for 16 March and, although Denis Sassou Nguesso has not said he will run again, few expect the 77-year-old president to

announce his retirement. Several candidates from the 2016 election are in prison. Pascal Tsaty Mabiala of UPADS, the official leader of the oppositon, has called for a postponement and the party has not said whether it will participate. The roster of candidates is likely to be long, with several from the diaspora.

Somalia As progress on securing the country has not gone as the government had planned, February’s presidential ballot will not be the country’s first ‘one citizen, one vote’ election, which was

The 14 January presidential will show how tightly President Yoweri Museveni grips all the levers of power in Uganda. With repression currently being meted out on the opposition, analysts argue that the government will not organise a vote it is going to lose. Museveni’s chief rival, Robert ‘Bobi Wine’ Kyagulanyi, has popular support, but his National Unity Platform lacks the grassroots machinery of the ruling party. The authorities arrested Kyagulanyi for violating anti-Covid-19 measures in November. Even if ‘Bobi Wine’ does not win, the polls should give an indication of the strength of his brand of mobilisation.

Zambia How low can the economy go without taking President Edgar Lungu with it? After borrowing heavily and developing a conflict-filled relationship with mining firms, Zambia is struggling to pay its debts, with spillover effects on the economy. But opposition leader Hakainde Hichilema will not have an easy time challenging the governing Patriotic Front (PF). While Hichilema highlights his skills as a businessman in taking the country forward, the government could again chose to prosecute him for blocking a presidential motorcade. With the legal threat hanging over him, will he be able to persuade enough of the PF-leaning urban voters to back him after he has lost five times in a row?

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WHAT TO WATCH IN 2021

Mozambique

There will be blood In Mozambique, you don’t need to look far to see the problems with conflict-resolution strategies that focus almost exclusively on the military. Before conflict broke out with the Islamist Ansar al-Sunna rebels in the gas-rich Cabo Delgado Province in 2017, the Frelimo government had not yet ended its years-long fight with Renamo. Rather than being on the path to peace, both sides in the Cabo Delgado conflict are alienating the population. Militants heinously beheaded 50 civilians in an attack in early 2020, and in October launched their first successful attack in Tanzania – where the population has also expressed discontent at the lack of development

while big gas projects boost the central government’s revenue. In turn, the Mozambique government’s response to Ansar Al-Sunna attacks has resulted in civilian deaths and damaged property. The fighting has displaced nearly 500,000 people already. French oil company Total is going ahead with its mega-gas project in Cabo Delgado and is financing security initiatives. Gas projects do not generate masses of jobs. And if the government waits until the gas project starts significantly boosting state revenue – which will take years – the crisis could continue to grow. The corruption and bribery connected to $2bn in secret loans for a supposed tuna fishing project in 2013 have

rocketed the government’s finances, leaving it with little to spend on development and infrastructure projects. Over in West Africa, regional cooperation between armies and help from France have yet to neutralise the security threat presented by the Islamist rebels of Boko Haram in Nigeria. The Economic Community of West African States has a lot more experience in regional peacekeeping initiatives than its Southern African counterparts, but Maputo’s diplomats are not yet at the point of assembling a regional taskforce. And none of Mozambique’s major international partners have agreed to provide the training to the armed forces that the government has requested.

RICARDO FRANCO/EPA/MAXPPP

Displaced people attempt to flee by boat from armed violence in Cabo Delgado

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THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

Lake Chad has shrunk to a fraction of its original size

Debt NASA

Payback time

Sahel Crises decades in the making Young men and women have stark choices growing up in the Sahel, that band of scrub and desert above the West African coastline but underneath the Sahara. As Lake Chad slowly evaporated over the past decades, it took centuries-old farming techniques with it. That environmental catastrophe is feeding into a governance crisis also decades-long in the making. Terrorist groups often make the law in rural areas of the Sahel. Sahelian states like Mali, and the states of northern Nigeria, are unable to project power and security for their citizens across their vast, sparsely populated territories. Islamic State in West Africa Province, a splinter group from Boko Haram, is suspected to be behind the massacre of 100 Nigerians in the northern state of Borno in November. Armed men on motorcycles arrived as farmers were harvesting their crops. ‘Boko Haram receives tax from farmers before they can harvest. Farmers have to pay Boko Haram. The massacre was a message to other farmers that may be willing to trust the Federal Government’s

protection over Boko Haram,’ suggested Twitter user @dondekojo. This recalls the 10% cultivation tax that Taliban fighters enforce on Afghanistan’s opium farmers. African negotiators will gather at the COP26 climate summit in Scotland in November 2021 to press the continent’s case on the climate front. Measures to protect farmers’ livelihoods would be welcome as part of a wider ‘Marshall Plan’ for the region that would boost civilian administrators, the police presence and infrastructure spending. Focusing on one region or one aspect of the crisis is not working: Chad’s withdrawal of troops from a regional security force to bolster the domestic front has coincided with a resurgence of Boko Haram attacks in northern Cameroon. And while Mali is getting more inter­ national attention due to its military coup, Burkina Faso continues to lose control of its territory. The year ahead will give mediators and policymakers the chance to develop bolder strategies and build up the momentum needed to get the Sahelian crises higher on national and international agendas.

African debt levels have been on the rise for the past few years and the Covid-19 pandemic slowed down the growth that is needed to keep the biggest borrowers solvent. Zambia (government debt of 120% of GDP in 2020) was the first country to hit a crisis, defaulting on its eurobond in October. Analysts are also sounding the alarm about Angola (120.3%) and the Republic of Congo (104.5%). The IMF typically recommends that African countries maintain their debts at below 60% of GDP. The World Bank predicts that average sub-Saharan African debt will hit a peak of 67.4% of GDP in 2021. Growth rates are expected to pick up next year and the Covid-19 crisis has led many countries to re-evaluate their development plans. Most creditors agreed to temporary delays in repayments, but global NGOs like Oxfam say it is not enough and are calling for a round of debt forgiveness. Such calls – of which Uganda’s President Yoweri Museveni is a vocal backer – are not yet gaining traction, and many African governments did not participate in the debt moratorium out of fears about credit ratings and investor sentiment. China is a major lender and, while it has forgiven small loans in the past, it was not a part of previous debt-forgiveness campaigns. Many African governments are now looking to raise money on the eurobond market because global investors will be looking for higher interest rates than they can get in Europe and the US. But bond buyers are likely to be more wary, raising borrowing costs for bond issuers – at least in the case of the riskiest countries, which are rolling over bonds to repay previous bonds.

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WHAT TO WATCH IN 2021

Culture Beyond the pastel-coloured attempts at seizing the African zeitgeist offered by Hollywood and Beyoncé, there is sizzling creative energy, and a ready market on the continent. Netflix has fallen in love with Nigeria. It is not hard to see why. Nigeria’s film industry generated $7.2bn in 2016, while South Africa’s music industry should

HOTTICKET

Time to get creative

hit revenues of $170m in 2020. For a change, it cuts both ways. Apple Music is burrowing into Nigerians’ pockets, just as Naija Beats musicians are making millions from the US market. “We need to showcase our African culture and history – this is the right time,” Blessing Amidu, a backer of Nigeria’s feature-length animated film

China

First you make the infrastructure…

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receive. “They have invested a lot in understanding this market, creating a range of devices from $15 to $500, […] and they research needs, such as long-life batteries for basic phones for rural areas.”

CHINA-AFRICA TRADE

(US$ bn ) China: exporting to Africa importing from Africa 250 200 150 100 50 0

2011 2012 2013 2014 2015 2016 2017 2018

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

SOURCE: UN COMTRADE

The first wave of telecoms growth in Africa made millionaires – in some cases, billionaires – of investors who bet on Africans spending on mobile phones. No one is underestimating the potential of the next wave – interlocking trade, digital money and communications. Certainly not the Chinese, whose technology, communications and finance companies are heavily invested. Blockchain and cryptocurrency analyst Michael Kimani, doodling on a napkin one day, sketched out the penetration of Chinese companies into East Africa’s mobile internet stack. “They are operating with a swarm intelligence,” he says, pointing to the interconnected developmentfinance support Chinese companies

Lady Buckit & The Motley Mopsters (pictured) tells The Africa Report. Beneath the blue-chips, as ever, things are much harder. Funding efforts remain bureaucratic and top-down, but they are arriving. In January 2020, Afreximbank announced a $500m credit facility to support cultural and creative products.

China Mobile is building a new submarine cable, alongside Facebook, Orange and others. The project will be completed by 2023 and has the equivalent of all the current cables connecting the continent combined. To a point, the telecoms companies and internet service providers are leaning on Huawei and ZTE fibre. At the mobile handset level, Transsion now sells every other mobile phone on the continent through its wildly popular Tecno brand, with operating systems developed by Huawei. The mobile phone companies delivering 1, 2, 3 and soon 4G networks are all, likewise, using Huawei and ZTE technology. On top of that, apps developed in China are increasingly used in Africa, often backed by Chinese venture capitalists. Boomplay, the most successful music-streaming service you have never heard of outside Africa, boasts 75 million users – which puts it in the same bracket as Apple and Spotify. To really allow Boomplay, and other apps that sit on mobile phones, to take off, you need to be able to monetise. Huawei’s latest high-end Mate 40 smartphone was launched in

Africa, with a new feature: an M-Pesalike app that allows for secure transactions in a Chinese cryptocurrency. It is not just about monetising apps, argues Eric Olander, managing editor of The China Africa project. He says there is a battle worldwide to establish standards, including in cryptocurrencies, and Chinese companies are using Africa as a proving ground for Beijing’s new digital currency electronic payment [DCEP] system. “Imagine getting into the Transsion ecosystem with a DCEP cryptocurrency to facilitate the functionality on things like Palmpay or Boomplay,” says Olander. “The user will never know this is a Chinese cryptocurrency, it just facilitates the transactions.” It is not just China. Companies from the US are very much in the race. In 2019, Visa dropped $200m into Nigerian payments company Interswitch. Stripe bought Nigerian fintech Paystack for $200m this year. Facebook’s Libra project is not dead, and it is already trialing payments on WhatsApp in India. Africa will be one of many global battlefields for digital dominance.

Energy

Renewable rewards If you are looking for the way the wind is blowing and the sun is shining, turn to Egypt’s Benban solar park. The huge project, which will have the capacity to produce 1.8GW on completion, is proposing to sell surplus electricity at a tenth of the price of legacy power generators in Europe. Talks are under way to build power connections to Europe and elsewhere in Africa. Other big solar plants in the pipeline are likely to be delayed by the economic uncertainty around Covid-19, says Jaakko Kangasniemi, CEO of Finland’s development finance institution, FinnFund. He says governments are unlikely to back powerpurchasing agreements while finances are being restructured. But, Kangasniemi says, the money is not going to be idle: instead, developers are targeting smaller industrial and commercial solar projects “like a factory or a block of apartments, or a

neighbourhood […]. We are not talking a quarter of a million solar panels, but a few hundred or a thousand panels, around 1MW.” One recent example: one of Zimbabwe’s biggest coldchain and tobacco players, Nhimbe Fresh, has signed a deal with South African startup Sun Exchange for a 1.9MW solar installation. Sun Exchange crowdsources cryptocurrency leasing of solar cells – the latest iteration of the new micropayments for energy story that has taken off in recent years. Africa-focused miners are turning to renewables too. CrossBoundary Energy has been aggregating these industrial and commercial solar agreements for a while. It recently sold off its 40MW off-grid solar portfolio to ARCH Emerging Markets Partners. Investors got an exit and a 15% return on their money, sending a clear signal: you can make good money from African solar.

GREEN ENERGY IS GETTING CHEAPER

The cost of generating electricity using renewable sources declined sharply from 2010 to 2018 and is now in the same range ($0.05 to $0.17 a kilowatt hour) as fossil-fuel-fired power generation (2018 US dollars per kilowatt hour)

0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0

2010 2018 2010 2018 2010 2018 2010 2018 2010 2018 2010 2018 2010 2018 Bioenergy

Geothermal

Hydro

Solar Concentrating photovoltaic solar power

Offshore wind

Onshore wind

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

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SOURCE: IRENA

Nairobi-based HEVA was Africa’s first fund dedicated to creative and cultural goods and services. It has invested in 40 businesses and directly supported over 8,000 creatives. To really start to extract value from creative industries means having a structured network of support services. As investment advisor Aubrey Hruby says: “Much of this currently takes place through the informal economy, as the formal creative industry has long suffered from a lack of access to capital.” Exceptions include Nigeria-based Creatrix Empire, which provides services such as branding and digital marketing, and Bookings Africa, a pan-African digital platform with access to models, make-up artists, influencers and more.

WHAT TO WATCH IN 2021

Ethiopia EDUARDO SOTERAS/AFP

Armed community guards outside a polling station during the Tigray regional elections

The trouble in Tigray Relations between Addis Ababa and Ethiopia’s states will shape the course of the year ahead. The country has previous experience in the dangers that an overly centralised government can pose, but its current constitution – with states based on ethnic identity, and ethnic self-determination as a right – has problems of its own. The 2018 election of Abiy Ahmed as leader of the ruling coalition, and thus as prime minister, changed the country’s ethnic calculus. Abiy is an Oromo, from the country’s largest ethnic group, and his rise signaled the sidelining of the Tigray People’s Liberation Front (TPLF), which had long dominated the government and armed forces under Meles Zenawi. Abiy set up the Prosperity Party to replace the ruling Ethiopian People’s Democratic Revolutionary Front. With attacks on civilians and calls for the break-up of the Southern Nations, Nationalities, and Peoples’ Region, Ethiopia’s ethnic federalism began to crack. Tensions led to war between Tigray and the federal government.

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The federal forces took the Tigray capital of Mekelle in late November, but the fighting does not look to be over. “Part of the problem is the overwhelming uncritical, almost unconditional, international support for Abiy ever since he took office, which emboldened him,” says William Davison, senior analyst for Ethiopia at the International Crisis Group. There seem to be three scenarios, for the short term at least. In the first, an Abiy victory in Mekelle is relatively uncomplicated, the TPLF rump is quickly wrapped up, Abiy’s legitimacy is assured nationally and regime stability returns. It sends a powerful message to the region – don’t mess with Ethiopia – that will be heard in Nairobi, Khartoum, Cairo and Mogadishu. In the second, the TPLF starts a small guerrilla war. It continues for several months and keeps Ethiopia on its war footing, caught between war and peace, similar to Côte d’Ivoire’s lost decade. Everything is on hold, from economic to political reform,

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while the military dominates, creating a slow decline in institutions. The intensity of the fightback will depend on the wider politics of Tigray, like how, for example, the 98.2% of voters who backed the TPLF in September’s elections now see the party. The last and most difficult scenario would see the TPLF launch a well-organised guerrilla war that gains increasing popular support because of the brutal behaviour of government forces. Ethiopia’s regional states then start to tire of Abiy and take advantage of the government being tied up in the north to push their own agendas, leading to schism and more localised violence. Egypt, Eritrea and others then take advantage of the situation in their own ways. The International Crisis Group’s Davison broadly sees the second scenario as most likely, perhaps edging toward the third. “But without the implication that continued problems in Tigray would lead to Prosperity Party regional governments rebelling. Instead the system might get further destabilised if other opposition ethno-nationalist forces, particularly in Oromia, regain their vitality as they sense weakness.”

WHAT TO WATCH IN 2021 SYRIA

Horn The gulf between us

Diplomatic, strategic and commercial activities are picking up in one of the world’s most important chokepoints: the Red Sea. At the start of 2020, the Horn and Gulf countries came together in the Saudi capital, Riyadh, to launch the new Council of Arab and African Littoral States of the Red Sea and Gulf of Aden. Representatives from Somalia, Djibouti, Eritrea, Sudan, Egypt, Jordan and Yemen were in attendance. Missing from the meeting was Ethiopia. Saudi Arabia is reasserting its power in the region as a response to the growing influence of Turkey and Iran. The US-China tariff war was also a chance for the region to come together under the banner of cooperation and multilateralism, despite the exclusion of certain key players. There are many interests at stake for African and Gulf states in the Red Sea, but also for global players such as the United States, China, Japan, India, Turkey, France, South Africa and the European Union. Their overlapping and contradictory goals could be major obstacles to the establishment of viable mechanisms for cooperation and crisis management in the Red Sea. Egypt, a historic powerbroker, no longer enjoys that convening authority to set the terms for African and Gulf cooperation. The eastern bank of the Red Sea also faces instability and complex transitions. Among the key issues are: the war in Yemen, Gulf rivalries, economic downturns triggered mainly by crashing oil prices, and shifting positions on the recognition of Israel. The Somali coastline is one of the longest on the continent and forms the gateway between the Indian Ocean

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Ras Sedr Tawfiq Petroleum Dock Ataka Adabya Ain Sokna Wadi Dome Wadi Ferran Ras Gharib Ras Shukeir Zeit Bay Hurghada Safaga Hamrawein EGYPT

PORTS AND MILITARY BASES AROUND THE RED SEA

LEBANON ISRAEL JORDAN Abu Zenimah

El Tor

IRAQ

Al Qusayr Port Ghalib

Red Sea Massawa ERITREA

United Arab Emirates military base Assab Tadjourah Ghoubet Djibouti Container Terminal Doraleh Container Terminal Horizon Djibouti Terminals Doraleh Multi-purpose Port

Italy’s National Support Military Base (Italy) Chinese People’s Liberation Army Navy (China) French naval and airbase of Djibouti (France) Japan Self-Defence Forces (Japan) Camp Lemonier naval and air base (US) UGANDA

OMAN

Jazan YEMEN Saleef Hodeida Aden DJIBOUTI

Berbera

Mukalla Rudhum

Ash Shihr

Socotra

Gulf of Aden Bosaaso

Arabian Sea

ETHIOPIA Commercial ports Military bases SOMALIA

400 km

KENYA

and the Red Sea, leading up to the Mediterranean. It has the potential to be a great international hub. But years of conflict, war, terrorism, poverty and famine have left their mark on the country, rendering it weak and thus vulnerable to external influences. Turkey is one power that has managed to gain a solid foothold in Somalia as a major provider of aid, managing key infrastructures of its port and airport and backing its military. Djibouti, on the other hand, has found another way to keep itself front and centre while its neighbours remain on their toes by hosting military bases for a number of foreign players. “We don’t have oil, but we have ideas,” said President Ismaïl Omar Guelleh recently. Djibouti has pushed ahead with its plans to become a major regional hub. But that hasn’t been without some drawbacks. Much like its neighbours, Djibouti has accumulated a lot of debt

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

UNITED ARAB EMIRATES

Port Sudan

Osman Digna (Suakin)

SOUTH SUDAN

Persian QATAR Gulf

Jeddah

Oseif

SUDAN

BAHRAIN

SAUDI ARABIA Yanbu King Fahd Rabigh

Abu Ghosoun Bérénice

North Port of Sudan Green Port Southern Port of Sudan

IRAN

Taba Elat KUWAIT Aqaba South Camp (Multinational Force and Observers) Sharm El Sheikh El Gouna Duba

to China, along with hosting China’s only overseas military base. Eritrea’s port in Assab hosts the Emirati naval base, boosting the Saudi military presence in the region. At the start of the year, the UAE looked into adding another military base, in Somaliland’s Berbera, but that was later cancelled. In January 2020, the leaders of Eritrea, Somalia and Ethiopia proposed to form a new regional bloc, the ‘Horn of Africa Cooperation’. The bloc could address a number of key issues in cross-border trade and the environment. For landlocked Ethiopia, it could also open up new access points to the sea. Eritrea’s President Isaias Afwerki pushed for the bloc with an eye to boosting Asmara’s reputation. It aims to become a regional force in competition with the Djiboutiheadquartered Intergovernmental Authority on Development.

CMI/TAR

Mediterranean Sea

WHAT TO WATCH IN 2021

Calendar

Highlights of the year ahead AfCFTA LIFT-OFF 1 January

AfDB ANNUAL MEETINGS May

Tariff-free trade will commence within the African Continental Free Trade Area. au.int/en/cfta

ACCRA | GHANA afdb.org

34th AFRICAN UNION SUMMIT 6-7 February

KIGALI | RWANDA africatechsummit.com/kigali

ADDIS ABABA | ETHIOPIA Last year’s summit on ‘Silencing the Guns’ set the bar high. With the fighting in Libya and the Tigray crisis in Ethiopia ongoing, conflict resolution will still be high on the agenda, along with the continent’s response to the Covid-19 pandemic. au.int

POWER & ELECTRICITY WORLD AFRICA 24-25 August

AFRICA TECH SUMMIT May

JOHANNESBURG | SOUTH AFRICA

76th SESSION OF THE UN GENERAL ASSEMBLY 14-30 September NEW YORK | UNITED STATES

IMF/WORLD BANK ANNUAL MEETINGS 15-17 October WASHINGTON DC | US imf.org

NIGERIA OIL, GAS & POWER 2021 26-27 October LAGOS | NIGERIA africaoilandpower.com

AFRICA COM 8-12 November CAPE TOWN | SOUTH AFRICA tmt.knect365.com/africacom

BLOCKCHAIN AFRICA 18-19 March

PACIFIQUE HIMBAZA FOR JA

JOHANNESBURG | SOUTH AFRICA blockchainafrica.co

INNOVATION AFRICA 2021 13-15 April LUSAKA | ZAMBIA innovation-africa.com/2021/

AVIATION AFRICA 2021 21-22 April KIGALI | RWANDA aviationafrica.aero/home

UK-AFRICA INVESTMENT SUMMIT 5-7 May LONDON | UNITED KINGDOM afsic.net/uk-grow-africa

40

AFRICA CEO FORUM October or November TBC

ABIDJAN | CÔTE D’IVOIRE The premier African business event is due to take off where it left off, after the March 2020 event was cancelled due to the Covid-19 pandemic. Top policymakers and business leaders will be discussing the impact of the health crisis and how it has accelerated many business trends, like the adoption of digital tools in the banking sphere and the influx of global investment in African startups. With the January 2021 commencement of trading under the AfCFTA, how to benefit from rising levels of intra-African trade will also be on the agenda. theafricaceoforum.com

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

NDDC Niger Delta Development Commission ... determined to make a difference

A ROADMAP FOR THE NIGER DELTA The Niger Delta Development Commission (NDDC) was founded in 2000 as a Nigerian federal government agency charged with the economic and social development of the Niger Delta region. It is run by Acting Managing Director Professor Kemebradikumo Daniel Pondei. A former provost of the College of Health Sciences in Bayelsa State, and the ex-Chairman of the Nigerian Medical Association, Professor Pondei was educated at the Universities of Lagos and Nottingham (UK). What have you achieved since you became MD in February?

The commission finally completed its headquarters building that was under construction for 24 years and we moved into it 4 months ago. We’ve also changed the way directorates do things…and cleared some debts.We’d have done even better if we’d had full funding.

MEETING WITH

Prof. Kemebradikumo Daniel Pondei, Managing Director of the NDDC

Please explain your funding difficulties NDDC funding is supposed to come from various sources: 15% statutory allocation from the Federal Government, 3% of the annual budgets of oil/gas-producing companies and 50% of ecological funds. However, the ecological funds have never been received and most oil/gas companies are not remitting anything. Meanwhile, though the Federal Government has done its best for us, its budget has been badly hit by Covid costs, the oil price drop and the global recession.

Since you took over in February, there’s been a lot of controversy, a lot of attacks on NDDC. How have you coped? I head an Interim Management Committee (IMC) and my colleagues and I knew from the start that bringing

change to any organisation that requires wide-ranging reforms is very difficult because there are interest groups who will fight change. The IMC was appointed to ensure that a forensic audit – which has started – takes place. A lot of people fear that the forensic audit is a witch hunt that will expose the bad things they have done. But we are bold to say that we are nt here to witch hunt. We really just want to know why the NDDC has not functioned at maximum capacity and has not been able to deliver on its core mandate. One of NDDC’s main problems is that it operates like parallel state and local governments [in Abia, Akwa Ibom,

Also, there is no reason why every community in the Niger Delta region should not have water. Our priorities, I believe, should be dredging major channels to reduce flooding, reclamation and new town projects. I believe that those are the things that NDDC should concentrate on, and it will impact on everybody in the long run.

Niger Delta Development Commission

Despite all the distractions – the Covid lockdown and EndSars protests, for example – I think it’s been a fairly good and stable year.

Why is NDDC not working more closely with Governors of the Niger Delta states to avoid duplication and conflict?

Advertorial I

Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers states], by undertaking small projects such as construction of one-kilometre roads. NDDC is supposed to be an interventionist agency and should do big things like building highways to hitherto unreachable communities.

NDDC’s relationship with state governments was dysfunctional until recently. Fortunately, we began to rectify this problem this year and have agreed to carry state governments along in future.

There are constant disagreements about who should run NDDC. Why? NDDC Board member selection generates continuous conflict because, over the years, different powerful interest groups have nominated people for selfish reasons, mostly so their nominees can help them access NDDC funds and build war chests for elections.

Unlike some previous MDs, you are not a politician. Have you struggled with the fiercely political backdrop against which NDDC operates?

We started to clear these historical debts this year. Ironically, this process was held against us during a National Assembly probe.

It is assumed that whoever is running the NDDC is there because the ruling political party expects him to help the party and its members financially. It is difficult to deflect those pressures.

But NDDC has a huge budget by any standards…

Advertorial II

Niger Delta Development Commission

Can you tell us more about the problems you’ve encountered? The historical problems I encountered when I arrived in February are enormous. There are contractors and service providers – caterers, internet suppliers, etc – who have been owed both small and large sums for up to 10 years. Many contractors have not been able to complete the projects they were given because they haven’t received milestone-related payments. NDDC was even disconnected from the national grid at one point because it hadn’t paid electricity bills for a long time.

Our accumulated liabilities are more than 2 trillion naira! In other words, we’d need to commit our entire budget for about 15 years – and award no new contracts - to clear our debts. NDDC is inundated with court judgements and litigations linked to outstanding payments; and it’s painful to spend so much money on legal issues. By the way, when we try to verify contract performance, we often discover that many contractors who are complaining about non-payment have not actually done the work they claim to have done. The National Assembly has oversight functions. How has the balance sheet been allowed to become so unbalanced? Why are so many undone or uncompleted contracts listed for full payment?

These are questions I hope the forensic auditors will answer. There has been institutional failure on a significant scale.

Is it true that one has to be friendly with staff to get paid? This Nigerian Factor is part of the problem. I’m trying to minimize this problem by introducing automation that will reduce personal contact between the staff and contractors. I’ll also improve monitoring of key performance indicators in every directorate.

Will the forensic auditors also help you improve NDDC’s governance structure and basic modus operandi? Yes, one of the aims is to improve the way directorates work together. Also, if I have my way, staff will be able to rise through the ranks and run the organisation – as opposed to MDs and executive directors always being recruited from outside, as this IMC was. There are peculiarities of the system that can be best managed by those who have years of in-house experience. A new measure like this will promote stability and acknowledge professional expertise.

Where will you like to see NDDC in a year’s time? Have you studied similar organisations in other countries that are more functional than Nigeria to learn from their experiences? I’ve looked into how things are done elsewhere. And it’s interesting to note differences. In Rwanda, for example, they have a national rather than regional Development Board that comes up with policies. It advises the government. It does not implement. But, as I said earlier, I would like NDDC to be repositioned in a way that will enable it to focus exclusively on mega

PROEJCTS DELIVERED Since 2015 in all regions

CAPITAL PROJECTS Covering roads, electricity and water supply

rather than micro projects. For example, when there is a flood, people who have been badly affected expect NDDC to give them palliatives like food and mattresses. We can do better by concentrating on dredging projects that will prevent flooding from occurring in the first place. We need a new masterplan that has measurable indices attached to it.

Do you work with foreign donor agencies? I’m told that foreign donors lost interest in NDDC before I arrived because of the perception that NDDC is corrupt, mismanaged and unwilling to change and embrace reforms. We need to make donors believe in us again. They need to feel that they won’t be throwing their money or technical assistance down the drain.

RURAL PROJECTS

Including rural electrification and water projects

If I were a businessman, I wouldn’t take my money to a place where I can’t count on fidelity on the part of the other person… or to a place where files that can easily be treated within 48 hours are frequently left unattended for 3 years. I’m sure that NDDC will attract private sector people when it has become more efficient and more transparent, a process that is ongoing and being taken very seriously by me and my team.

What specific plans do you have for 2021 and beyond? Once the annual floods are over, we will launch agricultural initiatives in all of the 9 states. We will clear forests to prepare

NDDC Headquarters

NDDC has so much potential. We can overcome obstacles. If there is a will, there is a way.

The NDDC Mission for the Niger Delta To offer a lasting solution to the socio-economic difficulties of the Niger Delta Region and to facilitate the rapid and sustainable development of the Niger Delta into a region that is economically prosperous, socially stable, ecologically regenerative and politically peaceful.

NDDC contact 167 Aba Road, Port Harcourt, Rivers State, Nigeria. Info@nddc.gov.ng

www.nddc.gov.ng

Niger Delta Development Commission

10510+ 60% 3000+

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Our RESULTS

Taking the Niger delta to a new level

land for local people to farm on. We will also provide equipment, training programmes and seedlings. The NDDC has a rice mill which is already functional at Elele. We will ensure it functions at full capacity.

Do you have any interfaces with the private sector? We have a Public Private Partnership (PPP) department; but PPP only works when there is investor confidence; and confidence is sadly lacking at the moment.

JAMG - Pictures : All rights reserved

Donors can add so much value in terms of capacity development and expertise. They do great work in many African countries, including Nigeria, and can teach us a lot via pilot projects. I look forward to welcoming them as corporate social responsibility partners.

ANDRIY ONUFRIYENKO/MOMENT RF/GETTY

Features

44 INTERVIEW Robert Kyagulanyi

52 WIDE ANGLE Post-Covid winners and losers

Released after his November arrest, which provoked deadly protests in Kampala, the politician better known as Bobi Wine tells The Africa Report why he and Uganda’s youth will not stop pushing for change in the 14 January elections. In his words: “Museveni has never had a challenge similar to the one before him right now.”

As Africa steps into a new era of economic integration, its countries are still reeling from the global impact of the Covid-19 pandemic, which has interrupted supply chains, tourism, mining exploration and infrastructure-building, among others. Amidst mounting debt and growing anger among the youth, but with GDPs predicted to rise, investors looking for opportunities, and African prowess coming to the fore in green energy and fintech, 2021 will be a test of agility for governments, both politically and economically.

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

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Mali’s transitional president Bah Ndaw meets EU foreign affairs minister Arancha González Laya

INVESTOR INSIGHT

Picking partners Beyond the major world powers seeking influence on the continent, Africa is high on the agenda of many countries, from Finland to Spain and Turkey. Each brings its own interests and expertise, be it in fighting insecurity in the Sahel, protecting the continent’s forests or setting up companies that boost employment and trade opportunities THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

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MINING DOSSIER

Glencore’s Kolwezi T17 mine in the DRC, now subject to the government’s 10% export tax GWENN DUBOURTHOUMIEU

The green mineral economy The continent’s rich resources, including cobalt and lithium, mean African miners will be key players as the world switches to electric vehicles and wind and solar power. For the moment, though, platinum and palladium for fuel-injection vehicles are very much in demand THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

81

EAST AFRICA FOCUS

SUN RUIBO/XINHUA-REA

Ports and opportunities 90

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

Mombasa port is the hub for a vast majority of East Africa’s trade, with its efficient infrastructure and transport links

East Africa is one of the fastest-growing regions in the world thanks to its expanding infrastructure and innovative companies, and it has ridden the storm of Covid-19. The prosperity is attracting much interest – from the DRC, which wishes to join the region, and from investors to benefit from its dynamism By NICHOLAS NORBROOK For those keeping an eye on where might bounce back fastest postCovid, East Africa might be a good place to start. Yes, the collapse of tourism is hitting the region hard. But it is one of the world’s fastestgrowing areas outside of Asia, with a 2021 growth rebound of 4.8% predicted by the IMF. There are deep-seated reasons for that, which include the end of conflicts in certain countries, and strong state investments in physical and social infrastructure. Life expectancy at birth in East Africa has risen by almost seven years over the past decade. The structure of East Africa’s economies may also play a role in its resilience, argues Andrew Mold, who is in charge of the East Africa office of the UN Economic Commission for Africa (UNECA). Households in the region tend to be rural and focused on agriculture, a resilient sector. The price of commodities like oil has been slashed, which has eased East African countries’ import bills, too. New port projects along the coast, and new rail, power and road interlinkages between countries, are creating an integrated market of half a billion people and a regional

GDP of $450bn. Neighbours like the DRC are keen to join the East African Community (EAC) (see page 88). The financiers of the region are starting to play their connective role, too. The purchase of two Congolese banks by Kenya’s Equity Bank is the beginning of a more coherent regional policy from big local corporates, which hitherto had focused more on internal markets, despite the EAC’s efforts.

Cross-border trade

“We can become a catalyst of cross-border trade,” says James Mwangi, chief executive of Kenya’s Equity Bank. “It hasn’t happened as fast as everybody expected. There’s been a frustration.” Things are now opening up. Equity’s venture capital division, for example, has been tapped to develop the Kigali International Financial Centre. China’s investments in the region as part of the Belt and Road Initiative is delivering new trade into Asian markets. Meanwhile European, Middle Eastern and US partners continue to woo the region, bringing competitive opportunities for East African companies. But it is the internal market and the ability of domestic officials and banks to keep it going through the crisis that is greatest cause

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

91

EAST AFRICA FOCUS / Ports and opportunities

for optimism. Kenyan companies were shielded from the worst by a coalition of public- and privatesector help. Tanzanian officials created mobile testing units to keep trucks flowing between Nairobi and Dar es Salaam. In an article for the Brookings Institution UNECA’s Mold and Anthony Mveyange of TradeMark East Africa write of

the fast rebound of Kenyan exports to the rest of the EAC: ‘By July, exports to Uganda and Rwanda had exceeded their pre-Covid-19 peaks, and re-exports towards Tanzania also accelerated sharply.’ Coffee exports from Uganda also hit a record high in July. The reigniting of hostilities in Ethiopia is a real disappointment

to those seeking vibrant regional markets, however. The investor excitement drummed up by the potential opening of the telecoms and other sectors may be put on hold. While Ethiopia beat Kenya to the crown of leading recipient of foreign direct investment in 2019, it is unlikely to achieve that again in the short term.

EDUARDO SOTERAS/AFP

The Addis skyline, free of the neon of global brands, but for how long?

ETHIOPIA

Opening up isn’t easy Prime Minister Abiy made it seem that it would be quick and simple to open up Ethiopia’s economy to foreign competition, but the reality is much more challenging By SAMUEL GETACHEW in Addis Ababa When it comes to liberalising Ethiopia’s economy, if the government moves too fast, it risks losing the support of local business and the population; move too slow and international investors could lose interest. The government of Ethiopia’s Prime Minister Abiy

92

Ahmed had been trying to find the right pace of reform before conflict in Tigray broke out in November, casting a pall over Nobel Peace Prize-winning Abiy’s plans. The state has played a major role in Ethiopia’s economic transformation, building industrial parks, modernising the Ethiopia-Djibouti railway and managing a telecoms

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

monopoly and top African airline Ethiopian Airlines. The Abiy administration was planning to open up many of these sectors to foreign investors. Addis Ababa has cancelled the privatisation of Ethiopian Airlines but says it will go ahead with the partial privatisation of Ethio Telecom and also issue two new telecoms licences. The government’s reasoning for opening the economy is sometimes unclear. When it walked back the plans to sell a minority stake in Ethiopian Airlines in October, finance minister Ahmed Shide said the airline “appears robust”. The airline has performed better than its African peers and its finances were not at the forefront of

EUROPEAN UNION AND PRIVATE SECTOR FOUNDATION UGANDA RESPOND TO COVID-19 IMPACT, PROMOTE GREEN INVESTMENTS AND DECENT EMPLOYMENT

The Board of the Sustainable Business for Uganda (SB4U) Platform has endorsed concrete actions responding to the COVID-19 negative consequences and advancing the Uganda-European Union Roadmap to Improved Investment Climate, in the area of skills development, access to finance and anti-corruption.

Ambassador Pacifici noted that additionally and given the exceptionally adverse situation for companies during Covid 19 pandemic, an innovative financial product to support the affected Tourism sector companies has been created jointly by Uganda Development Bank and the European Union as a result of the collaboration of the SB4U members. This financial product is expected to benefit about 200 companies in the short to medium term. The Board of the SB4U Platform, co-chaired by EU Ambassador Pacifici and PSFU Chairman Hon. Dr. Elly Karuhanga, saw the participation of both Ugandan and European entrepreneurs, as well as of high-level officials from the Ministry of Finance, Planning and Economic Development and the Ministry of Trade, Industry and Cooperatives. “The SB4U platform will work as a collaboration tool that can be used in implementation of EU programs in Uganda. As Board members, we were entrusted to strengthen the Uganda-EU economic alliance and focus on how to overcome the different hurdles for investment and trade in Uganda,” said Hon. Dr. Karuhanga. He added: “Equally

Í@EUinUG: https://twitter.com/EUinUG Í@PSF_Uganda https://twitter.com/PSF_Uganda

important was the exploration of new areas of closer cooperation between the European and Ugandan business networks such as digitalisation, green energy and finance, smart agriculture, ecotourism and sustainable exploitation of natural resources.” Hon. Dr. Karuhanga assured that PSFU had the mandate to bring EU companies closer to the private sector to enforce Uganda-EU bilateral relations to increase trade opportunities and not as a donor recipient. The website of the Platform (www.sb4uplatform.com) was also launched, with aim of providing unique information on Uganda and EU markets and helping respective businesses to link up. Contacts: Emmanuel Gyezaho Emmanuel-Davies.Gyezaho@eeas.europa.eu Background The Government of Uganda, Private Sector Foundation (PSFU), the European Union (EU) and European companies jointly created the Sustainable Business for Uganda (SB4U) Platform, officially launched by President Yoweri Kaguta Museveni during the first ever EU-Uganda Business Forum held March 9-10th 2020 (https://www.ugandaeuropebusinessforum.com/). The objective of this initiative is to help make Uganda’s business environment more conducive to inclusive and green investment for European and Uganda companies, particularly by ensuring a continued Uganda-EU investment climate dialogue and exploring innovative private-public collaboration initiatives. The initiative also seeks to strengthen EU-Uganda trade and investments links and initiate networking events, joint business missions and partnerships, as well as advancing, monitoring and further elaborating a Roadmap to Improved Investment Climate (https://www.ugandaeuropebusinessforum. com/wp-content/uploads/2020/01/EU-Uganda-Roadmap-to-Improved-Investment-Climate.pdf).

JAMG

Set up in March 2020, the SB4U Platform is a creation of the Government of Uganda, the Private Sector Foundation (PSFU) and the European Union, to help make Uganda’s business environment more conducive to inclusive and green investment for European and Ugandan companies. “The EU is progressively upgrading efforts to encourage private companies operating in Uganda to invest green and create decent jobs, particularly for the youth and among them women. Today we launched a Work Readiness Programme that shall enable young graduates to be trained and employed by domestic as well European companies and a series of measures in the area of e-procurement, digital services and corporate governance that shall reduce corruption in economic activities,” said EU Ambassador H.E Attilio Pacifici.

ÎEuropean Union in Uganda : www.facebook.com/eudeluganda ÎPrivate Sector Foundation Uganda: www.facebook.com/PSFUganda

EAST AFRICA FOCUS / Ports and opportunities

Diaspora diapason

The move has been welcomed by analysts, including Zemedeneh Negatu, an Ethiopian-American entrepreneur who argues that international experience of owning or operating sophisticated businesses abroad could be transformational for start-ups or even well-established businesses.

ETHIOPIA INVESTMENT (as a % of GDP)

Public :

30

21

on-budget 23.8

20.9

off-budget 24.1 22.5

24

5.1

4.7 6.5

10

6.9

6.6

7.7

10.1

9.1

9.4

6.1 8.3

6.5

0

“Companies with skilled leaders always have a much higher probability of attracting capital from private-equity funds and other investors since sustainability and building successful institutions is dependent on talent, especially in highly competitive industries such as financial services, technology and telecoms,” says Negatu. Ethiopia’s diaspora is already responding to the measures taken by the government. Black Rhino, an American investment group headed by Ethiopian-American entrepreneur Mimi Alemayehou, is looking at investing in Ethiopia’s power generation sector, as well as its financial sector. Others have laid the foundations for new banks and fintech companies or have started issuing shares in anticipation of the new regulation. One such is Selam

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the government’s explanations of its privatisation programme. The Ethiopian Investment Commission, an arm’s-length government agency in charge of attracting investment to the country, has introduced new regulations in order to invite in new players. These include members of the Ethiopian diaspora, who had previously been restricted from investing in most of the local sectors. The regulation reserves five sectors, including manufacturing of military weapons, bus rapid transit and courier services, for joint investment with the public sector, whereas other sectors, which include financial, wholesale and retail trade, are to be reserved for local enterprises. Foreign investors can now engage in power distribution and the development of electricity infrastructure, adding to the partial opening up of the logistics and telecom sectors.

Bank, a mortgage bank owned by diaspora members including Aman Feshetsion, Negatu and Ermias Eshetu, which aims to open in 2021. “Banking and capital markets could benefit tremendously by leveraging the highly experienced diaspora talent currently working in these sectors abroad or [who have] already returned back to Ethiopia and invested in these sectors. In my view, the diaspora’s major value-add is not just the financial capital they bring, but it’s the human capital,” Negatu adds. Meanwhile, corporations, including the US-headquartered Pepsi and many telecom operators, have expressed an interest in getting a foothold in the most populous landlocked country in the world. Currently, the Ethiopian Communications Authority is reviewing the applications of 12 telecom operators that expressed their intent to bid for a licence, including Kenya’s Safaricom and France’s Orange. “Competition is generally good for economies because it infuses new talent and ideas,” Sam Rosmarin, an American investor based in Addis Ababa, tells The African Report. He predicts that the most successful companies will be those that fuse local market understanding with international innovation. “For example, we may expect a wave of joint ventures in mechanised farming here in Ethiopia, facilitated by new lease laws.”

Ethiopian stock exchange

Ethiopia is laying the ground to establish its stock exchange – a move that has long been awaited. While this is expected to spur foreign investment, it is likely that it will also grab the attention of international brokers, consultants and equity investors, who will be licensed to trade. As the first step, the National Bank of Ethiopia drafted a

International standards

The government has also signed up to international frameworks on arbitration and the settlement of commercial disputes. Rosmarin believes it is a good path to take for Ethiopia. “As Ethiopia moves toward capital markets, implementing international business standards for accounting and corporate governance will be increasingly critical,” he says. “The smart companies will leverage the human and financial capital enabled by this law to make the leap to those standards.” Last month, the government surprisingly announced it would no longer build industrial parks. Instead, it will defer to the private sector and offer land, financial support, and sell or rent factories to international manufacturers. The country is already home to global brands like Ikea and H&M. Currently, Ethiopia has 10 active parks, which host 189 companies, creating more than 70,000 jobs, with annual exports valued at $165m. The parks were built to attract multinational investors, notably from China, India and Europe. Many of them have set up in the country looking for cheap labour and other benefits including cheap electricity and a favourable tax system.

LUIS TATO/AFP

bill to establish a Capital Market Authority, which is expected to be legislated by the end of 2020. The Authority will regulate the local financial sector and oversee how bonds and equites will be transacted. It will provide the licence for the Ethiopian Securities Exchange to come into being, with a share of between 5% and 25% allocated to the government

In Nairobi offices, phone lines are busy to Kinshasa

KENYA

Nairobi’s business leaders look west The DRC is a huge market with high potential, and East African companies are taking a greater interest in its banks and other businesses By NICHOLAS NORBROOK Pop quiz: Who was the only foreign head of state present at the inauguration of President Félix Tshisekedi of the Democratic Republic of Congo (DRC) in 2019? Answer: Kenya’s President Uhuru Kenyatta. Kenya is trying to enter the 85-million-consumer-strong regional market that lies to its west, and it is easy to see why. While the DRC’s GDP was in single digit billions early this century, last year it hit $50bn. The ‘peace dividend’ after years of conflict is there for the harvesting. Equity Bank chief James Mwangi is the poster child for Kenyan expansion into the DRC, having bought two banks: ProCredit and BCDC. He also sees the DRC coming out of the Covid-19 crisis better than other economies, “because prices of gold have gone up; prices of copper, too, because demand for these electric cars is going up.

So we realised we will have a huge run with those minerals,” he tells The Africa Report. Kenya’s financial-sector prowess is driving integration. The DRC has “low financial inclusion ratios, and a big unbanked population,” Reginald Kadzutu, project head for pensions, insurance and savings at Zamara Actuaries, Administrators and Consultants tells The Africa Report. “A lot of arbitrage opportunities exist as regulation catches up.” In 2016, Kenyan insurer Jubilee Insurance partnered with state insurer SONAS.

Kenya leads the move

While Equity Bank can ramp up its lending to DRC blue-chips thanks to the BCDC acquisition, the next stage is encouraging the leading companies it banks to head west. They could take some convincing because Kenyans have not always succeeded there, says a report by the East African Business Council

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EAST AFRICA FOCUS / Ports and opportunities

(EABC). Regional trade ties with the DRC are weak. While Rwanda and Uganda increased exports to the DRC, Kenya’s manufacturing exports declined since 2014. The DRC imported $6.6bn in goods and

services in 2018 – a third of that from China, while just 11% from East African Community (EAC) countries ($112m from Kenya). In 2019 the DRC applied to join the EAC. The request has many backers

RWANDA

in Nairobi. Opposition leader Raila Odinga, as AU High Representative for Infrastructure Development, went to Kinshasa in October, ostensibly to restart talks over the hydropower project at Inga.

President Kagame and Jack Ma at the launch of eWTP) Africa in 2018

Cracking the Chinese market

PAUL KAGAME/FLICKR

As China tries to encourage more consumption at home, Rwandan producers leap at the opportunities By HONORE BANDA Diego Twahirwa, a chilli farmer in Rwanda, has been exporting his produce to China since 2019. Although he exports to some European capitals as well, he views China as the steadiest market and he has a growing clientele there. “The good relationship between China and Rwanda has enabled farmers like me to realise our dreams. The Chinese market is quite unique when compared to the rest because they accept a wide range of goods without big complications,” Twahirwa tells The Africa Report. The relationship was sealed by President Xi Jinping’s visit to Rwanda in 2018. In September last year, Twahirwa signed a life-changing agreement worth $100m with China’s Chinese GK International Enterprises to supply 50,000tn of chilli annually for five years. This deal enabled him to expand from about 6ha to 160ha, to employ more people and invest in better fertilisers and

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seeds. “We are now waiting for both governments to sign a protocol that will enable us to export dry chilli to China. Once this promise is secured it will improve our business tremendously,” he says.

For all the coffee in China

Similarly, coffee farmers in Rwanda have gained access to China, thanks to China’s richest man, Jack Ma, founder of Alibaba Group. Ma jetted to Kigali twice in 2017 and met President Paul Kagame to advance the prospects of accessing the Chinese market for Rwandan entrepreneurs. Among the agreements they signed was one making Rwanda the first African country to join Alibaba’s Electronic World Trade Platform (eWTP). “I have sold coffee to China through the electronic platform five times now and it all gets finished and I got paid instantly,” says Simeon Ngendahayo, manager of West Hills Coffee.

THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021

“Selling coffee in China was not easy at first. The market seemed quite closed to our products, so I was focusing on European and some Asian markets. This all changed when Rwanda joined the eWTP. The onus is now on us to ensure a steady supply and quality.” The Kigali government reported in May that 1.5tn of Rwandan coffee beans sold out “in seconds” on the eWTP. The Private Sector Federation (PSF) now regularly conducts training sessions for exporters to ensure that they make products that meet Chinese standards. “We are seeing a surge in traders and farmers willing to be facilitated to access the market in China,” says the PSF’s Théoneste Ntagengerwa. On the other side of the balance sheet, Rwanda is also buying many more Chinese exports as trade ties deepen. Rwanda’s imports from China skyrocketed from $157m in 2017 to $628m in 2019.

175 NORTH AFRICA

154 WEST AFRICA

Country Profiles The global health crisis will persist into 2021, but economic growth is predicted to return. Security crises in Libya, Ethiopia and the Sahel pose challenges, along with high debt levels By MARSHALL VAN VALEN

Country Report Editor

Marshall Van Valen

Country Report Contributors

‘Tofe Ayeni, Anne-Marie Bissada, Rose-Marie Bouboutou, Olivier Caslin, Caroline Chauvet, Nadoun Coulibaly, Laurent de Saint-Perier, Aissatou Diallo, Franck Foute, Tom Gardner, Nandi Geloo, Jihad Gillon, Romain Gras, Fadwa Islah, Morris Kiruga, Camille Lafrance, Manon Laplace, Estelle Maussion, Jeff Mbanga, Matthieu Millecamps, Nicholas Norbrook, Mathieu Olivier, Crystal Orderson, Pacôme Pabandji, Zahra Rahmouni, Claire Rainfroy, Benjamin Roger, Emre Sari, Marième Soumaré, Justine Spiegel, Patrick Smith, Marshall Van Valen

Data Sources

Population (2019) United Nations Population Division. Life expectancy at birth (2019), position on the Human Development Index (2019), adult literacy (2006-2016) – United Nations Development Programme. GDP per capita (2020 estimate), inflation (2020 estimate), GDP (2017-2020), GDP growth (2017-2020) – IMF World Economic Outlook Database. Foreign direct investment (2019, inflows) – United Nations Conference on Trade and Development. Last change of leader – The Africa Report research.

121 EAST AFRICA

141 CENTRAL AFRICA

102 SOUTHERN AFRICA

176 103 155 105 156 122 142 157 144 145 123 158 124 146 177 148 125 106 126 149 160 161 163 164 128 107 165 179

Algeria Angola Benin Botswana Burkina Faso Burundi Cameroon Cabo Verde Central African Republic Chad Comoros Côte d’Ivoire Djibouti DRC Egypt Equatorial Guinea Eritrea Eswatini Ethiopia Gabon Gambia Ghana Guinea Guinea-Bissau Kenya Lesotho Liberia Libya

108 109 166 180 110 181 111 112 167 168 130 150 151 170 131 171 132 113 133 182 134 172 183 136 115 117

Madagascar Malawi Mali Mauritania Mauritius Morocco Mozambique Namibia Niger Nigeria Rwanda Rep. of Congo São Tomé e Príncipe Senegal Seychelles Sierra Leone Somalia South Africa South Sudan Sudan Tanzania Togo Tunisia Uganda Zambia Zimbabwe

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ALL RIGHTS RESERVED

THIS BLACK GENERATION GIVES ME HOPE FU UNMI ADEBAYO Writer and former trader

This has been an overwhelming year. Not just because it has been shrouded in a global pandemic. We have seen betrayal by governments, their remoteness from those they are meant to serve. And we have had to face the harsh reality of how entrenched all manner of inequalities are across the world. Hashtags have now become inextricably tied to social movements. I can’t see one without thinking of #EndSARS, #EndAnglophoneCrisis or, of course, #BlackLivesMatter. Viruses don’t discriminate. They show how human beings discriminate and they challenge everybody to consider their civic responsibilities. The wealthy and the political elite are not immune. And viruses don’t stop the hardest-hit from flooding the streets and demanding change. It’s no longer an ask, it’s an insistence. In Africa we are on the cusp of political change. The generation that grew up with the promise of freedom and democracy is challenging the old guard. There’s an expectation of government accountability unknown in military dictatorships. There’s also a more global identification of Blackness that binds this generation together, using social media to hash out what that means for different Black people all over the world.

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Police brutality in the US is centred around the disproportionate impact on the Black community, with calls to defund an institution that has its roots in “protecting” the “property” of slave owners. Whereas in Nigeria the police are also Black and the mechanisms behind police brutality are entirely different. But today, what happens in one part of the global Black community no longer feels isolated from the rest. It’s a new, radical, leaderless and largely digital pan-Africanism. It’s no longer centred around the idea of all Black people returning to Africa. This movement is committed to improving life for all Black people, wherever they are. It means that new coalitions have and can be built, beyond borders, using digital innovation. Anybody can send money to Africa using remittance apps or cryptocurrencies to avoid being tracked by the state to support a movement like #EndSARS. Track-and-trace methods used against the Ebola epidemic in Africa have been studied by more “developed” countries in the West. Digital grassroots movements seizing their freedom of expression highlight the failings of government. They also show this emergent generation is not apathetic in the slightest. They think innovatively to improve themselves and their communities. They’re ready to work with people all over the world and are decoupled from political vested interests. Next year will be difficult. There’s no point in pretending otherwise. It won’t be easy to navigate ballooning external debt, supply-chain disruption and an impending global recession. Yet Africa is a miraculously resilient continent. It’s this generation, the one that I am part of, that I hold my hope in. We won’t forget those we lost this year, whether through Covid-19, other diseases or at the hands of our leaders. We mourn them and hold them in our hearts. We will honour them through continuing the march towards change.

ADOBESTOCK

LAST WORD

Experience the Progress.

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