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.
COVER CREDITS: BRUNO LEVY FOR JA; VATICAN MEDIA/CPP/IP/SIPA; THEMBA HADEBE/AP/SIPA; GABRIELA BHASKAR/NYT/REDUX-REA; RON SACHS/CNP/ZUMA WIRE/REA; LUIGI MISTRULLI/SIPA; KIM HAUGHTON/IMF; HON SIU KEUNG/EYEPR/NEWSCOM/SIPA
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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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INVESTOR INSIGHT / Picking partners
By NICHOLAS NORBROOK The limelight may fall on France’s security investments in the Sahel, the Chinese companies building large infrastructure projects or the US energy giants spending billions on deep offshore oil projects. But Africa’s partners are multiplying, and the figures are starting to add up. Turkey’s bilateral trade with Africa jumped from $5bn in 2003 to more than $23bn in 2018. Over the past decade, it adds up to almost $200bn. European countries like Spain are increasingly engaged in markets beyond their traditional ‘backyard’, and not just to sell their wares. South Africa’s exports to Spain have almost tripled since the early years of the century, now averaging $1.2bn annually. Madrid, with its ancient colonial possessions of Ceuta and Melilla on the North African coast, and its concerns about migration, plays a more traditional
partner role. Spain quadrupled its aid budget to €673m ($798m) between 2015 and 2019. It will head up a training programme in Mali and is involved in European security missions in the Sahel. But, increasingly, technology and investment have become the watchwords of African engagement with foreign partners. Morocco’s green energy landscape has been revolutionised by the arrival of Spanish companies specialising in concentrated solar power. The Noor solar power project in Ouarzazate is now the world’s largest next-generation concentrated solar power project, and Moroccan researchers and contractors are woven into the fabric of the project. “Finland was known for its humanitarian engagement on the continent,” says Jaakko Kangasniemi, the CEO of Finland’s development finance agency Finnfund. “But for some years, African politicians have been saying: ‘Where are your businessmen?’
SPAIN
Building partnerships
Madrid’s diplomats are working to build peace in the Sahel, address African migration to Europe and help Spanish firms to win more business on the continent By MARIE VILLACÈQUE in Madrid and OLIVIER CASLIN Thursday, 5 November, 2020. Connected in Madrid, Las Palmas on the island of Gran Canaria and in Accra, via the Kofi Annan International Peacekeeping Training Centre, several African and Spanish experts debated online about security in the Sahel. Their goal? To highlight Spain’s contribution to peace in West Africa. At the beginning of October, Spain’s foreign affairs minister Arancha González Laya returned from a tour of Niger and Chad as general assembly president of the Sahel Alliance. As a member of the alliance since January 2018, Spain is
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involved in 91 projects, for which a total of €124m ($147.1m) has been earmarked. Spain will also lead the European Union Training Mission in Mali in January 2021, for which it is the largest contributor in terms of personnel. Finally, the Spanish Guardia Civil is leading the European Union (EU) Groupes d’Action Rapides – Surveillance et Intervention au Sahel (GAR-SI Sahel) project to create gendarm erie units in Senegal, Mali, Burkina Faso, Chad and Niger. Since the adoption of the Africa III Plan in March 2019, the Spanish government has set its sights on Africa. Much more ambitious than the two previous plans, this one is built around four objectives: peace and security, economic growth,
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
Spanish construction company TYPSA is present in 30 African countries including (seen here) Kenya
consolidation of African institutions and regulation of migration flows, and for the first time it has no time limit. Admittedly, the global health crisis has slowed down some of its initiatives. “I had a budget of more than €1m for the Africa III Plan
Delivering jobs is more important to these leaders now.” And while Helsinki may seem some way from concerns at the equator, Arctic and African countries have a common interest in climate change. Finland’s strength in forestry management has convinced African partners that Finland is there for the long haul. “Our projects have a long time horizon,” says Kangasniemi. “Trees are the very definition of patient capital!”
Too many players?
Africa has become crowded recently, and nations are realising that nothing beats feet on the ground. As a result, embassies are mushrooming – Finland will open a new one in West Africa next year, Spain recently opened one in Chad bringing its total to 24 in Africa, while Turkey will soon have 44, with Togo and Guinea-Bissau. Turkey has exemplified the ‘trade first’ approach of new partners, mostly avoiding
interference in internal affairs of African countries and pushing for UN solutions in the case of conflict. Turkey–Africa business forums are held in major capitals across the continent and Turkish energy and construction companies have become heavyweight players in bidding rounds. But political objectives remain. The country was able to open a military base in Somalia, where it is training the Somali army. In Libya, observers struggle to separate Ankara’s support of the UN-backed regime from its goal of countering Egyptian influence. The emergence of China as a major player led the West to worry about a new ‘scramble for Africa’. But so far the competition is putting pressure on each country to up its game. After complaints about the quality of Chinese construction projects in Africa, Spanish firm TYPSA is now overseeing the work done by Chinese contractors on an Angolan project.
of objectives. In Dakar, the first Cervantes Institute – promoting Spanish language and culture – outside the Maghreb is due to be inaugurated in 2021, with another planned for Côte d’Ivoire, where “demand for Spanish courses is high,” says Robredo Rubio.
TYPSA
A gateway for migrants
and I spent almost nothing,” says Raimundo Robredo Rubio, director general for Africa at the foreign affairs ministry. “For example, we postponed the visit of African mayors to Madrid in the fall and an exchange programme [for officials] with the African Union.”
However, most of the promises made have already been fulfilled. Spain opened an embassy in N’Djamena this year, bringing its embassies in sub-Saharan Africa to 24 – the fourth-largest network for a European country in Africa. Each embassy has its own series
Since September, the resumption of the migratory sea route to the Canary Islands has made the Spanish-owned archipelago the main gateway to Europe, with one out of every two migrants passing through Spain. With 5,328 arrivals in October, the islands recorded their highest monthly figure in the past 10 years. The tightening of controls in the Strait of Gibraltar has led migrants to abandon Mediterranean routes, and, despite the coronavirus crisis, migrants remain determined to reach Europe. The Spanish government has begun negotiations with the European Border and Coast Guard Agency (Frontex), which could involve the cooperation of Senegal and Mauritania, but also seeks to contribute more broadly to the
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
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INVESTOR INSIGHT / Picking partners
TYPSA, a leader in Africa
Early last October, TYPSA won two tenders to supervise the first phases of the construction site of the Luanda technological zone in Angola. Piloted by Huawei, the zone has the backing of the Angolan government and the African Development Bank. It is due to be inaugurated in December 2021. The firm won €45m in deals in 2019, a 100% increase over 2015. TYPSA got its first contract in Africa in the 1970s to supervise the
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The Guardia Civil lends its expertise in gendarmerie to Niger
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socio-economic development of African countries. Its official development assistance jumped from €104.2m in 2015 to €672.8m in 2019. Madrid also counts on important educational and health networks in its Africa activities. In July, the trade and industry ministry presented its new Horizonte África strategy to strengthen Spain’s economic and institutional presence on the continent. Despite weak growth due to the pandemic, the African market remains attractive for Spanish firms in search of new prospects. Spanish companies from the construction, water and energy, transport and agribusiness sectors are active on the continent. Some of the names include construction group TYPSA and transportationfocused Marguisa and Indra.
Spanish development assistance jumped from €104.2m in 2015 to €672.8m in 2019 Al Izdihar dam in Algeria. Since then, it has grown its presence to some 30 countries, with permanent offices in Tunisia, Morocco and Kenya. TYPSA’s teams are currently supervising the construction of Bugesera international airport in Rwanda and the Kalâa Kebira dam in Tunisia, where they are also providing technical assistance for the construction of six
desalination plants. In March, the group was appointed to work on the project to rehabilitate 330km of the Belabo-Ngaounderé railway line in Cameroon. In 2021, it will start work on 170km of roads in Angola’s Cabinda enclave. Marguisa has been the top maritime operator in Equatorial Guinea for more than 30 years, transporting mainly citrus fruits and timber from the former Spanish colony. The company’s activities are now much more diversified, since it works with containerised, roll on/roll-off and other goods. It belongs to the holding group Sea & Ports, and this has helped it to strengthen its presence in
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INVESTOR INSIGHT / Picking partners
Digital technologies
In recent years, many African countries have invested in their transport and energy infrastructure, while at the same time increasing urban development. Today, they are seeking to make these various facilities safer and more efficient through digital technologies. This is where Indra comes in. The group first gained a foothold in North Africa, mainly in the field
of technologies applied to transport and the defence sector. Today, Indra focuses on air traffic management – where it works with the main navigation service providers such as Asecna, which covers 17 countries – and energy. It has two regional offices in Dakar and Nairobi. Following in the footsteps of large corporations, more and more Spanish companies are betting on Morocco as a platform for subSaharan Africa. This is the case, for example, of the Basque company Tudefrigo, specialised in refrigerated transport. It set up a base in Tangiers in 2011, from where it also serves Mauritania and Senegal.
REYES MAROTO Minister of commerce, tourism and industry, Spain
JOAN CORTADELLAS
Africa, where it has about 20 establishments scattered along the coasts between Tunisia and Angola, but also in Latin America, Asia and in the ports of northern Europe.
‘Our country has a very special interest in Africa’ TAR: In July, your ministry presented its new Horizonte África strategy. What is it about? It is a commercial and financial strategy designed to help our companies to develop in the African market. It also aims to strengthen the presence of Spain in general. Our country has a very special interest in Africa, for political, migration and security reasons, and positioning ourselves well on the continent is one of our major objectives in terms of commercial policy. How is it different from Spain’s previous approaches? Horizonte África is structured around two axes. The first, financial, proposes measures related to the FIEM [internationalisation fund] such as strengthening concessional financing in
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sectors of special interest. We have also introduced changes in the policy of the CESCE [export credit insurance corporation]. Finally, the COFIDES [development finance corporation] wants to strengthen its relations with other European bilateral companies and open an office in Casablanca as a base for its operations in sub-Saharan Africa. The second axis is institutional and aims to increase the presence of our Spanish economic and trade advisers on the continent by organising regular missions and strengthening our capacities on the ground. We will streamline the network of Spanish economic and commercial offices abroad and will soon open a new one in Addis Ababa. Our strategy is ambitious, but our resources remain modest, so we are focusing on key countries and sectors.
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
In order to give a new dynamism to its Africa policy objectives, the Spanish government has appointed a diplomat on special mission for the Africa III Plan – Alberto Virella, who was ambassador to Senegal between 2015 and 2020. He prepared the first Mesa África, which took place in November in Madrid. This meeting for Spanish civil actors in Africa – NGOs, think tanks and the private sector – “is a very innovative tool that has no equivalent in any other department of the ministry,” insists Robredo Rubio, arguing that this shows that Africa remains a priority of Spanish foreign policy.
How do you identify the countries and sectors of interest to Spain? In selecting countries, we consulted some Spanish companies and the economic and commercial offices in Africa to evaluate the prospects of the different markets. At the same time, we identified a series of sectors specific to each country, such as energy, water and sanitation infrastructure in Côte d'Ivoire; waste management in Senegal; agribusiness in Algeria, rail transport and electricity generation and distribution in Kenya, Rwanda, Tanzania and Uganda. In Morocco, we focus on renewable energy and the water sector. What is Morocco’s role in Spain's strategy? Morocco is a market of great importance due to its geographical position. It’s our top trading partner in Africa, our eighth-largest customer in the world and it received 45.6% of all Spanish exports to Africa in 2019. The kingdom is also Spain's 11th supplier worldwide and the leading destination for Spanish investments in Africa. For all these reasons, it is at the core of the Horizonte África strategy. It will further strengthen its role as the Spanish hub on the African continent in the next few years.
Interview by MARIE VILLACÈQUE
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INVESTOR INSIGHT /
TURKISH PRESIDENTIAL PRESS SERVICE/MURAT CETINMUHURDAR/AFP
Senegal’s Macky Sall is one of Recep Tayyip Erdogan’s friendships with African leaders
TURKEY
Emerging partners
In diplomacy and business Turkey is becoming a major player on the continent, focusing on North Africa, West Africa and the Horn in particular By JOSEPHINE DEDET
When, in 2005, he first set foot on African soil, on a tour of Ethiopia, South Africa, Morocco and Tunisia, Turkish Prime Minister Recep Tayyip Erdogan had two goals: to take his country out of its almost exclusive relationship with the West and to open up previously untapped areas to Turkish trade. The Turkish government had made a first attempt to improve ties with Africa back in 1998. Liberal foreign minister Ismail Cem drew up an “action pact for Africa”, but it was never implemented because of the serious economic crisis in Turkey. The coming to power of Erdogan’s Adalet ve Kalkınma Partisi and the rise of the pious and dynamic Anatolian bourgeoisie in
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business changed the scene. In the wake of Turkish Airlines – which now serves 60 African cities – and giant conglomerates that have set out to win business on the continent, small Turkish companies are also seeking opportunities. Fifteen years after Erdogan’s first visit, Turkey is now a big player. The government is a “strategic partner” of the African Union and a non-regional member of the African Development Bank. Its trade with Africa has grown
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Turkey will soon have 44 embassies in Africa, compared to 12 in 2003; it aims to have one in every country
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
from $3bn in the early 2000s to more than $26bn in 2019. There are many Turkey-Africa business forums; the most recent took place by video–conference on 8-9 October. Turkey’s major business lobbies, Tüsiad and Müsiad, and the DEIK (council for economic relations with foreign countries) are active on the continent. They are supported by TIKA, the Turkish development agency, which has 22 offices in Africa and finances projects in the construction, agriculture and health sectors. It also renovates buildings from the Ottoman period, such as the Ketchaoua mosque in Algiers. This is part of Ankara’s soft power, which is not limited to the Turkish drama series that are all the rage in North Africa. Construction of hospitals, such as the one in Mogadishu, free medical operations and the donation of a fleet of buses in Conakry – the list of gestures of generosity from the state, NGOs or private companies is long. In addition, there is the work of the seven Yunus Emre cultural centres and the Maarif educational foundation, present in 31 African countries.
MESSAGE
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José SABATER, Regional Manager for West and Central Africa
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What are the challenges for
BTESA deploys terrestrial networks
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Reducing the technological gap is a
and solutions such as data centers,
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wireless systems. BTESA developed
regionalization and an advanced Having completed major projects in some of Africa’s hardest
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point to multipoint equipment to help Internet Service Providers delivering reliable service. What can you do to help Africa? What matters is what you do from your position. While most companies come to Africa to do business, BTESA brings solutions while favoring technological transfer and local employment, consequently business comes after. Since 2015 being closer to Africa is a priority,
than 20 years ago. During the
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INVESTOR INSIGHT /
Diplomatic daring
Regarding other actors in Africa, the Turkish government’s discourse is sometimes less smooth. Erdogan is often quick to castigate France’s colonial past, the world’s indifference to the ills that afflict the continent or the base mercantile interests of its competitors, to whom he opposes a “win-win”, egalitarian and fraternal relationship. While defending Ankara’s political interests – such as its intervention in Libya – Erdogan has encouraged foreign affairs minister Mevlüt Çavusoglu and his administration to acquire African expertise. Among their objectives: the organisation of a third Turkey-Africa summit and the opening of an embassy in each country of the continent. There are now 42, and soon 44 with Togo and Guinea-Bissau. Erdogan has developed friendly relationships with several leaders, such as Guinea’s Alpha Condé, Senegal’s Macky Sall and Niger’s Mahamadou Issoufou. His affinities with Libyan prime minister Fayez al-Sarraj led to the signing of an agreement on the TurkishLibyan maritime border in the eastern Mediterranean. Erdogan’s good ties with Somalia’s President Mohamed Abdullahi Mohamed and the fact that he was the first foreign head of state to visit war-torn Somalia enabled Ankara to open a military base in Mogadishu, where 200 Turkish soldiers are training the national army.
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TURKEY, AFRICA AND COVID-19 ALL RIGHTS RESERVED
Political ties are also wellestablished. Like Russia and China, Turkey generally tries to avoid telling other countries what to do. In resolving crises, such as the one in Mali, it advocates the use of ‘African solutions’, or, failing that, those from the United Nations. It is also lobbying for a better representation of the continent in international institutions.
YAV VUZ SELIM KIRAN Depuuty foreign affairs minister, Turkey
I am often asked how Turkey sees Africa, our priorities and expectations. An African proverb sums it up: If you want to go fast, walk alone, if you want to walk far, walk together. Far from being short-termist, our vision is sustainable and human-centric. Since 2005, our diplomacy has taken a multi-dimensional approach, both economic and humanitarian, and is getting clear results: the large uptick in our political, commercial, security and cultural ties is proof of its effectiveness. Our participation in the African Development Bank, our strategic partnership with the African Union, and the mutual high-level visits – President Recep Tayyip Erdogan has visited 28 African countries, including those during his time as prime minister – have played an important role in building ties between our peoples. Turkey has 42 embassies in Africa, and we have given ourselves the goal of building diplomatic representation in all 54 countries. Our institutions, which include development agency TIKA, cultural institutes Yunus Emre, the Maarif education foundation, the religious affairs foundation Diyanet, the disaster-response agency AFAD and our press
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
agency Anadolu are our flagbearers. As is Turkish Airlines. Early on we took the measure of the pandemic, understanding that a vaccine would be the only real solution to end the crisis. Of the 193 vaccination candidates on the WHO list, 11 are from Turkey. We want the future vaccine to be owned by all of mankind and for it to be produced in sufficient quantities to respond to the needs of all countries, and that it will be given out free of charge. The production of ‘Made in Turkey’ respirators and personal protective equipment constituted the majority of our non-financial aid sent to Africa to help combat the pandemic. Around 3.5m masks, a million blouses and medical biohazard suits, 160,000 testing kits and 217 respirators were sent to 45 countries. All this work, which mobilises our ministries, our missions abroad, the Turkish Red Crescent, Turkish organisations abroad, etc., is carried out in liaison with the coordination and support centre of the foreign affairs ministry. As President Erdogan often reminds us, our relationship with the continent is based on sincerity, fraternity and solidarity.
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2021
WINNERS AND LOSERS IN THE POST-COVID ERA
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INVESTOR INSIGHT /
INTERVIEW
FOREIGN TRADE MINISTRY OF FINLAND
Ville Skinnari ‘Finland can show the way for smart energy’ Finland’s minister of development cooperation and foreign trade says China’s activity in Africa is leading countries across the world to up their game Interview by NICHOLAS NORBROOK Helsinki’s climate may be far from equatorial, but Finland’s interest in Africa is renewed under the administration of Prime Minister Sanna Marin, who came into office in December 2019. As development cooperation and foreign trade minister Ville Skinnari says: “Finland has a very long-lasting relation with many, many African countries and governments.” The country’s four-point cooperation agenda encompasses peace and security, trade and the economy, climate and natural resources, and education and expertise. The economic imperative has changed with the rise of China. “When it comes to infrastructure and the construction sector, Finnish industries were there in Africa for decades,” says Skinnari. Now, service-sector companies such as Nokia are building telecoms networks that prefigure a future move to 5G and other projects. While China has large advantages in vendor finance – bringing
78
the ability both to fund and build a road, for example – Skinnari argues that European countries have some cards to play, both in terms of Europe’s federal strength and in refocusing towards areas where there are more advantages. “It’s true that the projects can be very big – they are huge – but this is the whole idea of ‘team Europe’, that we act together. Together [EU countries] can also provide sufficient results when it comes to financing, but Finland can really show and pave the way for sustainable and smart energy solutions, energy efficiency and the circular economy. With our technology African countries can get rid of coal, which is a major milestone for climate change.”
Francophone Africa
Finland is also interested in expanding its diplomatic reach to parts of the continent where it has historically been less present. “For the first time ever we will go to the French-speaking part of Africa. We’ve been working
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
on this a lot, and I’m really proud that we can open up a new site for Finland in this part of the world,” says Skinnari. While the minister remains discreet on the specific countries for now, it is believed a new embassy will be opened in West Africa. One priority for the administration is how to offer meaningful responses to the youth challenge – and potential – in Africa: “The next generation is really an emphasis for us, and we know that it’s also the emphasis for the European Union and the current commissioner Jutta Urpilainen [...] how we really support the youth, in employment, but also vocational training,” says Skinnari. He also points to Finnish support for NGOs involved in family planning. “Finland is one of the key players when it comes to gender questions, the rights of women and girls.” Skinnari applauds the continent’s handling of the Covid-19 crisis and argues that African countries can use it as a pivot point. “I think when we look at the resilience of Africa, when we look at the resilience in the social and healthcare sector, food sector, education sector – which are all important – I think it’s also a window of opportunity for change.”
Lamor Corporation Ab Rihkamatori 2 06100 Porvoo, Finland Tel: +358 20 765 0100 Email: thomas.field@lamor.com
AVIS D’EXPERT
www.lamor.com
Let’s clean the world Lamor’s mission to provide environmental services led from oil spill recovery to water treatment and waste management. Founded in Finland in 1982, Lamor’s philosophy is to develop and provide the best environmental services and solutions. Lamor develops comprehensive OSR products and services in close partnership with their customers.The company offers equipment rental, standby centres and up to tier 3 emergency response, as well as training and consultancy. Equipment provided includes everything needed to handle a spill in a variety of environments. Lamor also provides waste management services. This includes treatment and disposal of both hazardous and non-hazardous waste. The very concept of
Lamor offers equipment as well as training and consultancy services to the Oil industry but also waste management services. This includes treatment and disposal of both hazardous and non-hazardous waste. “waste” is disappearing as the circular economy begins to take root. Lamor can help find the value in waste with their material recovery and recycling services. Water is one of the planet’s most precious resources. Lamor offers water treatment equipment and services for municipal and industrial segments. Lamor provides wide range of technologies such as oily water treatment,
Thomas FIELD, Group Development Director (Middle East and Africa regions).
toxic gas removal, reverse osmosis systems, containerized wastewater solutions for remote locations etc.The provided solutions are widely in use in maritime industry, ports and in oil and gas industry. Lamor has a network of agents, representatives and consultants across the continent. If you would like to learn more about the value Lamor provides, please go to lamor.com.
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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
MINING DOSSIER / The green mineral economy
450%
By GREGORY MTHEMBU-SALTER Loose talk from mining companies about “sustainability” irritates their critics, who point out that it cannot be sustainable to extract minerals such as copper or cobalt that are non-renewable resources. Mining companies may, however, be on surer ground when they stress their contribution to the ‘green economy’. The world’s billions of petrol and diesel engines are a massive known source of carbon emissions, and the electric vehicles (EVs) and batteries that can replace them all depend on components that only mining companies can supply. Global consumers, however, still prefer petrol and diesel vehicles to electric ones. Chinese state subsidies on electric vehicles and increasingly steep fines imposed by the European Union on their fuel-vehicle manufacturers is pushing up demand for EVs, nonetheless.
Kinshasa’s cobalt gamble
This in turn drives continued demand for the minerals with which to make them. A 2020 World Bank report states: ‘Production of graphite, lithium and cobalt will need to be significantly ramped up by more than 450% by 2050 — from 2018 levels — to meet demand from energystorage technologies.’
Estimated increase in production of graphite, lithium and cobalt needed to meet demand by 2050
EV batteries, and most batteries now used to store solar power, have as their core ingredients nickel, lithium, cobalt and manganese. The Democratic Republic of Congo (DRC) produces an estimated 70% of the world’s cobalt supply, and its government likes to describe itself as the OPEC of cobalt. In 2018, as the international cobalt price spiked at a remarkable $94,000/tn, the Congolese government imposed a ‘strategic minerals’ tax of 10% on cobalt exports, ignoring howls of protest from the mining community. But the tax has generated a disappointing yield for the government, as the cobalt price collapsed to under $30,000/ tn in 2019, recovering slightly to $32,500 by late 2020. The main reason the cobalt price tumbled in 2019 was the Chinese government reducing its subsidy on EVs, which quickly lowered consumer demand there and pushed the global market into oversupply. This led international speculators, who had during 2017-18 been betting on cobalt’s remorseless price rise, to do an about turn and storm for the exits.
SOURCE: BENCHMARK MINERAL INTELLIGENCE
LITHIUM AND COBALT DEMAND VS SUPPLY Lithium (million tonnes LCE)
4
600 Demand
3
500
Additional/secondary supply requiring ongoing capital expenditure or is unfinanced
2
400 300
Operational supply
200
1 0
Cobalt (Thousand tonnes contained cobalt)
100 2015
82
2020
2025
2030
2035
0 2015
2020
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
2025
2030
2035
In August 2019, Swiss commodities producer and trader Glencore placed its Mutanda copper and cobalt mine in Lualaba, DRC, on care and maintenance. This removed about 15% of global cobalt production and succeeded in halting the price rout, though not in encouraging much of a price recovery.
Ethical concerns
In the longer term, prospects are rosier. They are buoyed by steadily rising international demand for cobalt and the other battery metals, to the point where mining companies may be unable to mine sufficient supplies without massive new investment in exploration and production. According to Londonbased analysts Benchmark Mineral Intelligence, there was more than $60bn in new global investment in lithium ion battery production in 2019 alone. Benchmark calculates that an additional $170bn has been committed by battery manufacturers in further production capacity up until 2028. Campaigners worry about the conditions in which cobalt is mined in the DRC. There is a pending lawsuit against Apple, Microsoft, Tesla and others, arguing that they are benefiting from the use of child labour. Earlier this year, China’s Huayou Cobalt stopped buying artisanal cobalt from the DRC. ‘We can only temporarily stop sourcing artisanal cobalt until relevant standards can be recognised and supported by the whole industry,’ the company said. Currently, the world’s largest battery factory belongs to Tesla, a US company, producing batteries annually with combined electricity storage capacity of 37GWh. The next biggest is China’s LG Chem factory in Nanjing, with 28GWh. By 2030, it is predicted that Tesla’s largest factory will produce a massive 100GWh. China’s CATL, whose factories today produce
Experience the Progress.
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MINING DOSSIER / The green mineral economy
PAUL LANGROCK/ZENIT/LAIF/REA
72GWh, making it the world’s largest battery manufacturer, will by 2030 also be producing 100GWh, and LG Chem’s Nanjing plant is on course to produce another 92GWh. Recent technological advances mean that the quantity of cobalt needed in each EV battery continues to come down, but overall demand for cobalt is still likely to increase because of the projected growth in the number of batteries worldwide. Due to cobalt’s cost, companies are seeking to innovate. In September, Tesla announced it is working on batteries that do not use cobalt cathodes. However, analysts reckon that from 2022 onwards, demand may start to outstrip supply, unless there is rapid investment in new mines. It is a similar story with lithium, which is more abundant and widespread than cobalt, but will also need to be mined in far larger volumes to keep up with anticipated demand. Where the money will come from, however, is unclear. So far, banks seem to lack appetite to pour in funds on the scale required, and analysts speculate that it may take
large-scale investment in mining by battery and vehicle manufacturers themselves, which would be unprecedented. Zimbabwe is said to have some of the continent’s richest lithium deposits, but investors are wary of the country’s investment climate. Australia’s Prospect Resources is developing the Arcadia mine outside of Harare, with managing director Sam Hosack saying: “This will be the first major mining project to come on-stream in the post-Mugabe Zimbabwe.”
Palladium high
The transition away from fuel vehicles to EVs spells trouble in the long run for the platinum and palladium industries, since the bulk of demand for both metals is for catalytic converters to reduce CO2 emissions. It was in large
100Gwh
2030 production target for both Tesla’s largest battery factory and China’s CATL plants, currently at 37GWh and 72GWh
VW’s ID.3, out in 2020, is one of the new generation of ‘affordable’ electric cars
84
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
part market anxieties about these metals’ uncertain place in the green economy that drove a 10-year slump in the fortunes of South Africa’s platinum and palladium producers, which ended in 2019. But the fact is that millions of new fuel vehicles continue to hit the roads each year, and all of them, especially in Europe, need catalytic converters if their manufacturers are to keep the carbon emissions fines levied on them by the EU to a minimum. Miners simply cannot meet demand, pushing prices to record highs. In early November, the platinum price was around $900/oz and the palladium price was a staggering $2,300/oz. This is great news for South Africa’s platinum and palladium miners and, sure enough, share prices are surging. Impala Platinum’s share price, for example, rose from R45 ($2.10) in 2015 to R165 in late 2020, while the Anglo American Platinum share price rose 380% over the same period. The mines are a precious source of foreign exchange for South Africa, and clearly there is still life in the brown economy yet.
MESSAGE Orano Mining Niger
EXPERT ADVICE
Immeuble SONARA 1 BP11.858 Niamey - Niger Phone: +227 20.72.39.27
www.orano.group
Orano in Niger: a long-lasting partnership with many years ahead of it What is Orano’s current
act for long-term, sustainable social
footprint in Niger?
transition that is of practical benefit
Orano is a world leading uranium
for the local population.
producer. Of the three uranium deposits that Orano and the State of Niger discovered in the 1960 and 70s in the north of the country, Orano is currently mining two of them, responsibly, through two mining companies COMINAK and SOMAÏR. The mines bring important economic and societal benefits to the country, improving the standard of living of local populations. The third deposit, Imouraren, is not in production as, today, it is not economically viable. Production at COMINAK mine will end on March 31 2021, as resources are depleted, but it is not the end of the story.
Pascal BASTIEN, Representative of Orano in Niger
What is your forecast for the lifetime of SOMAÏR mine? SOMAÏR continues to invest in find-
is the economics of the mine in to-
ing new uranium resources to extend
day’s market. We are looking at new
the operation life of the mine. In this
extraction methods that reduce costs
tough market, the mine must be
and are planning drilling campaigns
profitable, so many initiatives have
in certain areas of the deposit to test
been taken to keep SOMAÏR running
the feasibility of operations. Our
beyond 2035, including technical
goal is to begin mining at Imou-
optimizations and digitalization, all
raren before the end of operations
of which contribute to improving
at SOMAÏR.
The mines bring important economic and societal benefits to the north of the country, improving the standard of living of local populations.
What is being done to mitigate the impact
the economics, quality and safety of
Beyond mining, what are Orano’s
of COMINAK’s closure?
the operations. We are also paying
activities in Niger?
To begin with, the mine may be clos-
attention to the energy efficiency and
ing, but work on remediation of the
carbon footprint of our mine as part
site will continue for 10 years and en-
of our commitment for climate. And
vironmental monitoring for a further
SOMAÏR is on the right track.
10 years. The aim of this is to ensure
Our partnership with the country goes well beyond mining. We intervene to improve education, health, access to water, economic activities,
Will Orano still be mining
culture and sport. For example, we
in Niger in 15 years’ time?
fund the development of irrigation
and communicating continuously
As well as our endeavors at SOMAÏR,
systems in partnership with the
and transparently with stakeholders,
we are looking at Imouraren, which
State of Niger, as part of the CFA11bn
to support the reconversion of our
contains a substantial share of
(€17m) Irhazer agro-pastoral project
employees and subcontractors and
Orano’s ore reserves. The difficulty
for sustainable food security.
the site will be safe and non-polluting. We are committed to dialogue
MINING DOSSIER
ANNE MIMAULT/REUTERS
Endeavour has increased its properties in Burkina Faso through two mergers
GOLD
Canada digs deeper in West Africa
Despite insecurity, power problems and other challenges, Canadian miners like Barrick and Endeavour are making major inroads into fast-growing gold-producing regions By AMADOU OURY DIALLO in Dakar, CHRISTOPHE LE BEC and HONORÉ BANDA In the underexplored and booming gold-mining areas of West Africa, Canadian miners are moving fast to expand their operations. Mining firms large and small are exporting the expertise gained in their home market to Francophone West African countries where governments are keen to boost their revenue. Canada is home to gold giants like Barrick Gold, as well as minnows that are far from being household names. “West Africa has more potential than any other region in the world. Its geology is similar to that of northern Ontario,
86
Quebec or Western Australia – exceptionally prolific belts,” says Richard Young, head of the Canadian mining group Teranga Gold Corporation, which is active in Senegal and Burkina Faso. The region is the third-richest gold-bearing zone in the world, after Australia and Canada. The Covid-19 pandemic has helped boost the gold price, as many investors sought safe havens for their money. The price briefly broke the $2,000/oz barrier in August 2020, before returning to the high $1,800s in November. Three countries in the region are now among the top five African gold producers, starting with Ghana, which has become the
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
continent’s largest producer with 142tn mined in 2019. This puts it ahead of South Africa (118tn), Sudan (76tn), Mali (61tn, with 15 industrial mines in operation) and Burkina Faso (51tn, 14 mines). Although, according to experts, the region is still largely underexplored, it is nevertheless attracting a growing number of players, such as global mining giant Barrick Gold, which became the world leader in the sector after its merger with Randgold Resources in January 2019. The Canadian group has been established in Mali for some 15 years and is now present in Burkina Faso, Côte d’Ivoire and Senegal.
Business Resilience Expertise for the Extractives Sector maximizing local benefits closely aligned to defined ESG commitments. Where a client values a local security provider, GardaWorld has created joint ventures and capacity building projects in Kenya and Tanzania to align local security partners to our standards of global certification.
DUE DILIGENCE – In the current dynamic economic environment, investment opportunities need a quick and effective analysis of security and associated risks affecting an investor’s due diligence assessment. Recently a gold investor tasked GardaWorld to conduct a due diligence assessment on short notice in a remote conflict zone of eastern DRC. The assessment provided ground-truth insight into the overall risks, and how, if the investor went ahead, they could best prioritise and mitigate operational risk.
by proven advice on how these might be mitigated or managed throughout the supply chain. POLITICAL AND SOCIAL RISK MANAGEMENT, COMMUNITY AND STAKEHOLDER ENGAGEMENT – Our clients ask us to review highly complex issues such as extortion and corruption, persistent Artisanal Mining challenges, and why social development programs are often not positively construed by local communities.
STRATEGIC INTERACTIONS AND COMMUNICATIONS – Built upon detailed knowledge of the CONFIDENTIAL INVESTIGATIONS environment, we map and – Our experts facilitate manage information flows responsive, quick early-stage and decision making in local fact-finding on initial allegations communities, understand to support legal strategies socio-political risks specific to and lessons learned around the environment, and advise corruption, extortion and and/or implement effective human rights abuse, producing communications. more formalized engagements to avoid or respond to legal SECURITY SERVICE SOLUTIONS actions. – We design our security INTEGRATED BASELINE RISK plans, using our professionally ASSESSMENT – We provide trained, highly motivated and our clients a thorough legally paid local security understanding of political, ESG, officers, to integrate with our and security risks; supported clients’ local CSR programs
TECHNOLOGY AND DIGITISATION – Clients are increasingly asking us to help achieve budgetary efficiencies and operational improvements in the delivery of security services through an integrated security strategy that maximizes the potential of technology and digitization of information. EMBEDDED EXPERTS – We provide our clients with an alternative to hiring full-time employees in supervisory, management, specialist security, risk management, and CSR functions. CRISIS MANAGEMENT – From natural disasters to industrial accidents, kidnap for ransom, sabotage cyber extortion, war, terrorism and evacuation, we support clients through the full crisis management cycle of Prepare, Prevent, Respond, and Recovery. RICHARD ROBINSON, Senior Adviser, GardaWorld
MESSAGE
GardaWorld is increasingly contributing to avoiding physical, financial and reputational risk for extractives clients throughout Africa, beyond simply the provision of physical security. Examples of how we are doing this include:
garda.com
MINING DOSSIER
Production boom
And the merger season was not over for Endeavour. On 16 November, the company, which counts Egyptian billionaire Naguib Sawiris as a shareholder, announced a $1.86bn deal to buy its smaller rival Teranga, consolidating it as the biggest miner in West Africa and taking it into the top 10 wordwide. The deal will add to Endeavour’s properties in Burkina Faso and also expand its operations into Senegal. Endeavour produced 651,000oz in 2019 and with Semafo and
88
WEST AFRICAN GOLD PRODUCTION Ghana
2000
1500
Mali Burkina Faso Côte d’Ivoire Mauritania Guinea Senegal 97 115 176 419
1000 500 0
435
82
103 114 131 415 444
635
700
Q1 2020 Thousand oz
Q1 2019 Thousand oz
72
SOURCE: MINES AND METALS
Barrick’s compatriots IAMGOLD (Senegal, Burkina Faso, Mali) and Endeavour Mining are also expanding their West African operations. IAMGOLD has four producing gold mines and is also spending on exploration in order to add to its pipeline. It is working with small UK-based firm Oriole Resources on the Senala exploration joint venture in Senegal. IAMGOLD is also developing its Boto project in Senegal – part of what it considers several very prospective properties in the border region between Senegal, Mali and Guinea. It expects Boto to produce 160,000oz per year in its first years of operation. In July 2020, Endeavour – managed by France’s Sébastien de Montessus – completed its merger with Canada-based Société d’Exploitation Minière en Afrique de l’Ouest (Semafo) for $755m. The company is present in Burkina Faso, Mali and Côte d’Ivoire. In Burkina Faso, the merged company will make the most of its synergies: by joining up operations at Endeavour’s Houndé mine and Semafo’s Mana and Bantou properties, all in the south-west, it can reduce its production costs. Endeavour is now Burkina Faso’s biggest gold miner in terms of volume.
Teranga on board it plans to produce about 1.5m ounces a year. Endeavour is spending big on exploration and says its target is to discover at least 10m ounces in the year ahead to add to the 23m measured and indicated ounces already in its portfolio. Among the countries where the sector is developing strongly, Côte d’Ivoire saw its production increase from 7tn in 2009 to nearly 30tn in 2019. The country now has five industrial mines, operated by Barrick, Endeavour and Australia’s Perseus Mining. In Senegal, the industrial mine operated by Sabodala Gold Operations, a local subsidiary of Teranga Gold, produced 241,276oz of gold in 2019, a record since it began production in 1998. The new mining codes drawn up by various countries to attract and secure foreign investment have favoured the gold boom and the arrival of operators from all over the world. In West Africa, a mining permit can be obtained in one year, compared to at least five years in North America.
B2Gold and Robex signed solar power and storage deals for their mines
THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
But there are challenges too. One of the main ones facing governments and professionals in the sector is the insecurity linked to jihadist attacks in the Sahel. On 6 November 2019, insurgents targeted a convoy carrying workers to Semafo’s Boungou mine in eastern Burkina Faso, killing 39 people and injuring some 60 others.
Transition in Mali
Most mining firms also remained bullish on Mali, despite the coup and fall of President Ibrahim Boubacar Keita in 2020. For example, B2Gold, which holds a 80% stake in the Fekola mine that produced 456,000oz of gold in 2019, said its work was largely unaffected, as were its plans to continue investing. However, the national transitional authority says that it is reviewing mining conventions with the target of renegotiating any deals seen as unfavourable to the state. B2Gold also recently told media that it is in talks about investing in another difficult operating environment: Zimbabwe. Other West African obstacles include the high cost and low availability of electricity, as well as the need to regulate the activity of artisanal miners and to control gold panning. These are big problems both for government revenue and for investments by private operators. Some Canadian miners are seeking sustainable solutions to their power problems. In December 2019, B2Gold signed a solar power storage deal with Finland’s Wärtsilä for its Fekola mine in Mali. And Canada’s Robex Resources signed a solar power and storage deal with Britain’s Vivo Energy for its Nampala mine, also in Mali. Long-term solutions for artisanal mining and gold panning are likely to prove much more difficult to create.
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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.
186 THEAFRICAREPORT / N° 114 / JANUARY-FEBRUARY-MARCH 2021
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.
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