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Italy making its way back to Africa

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The countries of the Horn of Africa (Ethiopia, Eritrea, Djibouti and Somalia) have recently been the focus of attention of Italian diplomacy, with the need to find political partners in Africa to resolve the migrant crisis, the signing of a long-awaited peace deal between Ethiopia and Eritrea in 2018, China’s rapidly expanding influence in neighboring Djibouti amid the French and US military presence there making the region a strategically important hub.

Rome would like to see an end to Ethiopia’s “landlocked imprisonment” on the Red Sea coast of Eritrea and Djibouti, restore Italy’ presence in the region, based on its colonial past, and ensure Italian companies’ participation in the construction of a strategically important transport infrastructure in the region where they could be entrusted with looking at the possibility of building a railway connecting the Ethiopian capital Addis Ababa with the Eritrean port of Massawa.

The share of Somalis, Ethiopians and Eritreans in the migration flows from Africa to the European Union via Chad, Sudan and Libya has been traditionally high. Italy, which currently ranks third after China and the United Arab Emirates in terms of investment in Africa, wants to help reduce migration by investing in the Horn of Africa countries’ economy and transport infrastructure to improve the economic situation in the region and bring locally produced goods to foreign markets.

With 90 percent of Ethiopian exports going to Djibouti, a country with a population not exceeding 900,000, this helps check the number of Ethiopians heading to the EU, since the country depends on Djibouti, Eritrea and Somalia both in terms of infrastructure and also from the standpoint of ensuring political stability in these countries.

While still remaining a poor country, Ethiopia keeps growing fast economically, raking in an impressive yearly growth of 10.3 percent between 2007 and 2017, compared to the regional average of just 5.4 percent. According to experts at the Washington-based Center for Global Development, Ethiopia, with its fast-growing population and relatively cheap labor, will soon emerge as an “African China” in terms of production volumes.

Addis Ababa is also active diplomatically, promoting closer ties with Kenya and Sudan. Italy, for its part, is staking on Ethiopia as an economic and political springboard for expanding its foothold in the Horn of Africa and extrapolating this presence into the Arabian Peninsula via the Red Sea and towards the Indian Ocean.

It is apparently with this goal in mind that, while traditionally maintaining a partnership with Ethiopia and having access to the Indian Ocean, Rome seeks a more dynamic relationship also with Kenya. Italian donor NGOs are currently working in Kenya, and Italian exports to this East African country now exceed €182 million. According to Italy’s Foreign Development Assistance Program (la Cooperazione allo Sviluppo Esteri), Somalia enjoys a priority position here with €270 million worth of Italian grants expected to come in the next 20 years.

Chad and Niger, which border on Libya, are a logical continuation of the Sudan – Eritrea – Ethiopia – Djibouti – Somalia – Kenya geopolitical chain being built by Rome. This explains why Italian Prime Minister Giuseppe Conte visited Ndjamena and Niamey in January after stopovers in Ethiopia and Eritrea.

Chad and Niger play a key role in balancing the international security system in the Sahel region, where Italian troops serve as part of a multinational force deployed there. Since the collapse of the Libyan state, Niger and Chad have been viewed by Rome as Europe’s southern border. Rome credits the 80 percent drop in migrant flows from these two countries to Libya to its cooperation with Chadian and Nigerian partners.

Meanwhile, the broad outlines of a rivalry between European powers, above all Italy and France, for control over strategically important African regions and their resources are already visible.

France fears that Italy’s diplomatic successes in Africa could eventually give Rome political and/or economic control over a vast region stretching from Algeria to Kenya, which in turn could politically separate French-speaking North Africa from Central Africa.

Algeria, Tunisia, Mali, Mauritania and Burkina Faso, which have been a traditional zone of French influence, have not been overlooked by Rome either with an Italian embassy expected to open in Burkina Faso shortly.

Rome’s expanding foothold in Kenya and Somalia is geographically taking it to Madagascar on the east coast of Africa, which is a place where France has its own interests too.

The present cool in Franco-Italian relations, stemming from the two countries’ conflicting views on the migrant problem and the ways to solve it, as well as the degree of political and legal sovereignty EU member states not sharing the views of Brussels, Paris and Berlin on matters pertaining to foreign and domestic economic policy, gives us a reason to expect the competition between Italy and France in Africa to heat up.

First published in our partner International Affairs

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Unprecedented humanitarian crisis in Mali revealed in new report

MD Staff

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Escalating violence and insecurity in Mali have sparked an unprecedented humanitarian crisis, rendering 3.9 million people in need of assistance and protection – an increase of 700,000 since the beginning of the year, the UN said on Thursday.

Citing a recent report from the NGO Refugees International, Deputy Spokesperson Farhan Haq told correspondents in New York that the number of internally displaced people has also jumped from around 80,000 to nearly 200,000 in one year with more than half being children and women.

The data shows that 650,000 people face food insecurity, compared to 185,000 at the same time last year and that number is projected to nearly double to 1.2 million by June 2020.

These figures are the highest recorded level over the last five years, said Mr. Haq.

The report notes that eight years after the onset of the political crisis that has destabilized Mali, “the international community remains heavily focused on stabilization and counterterrorism, at times to the detriment of the worsening humanitarian situation.”

While insurgent violence in the north rages on, anti-Government elements have spread south into central Mali, where they have inflamed intercommunal tensions.

Some 70 per cent of the people affected live in the conflict regions of Mopti, Timbuktu and Gao.

Throughout the year, UN and humanitarian partners have assisted about 900,000 people with food assistance and in 2020, the Humanitarian Response Plan seeks $365.6 million to assist nearly three million in urgent need.

Needs, grievance must be addressed

Mali has been the scene of perpetual conflict and displacement for nearly eight years, when in January 2012, tensions in the marginalized north came to a head as rebels took over almost one-third of the country. A peace agreement signed in 2015 between the complex web of warring parties, has failed to take hold.

While the UN Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) has restored some semblance of peace and government control there, the country’s northern and central regions remain trapped in cycles of violence.

The report maintains that there is no purely military solution to the country’s crisis.

Although international humanitarian aid must be strengthened, Mali’s citizens also require a government willing and able to meet the needs of its people and address grievances at the root of the conflict while implementing the terms of the peace agreement in a timely and transparent fashion.

“The real war will be won by whoever wins over the population. And for now, the state is perceived to not even be trying”, one UN representative said in the report.

At least 71 dead in Niger

Against a backdrop of rising extremist violence, lawlessness and extreme weather linked to climate change across the whole Sahel region, neighbouring Niger suffered a major blow after at least 71 Government troops died during an attack on a military base, claimed by the ISIL terrorist group.

Mohamed Ibn Chambas, Head of the UN Office for West Africa and the Sahel (UNOWAS) condemned Tuesday’s attack on the camp located in Inates, Niger, close to the border with Mali. A further 12 soldiers were also injured during the assault involving “several hundred” militants, according to news reports.

The Special Representative extended his heartfelt condolences to the families of the victims and to the Government and people of Niger, wishing a prompt recovery to the wounded.

He also called for the perpetrators of this crime to be swiftly brought to justice.

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U.S. Policy on Zimbabwe Leaves Door Open for China

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The clearest image yet of the failure of United States’ policy towards Zimbabwe was on display last week when President Emmerson Mnangagwa toured the site of his country’s new parliament building, funded by the Chinese government and being built by a Chinese contractor.

Scheduled for completion by March 2021, this $140 million building at Mount Hampdennear Harare will stand six stories tall as the largest building in Africa funded by China. It will soon be the seat of Zimbabwe’s democracy as the country ends its decades of isolation. But rather than western democracies coming forward to support Zimbabwe in this transition, it is China which has filled the gap.

“We cannot tire in repeating our sincere and deep gratitude to China for the magnificent gesture…we are grateful,” President Mnangagwa said as he toured the site.

According to the Johns Hopkins School of Advanced International Studies in Washington, China extended loans worth $2.2 billion to Zimbabwe during 2000-2017.Recent loans have been awarded for the upgrade of Harare’s airport as well as construction of the Hwange 7 and 8 power plant project.

The West, on the other hand, has stuck to sanctions as its foreign policy tool. These were first imposed on Zimbabwe in the early 2000s by the U.S. and European Union in response to the alleged crackdown on political opponents by former president Robert Mugabe. This included financial and travel restrictions against specific individuals and companies.

Many of these measures are still in place today despite Mugabe’s resignation in 2017 and Mnangagwa’s election last year. The EU, however, has begun to normalise its relations with Zimbabwe, with only a few sanctions remaining.  The start of political talks in June was perceived as a positive sign towards abandoning all EU sanctions in the near future.

An EU memo ahead of talks in Harare last week, noted that Zimbabwe has made progress by not enforcing its empowerment law, which would have required all foreign investors to cede at least 51% of their shares in local operations to Zimbabweans.

The memo also said the government’s interim compensation of white farmers whose land was seized under Mugabe was a positive gesture towards re-opening export markets in the EU. In a budget statement last week, Finance Minister Mthuli Ncube set aside $24 million to compensate white farmers, 768 of whom had consented to the interim compensation scheme.

The U.S., meanwhile, has maintained wide-ranging sanctions, at least until March 2020. Officials in Washington claim this is due to Zimbabwe’s failure to change laws curbing protests and media freedoms – a strange assessment since Mnangagwa’s government is currently modernising 30 Mugabe-era laws to meet Western standards. A controversial emergency law has already been replaced, and media laws are being replaced with new legislations currently in Parliament.

Following decades of open hostility with Zimbabwe, the West is now jeopardising the opportunity to work constructively with the Mnangagwa government. Under Mugabe, Zimbabwe had actively pursued Chinese investment under his ‘Look East’ policy. But after Mugabe resigned, Mnangagwa said restoring ties with the West and western financial institutions was one of his major priorities.

That was the moment when the U.S could have helped turn Zimbabwe around, bringing in international investment and technical knowhow. But the U.S. instead chose to extend its sanctions, leaving Zimbabwe’s economy reeling from high inflation and power shortages, exacerbated by the effects of climate change. Despite signals of keeping the door open, the Mnangagwa government is slowly but surely being forced to turn back to the arms of a willing China.

Guo Shaochun, the Chinese Ambassador to Zimbabwe, summed up the West’s short-sighted approach.“No country is perfect. No country knows Zimbabwe better than Zimbabwe. Zimbabwe doesn’t need other countries to teach it to do this or not to do that. Zimbabwe needs real partners and real help without any political conditions. Zimbabwe has the wisdom & ability to address its own issues,” Guo tweeted on November 16.

At the site of Zimbabwe’s new parliament, President Mnangagw aexpressed his frustration last week, saying Western countries had done “nothing except criticise” Zimbabwe.

“Those countries who speak against our relations with our good friends have done nothing except to impose sanctions on us,” the president pointed out.

The situation is not yet completely lost, however. If the U.S. were to reach out to Zimbabwe and acknowledge the painful reforms undertaken by Mnangagwa, it could still turn this southern African country towards the West.

The U.S. should also immediately allow Zimbabwe access to international lending agencies and provide technical expertise that is urgently needed, and, above all, eliminate sanctions when these come up for renewal in March.

Winning the hearts and minds of Zimbabweans – the most educated population in Africa – will take more than the ‘stick’ approach that has been tried so far; a ‘carrot’ will do the work much better. If the West doesn’t grab this opportunity, then it should not be surprised when China steps in to reap the benefits.

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A New Currency Offers New Hope for Zimbabwe

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For many Zimbabweans queuing up outside banks last week, it must have felt like the beginning of a new era. A decade after the Zimbabwean dollar was abandoned after falling victim to years of hyper-inflation, crisp new “Zimdollars” have once again entered circulation. However, this time around the denominations come – at least for now – in two and five dollar bills, instead of the 100 million dollar notes that were printed towards the end of the last Zimbabwean dollar.

This new generation Zimdollar is the latest salvo by the government to combat the physical cash crunch and a crucial step ahead in its currency reforms. The Reserve Bank of Zimbabwe plans to incrementally inject $1 billion into the economy over the next six months, stimulating demand and production in a measured manner while keeping money supply in check.

“We will make sure that we drip-feed the physical cash into the market in order to ensure that there is sufficient cash in the economy,” said central bank chief John Mangudya. “We believe this will also help in eliminating queues at the bank where people spend countless hours of productive time queuing for cash.”

Mangudya added that the new Zimdollar would take the place of existing electronic money, alleviating the fear that the cash injection in the middle of an economic crisis would stoke inflation. Keeping price increases and speculative behaviour in check is also one of the reasons why the Reserve Bank is initially issuing lower denomination notes and coins.

For Zimbabweans, the new cash is a welcome relief. Over the past 10 years, they had to juggle a multitude of currencies and proxies. Following the collapse of the old Zimbabwean dollar in 2009, a basket of currencies became legal tender in the country, from the US dollar to the Chinese yuan. By 2015, the foreign currency notes dried up at the banks, which started the chronic cash shortage in Zimbabwe. The central bank introduced bond notes as a surrogate currency, but black market speculation quickly eroded their value, which then triggered the creation of electronic notes.

Given Zimbabwe’s disastrous state of affairs, a popular uprising ensued against the country’s long-time strongman Robert Mugabe, leading to his resignation two years ago. He was replaced by Emmerson Mnangagwa, who then won the presidential election in July 2018. He inherited a struggling economy marked by hyperinflation, cash shortages, a budget deficit, endemic corruption and a lack of monetary sovereignty.

Promising wide-ranging reforms, Mnangagwa appointed MthuliNcube as Finance Minister, a respected economist who was a professor of Public Policy at Oxford with a PhD in Mathematical Finance from Cambridge University. Mnangagwa tasked him to stabilise and transform the Zimbabwean economy so that it could achieve upper middle-income status by 2030, in line with countries such as Russia, China, Thailand, Costa Rica, Turkey and Malaysia (in fact, Zimbabwe was upgraded by the World Bank from a low income to lower middle income country in July).

Facing large fiscal deficits due to the expansion of underground economic activity and the sanctions imposed on Zimbabwe during Mugabe’s rule – which restricted access to U.S. dollars – Ncube launched the Transitional Stabilisation Programme (TSP) a year ago with far-reaching currency and structural reforms. The move was endorsed by the International Monetary Fund (IMF), with whom Zimbabwe signed a two-year monitoring programme that could earn it debt forgiveness and future financing.

In February this year, the government introduced the so-called Real Time Gross Settlement (RTGS) dollar and abandoned its multi-currency system four months later. By now, most Zimbabweans had resorted to mobile money, which became an integral part of the country’s payment system. But it too had its challenges, as wallet holders had to pay premiums of up to 50% to price-gouging mobile money agents to access their funds in cash. This contributed to the rapid depreciation of the currency and compounded the cash shortage. This month’s issuance of the physical Zimdollar bills aims to alleviate that problem, as the availability of cash will eliminate the extortionate premiums incurred when transacting through mobile money.

The new currency likely faces an uphill battle. But the government is confident, urging Zimbabweans to embrace the freshly minted bills and coins to ensure they find traction in the market. Leaders from politics, business and civil society need to play their part as well, shedding their differences and quarrels and rally collectively behind the Zimdollar.

Its roll-out comes at a critical time for the government’s reform agenda, coinciding with the presentation of Zimbabwe’s 2020 budget, which revolved around enhancing productivity, growth, competitiveness and job creation, and the passing of the Maintenance of Peace and Order (MOPA) bill, which replaced a controversial emergency law that dated back to the Mugabe era, a key demand by the U.S. government to remove sanctions.

Implementing reforms – especially after decades of mismanagement – is a painful process and Zimbabweans are tired. But with political will tangible results are gradually being achieved. The country may be on the cusp of a better future, finally putting the years of isolation behind it. Perseverance and collaboration will help to ease the way.

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