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Eurasian Integration Could Open Market for Africans

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Early January, Russia and four other ex-Soviet republics completed finally the creation of a new economic alliance intended to bolster their integration. The Eurasian Economic Union or popularly referred to as EAEU, which includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, came into existence on January 1, 2015.

It is expected that Kyrgyzstan will become a full-fledged member from May 1, 2015. In addition to free trade, it’s to coordinate the members’ financial systems and regulate their industrial and agricultural policies along with labor markets and transportation networks.

Russia’s changing economic identity with its neighbouring ex-Soviet republics, Armenia, Belarus and Kazakhstan has opened business and economic opportunities despite the inherent teething problems associated with its creation. For instance, President Vladimir Putin said that the new union will have a combined economic output of $4.5 trillion and bring together 170 million people which means a huge potential market for business. “The Eurasian integration is based on mutual benefit and taking into account mutual interests,” Putin said after business talks with his colleagues in the Kremlin.

Some experts say the union members will benefit largely members and other foreign countries if the emerging opportunities are exploited strategically, while other analysts have explained in an email to Buziness Africa that foreign countries such European countries and Asian states, expecially all three major powers of Asia – China, Japan and India are ready to take their share of the new developments. But on the other hand, the experts interviewed for this story are, however, skeptical as to what extent African business leaders, investors and political elites will recognise, interprete and explore the profitability of the new geostrategic economic arrangement in the region.

The key question is who can benefit from EAEU. According to an official statement posted on Kremlin website on Decemebr 23, 2014, “there is growing interest in cooperating with the Eurasian Union among countries in other regions. Thus, the drafting of a free trade agreement with Vietnam has entered its final stage. We are working on similar agreements with Turkey, India and Israel.”

In addition, the Eurasian Economic Commission (EAEC) press office explained in an email query to Buziness Africa media that foreign countries interested in cooperation with the Union have to apply to the EAEC and if all the necessary conditions fit both parties, the consultations about one of the forms of cooperation (e.g. Free Trade Agreement) could be started.

The press office cited in the report sent by email to Buziness Africa that “EAEC has negotiations with Vietnam about Free Trade Agreement. At this time, we have eighth round of negotiations, that were dedicated to existing provisions of the future agreement. The parties believe that they manage to reach a fair balance of benefits for the both of them and provide for necessary tools that would mitigate the risks for entrepreneurs. But the work is not over yet, the remaining issues will be solved in further consultations.”

According to media reports, East African Community (EAC) countries could soon be able to export tea, coffee and horticultural products to the Eurasian Economic Commission (EAEC) member states without going through Western Europe. According to the article based on official statement issued after a meeting by the EAC Ambassadors in the Russian Federation, this was one of the resolutions agreed on during a recent meeting between EAC ambassadors in the Russian Federation, “the meeting was aimed at learning about the EAEC integration process and development of the economic bloc with view of exploring business opportunities for EAC member states.”

EAC diplomats agreed that traders from the region pay custom taxes at only one entry point to the EAEC bloc to boost exports from East Africa. Once in effect, the EAEC bloc will represent a single economic market of 171 million people with a gross domestic product of $3 trillion. The East African Community (EAC) is a regional intergovernmental organisation of the Republics of Burundi, Kenya, Rwanda, the United Republic of Tanzania and the Republic of Uganda, with its headquarters in Arusha, Tanzania.

Last year, a high-powered delegation of officials from the Eurasian Economic Commission also visited South Africa to explore economic relations with SA and Africa broadly. Headed by Tatyana Valovaya, a member of the Board of the Commission responsible for Integration and Macroeconomics, the delegation held discussions with South African business representatives, political actors and academics on significant economic opportunities for South Africa and Africa.

This visit received no media reports or publicity but this does not mean that it was insignificant. The key questions are what is the potential for SA-Russia relations to be the springboard for relations with the whole of Eurasia generally or the Commission area particular? What would be the key drivers and pillars of such relations? What economic and trade potential lies is such relations? How should South Africa’s foreign policy and Russian foreign policy gurus be thinking through this development?

Egypt is one of Russia’s leading trade partners in the Arab world and may soon conclude an agreement to establish a free trade zone with the Eurasian Economic Union (EAEU), according to the Russia’s Chamber of Commerce and Industry. Experts argue that this will contribute to the revitalization of trading activities and develop deeper cooperation in a number of fields between Egypt and member countries of EAEU.

Victor Spasskiy, the director in charge of integration development, said there are initiatives to expand the bloc to include Armenia and Kyrgyzstan. Local business people were encouraged to take advantage of the immense opportunities in the bloc to develop new business ties with the EAEU business community. Possible exports from EAEC include natural resources, human capital, technology in manufacturing industry and farming machinery.

Some experts are skeptical pointing to the teething problems including differences in approach to varying issues in the region. The creation of the Eurasian Economic Union parallels two deepening interrelated crises: the growing rift between Russia and the West over the conflict in Ukraine and the looming economic crisis in Russia.

Since the beginning of 2014 the ruble lost almost half of its value and the inflation in Russia has exceeded 11%. Some of the member-states of the Eurasian Union (Belarus and Kazakhstan in particular) have been growing more and more ambivalent about Russia’s increasingly heavy-handed attempts to reassert its influence in the former Soviet spaces, according to views of Maxim Matusevich, director of the Russian and East European Studies program at Seton Hall University in New Jersey.

Historically, he maintained that African states have been exceptionally sensitive to any real or perceived efforts by “developed” nations to establish neocolonial control in their former zones of influence. And by a number of measures, Russia’s muscle-flexing in the so-called “near abroad” can be perceived as neocolonial.

“I wouldn’t be surprised if some African states responded to such aggressive expansionism with caution or even distaste. So far only Egypt, which under the new military leadership has grown closer to Putin’s regime, expressed any interest in possible closer ties with the EAEU. But there exist far more specific reasons, for which, I believe, the creation of the Eurasian Union will have little relevance for Africa,” the director said.

Matusevich pointed out: “The member-states of the union have little to no manufacturing output, the two pillars of the union (Russia and Kazakhstan) have economies almost entirely based on oil and gas exports. It is not clear what exactly they can offer to African nations, especially in the context of the deepening economic crisis in Russia. I expect that just like during the previous period of economic turmoil in the 1980s and 1990s Russia and some of its post-Soviet allies will cut down on their ties with Africa rather than expand them. Africa, in my opinion, has very little either to gain or to lose from the creation of the Eurasian Economic Union.”

In an address at the Supreme Eurasian Economic Council meeting in December 2014, Putin further explained that Memorandum of Understanding (MoUs) were drafted with ASEAN and Mercosur states. “I am certain that expanding ties with all countries and organisations both in the East and in the West on the basis of equality and mutual benefit meets the interests of our Union as well. There are great new challenges ahead of us. We are to ensure the stable and efficient functioning of the Eurasian Union and continue strengthening its institutional basis,” Putin said assertively.

Among the priorities is the need to make the Union more competitive and attractive for investors, to launch joint projects and create high-technology jobs in the oil and gas sector, in the metals and chemical industries, aviation, machine-building and the space industry. In addition, to remove the existing barriers that impede the free movement of goods, services, capital and labour, and to implement plans to form as of 2016 a common market of pharmaceutical and medical products.

Putin added: “We will also approve a list of services sectors where the common market will become functional on January 1, 2015. This will benefit construction workers, wholesale and retail traders and companies working in tourism. It is important that we do not drag our feet with the mutual approval of licences for these activities issued by our respective countries. This will make it possible for our companies to take full advantage of the benefits of integration right from the start.”

The Treaty on the establishment of the Eurasian Economic Union was signed by the presidents of Russia, Belarus and Kazakhstan on May 29, 2014 in Astana. The agreement is the basic document defining the accords between Russia, Belarus and Kazakhstan for creating the Eurasian Economic Union for the free movement of goods, services, capital and workforce and conducting coordinated, agreed or common policies in key sectors of the economy, such as energy, industry, agriculture and transport. The agreement stipulates the transition of Russia, Belarus and Kazakhstan to the next stage of integration after the Customs Union and the common economic space.

MD Africa Editor Kester Kenn Klomegah is an independent researcher and writer on African affairs in the EurAsian region and former Soviet republics. He wrote previously for African Press Agency, African Executive and Inter Press Service. Earlier, he had worked for The Moscow Times, a reputable English newspaper. Klomegah taught part-time at the Moscow Institute of Modern Journalism. He studied international journalism and mass communication, and later spent a year at the Moscow State Institute of International Relations. He co-authored a book “AIDS/HIV and Men: Taking Risk or Taking Responsibility” published by the London-based Panos Institute. In 2004 and again in 2009, he won the Golden Word Prize for a series of analytical articles on Russia's economic cooperation with African countries.

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South Sudan’s transition from conflict to recovery ‘inching forward’

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South Sudan’s transformation from conflict to recovery is underway, but much needs to be done before securing “a peaceful and prosperous future”, the UN Special Representative to the country told the Security Council on Tuesday. 

“Because of the collective efforts of so many…South Sudan is in a better state”, the head of the UN Mission in South Sudan (UNMISS), David Shearer, said in his last briefing, after serving as Special Representative for four years. 

However, he stated that “it is inching forward – frustratingly slowly – with still so much to do”. 

Despite recently marking the one-year anniversary of the transitional government, progress is lagging – including in reconstituting a Transitional National Legislature, constitution-making, transitional justice, and economic reform, according to Mr. Shearer, who also pointed out that troops that have yet to be unified. 

“Slow implementation comes at a cost. The power vacuum at a local level has opened opportunities for spoilers and national actors who have exploited local tensions and fueled violence”, he said. 

The UNMISS head also noted “a worrying surge in violence” between various heavily armed community militia in Warrap, in the Bahr el Ghazal region, while highlighting that despite the deaths of nine aid workers last year, humanitarian agencies continue to provide “critical assistance”. 

Four years later 

Reflecting on how far the nascent State has come since 2018, Mr. Shearer spotlighted a ceasefire, a peace deal, improved political security, a transitional government, a presidency, council of ministers, governors and local leadership, which is “slowly being installed”.  

Moreover, political violence had reduced “by a power of 10” compared to those who were dying or displaced from widespread conflict in 2016, he informed the Ambassadors. 

UNMISS: ‘Stabilizing force’  

“A caveat is our concern about the upsurge in armed community militia seemingly in open defiance of state forces”, said the UN official, adding that UNMISS is making “a real difference in lowering the level of this kind of violence and bringing diverse communities together”.  

He called the mission “a stabilizing force that extends well beyond our physical presence – and which is welcomed by nearly 80 percent of South Sudanese who we have independently surveyed”.  

Mr. Shearer updated the Council that UNMISS continues to push the peace process forward by working closely with all political parties, in coordination with regional and international partners. 

‘Extremely fragile’ peace 

However, he underscored that “the peace process remains extremely fragile”, noting that many citizens question the political will and fear the collapse of progress.  

“It is for those people that we, the international community, must remain united and committed to pushing the peace process forward”, said the Special Representative. 

“We can’t sit on the sidelines as spectators…That’s what failure looks like”, he spelled out. 

Challenges ahead 

The UNMISS head highlighted the need for a financial system that works for the South Sudanese. 

“The wealth of this country – from oil and elsewhere – bypasses its people, siphoned off in secrecy with no public accountability for how it is spent”, he said, posing the “obvious question: Why would key decision-makers benefiting from their current positions hold an election that could put their access to power and resources at risk?”. 

Struck by the “immense pride” of the South Sudanese in their country, Mr. Shearer explained that “true sovereignty” means being responsible and genuinely caring for the nation’s 12 million citizens.  

“It also means independence”, he said.  

Yet the UN envoy referred to the country as “perhaps one of the most dependent nations in history”, drawing attention to education and health systems, roads and infrastructure “provided by outsiders”.  

“We have too eagerly stepped in…[and] added to their dependency – and, in doing so, undermined their dignity”, he said.  

Mr. Shearer maintained that the Government must also step up, saying, “State-building is a finely tuned endeavour that constantly needs to be re-evaluated and questioned”.  

Fond farewell 

The Special Representative praised the South Sudanese as “without doubt, the toughest, most resilient people I’ve ever met”.  

Despite hardship, he said “they can sit, discuss, and…laugh in the face of huge adversity”. 

Mr. Shearer expressed admiration for their “seemingly endless patience and hope as they fight against huge odds to achieve the much brighter future they deserve”. 

“I will miss this young country and I wish it well from the bottom of my heart”, concluded the outgoing UN envoy. 

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China’s vaccine diplomacy in Africa

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China appears moving steadily to deliver on its pledge by offering manufactured vaccines aim at eradicating the coronavirus in Africa. Simultaneously, China is strengthening its health diplomacy with Africa, and experts describe it as an additional step to reassert further its geopolitical influence in the continent.

Undoubtedly, the Chinese Sinopharm vaccines are increasingly becoming popular among African countries. Deliveries have already been made in Egypt, Equatorial Guinea, Namibia, Senegal, Sierra Leone, Mozambique and Zimbabwe.

Chinese Foreign Ministry has indicated that China would help 19 African countries as part of its commitment to making vaccines global public goods. Foreign Ministry spokesperson, Wang Wenbin, said on February 22 that China would also support enterprises to export Covid-19 vaccines to African nations that urgently need, recognize, and have authorized the emergency use of Chinese vaccines.

The aid is a clear manifestation of the China-Africa traditional friendship, Wang Wenbin said, adding assertively “China will continue to provide support and assistance within its capacity and in accordance with the needs of Africa.” Further to that, China welcomes and supports France and other European and American nations in providing vaccines to help Africa fight the pandemic.

In West African region, Sierra Leone became the latest African country to receive 200,000 coronavirus vaccine donation, and 201,600 pieces of disposable needles and syringes from the Chinese government. According to reports, the consignment arrived at the Lungi Airport on February 25, and was received by a high-powered government delegation.

Down in Southern Africa, Zimbabwe will buy an additional 1.2 million vaccine doses from China at a preferential price, President Emmerson Mnangagwa’s spokesman said, after Beijing agreed to give more free doses to the southern African country. Zimbabwe has already begun vaccinations after receiving a donation of 200,000 doses from the China National Pharmaceutical Group (Sinopharm).

Chinese Ambassador Guo Shaochun said in a statement that his country had decided to double its donation of vaccines to 400,000 as part of its “solidarity and action” with Zimbabwe.

Mnangagwa’s spokesman George Charamba said the government, which had already bought 600,000 doses from Sinopharm and would increase its purchases from China. “Zimbabwe is also procuring more vaccines from China at a preferential price. Zimbabwe is set to purchase another 1.2 million doses from China,” Charamba wrote on Twitter.

It targets 10 million vaccinations as the country has been hit with increasing infections.  More than two thirds of Zimbabwe’s 35,910 coronavirus infections and 1,448 deaths have been recorded this year, according to a Reuters tally.

Separately, on February 24, neighboring Mozambique also received 200,000 doses of Sinopharm vaccine donated by China. The delivery of the first consignment, ferried to Mozambique by an aircraft of the Chinese People’s Liberation Army, was witnessed by Prime Minister, Carlos Agostinho do Rosário, Minister of Health, Armindo Tiago, Chinese Ambassador Wang Hejun and other senior government officials.

Speaking at the delivery ceremony, held at the Maputo Air Base, Agostinho do Rosario thanked the government and the people of China for the donation of the first batch consists of 200,000 doses and the same number of syringes. “The swift delivery of the vaccine mirrors the determination and commitment of the leaders of both countries to ensure the well-being of the Mozambican people,” the Prime Minister said, stressing that the government has adopted a vaccination strategy that attaches priority to high risk groups particularly health professionals on the front-line of the fight against Covid-19.

Chinese Ambassador Wang Hejun, however pledged to strengthen the cooperation between the two countries in the health field and reaffirmed his country’s openness to assist Mozambique in acquiring more vaccines.

He said the Mozambican health system is currently under increasing pressure, but believed the first batch of the vaccine will certainly make an enormous difference. Mozambique is among the first African countries to receive the Chinese vaccines. Vaccines are currently available from two Chinese companies, Sinopharm and Sinovac Biotech.

The vaccine that arrived in Maputo was from Sinopharm. A major advantage of the Sinopharm vaccine is that it does not need to be stored at ultra-low temperatures. It can be kept at normal refrigeration temperatures of two to eight degrees Celsius.

Indeed, Indians are also speeding with donations to the African continent. The Indian government has promised to send Mozambique 100,000 doses of the vaccine developed by the Indian pharmaceutical industry. Still in the southern Africa, Namibian officials said Beijing would donate 100,000 doses vaccine while India promised a donation of 30,000 shots to Windhoek.

In order to sustain relations and as part of a “bilateral cooperation” efforts, Portugal plans to donate 5% its excess to a group of Portuguese-speaking African countries. With a population of just over 10 million people, Portugal is entitled to 35 million vaccine doses this year under an EU-coordinated purchasing scheme, mostly for double-dose inoculation, leaving it with millions of extra shots.

The 5% share would make up 1.75 million doses. The group of countries is comprised of Portugal’s former African colonies of Angola, Mozambique, Cape Verde, Guinea Bissau, Equatorial Guinea, and Sao Tome and Principe.

Besides getting vaccines through the African Union, a number of African countries by bilateral agreements will purchase vaccines directly from China, Russia and India. For example, five (5) African countries (Algeria, Gabon, Ghana, Guinea and Tunisia) have registered the Sputnik V, which was developed by Russia’s Gamaleya National Research Center for Epidemiology and Microbiology.

The African Union and Africa CDC for its ongoing vaccine readiness work through the African Vaccine Acquisition Task Team. The AU has secured vaccines through the COVAX facility for Africa. WHO has listed three (3) vaccines for emergency use, giving the green light for these vaccines to be rolled out through COVAX. The Group of Seven (7) leaders have committed US$4.3 billion to fund the equitable distribution of vaccines, diagnostics and treatments. European Union has also contributed an additional 500 million euros to COVAX.

The COVAX vaccine facility – which pools financial resources and spreads its bets across vaccine candidates – has handed over the first of 337 million doses it has allocated to around 130 countries for the first half of the year. COVAX receives around 90 percent of its funds from G-7 countries and the EU, but none from China, India or Russia.

By March 2, as reported by the GhanaWeb, the number of African countries to have received vaccine doses are the following:

  • South Africa – Johnson and Johnson (J&J)
  • Rwanda – Pfizer and Moderna (reportedly)
  • Egypt – Sinopharm
  • Morocco – AstraZeneca/Sinopharm
  • Seychelles – AstraZeneca/Sinopharm
  • Mauritius – AstraZeneca
  • Algeria – Sputnik V
  • Zimbabwe – Sinopharm
  • Sierra Leone – Sinopharm
  • Equatorial Guinea – Sinopharm
  • Senegal – Sinopharm
  • Ghana – AstraZeneca/Serum Institute of India (COVAX)
  • Ivory Coast – AstraZeneca (COVAX)
  • Guinea – Sputnik V (Experimental basis)
  • Mozambique – Sinopharm.

Dr. Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization has acknowledged that the pandemic has struck at a time of rapid transformation for Africa. “We cannot and must not see health as a cost to be contained. Quite the opposite: health is an investment to be nurtured – an investment in productive population, and in sustainable and inclusive development,” he explained.

According to Adhanom Ghebreyesus, it takes a whole-of-government, whole-of-society approach, and added that “many African countries have low levels of coverage of health services, and when health is at risk, everything is at risk.”

Since April last year, World Health Organization and its partners have been working through the Access to COVID-19 Tools Accelerator for the equitable distribution of vaccines as global public goods. As already known, so far around 200 million doses of vaccine have been administered, but unfortunately most of them in the world’s richest countries.

WHO declared the coronavirus outbreak a pandemic in March 2020. Since then, more than 110 million cases have now been reported to this organization, and almost 2.5 million people have lost their lives. The overall number of Covid-19 cases in Africa currently stands more than 3.8 million late February, according to the World Health Organization’s (WHO) Regional Office for Africa.

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Kenya’s Peter Mathuki appointed as Head of EAC Secretariat

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Kenya’s Peter Mutuku Mathuki has been appointed to head the East African Community (EAC), the regional bloc that brings East African countries under one umbrella. Mathuki replaces Burundi’s Liberat Mfumukeko, whose five-year term ended early 2021. The post is usually rotational for five years.

As Secretary-General of the regional bloc, his key tasks include regional development, increasing inter-regional trade and addressing investment possibilities for both potential internal and external investors.

According to his profile, Mathuki has worked as Executive Director at the East African Business Council, and consequently emerged as the top candidate for the new position. Over the years, he has been dealing with the corporate business sector, and believed to have sufficient experience and contacts useful to address incessant wrangles in the East African Community.

Mathuki previously served as a member of the East African Legislative Assembly, chairing the Committee on Legal Affairs and Good Governance as well as Accounts, Trade and Investment.

He has held political positions in Kenya and in international bodies including the International Labour Standards at the former International Confederation of Free Trade Unions (ICFTU-Africa), now ITUC-Africa, which he served as director. He was also a consultant for European Union programmes in Kenya.

Mathuki comes on board as the African continent implements the Africa Continental Free Trade Area (AFCFTA) agreement, where he has been involved in the creation of the nascent African Business Council. Trading under this AfCFTA began on January 1, 2021 and opens up more opportunities for both local African and foreign investors from around the world.

Mathuki was taken on as a rectification strategy by Kenya, following a low-key leadership by Mfumukeko. Under his term, countries routinely skipped summits and member states wrangled over tariffs and political accusations. His secretariat faced financial constraints as member states delayed remitting their membership dues and donors reduced funding following allegations of corruption.

The latest report from the East African Community Secretariat for this year shows, for example, that South Sudan is the most indebted member of the EAC. It owes US$24.6 million in funding towards the main budget even though it should pay up to US$32.4 million including this year’s dues. It should also pay US$2.8 million to the Inter-University Council of East Africa and another US$345,000 to the Lake Victoria Fisheries Organization.

The main budget usually funds the operations of the EAC Secretariat, the East African Court of Justice, the East African Legislative Assembly and other bodies dealing with specified fields. The Secretary-General is the principal executive and accounting officer of the community as well as the secretary of the summit and serves for a fixed period of five years.

Many businesses and market players perceive the region as progressively stable for long-term beneficial business, investment and trade. With a combined population estimated at 173 million, the region is relatively large. The East African Community (EAC) is an intergovernmental organization composed of six countries in the Great Lakes region in Eastern Africa. The members are Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda.

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