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Djibouti’s “International” Free Trade Zone is really just for one country

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For the past quarter century, Djibouti has flourished as the Horn of Africa’s most strategic port, serving as a lifeline for landlocked Ethiopia’s $3.13 billion in exports at the mouth of the Red Sea and Gulf of Aden. So on the face of it, the Phase 1 opening last month of the Chinese funded, multi-billion dollar Djibouti International Free Trade Zone (DIFTZ) appears to position the tiny nation as a growing trading hub for the entire East African region. But is that just wishful thinking?

The DIFTZ is a sprawling complex meant to house four industrial clusters specializing in trade and logistics, export processing, business and financial support services, as well as manufacturing and duty-free merchandise retail. It’s touted to provide employment for tens of thousands and solidify Djibouti’s reputation as a business-friendly place.

The geopolitical calculations behind China’s generous financing in Djibouti are part of its Belt and Road Initiative, an aggressive economic plan designed to open up and create new markets for Chinese goods and technology by strengthening the traditional Silk Road trade route. That rationale is rooted in the fact that Ethiopia uses ports in Djibouti for about 95 percent of its external trade and pays around $1.5-2 billion in port fees. With the Ethiopian economy growing fast, obtaining better access to Addis Ababa is a crucial objective for the Chinese leadership.

But Djibouti should hold the champagne for now. Despite the glowing press releases, there are at least three major partners who have serious reasons for doubting the trustworthiness of the country’s leaders and its viability as a new axis for regional trade.

First, many U.S. analysts are expressing concern that the DIFTZ is financed by loans from state-backed financial institutions from China, dulling Djibouti’s triumphant expansion as a critical line between the export-rich Ethiopia and vital shipping lanes. In East Africa, the Export-Import Bank of China is the major investor in at least eight infrastructure projects, including an ongoing $322 million water pipeline project from Ethiopia and the $490 million Addis Ababa-Djibouti railway. Yet critics have described the Belt and Road Initiative as a method of entrapping poor countries to Beijing as “economic vassals.” For instance, a major report from the Washington-based Center for Global Development released in March cautions that the Chinese iniatives raise “serious concerns about sovereign debt sustainability in eight countries it funds,” including Djibouti.

Even more worrisome, Chinese commercial investment in Djibouti has been paralleled by the construction of a major Chinese military base, a mere six miles from the United States’ long-established Camp Lemonnier — the only permanent U.S. military base in Africa. The Chinese base is the first outside its borders and gives Beijing a military foothold on the African continent, an outcome that previously led to American political and military leaders pressuring the Djibouti government to block the construction of the base. U.S. military experts have expressed concern that a Chinese presence would hinder U.S. interests and its counter-terrorism missions, tensions that remain as American allies France, Japan and Italy also have bases of various sizes and capabilities in Djibouti.

The second reason: Ethiopia. Until a few months ago, Djibouti represented the country’s only way to access the sea and, as a stable partner, reaped the benefits of a near-monopoly on thriving Ethiopian trade. While ports exist in Sudan, Somaliland, and Eritrea, Djibouti’s developed facilities, political stability and investment-friendly atmosphere have proven more attractive than anywhere else in the region.

Now, however, a new player is coming to town: according to reports from Bloomberg, Eritrea is now mulling building a port on its coastline to export potash from its own mines as well as from Ethiopia. The port will be based at the Bay of Anfile, close to Eritrea’s potash mine at Colluli, which contains large quantities of potash that can be used as fertilizers for fruits, vegetables, and coffee trees. Most significantly, the development follows a historic rapprochement between Ethiopia and its former province of Eritrea in July, which has left Djibouti scrambling to protect its market share.

The third issue: the United Arab Emirates (UAE). Djibouti illegally seized a leased port container terminal from the UAE-based DP World company over a dispute dating back to at least 2012. Earlier this month, Dubai successfully sued the Djibouti government in a London-based international arbitration court over the seizure. Eyebrows were raised when Djibouti issued a statement dismissing the ruling as inconsequential, and the country is now trying to negotiate damages. But the scandal has already cast a shadow over Djibouti with potential foreign investors, as large shipping clients such as DP World publicly advocate for an additional 10 to 12 ports from Sudan to Somalia and continue to make a number of investments in East Africa, including in Somaliland.

The Emiratis also have close ties to Eritrea, where they established a naval base in 2015 that has been used to support the Saudi-led war against Houthi rebels in Yemen. And it was the UAE that helped broker a peace deal between Eritrea and Ethiopia, a further indicator that UAE businesses may favor Eritrean ports over those in Djibouti.

Is Chinese investment in the DIFTZ and other infrastructure projects enough to make up for all of this disruption? Perhaps not. Beijing had already started to cool on Ethiopia as an investment destination, and if the Ethiopian market finds multiple alternative ports in Eritrea or Somaliland, the promises of a thriving DIFTZ may end up being little more than hype.

Samantha is a freshly minted graduate in International Relations based in Cairo, currently working as a research assistant in a small think tank looking at development and inequality in Africa

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Africa

West Africa: Extreme poverty rises nearly 3 per cent due to COVID-19

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Food insecurity is affecting millions of people in Burkina Faso. © UNICEF/Vincent Treameau

Extreme poverty in West Africa rose by nearly three per cent in 2020, another fallout from the COVID-19 pandemic, a UN-backed report launched on Thursday that looks at the socio-impact of the crisis has revealed. 

The proportion of people living on less than $1.90 a day jumped from 2.3 per cent last year to 2.9 per cent in 2021, while the debt burden of countries increased amid slow economic recovery, shrinking fiscal space and weak resource mobilization. 

More than 25 million across the region are struggling to meet their basic food needs. 

Gains annihilated 

The study was published by the Economic Community of West African States (ECOWAS), in partnership with the West Africa Sub-Regional Office for the UN Economic Commission for Africa (UNECA) and the World Food Programme (WFP). 

Sekou Sangare, the ECOWAS Commissioner for Agriculture, Environment and Water resources, said the pandemic has, in particular, annihilated benefits gained in fighting food insecurity and malnutrition. 

“Even if we are happy with the governments’ response through the mitigation actions they have taken, we have to worry about the residual effects of the health and economic crisis as they are likely to continue disturbing our food systems for a long time while compromising populations access to food, due to multiple factors,” he said

The report highlights the effects of measures aimed at preventing coronavirus spread, such as border closures, movement restrictions and disruption of supply chains. 

Forced to sell 

These measures had an impact on income-generating activities, and on food prices in markets, with small traders, street vendors and casual workers most affected. 

The deteriorating economic situation has adversely affected food security and nutrition in West Africa.  

More than 25 million people are unable to meet their basic food needs, a nearly 35 per cent increase compared to 2020. People have been forced to sell their assets and livelihoods in order to get enough to eat. 

The situation is most severe in those areas affected by conflict, such as the Lake Chad Basin region, the Sahel, and the Liptako-Gourma region, which borders Burkina Faso, Mali and Niger. 

Strengthen social protection 

The partners hope the report will encourage public and private response to address the pandemic’s negative impacts on the people of West Africa. 

Chris Nikoi, WFP’s Regional Director for West Africa, underscored the need for immediate and concerted action. 

“This report clearly shows the urgent need for Governments and partners to deliberately increase investments to strengthen and increase social protection programs, social safety-nets such as school meals, and other livelihoods-enhancing programs with particular emphasis on women and youth,” he said. 

The Director of the ECA’s Sub-Regional Office, Ngone Diop, pointed to one of the strengths of the partnership, namely the ability to carry out an online survey which mobilized nearly 8,000 respondents. 

Moreover, she said “basing our analyses on primary, first-hand data from households directly impacted by the health crisis makes it possible to offer decision-makers at the regional and national levels with relevant and better-targeted policy options.” 

Responding to needs 

Since the outbreak of the pandemic nearly three years ago, ECOWAS and its partners have implemented several economic and financial measures to respond to the increasing needs in the region.  

ECOWAS Member States, with support from WFP and other technical partners, have also expanded social protection programmes, as well as food distributions, for the most vulnerable communities.  

For example, In Mali and Niger, they are supporting some 1.4 million people and helping to strengthen national social protection systems. 

“WFP is committed to engage more with ECOWAS in enhancing coordination and facilitating experience sharing among countries, with the aim to ensure social protection systems in the region support food security and nutrition and provide resilience to shocks,” said Mr. Nikoi. 

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Pragmatic Proposals to Optimize Russia’s Pledged Rehabilitation of Ethiopia

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A girl stands outside her home in the Tigray Region, Ethiopia. © UNICEF/Tanya Bindra

Russian Ambassador to Ethiopia Evgeny Terekhin pledged that his homeland will help rehabilitate his hosts after getting a clearer understanding of the full extent of the damage that the terrorist-designated Tigray People’s Liberation Front (TPLF) inflicted on the northern part of the country throughout the course of its approximately half-year-long occupation of the Afar and Amhara Regions. China’s Xinhua recently cited official Ethiopian government statistics about this which claim that the Amhara Region suffered damages upwards of approximately $5.7 billion.

According to their data, the TPLF partially or fully damaged 1,466 health facilities and vandalized water, electricity, and transport infrastructure. 1.9 million children are out of school in that region after more than 4,000 schools were damaged by the group. Over 1.8 million people were displaced from the Afar and Amhara Regions while 8.3 million there are suffering from food insecurity. The scale of this humanitarian crisis is massive and the direct result of the US-led West’s Hybrid War on Ethiopia that was waged to punish the country for its balanced foreign policy between the US and China.

It’s here where Russia can rely on its recent experiences in helping to rehabilitate Syria and the Central African Republic (CAR) in order to optimize its pledged rehabilitation of Ethiopian. Those two countries are much more war-torn than Ethiopia is, the latter of which only saw fighting in its northern regions instead of the entirety of its territory like the prior two did. The most urgent task is to ensure security in the liberated areas, which can be advanced by summer 2021’s military cooperation agreement between Russia and Ethiopia.

This pact could potentially see Russia sharing more details of its earlier mentioned experiences in order to enhance the Ethiopian National Defense Force’s (ENDF) security and stabilization operations in the northern part of the country. Syria and the CAR survived very intense Hybrid Wars that utilized cutting-edge military tactics and strategies against them similar to those that were subsequently directed against Ethiopia by the TPLF. It would help the ENDF to learn more about the challenges connected to ensuring security in areas that have been liberated from such contemporary Hybrid War forces.

The next order of business is to help the many victims of that country’s humanitarian crisis. Russia’s experience with assisting Syria in this respect, which suffered one of the world’s worst humanitarian crises in decades, can be of use to Ethiopia. This is especially the case when it comes to aiding its internally displaced people. Their immediate needs must be met and maintained, which might require urgent support from that country’s trusted partners such as Russia. Provisioning such in an effective and timely manner can also improve Russia’s international reputation too, especially among Africans.

Northern Ethiopia’s post-war rehabilitation must be comprehensive and sustainable. The country’s Medemer philosophy — which has been translated as “coming together” – will form the basis of these efforts. Prime Minister Abiy Ahmed touched upon this in his 2019 Nobel Peace Prize speech and his book of the same name that was released earlier that year. Its English translation hasn’t yet been published but Medemer was explained at length by high-level Ethiopian officials during an early 2020 US Institute of Peace panel talk and in Ethiopian writer Linda Yohannes’ insightful book review.

An oversimplification of it in the economic context is that Medemer preaches the need for comprehensive, inclusive, and sustainable growth through public-private and other partnerships that bring prosperity to all of its people, which in turn strengthens socio-political relations between them. It seeks to apply positive aspects of foreign models while avoiding the bad ones. The Medemer mentality aspires to balance cooperation with competition, constantly improving itself as needed, in order to synchronize and synergize Ethiopia’s natural economic advantages in people, location, and resources.

In practice, this could see Russian public and private companies partnering with Ethiopia’s primarily public ones to rehabilitate the northern regions’ damaged infrastructure. Since sustainable growth is one of Medemer’s key concepts, the country’s Russian partners could also train more laborers, social workers, teachers, and doctors throughout the course of these projects while offering scholarships to some internally displaced youth for example. In that way, Russia and Ethiopia could truly embody the Medemer spirit by literally bringing their people closer together as a result of these noble efforts.

All the while, Russia’s international media flagships of RT and Sputnik should be active on the ground documenting the entire experience. The immense influence that Moscow has in shaping global perceptions can be put to positive use in exposing the foreign-backed TPLF’s countless crimes against humanity in northern Ethiopia. This can powerfully counteract the US-led West’s information warfare campaign against its government, which misportrays the TPLF as innocent victims of the “genocidal” ENDF, exactly as similar Russian media efforts have done in debunking Western lies against Syria.

The world wouldn’t only benefit by learning more about the US-led West’s lies against Ethiopia, but also in seeing how effectively Russia is working to reverse the damage that their TPLF proxies inflicted in the northern part of that country. Russia is also a victim of their information warfare campaign, which misportrays the Kremlin as a dangerous and irresponsible international actor. The truth, however, is that Russia is a peaceful and responsible international actor that has a documented track record of cleaning up the West’s Hybrid War messes in Syria, the CAR, and prospectively soon even Ethiopia too.

Upon taking the lead in rehabilitating northern Ethiopia, Russia should diversify the stakeholders in that country’s prosperity in coordination with its hosts. It’s in Ethiopia’s interests as well to receive assistance from as many responsible and trusted partners as possible. Russia can help by requesting that relevant aid and multilateral rehabilitation efforts be placed on the agenda of the proposed heads of state meeting between the Russian, Indian, and Chinese (RIC) leaders that presidential aide Yury Ushakov said was discussed for early 2022 during President Putin’s latest video call with President Xi in December.

The RIC countries stood with in solidarity with Ethiopia at the United Nations in the face of the US-led West’s subversive attempts to weaponize international law against it. They’re strong economies in their own right, not to mention through their cooperation via BRICS and the SCO, the latter organization of which also has anti-terrorist and other security dimensions. These two multipolar platforms could potentially be used to extend economic, financial, humanitarian, and security cooperation to their Ethiopian partner to complement bilateral and trilateral efforts in this respect.

Russia’s increasingly strategic ties with the United Arab Emirates (UAE) could also lead to Moscow working more closely with Abu Dhabi on related rehabilitation matters with their shared partners in Addis Ababa. Observers shouldn’t forget that Crown Prince Mohammed Bin Zayed (MBZ) played a crucial role in brokering peace between Ethiopia and Eritrea in 2018. He even awarded their leaders his country’s highest civil honor when they both visited the UAE that summer. Furthermore, Al Jazeera alleges that the UAE has maintained a humanitarian (and possibly even military) air bridge to Ethiopia.

Regardless of whether or not the military aspect of this reported bridge is true or not, there’s no denying that the UAE has emerged as a major stakeholder in Ethiopia’s success. It deposited $1 billion in Ethiopia’s central bank in summer 2018 as part of its $3 billion aid and investment pledge at the time. The UAE also plans to build an Eritrean-Ethiopian oil pipeline in order to help the latter export its newly tapped reserves in the southeast. Additionally, DP World signed a memorandum with Ethiopia in May 2021 to build a $1 billion trade and logistics corridor to separatist Somaliland’s Berbera port.

Considering the closeness of Emirati-Ethiopian relations, it would therefore be fitting for RIC to incorporate the UAE as an equal partner into any potential multilateral plan that those countries might come up with during their proposed heads of state summit sometime in early 2022. It enjoys excellent relations with all three of them so it’s a perfect fit for complementing their shared efforts. Plus, the UAE has the available capital needed to invest in high-quality, long-term, but sometimes very expensive infrastructure projects, which can ensure northern Ethiopia’s sustainable rehabilitation.

It’s pivotal for Russia to prioritize its pledged rehabilitation of Ethiopia ahead of the second triennial Russia-Africa Summit that’s expected to take place in October or November after fall 2019’s first-ever summit saw Russia return to Africa following a nearly three-decade-long hiatus. Coincidentally, Ethiopia requested last April to hold the next event in Addis Ababa. That would be a sensible choice since its capital city hosts the African Union headquarters, has sufficient infrastructure, and can serve most of the continent through its Ethiopian Airlines, which regularly wins awards as Africa’s best airline.

The interest that Ethiopian Ambassador to Russia Alemayehu Tegunu recently expressed in courting more Russian investment ahead of the next summit goes perfectly well with Russian Ambassador to Ethiopia Terekhin’s vow to heighten cooperation between those countries’ ruling parties. This in turn raises the chances that the present piece’s proposals could hopefully serve as the blueprint for beginning relevant discussions as soon as possible on Russia’s pledged rehabilitation of Ethiopia with a view towards achieving tangible successes ahead of the next Russia-Africa Summit.

That timing is so important since Russia mustn’t miss the opportunity to showcase its bespoke “Democratic Security” model in Ethiopia. This emerging concept refers to the comprehensive thwarting of Hybrid War threats through economic, informational, military, and other tactics and strategies such as the action plan that was proposed in the present piece. “Democratic Security” approaches vary by country as evidenced from the differing ones that Russia’s practicing in Syria and the CAR, but the concept could attract many more African partners if it’s successful in Ethiopia by next fall’s summit.

Russia must therefore do everything in its power to bring this best-case scenario about. Rehabilitating Ethiopia won’t just improve millions of lives, expose the war crimes committed by the US-led West’s TPLF proxies, and enable Russia to showcase its “Democratic Security” model to other African countries, but ensure that the continent’s historical fountainhead of anti-imperialism and pan-Africanism survives its existential struggle. Upon that happening, Ethiopia can then serve to inspire a revival of these ideas all across Africa through its complementary Medemer concept and thus strengthen multipolarity.

From our partner RIAC

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Decade of Sahel conflict leaves 2.5 million people displaced

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Two displaced women sit at a camp in Awaradi, Niger. © UNOCHA/Eve Sabbagh

The UN Refugee Agency (UNHCR) called on Friday for concerted international action to end armed conflict in Africa’s central Sahel region, which has forced more than 2.5 million people to flee their homes in the last decade.

Speaking to journalists in Geneva, the agency’s spokesperson, Boris Cheshirkov, informed that internal displacement has increased tenfold since 2013, going from 217,000 to a staggering 2.1 million by late last year.

The number of refugees in Burkina Faso, Mali, and Niger now stands at 410,000, and the majority comes from Mali, where major civil conflict erupted in 2012, leading to a failed coup and an on-going extremist insurgency.

Increase in one year

Just last year, a surge in violent attacks across the region displaced nearly 500,000 people (figures for December still pending).

According to estimates from UN partners, armed groups carried out more than 800 deadly attacks in 2021. 

This violence uprooted some 450,000 people within their countries and forced a further 36,000 to flee into a neighbouring country.

In Burkina Faso alone, the total number of Internally Displaced Persons (IDPs) rose to more than 1.5 million by the end of the year. Six in ten of the Sahel’s displaced are now from this country.

In Niger, the number of IDPs in the regions of Tillabéri and Tahoua has increased by 53 per cent in the last 12 months. In Mali, more than 400,000 people are displaced internally, representing a 30 per cent increase from the previous year.

Climate, humanitarian crisis

Meanwhile, the humanitarian situation is rapidly deteriorating with crises on multiple fronts.

Insecurity is the main driver, made worse by extreme poverty, and the COVID-19 pandemic. The effects of the climate crisis are also felt more strongly in the region, with temperatures rising 1.5 times faster than the global average.

Women and children are often the worst affected and disproportionately exposed to extreme vulnerability and the threat of gender-based violence.

According to the UNHCR spokesperson, “host communities have continued to show resilience and solidarity in welcoming displaced families, despite their own scant resources.”

He also said that Government authorities have demonstrated “unwavering commitment” to assisting the displaced, but they are now “buckling under increasing pressure.”

Bold response

UNHCR and humanitarian partners face mounting challenges to deliver assistance, and continue to be the target of road attacks, ambushes, and carjacking.

In this context, the agency is calling on the international community to take “bold action and spare no effort” in supporting these countries.

UNHCR is also leading the joint efforts of UN agencies and NGOs to provide emergency shelter, manage displacement sites and deliver vital protection services, including combating gender-based violence and improving access to civil documentation.

In 2021, more than a third of the agency’s Central Sahel funding needs were unmet.

This year, to mount an effective response in Burkina Faso, Niger and Mali, the agency needs $307 million.

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