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South Africa’s Economic Hegemonic Imperatives in SADC

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South Africa is the current chair of SADC, and as such its leadership is of paramount interest. South Africa is also the gateway to foreign direct investment to the developing world. The country also holds the key for the success of SADC both at economic and political level. However, since 1994 Pretoria has only intermittently, and reluctantly so, demonstrated leadership in SADC. More than 24 years later, a majority of key institutions for regional integration are largely inefficient and the prospects for human development index are painfully blur. A number of factors were earmarked to comprehend the lethargic state of regional integration and development in SADC. These include the lack of political will amongst member states to integrate for development purposes, various levels of economic development and systems.

Retrospectively, since the achievement of a democratic state, South Africa earmarked Southern Africa as its foremost foreign relations priority. This relationship with the region is a delicate one for Pretoria as it has to fulfill its roles as regional, continental and global player. South Africa assumed the region’s responsibility as to address such issues as closer collaboration and economic integration and utilised the SADC as a vehicle to steer the developmental agenda of the region. Arguably, this has benefited the region since South Africa’s spotlight on the global arena helps intensify the regions potential in many aspects. Notwithstanding the fact that this has not always brought the desired results for the region and beyond. Subsequently, South Africa has, overtime, continued to isolate itself from the region and likewise the region may have also chose to isolate South Africa in its own dealings.  South Africa acceded to the SADC Treaty on 29 August 1994 at the Heads of States Summit in Gaborone, Botswana. This accession was approved by the Senate and National Assembly in September 1994.After joining SADC South Africa was given a sector responsibility for finance, investment and health. This was a decision that was formed by South Africa’s comparative advantage in this area. It is undeniable that South Africa is the most developed and advanced economy in SADC and on the continent of Africa. This position cannot be ignored if the possibility of regional integration is prioritized on the region and the continent itself. For this reason, it is perhaps essential to earmark the owing to its economic strength South Africa also holds the capacity to make or break regional integration within the SADC and the continent. Moreover South Africa can be described as the economic hub of the region.

Consequently, South Africa is often confronted with a crisis of trying to balance its domestic, regional and global interests especially with the rise of transnational cooperation’s including membership into the BRICS group of countries. Evidently, in the process the probability of conflict of interest is inevitable. On the other hand, the success of the SADC unequivocally rely on South Africa’s will to support and develop it as envisaged. SADC established the Regional Indicative Strategic Development Plan as a thorough guide to intensify integration. According to the 15 year plan, the key milestone are to reach a Free Trade area in 2008, Customs Union in 2010, Common Market in 2015, Monetary Union in 2016 and regional currency in 2018. The Regional Indicative Strategic Developmental Plan (RISDP) remains the strongest indicator of SADC’s desire for deeper integration with an objective of achieving a level of intra-regional unrestricted flow of goods, services and investment. The RISDP cannot be implemented without the support of the biggest economy of the region. SADC needs South Africa but the fear is that the same cannot be said of South Africa needing SADC.

According to Alde and Pere, South Africa’s biggest export market is SADC. This is often overlooked when surveying South Africa’s trade figures, the reason being that a great portion of South Africa’s exports to other countries are concealed within SACU. Evidently, the relevance of the SADC market to South Africa should not be underestimated. Since 1994 the South African government has regarded the Southern African region as the foremost priority of its foreign relations. To exemplify the prominence attached to this region, the first foreign policy document adopted by its democratic government was in fact a “Framework for Co-operation in Southern Africa” endorsed by Cabinet in August 1996. In terms of this “Framework”, the vision for the Southern African region is one of the highest possible degree of economic cooperation, mutual assistance where necessary and joint planning of regional development initiative, leading to integration consistent with socio-economic, environmental and political realities.

South Africa has taken a leading role in the region to address such issues as robust cooperation and economic integration. These include the establishment of a free trade area within the region, the development of basic infrastructure, the development of human resources and the creation of the necessary capacity to drive this complicated process forward, as well as the urgent need for peace, democracy and good governance to be established throughout the region. Nevertheless, history has proven that South Africa bullies its fellow member states within the region. South Africa opts to wield its economic power when negotiating with partners in both SACU and SADC. This oversight plays itself out in how some South African government officials view their regional partners. For example in response to questions about the consequences of the negative impact that an EU/SA Free Trade Agreement would have on its SACU member states. Former Director of Regional Economic Organisations within the South African Ministry of Foreign Affairs Willem Bosman maintained that, there is a need for a shock treatment that is necessary to fellow SACU member states. Bosman further maintained that SACU members are on their own, as South Africa would no longer provide for the 50% of their budget….”now you will have to tax your own people; you also have to work according to the structures of a free independent country”. The irony of this statement is that even if the new SACU agreement replaced the old agreement in 2002, SACU largely remains an apartheid-created relic, designed to ensure that South Africa would have a captive market for its agricultural and non-international competitive manufactured products. This economic dependency of the SACU states on South Africa was “part of a strategy to ensure that South Africa’s economic hegemony in Africa. If SACU states experienced economic deterioration as a result of the EU/SA Free Trade Agreement, who will buy South Africa’s non-international competitive manufactured products? By placing integration at the global level a priority, South Africa has always risked national and regional economic destabilization.

South African’s global integration agenda

In the interest, for many, South Africa has an urgent need to further integrate its economy into the world economy. This could also be at the expense of its SADC counterparts. Nevertheless, for South Africa to attract good foreign direct investment, therefore there’s an urgent need for South Africa be seen as an environment of peace and tranquility not just in South Africa but the region. Many global players who take interest in investing in Africa perceive South Africa as the gate way.  Nonetheless unfamiliar circumstances arise from the role played by external partners in the region, especially the EU and the USA. In respect of the EU, the outcomes of the Economic Partnership Agreements negotiations will fundamentally alter the peace and nature of regional integration in Africa. Other global players refuse to be side-lined. This was illustrated by the recent introduction of the China-Africa office in South Africa in March 2008. South Africa has to assume leadership in ensuring that the Zimbabwean problems are resolved since regional peace is important for the national economy of South Africa. Nonetheless, many have questioned South African former President Thabo Mbeki’s impartiality in the process. What this means is that there has to be a balance of interest between national, regional and global integration aspirations for South Africa.

Moreover, there are ways in which South Africa has attempted to integrate its economy in the world economy at the expense of its regional counterparts. It is also noteworthy to point out that this was inevitable in light of long term planning. The EU/SA TDCA agreement stabling a free trade areas demonstrate this phenomenon. South Africa become a signatory to this trade agreement with full knowledge that it would bare devastating impact on both the members of SACU and SADC. In light of the SACU, the agreement was endorsed without consultation without consultation with the other BLNS SACU member states. This was a precise disregard of the SACU Treaty that stipulates that such agreements must be approved by all SACU members. By acting unilateral, it is clear that South Africa is trying to monopolise/maximize these economic benefits for itself at the expense of the other members.

In light of SADC, the fear of EU goods flooding the regional market has been duly noted. This is because when EU goods have entered South Africa, it becomes relatively easy to have them anywhere else within the SADC region and Africa at large.  Evidently, this has undermined the agricultural and industrial sectors. A number of SADC states launched a complained that South Africa only became serious about completing the negotiations for the SADC FTA when it had completed negotiations with the EU. However, a few South African trade officials felt that the EU/SA FTA allowed them to become more integrated into the world economy, notwithstanding the fact that the consequences could also be severe for South Africa’s own economy.

A look at the TDCA agreement will show that South Africa has divided attention, with more emphasis place on the EU and not the SADC region. This agreement follows several aspects; strengthening dialogue between the parties, supporting South Africa in its economic and social transition processes, promoting regional cooperation and the country’s economic integration in Southern Africa and in the world economy, and expanding and liberalizing trade in goods, services and capital between the parties. The amount of loss of revenue is very high since SACU and SADC states will not be able to levy duties on the EU products. “Based on respect for democratic principles, human rights and the rule of law, the Agreement establishes a regular political dialogue on subjects of common interest, both at bilateral and regional level (within the framework of the EU’s dialogue with the countries of Southern Africa and with the group of the African Caribbean and Pacific (ACP) countries. The duration of the agreement is unspecified, but provision is made for its revision every five years of the date of its entry into force in order to consider possible amendments. The agreement covers a number of areas and includes a future developments clause making it possible to widen the field of cooperation”.

Concluding remarks

South Africa’s dominance in southern Africa, most prolific in the economic sphere, remains uncontested. South Africa accounts for about 60% of SADC’s total trade and about 70% of the regions GDP. The country is also within the region, the most diversified economy and thus critical to SADC’s drive towards developmental regionalism. Nevertheless, it is also true that a relationship of interdependence binds South Africa to the region. Moreover, in varying degrees, the economies of other SADC member states also benefit from employment opportunities, skills transfer, tax revenues and global linkages as a result of the business activities of South Africa firms.

Charles Matseke studied his Masters in International Relations and Foreign Policy at the SARChI: Chair for African Diplomacy and Foreign Policy at the University of Johannesburg. He is currentlyProgram Manager for Africa-China in International Forums at the Centre for Africa-China Studies at the University of Johannesburg. His main areas of focus are developmental policy and developmental foreign policy. He has published on these areas in various platforms.

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Africa

Addressing Economic Challenges in Africa Through Deep Investments

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The African continent comprises a diverse collection of countries, each with its own set of challenges. The governance of individual territories, regions, and countries requires tremendous care and attention, particularly where peace and stability are concerned. Leadership is central to the prosperity of the African continent, particularly economic development. If the authorities are perceived as legitimate, peace and prosperity have a better chance of succeeding. The political culture and climate of the African continent is an important barometer of where Africa will be as an emerging force in the global economy.

Currently, Africa’s 54 nations comprise approximately 25% of the countries making up the United Nations. The interaction of regional and national governance is sacrosanct. Over the years, Africa has undergone periods of violent change, from precolonial to postcolonial, and modern-day leadership. Given that European cartographers drew the boundaries of many African nations, the ties between people and their leaders are often fraught with difficulties. Over the years, African governments have redrawn their boundaries to better reflect cultural, political, and social nuances.

Over time, the conflict-ridden areas throughout Africa have eased. Multiple peace initiatives have supplanted growing conflict, and fomented a new cultural consciousness that espouses growth and development over war and conflict. While conflict still exists across many parts of Africa, the overall climate has cooled significantly from the days of rebellion and genocide. War-torn zones still exist, and development in these areas is riddled with challenges, extreme poverty, and hopelessness.

Conflict and governance are interlinked across Africa. Corruption is a widespread problem, particularly in the Central African Republic, Somalia, and South Sudan. Post-Cold War, major changes began to shape the political and social landscape across Africa. The liberalization of the USSR led to the development of civil society across Africa. Consider the Freedom House report from 1988 (17/50 countries were free or partly free) compared to the report from 2015 (31/54 countries were free or partly free).

Massive and Unprecedented Urbanization across Africa

Governance is also impacted by external forces. Global political movements, particularly the rise of India, China, Russia, and Arab states have impacted African society in many ways. These external actors necessitate economic environments which are conducive to peace and stability. The increasing urbanization of African society is yet another driver of success. The shift from rural to urban development is unprecedented. A report titled ‘Urbanization and Migration in Africa’ found a total of 53% of African emigrants living within Africa as a percentage of the total emigrants population

The migration between people is one of the most notable trends taking place across Africa. In 2017, intra-African migration was strongest in countries like South Africa, Ethiopia, Côte d’Ivoire, Uganda, Nigeria, and Kenya. Factors leading to mass migration include underdevelopment and development. Nigeria currently tops the list of countries in Africa with remittance receipts at approximately $22.3 billion (2018), followed by Egypt at $18.1 billion, Morocco at $7.1 billion, and Senegal at $2.3 billion. The rate of urbanization in sub-Saharan Africa was measured at 37.9% in 2015 and is expected to grow towards 54.8% by 2050. The figure is even greater for the continent as a whole at 40.4% in 2015, and 55.9% by 2050.

Tapping into Africa’s Rich Natural Resources

Africa is a hive of activity with respect to natural resources. South Africa is home to vast supplies of gold and coal, while countries like Angola are rich with diamonds, oil and natural gas. North African countries are the chief suppliers of crude oil, including Algeria, Cameroon, Chad, Egypt, Eritrea, Libya, Tunisia, Sudan and South Sedan. Central African countries like the Democratic Republic of the Congo, the Central African Republic, Botswana, and Angola lay claim to massive diamond supplies, cobalt, and petroleum resources. The issues of extracting these natural resources and marketing them to the world at large hinge upon the effectiveness of transportation networks, infrastructure development, and telecommunications facilities. Many African leaders are investing heavily in these areas, fast-tracking Africa’s learning curve to meet the requirements of major world players like China, the United States, and the European Union.

Spotlight on Angola: An African Giant in The Wings

Angola has substantial resources of liquefied natural gas and oil. It also boasts tremendous economic potential, given its hydropower facilities, agricultural growth and development, fisheries, gold production, iron production, and diamond production. The country also lays claim to significant international financial support a.k.a. FDI. Of course, its reliance on commodities like crude oil means that the country’s revenues are subject to extreme volatility. Among the many other challenges faced by Angola are its rising unemployment rate and social inequalities. The country, like many other African nations lacks a world-class infrastructure, and it has a fragile banking sector.

Leaders like Isabel Dos Santos, chair of Unitel, and other major companies like ZAP, Candando, Sodiba, and Efacac are convinced that the pathway to success is the result of a multi-faceted approach. Education and skills training, rural development, the provision of basic resources, access to financing, eradication of malaria and waterborne diseases, hospitals and paediatric clinics, and combating gender stereotypes are central to the success of Angola. For her part, Isabel Dos Santos has invested heavily in gender equality initiatives, such as promoting women from within the ranks, empowering local communities of women to take charge of their own economic destiny, and fostering a climate where female academic and economic development is encouraged and supported.

Angola’s GDP rate is expected to turn the corner by the end of 2019 and reach 1% growth, following three years of negative growth rates. The inflation rate has declined from 30.4% on average in 2016 to 15.9% forecast for 2019. Public debt in Angola has also declined from 71.9% in 2016 to a forecast total of 69.9% for 2019. And yet, despite these dramatic strides, Angola still battles the demons of volatile prices for commodities. The country generates approximately 90% of its revenues through crude oil exports, but its strongest resources have yet to be tapped – its people. By investing in the youth, women and men through literacy initiatives, educational development, and vocational training, business leaders like Isabel Dos Santos are confident that the economy will turn the corner for the better.

The World Bank report on Angola states that the new administration in the country is supportive of reforms geared towards macroeconomic stability. This is all conducive to economic growth and prosperity. The IMF has offered additional assistance to the country through its Extended Financial Facility (EFF) valued at $3.8 billion. While oil accounts for 33% of GDP and 90% of Angolan exports, there are factors limiting economic expansion in the current year. These include a production limit set by OPEC, and low oil prices globally. The central bank of Angola has adopted a monetary tightening policy to hedge against inflationary pressures, and this is already starting to pay dividends with reduced year-on-year inflation figures reported in January 2019. The World Bank group has committed $1.05 billion towards 9 investment projects across Angola.

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Africa yet to unleash full potential of its nature-based tourism

MD Staff

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Countries in Africa can do more to develop tourism in protected areas, which would in turn create jobs in rural places, diversify and grow their economies and improve environmental resilience in the face of growing pressures, a report has said.

Africa’s biodiversity could “transform” the continent’s economy, but at present many governments are scaling back on protection because of limited budgets needed for other pressing public needs, a report produced by conservation organization Space for Giants Club and the UN Environment Programme said. To preserve their wildlife and wild places, governments should look at protected areas not only as environmental assets but economic ones as well, with the continent’s 8,400 protected areas producing US$48 billion in revenue.

According to the paper, nature-based tourism could improve the livelihoods of many people as it generates 40 per cent more full-time employment than agriculture and provides greater opportunities for women than other sectors.

Oliver Poole, Executive Director of Space for Giants Club, said the organization “strongly believed” that the right type of nature-based tourism done in a sustainable way is a powerful conservation tool.

“That’s because it creates jobs for the local community, and it brings visitors to the national parks, creating money for wildlife services, that often have limited budgets,” he said. “But it also starts building a nature-based tourism sector that pays taxes and builds economies, making them of national importance and therefore more likely to be protected.”

Wildlife is the single biggest revenue for Africa’s tourism, with the United Nations World Tourism Organization stating 80 per cent of annual trips to Africa were for wildlife watching. And as projections point to a doubling of visitors to the continent by 2030 from the current 62 million, the report argues that additional revenue is attainable.

Ethiopia, which boasts nine UNESCO World Heritage sites, wasn’t able to attract more than 50,0000 visitors to each one in 2016. To improve these numbers, the report says the country would need to invest in better infrastructure for national parks and capitalize on its unique features, like being home to 835 bird species—a potential birdwatcher’s paradise rivalling Costa Rica or South Africa.

As the continent grapples with a growing population, poverty, climate change and a booming illegal wildlife trade, the report says important ecological areas could be lost before their value is utilized. Several places in Africa have already developed parks in ways that could threaten their natural capital, while others are planning to extract oil, minerals and other activities.

Doreen Robinson, wildlife expert at UN Environment said it was important for governments to develop partnerships with private, community and non-profit organizations to realize the full capacity of nature-based tourism in Africa and thus ensure wildlife for future generations.

“Private investment and know-how are needed to develop attractive tourism services and products, while good public management must ensure equitable business practices and reinvestment of profits into conservation of wildlife,” she said. “Ultimately this formula grows the economy, protects nature and supports human development.”

The report states only four African countries—Kenya, Rwanda, South Africa and Zimbabwe—are top nature tourism destinations, each attracting between 2–5 million visitors a year. But there is a lot of room for improvement, particularly in western Africa that has tropical forests and beaches, yet due to poor marketing hasn’t tapped its full tourism potential.

For governments to gain the most of protected areas, they should create national tourism plans for protected areas and integrate them into the economic plans of the country—that way, wild places will finally get the resources they deserve.

UN Environment

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Saudi Iranian rivalry polarises Nigerian Muslims

Dr. James M. Dorsey

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A recent ban on a militant, Iranian-backed Shiite group raised the spectre of the Saudi Iranian rivalry spilling onto Nigerian streets as security forces launched a manhunt to find the alleged Boko Haram operatives who killed 65 people attending a funeral.

Nigeria, Africa’s foremost oil producer, banned the Iranian-backed Islamic Movement of Nigeria (IMN) this weekend after demonstrations in the capital Abuja to free its leader, Ibrahim El-Zakzaky turned violent. At least six people were killed.

“The Saudis watching the Iranians trying to break into northern Nigeria is almost like watching someone else try to befriend your best friend,” said Ini Dele-Adedeji, a Nigerian academic at the University of London’s School of Oriental and African Studies, referring to the region’s religious elites that have aligned themselves with the kingdom.

Saudi cables released in 2015 by WikiLeaks reveal concern about Iranian-funded Shiite expansion in West African and Sahel nations including Mali, Mauritania, Burkina Faso and Nigeria.

Mr. Dele-Adedji said Saudi and Iranian funding was “on the surface…about these countries helping out with ‘charitable work’ activities. But beyond that it’s also a way for those countries to almost create extensions of themselves.”

Mr. El-Zakzaky, a Sunni Muslim student activist inspired by the 1979 Iranian revolution, initially agitated for a repeat in his native Nigeria. When that didn’t work, Mr. El-Zakzaky went to Iran, converted to Shiism, and started wearing the white turban of a Shiite cleric.

Returning home in the 1990s, he became the leader of the Islamic Movement and turned it into a vehicle for proselytizing and gaining followers.

Things got out of hand when Nigerian troops killed hundreds of Shiites in the ancient university town of Zaria in December 2015 and arrested Mr. El-Zakzaky and hundreds of his followers. The army accused the Shiite group of attempting to kill Nigeria’s army chief-of-staff, a charge the movement denies.

Iran has been funding Mr. El-Zakzaky for years and the area of Zaria he worked in became the “mecca for the dispossessed in Nigeria,” according to Matthew Page, a former U.S. State Department specialist on Nigeria. The Islamic Movement has been receiving about $10,000 a month from Iran, he estimated.

Mr. El-Zakzaky used the money to fund soup kitchens and homeless shelters, Mr. Page said. “This was a very inexpensive way for Iran to have a toehold in Nigeria,” he said.

Ghanem Nuseibeh, founder of London-based consultants Cornerstone Global Associates estimated that Mr. El-Zakzaky’s organization operates more than 300 schools, Islamic centres, a newspaper, guards and a “martyrs’ foundation.” The network is similar to welfare systems established elsewhere by Lebanese Shiite militia Hezbollah and other Iranian-backed groups.

The Nigerian government first declared the Islamic Movement a security threat in 2017, comparing it with the Boko Haram insurgency, according to Nigerian diplomats.

Peregrino Brimah, a trained medical doctor who teaches biology, anatomy and physiology at colleges in New York never gave much thought while growing up in Nigeria to the fact that clerics increasingly were developing links to Saudi Arabia.

“You could see the money, the big ones were leading the good life, they ran scholarship programs. In fact, I was offered a scholarship to study at King Fahd University in Riyadh. I never thought about it until December 2015 when up to a 1,000 Shiites were killed by the military in northern Nigeria. Since I started looking at it, I’ve realized how successful, how extraordinarily successful the Wahhabis have been.” Mr. Brimah said.

He decided to stand up for Shiite rights after the incident in which the military arrested Mr. El-Zakzaky.

The Nigerian military said that it had attacked sites in Zaria after hundreds of Shia demonstrators had blocked a convoy of Nigeria’s army chief General Tukur Yusuf Buratai in an effort to kill him.

Military police said Shiites had crawled through tall grass towards General Buratai’s convoy “with the intent to attack the vehicle with [a] petrol bomb” while others “suddenly resorted to firing gunshots from the direction of the mosque.”

A phone call to Nigerian President Mohammed Buhari in which King Salman expressed his support for the government’s fight against terrorist groups was widely seen as Saudi endorsement of the military’s crackdown on the country’s Shiite minority.

The state-owned Saudi Press Agency quoted King Salman as saying that Islam condemned such “criminal acts” and that the kingdom in a reference to Iran opposed foreign interference in Nigeria.

Mr. Brimah’s defense of the Shiites has cost him dearly, illustrating the degree to which Saudi-funded ultra-conservatism and Iranian agitation has altered Nigerian society.

“I lost everything I had built on social media the minute I stood up for the Shiites. I had thousands of fans. Suddenly, I was losing 2-300 followers a day. My brother hasn’t spoken to me since. The last thing he said to me is: ‘how can you adopt Shiite ideology?’ I raised the issue in a Sunni chat forum. It became quickly clear that these attitudes were not accidental. They are the product of Saudi-sponsored teachings of serious hatred. People don’t understand what they are being taught. They rejoice when a thousand Shiites are killed. Even worse is the fact that they hate people like me who stand up for the Shiites even more than they hate the Shiite themselves,” Mr. Brimah said.

In response to Mr. Brimah’s writing about the clash, General Buratai invited him for a chat. Mr. Brimah politely declined. When Mr. Brimah reiterated his accusation, General Buratai’s spokesman, Colonel SK Usman, adopting the Saudi line of Shiites being Iranian stooges, accused the scientist of being on the Islamic republic’s payroll.

“Several of us hold you in high esteem based on perceived honesty, intellectual prowess and ability to speak your mind. That was before, but the recent incident…and subsequent events and actions by some groups and individuals such as you made one to have a rethink. I was quite aware of your concerted effort to smear the good name and reputation of the Chief of Army Staff to the extent of calling for his resignation,” Colonel Usman said in an email to Mr. Brimah that the activist shared with this writer.

General Buratai “went out of his way to write to you and even invited you for constructive engagement. But because you have dubious intents, you cleverly refused…. God indeed is very merciful for exposing you. Let me make it abundantly clear to you that your acts are not directed to the person of the Chief of Army Staff, they have far reaching implication on our national security. Please think about it and mend your ways and refund whatever funds you coveted for the campaign of calumny,” Colonel Usman said.

Mr. Brimah’s inbox has since then been inundated with anti-Shiite, anti-Iranian writings in what he believes is a military-inspired campaign.

Mr. Brimah’s predicament reflects the fallout of the Saudi Iranian rivalry in West Africa as a result of Saudi and Iranian funding that has let the genie of intolerance, discrimination and bigotry out of the bottle.

Issoufou Yahaya, in the Sahel state of Niger, recalls his student days in the 1980s when there wasn’t a single mosque on his campus. “Today, we have more mosques here than we have lecture rooms. So much has changed in such a short time,” he said.

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